United States of America v. Weldon et al

Filing 29

STIPULATION and ORDER regarding lien priority between the United States, State of California Franchise Tax Board and the County of Fresno signed by District Judge Lawrence J. O'Neill on 4/10/2009. (Lundstrom, T)

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1 2 3 4 5 6 LAWRENCE G. BROWN United States Attorney ADAIR F. BOROUGHS Trial Attorneys, Tax Division U.S. Department of Justice P.O. Box 683, Ben Franklin Station Washington, D.C. 20044-0683 Telephone: (202)305-7546 E-mail: adair.f.boroughs@usdoj.gov Attorneys for the United States of America 7 8 9 UNITED STATES OF AMERICA, 10 Plaintiff, 11 v. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The United States of America, the California Franchise Tax Board ("FTB"), and County of Fresno, through their respective attorneys, hereby stipulate and agree as follows: 1. The parcel of real property located at located at 5915 West Clinton Avenue, Fresno, LOWELL D. WELDON, BESSIE L. WELDON, MIDLAND MORTGAGE COMPANY aka MIDFIRST BANK, STATE OF CALIFORNIA FRANCHISE TAX BOARD, COUNTY OF FRESNO, Defendants. STIPULATION AND PROPOSED ORDER REGARDING LIEN PRIORITY BETWEEN THE UNITED STATES, THE STATE OF CALIFORNIA FRANCHISE TAX BOARD AND THE COUNTY OF FRESNO Civil No. 1:08-cv-01643-LJO-SMS IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA California 93722 (referred to in the Complaint and herein as the "Clinton Property"), is situated in the County of Fresno, State of California, and is more particularly described as follows: The east half of the north half of the west 303.50 feet of Lot 4, Vista Bonita Tract, according to the map thereof, recorded November 17, 1914, in Book 7, Page 52 of Plats, in the Office of the County Recorder of Fresno County. 2. The parcel of real property located at 210 Oxford Avenue, Clovis, California 93612 (referred to in the Complaint and herein as the "Oxford Property"), is situated in the County of Fresno, State of California, and is more particularly described as follows: Lot 1 of Forest Park, in the City of Clovis, County of Fresno, State of California, 1 2 according to the map thereof recorded in Book 13, page 61 of Plats, in the office of the County Recorder of said County. 3. The parcel of real property located at 2490 South Holloway Avenue, Fresno, California 3 93725 (referred to in the Complaint and herein as the "Holloway Property"), is situated in the County of 4 Fresno, State of California, and is more particularly described as follows: 5 Lot 83 of Sequoia Village, Tract #1133, recorded in Plat book 14 page 91. 6 4. 7 and Holloway Property. 8 5. 9 delinquent personal property taxes. 10 6. 11 years listed below, creating state tax liens: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2Tax Year 2004 2005 2006 8. Assessment Date July 29, 2006 June 16, 2007 May 31, 2008 On the following dates, a duly authorized delegate of the Secretary of the Treasury made Tax Year 2000 2001 2002 2003 7. Assessment Date November 19, 2002 June 23, 2003 July 12, 2004 July 11, 2005 On the following dates, the FTB made tax assessments against Bessie Weldon, for the tax On the following dates, the FTB made tax assessments against Lowell Weldon, for the tax The County of Fresno also filed a lien against Bessie Weldon on September 22, 2005, for The County of Fresno has real property tax liens on the Clinton Property, Oxford Property, years listed below, creating state tax liens: assessments against Lowell D. Weldon for federal income taxes, penalties, interest, and other statutory additions for the tax years listed below, creating federal tax liens: 1 2 3 4 5 6 7 8 Tax Year 1997 1998 1999 2000 2001 2002 2003 9. Assessment Date March 22, 2004 March 22, 2004 March 22, 2004 March 22, 2004 March 22, 2004 December 20, 2004 January 9, 2006 On January 31, 2007, and again on March 7, 2007, the Internal Revenue Service ("IRS") 9 recorded Notices of Federal Tax Lien against Lowell D. Weldon with respect to his unpaid tax liabilities 10 for tax years 1997 through 2002 with the County Recorder, Fresno County. 11 10. 12 Weldon with respect to his unpaid federal tax liabilities for tax year 2003 with the County Recorder, 13 Fresno County. 14 11. 15 with respect to his unpaid state tax liabilities for tax years 2001 and 2002 with the County Recorder, 16 Fresno County. 17 12. 18 with respect to his unpaid state tax liabilities for tax years 2000 and 2003 with the County Recorder, 19 Fresno County. 20 13. 21 Weldon with respect to her unpaid state tax liabilities for tax year 2004 with the County Recorder, Fresno 22 County. 23 14. 24 a. Fresno County's real property tax liens are senior to and have priority over the United States' 25 federal tax liens, the FTB's state tax liens, and Fresno County's personal property tax lien; 26 27 28 -3The United States, the FTB and Fresno County agree as follows: On November 28, 2006, the FTB recorded a Notice of State Tax Lien against Bessie L. On May 23, 2006, the FTB recorded Notices of State Tax Lien against Lowell D. Weldon On April 19, 2005, the FTB recorded Notices of State Tax Lien against Lowell D. Weldon On July 23, 2007, the IRS recorded a Notice of Federal Tax Lien against Lowell D. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 b. The FTB's state tax liens against Lowell Weldon for tax years 2000 and 2001 are senior to and have priority over the United States' federal tax liens, Fresno County's personal property tax lien, and the remainder of the FTB's state tax liens; c. Fresno County's personal property tax lien is senior to and has priority over the United States' federal tax liens and the remainder of the FTB's state tax liens; d. The United States federal tax liens against Lowell Weldon for tax years 1997-2001 are senior to and have priority over the FTB's remaining state tax liens and the United States' remaining federal tax liens; e. The FTB's state tax lien against Lowell Weldon for tax year 2002 is senior to and has priority over the FTB's remaining state tax liens and the United States' remaining federal tax liens; f. The United States federal tax lien against Lowell Weldon for tax year 2002 is senior to and has priority over the FTB's remaining state tax liens and the United States' remaining federal tax liens; g. The FTB's state tax lien against Lowell Weldon for tax year 2003 is senior to and has priority over the FTB's remaining state tax liens and the United States' remaining federal tax liens; h. The United States federal tax lien against Lowell Weldon for tax year 2003 is senior to and has priority over the FTB's remaining state tax liens. 15. In the event that the Court permits the sale of Clinton Property, the property will be sold free and clear of all liens of record, with the liens to follow the proceeds of the sale in the same amount and with the same priority that they had against the Clinton Property. The Order of Judicial Sale shall provide that the sale proceeds shall be distributed first to the United States to the extent of its costs and expenses of the sale and then following the priority interests of the United States, the FTB and Fresno County established in the preceding paragraph (including principal and interest to the date of distribution, in an amount according to proof at that time). If the affected parties cannot stipulate to the amounts of lien, the Court may hold an evidentiary hearing to determine the amounts. 16. In the event that the Court permits the sale of Oxford Property, the property will be sold -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 free and clear of all liens of record, with the liens to follow the proceeds of the sale in the same amount and with the same priority that they had against the Oxford Property. The Order of Judicial Sale shall provide that the sale proceeds shall be distributed first to the United States to the extent of its costs and expenses of the sale and then following the priority interests of the United States, the FTB and Fresno County established in Paragraph 14 (including principal and interest to the date of distribution, in an amount according to proof at that time). If the affected parties cannot stipulate to the amounts of lien, the Court may hold an evidentiary hearing to determine the amounts. 17. In the event that the Court permits the sale of Holloway Property, the property will be sold free and clear of all liens of record, with the liens to follow the proceeds of the sale in the same amount and with the same priority that they had against the Holloway Property. The Order of Judicial Sale shall provide that the sale proceeds shall be distributed first to the United States to the extent of its costs and expenses of the sale and then following the priority interests of the United States, the FTB and Fresno County established in Paragraph 14 (including principal and interest to the date of distribution, in an amount according to proof at that time). If the affected parties cannot stipulate to the amounts of lien, the Court may hold an evidentiary hearing to determine the amounts. 18. The United States, the FTB and Fresno County agree to bear their respective costs related to this litigation, including any possible attorney's fees. 19. The FTB and Fresno County have been named as defendants under 26 U.S.C. 7403(b). The United States claims no monetary relief against the FTB or Fresno County in this action. Unless otherwise ordered by the Court, the FTB and Fresno County are excused from further participation in this action, appearing in Court, or otherwise asserting its claim in this case. The FTB and Fresno County agree to be bound by the judgment in this case, which shall incorporate the terms of this stipulation and order. // // // -5- 1 2 3 The parties so agree and request an order confirming the foregoing. Dated: April 10, 2009 4 5 6 7 8 9 10 Dated: April 3, 2009 By: /s/ Adair Boroughs ADAIR BOROUGHS Trial Attorney, Tax Division U.S. Department of Justice Attorney for the United States By: /s/ William F. Mar, Jr. (as authorized on 4/3/09) WILLIAM F. MAR, JR. Senior Deputy County Counsel County of Fresno Attorney for Fresno County 11 12 Dated: April 7, 2009 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6IT IS SO ORDERED. Dated: 66h44d April 10, 2009 /s/ Lawrence J. O'Neill UNITED STATES DISTRICT JUDGE By: /s/ Jeffrey A. Rich (as authorized on 4/7/09) JEFFREY A. RICH Deputy Attorney General California Department of Justice Attorney for the California Franchise Tax Board

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