F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                        MAY 29 1997
                            FOR THE TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

    ELMER M. GONZALES and
    RUDOLFO J. GONZALES,

         Plaintiffs-Third-Party-
         Defendants-Appellants,                        No. 96-2207
                                                (D.C. No. CIV-95-1348-BB)
    v.                                                  (D. N.M.)

    JOHN P. MONTOYA,

         Defendant-Third Party-
         Plaintiff-Appellee,

    v.

    INTERNAL REVENUE SERVICE,

         Third-Party-
         Defendant-Appellee.




                            ORDER AND JUDGMENT *



Before BRORBY, BARRETT, and LUCERO, Circuit Judges.




*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore

ordered submitted without oral argument.

      The Internal Revenue Service seized real estate from Elmer and Rodolfo

Gonzales and sold it to satisfy a portion of their alleged tax deficiencies. The

Gonzales, representing themselves, filed suit in state court against the buyer, John

Montoya, challenging his right to title. Montoya later filed, also in state court, a

third-party complaint for indemnification against the Internal Revenue Service in

case he lost. On the basis of the third-party complaint and the fact that a

government employee was named as a defendant in it, the Internal Revenue

Service removed the entire action to federal court.

      The federal magistrate judge issued an initial scheduling order requiring the

parties to appear at a hearing on January 25, 1996. Plaintiffs did not appear. The

magistrate judge then issued an order requiring plaintiffs to show cause why their

“action should not be dismissed, or [] other sanctions be imposed” for their

failure to obey the court’s order. R. doc. 9. After a hearing and additional

briefing from the parties, it appeared that plaintiffs chose not to attend the

January 25, 1996 hearing because, they claimed, they had not been served with




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the third-party complaint and therefore were not parties to the action. See R.

doc. 4 at 2, ¶ 7; 

The magistrate judge concluded that dismissal was

an appropriate sanction under Fed. R. Civ. P. 37(b)(2)(C) in response to

plaintiffs’ intentional failure to appear at the January 25, 1996 hearing, and

recommended that plaintiffs’ complaint be dismissed with prejudice. The district

court reviewed the record de novo, adopted the magistrate judge’s

recommendation, and dismissed plaintiffs’ complaint. Plaintiffs appeal. We have

jurisdiction under 28 U.S.C. § 1291, and affirm.

       Plaintiffs argue on appeal that the district court abused its discretion by:

(1) dismissing their suit without first verifying that they had been served with the

third-party complaint; (2) failing to determine that it had subject matter

jurisdiction over the action; and (3) failing to resolve the issue of alleged fraud in

the tax sale.

       Plaintiffs’ first contention is without merit. Under New Mexico law,

service is effected by and complete upon mailing. See S.C.R.A. Rule 1-005(B)

N.M. Stat. Ann. The record shows that defendant stated he mailed plaintiffs a

copy of the third-party complaint and that the envelope was not returned to him

by the Postal Service. Defendant also attached a certificate of service to the

third-party complaint indicating that a copy had been mailed to plaintiffs. This is




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competent evidence of service. Cf. Greyhound Lines, Inc. v. Rogers (In re Eagle

Bus Mfg., Inc.), 

, 735-36 (5th Cir. 1995) (holding court may consider

whether notice had correct address and postage, whether notice was mailed, and

whether certificate of service was filed to determine whether mailing was

accomplished); Chesson v. Jaquez, 

, 365 (10th Cir. 1993) (holding

date on certificate of service accepted as date of service absent evidence to the

contrary). Plaintiffs assert here, as in the district court, that they did not receive

the third-party complaint even if it was mailed to them. This mere assertion of

nonreceipt, however, is insufficient to show that the magistrate judge’s finding is

clearly erroneous, or that the district court abused its discretion in adopting it.

      Plaintiffs’ contention that the district court lacked subject matter

jurisdiction is also without merit. Because removal was not challenged, any

defects in removal procedure were waived. See Baris v. Sulpicio Lines, Inc., 

, 1543 (5th Cir. 1991). The only question is whether the federal court

would have had jurisdiction if the suit had been filed in federal court as the suit

was postured at the time of judgment. See Grubbs v. General Elec. Credit Corp.,

, 702 (1972). According to plaintiffs’ own admissions, their

complaint raised a federal question under the tax code. Thus, the district court

had federal subject matter jurisdiction at the time of judgment. To the extent

plaintiffs inartfully attempt to challenge the district court’s assertion of personal


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jurisdiction over them, we note that plaintiffs submitted to federal court

jurisdiction when they filed a removable complaint in state court.

      Because the district court had subject matter jurisdiction over the action

and dismissed plaintiffs’ complaint as a sanction based on a factual finding that is

not clearly erroneous, we need not address plaintiffs’ merits argument. We do not

consider whether imposition of lesser sanctions is appropriate under Ehrenhaus v.

Reynolds, 

(10th Cir. 1992), and its progeny. The issue was neither

raised before us, nor noted below. We will not manufacture arguments on appeal

for litigants. See National Commodity & Barter Ass’n v. Gibbs, 

,

1244 (10th Cir. 1989).

      The judgment of the United States District Court for the District of New

Mexico is AFFIRMED.



                                                    Entered for the Court



                                                    Wade Brorby
                                                    Circuit Judge




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