United States of America v. Davis et al
ORDER granting 40 Motion for Default Judgment; USA to promptly lodge appropriate form of judg for crt's consideration. Signed by Judge John W. Sedwick on 8/8/11. (PRR, COURT STAFF)
UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA
UNITED STATES OF AMERICA,
JAMES H. DAVIS,
ORDER AND OPINION
Motion at docket 40]
I. MOTION PRESENTED
At docket 40, plaintiff United States moved for a default judgment. Defendant
James Davis opposed the motion in his papers at docket 47. Plaintiff filed a reply at
docket 49. Mr. Davis moved at docket 38 to set aside the Clerk’s entry of default, but
the court denied that motion in the order at docket 50. The motion for a default
judgment is now ripe for decision. Neither party requested oral argument, and oral
argument would not assist the court.
The United States initiated this action to reduce tax assessments to judgment
and to foreclose tax liens on certain real property located in Juneau, Alaska.1 The City
and Borough of Juneau (“City”) was also named as a defendant, because it held a lien
on the real property involved, which is commonly known as 8759 Dudley St. The United
States and the City reached a settlement pursuant to which the City was dismissed.2
Complaint, doc. 1.
Order, doc. 20.
Mr. Davis’ default having been entered, the question to be resolved now is whether a
default judgment should be entered against him.
Plaintiff’s complaint relates to Mr. Davis’ tax liabilities for the years 1994 through
2005 inclusive. Mr. Davis having defaulted, all of the well-pled facts in the complaint
relating to his liability are deemed to be true.3 Mr. Davis’ papers at docket 47 do not
meet the allegations of fact. He points to no evidence which would refute the
proposition that he is liable to make the payments demanded by plaintiff. Instead, in a
rambling discourse, Mr. Davis asserts that the income tax is voluntary and that it is a
violation of the Fifth Amendment to require people to file tax returns or otherwise give
information regarding the activities for which they may owe taxes. These arguments are
without merit as aptly explained in plaintiff’s reply memorandum with which this court
agrees in all material respects.
The United States has provided the assessments of Mr. Davis’ tax liability on
Forms 4340 for each year in question under cover of Ms. Newman’s declaration.4 Also
provided with Ms. Newman’s declaration are calculations of Mr. Davis’ tax liability for the
years at issue on Forms 4549 along with pertinent revenue rulings. Also attached to
Ms. Newman’s declaration are notices of tax lien and deeds showing conveyances of
the property subject to the liens. Ms. Newman’s declaration also supplies additional
materials used to give Mr. Davis notice of the sums due as calculated by the
government for the years in question. Mr. Davis has not questioned the accuracy of the
materials. And he has provided no other evidence bearing on the amounts he actually
owes. Based on the undisputed evidence, Mr. Davis owes plaintiff the sum of
$575,387.27, plus interest accruing pursuant to 26 U.S.C. § 6622 from April 1, 2011,
until the amounts due are paid. It also appears that plaintiff is entitled to foreclose its
tax liens on the property commonly known as 8759 Dudley St., Juneau, Alaska, in an
effort to collect what Mr. Davis owes.
Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002).
A judgment is a serious matter, so before entering a judgment by default, the
court should consider a number of factors which were identified by the Court of Appeals
in Eitel v. McCool.5 The factors include (1) possible prejudice to plaintiff, (2) the merits
of plaintiff’s claim, (3) sufficiency of plaintiff’s complaint, (4) the amount at stake,
(5) possibility that there is a dispute about material facts, (6) whether the entry of default
was due to excusable neglect, (7) and the policy favoring resolution of disputes on the
If a judgment were not entered, there would be prejudice to the United States,
because the record demonstrate that it has been attempting to collect taxes owed by
Mr. Davis for years, but the amount remaining unpaid is sizable. It would be prejudicial
to demand further effort and expense to collect what Mr. Davis owes. The first factor
supports entry of a default judgment.
As explained above, the evidence amply supports plaintiff’s claims, so the
second factor also weighs in favor of entering judgment. The complaint in this case is
detailed and clearly lays out the claims being litigated. Thus, the third factor is added to
the list favoring entry of judgment.
The amount of money sought by the United States is substantial, which raises
some concern about the entry of a default judgment. However, the amount sought is
limited to taxes owed with statutorily authorized additions arising from Mr. Davis’ failure
to pay. On balance, the fourth factor is consistent with the entry of default judgment.
Given the evidence in the record, and Mr. Davis’ failure to dispute the evidence,
there is no possibility that disputed material facts would emerge were the case taken to
trial. Thus, the fifth factor weighs in favor of entering judgment now. The default
entered was not entered because of some neglect by Mr. Davis for which there might be
an excuse. This court set aside the original default entered against Mr. Davis and gave
him an additional 14 days in which to answer the complaint.7 After Mr. Davis filed
782 F.2d 1470 (9th Cir. 1986).
Id., 782 F.2d at 1471-72.
Order at docket 22.
papers which were insufficient to serve as an answer to the complaint, the court gave
him an additional 28 days to file an answer.8 Mr. Davis did not do so. Thus, the sixth
factor weighs in favor of entering judgment. While the last factor, the policy favoring
resolution of disputes on the merits, always weighs against entry of default judgment, it
adds very little weight to the scales in the circumstances here. That is because the
plaintiff has produced persuasive evidence which Mr. Davis has failed to refute,
preferring to rely entirely on unsupportable assertions about applicable legal principles.
Finally, the court has not identified any other factor or consideration which would
warrant allowing this case to proceed further.
Having considered all of the relevant factors, the court concludes that entering
default judgment at this time is appropriate. With a judgment in hand, the United States
may be able to collect what Mr. Davis owes, a result which has eluded the government
for some years now.
For the reasons set out above, the motion at docket 40 is GRANTED. The
United States will please promptly lodge an appropriate form of judgment for the court’s
DATED this 8th day of August 2011.
/s/ JOHN W. SEDWICK
UNITED STATES DISTRICT JUDGE
Order at docket 29.
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