United States of America v. Wanland

Filing 106

ORDER signed by District Judge Kimberly J. Mueller on 8/28/2017 DENYING 99 Motion for Relief under Rules 59(e) and 60(b)(4) and GRANTING 99 Motion for Relief under Rule 60(b)(1). The Court VACATES the 97 Order Adopting Findings and Recommendations and the 76 Motion for Summary Judgment is REMANDED to the Magistrate Judge for reconsideration in light of defendant's declaration. CASE REOPENED. (Donati, J)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10
11

UNITED STATES OF AMERICA,

12

Plaintiff,

13
14

No. 2:13-cv-02343-KJM-KJN

v.

ORDER

DONALD M. WANLAND, JR.,

15

Defendant.

16
17
Pro se defendant Donald Wanland was held liable for tax evasion, and this court

18
19

granted judgment in favor of plaintiff the United States against Wanland for $1,065,493.30, plus

20

any statutory interest. ECF Nos. 97, 98. Defendant now moves the court to reconsider this

21

judgment under Federal Rule of Civil Procedure 59(e), or to set aside the judgment under Rule

22

60(b). Mot., ECF No. 99. The motion was submitted without oral argument. ECF No. 105. For

23

reasons explained below, the court GRANTS defendant’s motion in part, and DENIES

24

defendant’s motion in part.

25

I.

BACKGROUND

26

The United States commenced this civil action against defendant, seeking a

27

determination under 11 U.S.C. § 523(a)(1)(C) that assessments for defendant’s federal tax

28

liabilities for tax years 1996, 1997, 1998, 2000, 2001, 2002 and 2003 were not discharged in
1

1

bankruptcy. See generally Compl. ECF No. 1. The United States also sought to reduce the tax

2

assessments to judgment. Id. After this court adopted findings and recommendations and denied

3

defendant’s motion to dismiss, ECF No. 27, plaintiff filed a motion for summary judgment, Mot.

4

Summ. J. (MSJ), ECF No. 76. On December 5, 2016, the magistrate judge filed findings and

5

recommendations recommending this court grant plaintiff’s motion for summary judgment.

6

Findings and Recommendations (F&R), ECF No. 90. This court adopted the findings and

7

recommendations on March 28, 2017, ordered defendant to pay the United States

8

“$1,065,493.30,” and closed the case. ECF No. 97. On April 25, 2017, defendant moved for

9

reconsideration of the court’s decision, and alternatively, to amend the judgment. Mot. The

10

United States opposed. Opp’n, ECF No. 102. Defendant replied. ECF No. 104.

11

II.

12
13
14

DISCUSSION
A.

Legal Standards
Defendant moves for reconsideration under Rule 59(e), or in the alternative to

vacate judgment under Rules 60(b)(1) and 60(b)(4). Mot. at 4, 19, 20.

15

1,

16

A Rule 59(e) motion is an “extraordinary remedy, to be used sparingly in the

Rule 59(e)

17

interests of finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of

18

Bishop, 229 F.3d 877, 890 (9th Cir. 2000). A district court may grant a Rule 59(e) motion if it

19

“‘is presented with newly discovered evidence, committed clear error, or if there is an intervening

20

change in the controlling law.’” McDowell v. Calderon, 197 F.3d 1253, 1255 (9th Cir. 1999)

21

(en banc) (quoting 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)). A

22

Rule 59(e) motion may not be used to raise arguments or present evidence for the first time when

23

they could reasonably have been raised earlier in the litigation. Kona, 229 F.3d at 890.

24

2.

25

Under Rule 60(b), the court may relieve a party or its legal representative from a

26
27

Rule 60(b)

final judgment, order or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;

28
2

1
2
3

(2) newly discovered evidence that, with reasonable diligence,
could not have been discovered in time to move for a new trial
under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;

4
(4) the judgment is void;
5
6

(5) the judgment has been satisfied, released, or discharged; it is
based on an earlier judgment that has been reversed or vacated; or
applying it prospectively is no longer equitable; or

7
(6) any other reason that justifies relief.
8
9

Fed. R. Civ. P. 60(b). Here, defendant requests relief from judgment due to “excusable neglect,”

10

Mot. at 19 (citing Rule 60(b)(1)), and because he says the judgment is void, Mot. at 20 (citing

11

Rule 60(b)(4)).

12

In assessing “excusable neglect” under Rule 60(b)(1), the court must apply a four-

13

factor equitable test, examining: “(1) the danger of prejudice to the opposing party; (2) the length

14

of the delay and its potential impact on the proceedings; (3) the reason for the delay; and

15

(4) whether the movant acted in good faith.” Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253,

16

1261 (9th Cir. 2010) (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S.

17

380, 395 (1993); Briones v. Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir. 1997) (adopting

18

this test for consideration of Rule 60(b) motions)). This assessment is known as the

19

“Pioneer/Briones equitable balancing test.” Id. Courts engaged “in balancing the Pioneer/

20

Briones factors may not apply per se rules.” See id. (district court crafted an “impermissabl[e] . . .

21

per se rule” in concluding, without analysis, that “a calendaring mistake is the type of ‘inadvertent

22

mistake’ that is not entitled to relief pursuant to Rule 60(b)(1).”).

23

As Rule 60(b)(4) suggests, a court may relieve a party from a final judgment if

24

“the judgment is void.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010).

25

“[A] void judgment is one so affected by a fundamental infirmity that the infirmity may be raised

26

even after the judgment becomes final.” Id. Such infirmities are extremely rare, as they must be

27

premised on “a certain type of jurisdictional error or on a violation of due process that deprives a

28

party of notice or the opportunity to be heard.” Dietz v. Bouldin, 794 F.3d 1093, 1096 (9th Cir.
3

1

2015). Judgments are generally considered void for jurisdictional defects only when “the court

2

that rendered judgment lacked even an ‘arguable basis’ for jurisdiction.” Whitsitt v. City of

3

Tracy, No.10–00528, 2016 WL 1357566, at *4 (E.D. Cal. Apr. 6, 2016) (citing Nemaizer v.

4

Baker, 793 F.2d 58, 65 (2d Cir. 1986)). With these standards in mind, the court assesses

5

defendant’s contentions below.

6

B.

Rule 59(e) Arguments

7

Defendant raises three arguments for relief under Rule 59(e): (1) the magistrate

8

judge committed “clear error” in denying defendant an opportunity to present oral argument at

9

summary judgment, Mot. at 4; (2) the magistrate judge committed “clear error” in incorrectly

10

applying the doctrine of offensive collateral estoppel, id. at 5; and (3) the magistrate judge

11

committed “clear error” in denying his request to stay proceedings pending the outcome of the

12

criminal case and to allow for additional discovery, id. 15–17. The latter point in effect argues

13

this court committed error as well, in adopting the findings and recommendations.

14

In response to the first argument, plaintiff contends no oral argument is required.

15

Opp’n at 3. In response to arguments two and three, plaintiff contends because the magistrate

16

judge rejected these arguments “at least once already in the course of this action,” there is “no

17

good reason to revisit them now.” Opp’n at 4. Before considering the merits of defendant’s

18

argument, a discussion of “clear error” is warranted.

19

1.

20

“Clear error” occurs when “the reviewing court on the entire record is left with the

Clear Error

21

definite and firm conviction that a mistake has been committed.” Smith v. Clark Cty. Sch. Dist.,

22

727 F.3d 950, 955 (9th Cir. 2013). However, a district court does not commit clear error

23

warranting reconsideration when the question before it is a debatable one. See McDowell v.

24

Calderon, 197 F.3d 1253, 1256 (9th Cir. 1999) (district court did not abuse discretion in denying

25

reconsideration where it was debatable whether court could enter protective order in habeas

26

action limiting Attorney General’s use of documents from trial counsel’s file). The Ninth Circuit

27

has held it is not an abuse of discretion to deny a motion for reconsideration merely because the

28
4

1

underlying order is “erroneous,” rather than “clearly erroneous.” Id. at 1255 n.4. To obtain relief

2

here, defendant must convince this court, beyond debate, that a mistake “has been committed.”

3

2.

4

A district court may not, by rule or otherwise, preclude a party from requesting

5

oral argument, nor deny such a request when made by a party opposing a motion for summary

6

judgment unless the motion is denied. Dredge Corp. v. Penny, 338 F.2d 456, 462 (9th Cir. 1964).

7

However, an opportunity to be heard orally on questions of law “is not an inherent element of

8

procedural due process, even where substantial questions of law are involved.” Id. at 462 n.14;

9

accord Burchett v. Cardwell, 493 F.2d 492, 495 (9th Cir. 1974) (referencing Dredge in habeas

Oral Argument

10

context). In any event, “the right of oral argument as a matter of procedural due process . . .

11

varies from case to case in accordance with differing circumstances.” Dredge Corp., 338 F.2d at

12

462 n.14.

13

Here, in opposing plaintiff’s motion for summary judgment, defendant requested

14

oral argument. See MSJ Opp’n at 9, ECF No. 83. The magistrate judge, however, submitted the

15

motion without oral argument. See F&R 1 n.2. In moving for summary judgment, plaintiff

16

requested the court make a determination, under 11 U.S.C. § 523(a)(1)(C), of assessments of

17

defendant’s tax liabilities for several tax years not discharged in bankruptcy, specifically 1996,

18

1997, 1998, 2000, 2001, 2002 and 2003. Id. at 2; MSJ at 2. Plaintiff also sought to reduce the tax

19

assessments to judgment. F&R at 2; MSJ at 2. Plaintiffs’ claims were inherently legal in nature

20

and resolution required little to no assessment of whether material facts were disputed. See F&R

21

at 10 (magistrate judge assessing “whether a particular exception to the general discharge applies”

22

(citing 11 U.S.C. § 523(a)(1)(C)). Where the magistrate judge did make factual determinations, he

23

reported that “defendant has not produced any controverting evidence,” and “the record before

24

the court reveal[ed] no genuine dispute” regarding defendant’s tax liability. F&R at 13. While

25

the court addresses the reliance on absence of controverting evidence below in its analysis of the

26

Rule 60(b) motion, defendant has not shown any prejudice flowing from the court’s denial of oral

27

argument; no oral argument was warranted because it would not have made a difference. See

28

Mahon v. Credit Bureau of Placer Cty. Inc., 171 F.3d 1197, 1200 (9th Cir. 1999) (no oral
5

1

argument warranted where “[b]oth parties provided the district court with complete memoranda

2

of the law and evidence in support of their respective positions,” and “[t]he only prejudice

3

[defendants] contend they suffered was the district court’s adverse ruling on the motion.”);

4

Houston v. Bryan, 725 F.2d 516, 518 (9th Cir. 1984) (relief from denial of oral argument

5

unwarranted absent a showing of prejudice). Defendant’s first argument does not afford relief.

6

3.

7

“[O]ffensive use of collateral estoppel occurs when the plaintiff seeks to foreclose

Offensive Collateral Estoppel

8

the defendant from litigating an issue the defendant has previously litigated unsuccessfully in an

9

action with another party.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.4 (1979); accord

10

Pena v. Gardner, 976 F.2d 469, 472 (9th Cir. 1992). Offensive collateral estoppel may be used

11

when: (1) there was a full and fair opportunity to litigate the issue in the previous action; (2) the

12

issue was actually litigated in that action; (3) the issue was lost as a result of a final judgment in

13

that action; and (4) the person against whom collateral estoppel is asserted in the present action

14

was a party or in privity with a party in the previous action. Pena, 976 F.2d at 472 (citing

15

CHARLES A. WRIGHT, LAW OF FEDERAL COURTS 682–85 (4th ed. 1983); Parklane Hosiery, 439

16

U.S. at 329)).

17

Here, plaintiff’s civil case alleged defendant attempted to evade taxes for the years

18

1996 to 1998 and 2000 to 2003. MSJ at 2; see Compl. at 2. The criminal proceedings brought

19

against defendant, however, pursued only charges for attempting to evade taxes for years 2000 to

20

2003. See Superseding Indictment 1, ECF No. 57-16; but see ECF No. 67-1 at 22 (tax levy

21

specifically referenced in indictment detailing tax years 1996, 1997, 1998, and 2000 to 2003). In

22

light of this tactical difference in pleading as opposed to charging, the magistrate judge explicitly

23

declined to reach the merits of the collateral estoppel issue and assumed without deciding the

24

doctrine of offensive collateral estoppel could not be applied with respect to the 1996 to 1998

25

taxes. F&R at 13. Instead, he relied on the evidence in the record, concluding there was “no

26

genuine dispute that defendant also willfully attempted to evade or defeat payment of his 1996–

27

1998 taxes.” Id. Accordingly, that plaintiff did not provide the requisite showing for offensive

28

collateral estoppel to apply for years 1996 to 1998 was of no import; the magistrate judge granted
6

1

plaintiff’s motion for alternative reasons, namely, that there was “no genuine dispute that

2

defendant also willfully attempted to evade or defeat payment of his 1996–1998 taxes.” Id.

3

Defendant’s second argument does not warrant relief.

4

4.

5

Defendant also contends the magistrate judge committed “clear error” in denying a

Request to Stay Proceedings

6

request for stay (1) pending the outcome of his criminal appeal, and (2) to allow for additional

7

discovery. Mot. at 15–17.

8
9

Regarding the first argument, defendant contends the magistrate judge should have
held off pending full completion of the criminal case, including awaiting resolution of any

10

petition for certiorari to the Supreme Court. Id. at 16. In December 2016, the magistrate judge

11

rejected defendant’s request for a stay after the Ninth Circuit earlier in the year had “affirmed the

12

judgment in defendant’s criminal case in all respects,” denied defendant’s petitions for panel

13

rehearing and rehearing en banc, and issued its mandate. F&R at 5; see also United States v.

14

Donald M. Wanland, Jr., Case No. 2:09-cr-8-LKK, ECF Nos. 263, 266, 301–03, 335–37

15

(mandate issued October 25, 2016). In other words, the magistrate judge awaited full resolution

16

in the Ninth Circuit before rejecting defendant’s request to stay.

17

Declining a stay to await a Supreme Court ruling, if a ruling is available, is not

18

“clear error.” On the contrary, the Ninth Circuit has held “once a federal circuit court issues a

19

decision, the district courts within that circuit are bound to follow it and have no authority to

20

await a ruling by the Supreme Court before applying the circuit court’s decision as binding

21

authority.” Yong v. I.N.S., 208 F.3d 1116, 1119 n.2 (9th Cir. 2000). Defendant’s first argument

22

regarding a stay is unavailing.

23

Defendant’s second argument also fails. Defendant contends he needed additional

24

discovery to make up for plaintiff’s “manifest discovery abuses.” Mot. at 17. Plaintiff was

25

sanctioned for its failure to adhere to its discovery obligations, and defendant was granted a

26

limited discovery extension. F&R at 5; see ECF No. 68 (magistrate judge ordered plaintiff’s

27

counsel to pay a monetary fine for discovery abuses). Defendant had not shown he was

28

ultimately prejudiced by the United States’ discovery misconduct in light of the relief he
7

1

obtained, so even further discovery was not warranted. F&R at 5; see generally Mot. His second

2

argument regarding a stay does not provide a basis for relief.

3

5.

4

Defendant has not shown any of his Rule 59(e) contentions warrant relief.

5

Summary

Accordingly, the court proceeds to his arguments based on Rule 60(b).

6

C.

Rule 60(b) Arguments

7

Defendant raises two arguments for relief under Rule 60(b): (1) his conduct

8

qualifies as “excusable neglect” because pending criminal proceedings precluded him from

9

raising a material dispute of fact in opposition to plaintiff’s motion for summary judgment, Mot.

10

at 19 (citing Rule 60(b)(1)); and (2) the magistrate judge’s findings and recommendations were

11

void upon issuance because the court lacked jurisdiction over plaintiff’s claims, Mot. at 20–21

12

(citing Rule 60(b)(4)). In response to the first argument, plaintiff contends defendant’s inability

13

to raise a triable issue of fact was attributed to a “strategic choice to withhold testimony,” and

14

thus does not fall within the ambit of “excusable neglect.” Opp’n at 4–5. Regarding the second

15

argument, plaintiff relies on the magistrate judge’s findings and recommendations, see Opp’n at 6

16

(citing F&R at 5–8), as discussed in more detail below.

17

1.

18

A brief explanation of defendant’s contention in this regard is warranted.

Excusable Neglect

19

Defendant concedes he failed to raise a material dispute of fact regarding plaintiff’s claim that he

20

attempted to evade taxes for the years 1996 to 1998. Mot. at 20. He argues, however, because of

21

pending criminal proceedings against him for tax evasion, he could not adequately oppose

22

plaintiff’s motion for summary judgment without compromising his Fifth Amendment privilege

23

against self-incrimination. Id. As noted above, the court assesses defendant’s claim under the

24

“Pioneer/Briones equitable balancing test,” evaluating “(1) the danger of prejudice to the

25

opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the

26

reason for the delay; and (4) whether the movant acted in good faith.” Ahanchian, 624 F.3d at

27

1261.

28
8

1

a)

Reason for Delay

2

For logical flow, the court assesses the third Pioneer/Briones factor first. This

3

prong considers defendant’s excuse for his failure to “file [needed information] on time,” and

4

assesses the excuse for reasonableness. Washington v. Ryan, 833 F.3d 1087, 1098 (9th Cir. 2016)

5

(“simply miscalculat[ing] the date for a [notice of appeal]” and filing one day late was “excusable

6

negligence.”). Defendant contends he could not present opposing evidence without

7

compromising his Fifth Amendment right against self-incrimination. Mot. at 19–20. He

8

presented this argument on several occasions throughout the case, including in his motion to

9

dismiss plaintiff’s complaint, ECF No. 17 at 6, objections to the magistrate judge’s findings and

10

recommendations to deny his motion to dismiss, ECF No. 25 at 3, his opposition to plaintiff’s

11

motion for summary judgment, see MSJ Opp’n at 37, objections to the magistrate judge’s

12

findings and recommendations to grant plaintiff’s motion for summary judgment, ECF No. 93 at

13

4, and the instant motion to vacate the judgment, Mot. at 4. In this motion, he contends the

14

magistrate judge’s grant of summary judgment for plaintiff erroneously overlooked potential

15

disputes of fact. Id.

16

The Fifth Amendment privilege against self-incrimination can be asserted in any

17

proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory, in which a

18

person reasonably believes the information sought, or discoverable as a result of his testimony,

19

could be used in a state or federal criminal proceeding. United States v. Balsys, 524 U.S. 666,

20

672 (1998) (citing Kastigar v. United States, 406 U.S. 441, 444–45 (1972)). The privilege

21

reflects a “complex of our fundamental values and aspirations, and marks an important advance in

22

the development of our liberty.” Kastigar, 406 U.S. at 444–45. Federal courts have been

23

“zealous to safeguard the values which underlie the privilege,” and thus should carefully consider

24

a person’s inability to produce testimony when such inability is linked to a reasonable fear of

25

prosecution. Id.

26

Here, plaintiff filed its motion for summary judgment on May 2, 2016. MSJ.

27

Under the court’s briefing deadlines, opposition briefs were due June 16, 2016, with reply briefs

28

due July 14, 2016. ECF No. 68. In compliance with court deadlines, defendant filed his
9

1

opposition on June 16, 2016. MSJ Opp’n. At the time, defendant was still mired in criminal

2

proceedings; defendant was convicted on September 26, 2013, Case No. 2:09-cr-8-LKK, ECF

3

No. 263, the Ninth Circuit would not affirm judgment in his criminal case until July 27, 2016, and

4

defendant’s subsequent request for panel rehearing and rehearing en banc would not be denied

5

until October 14, 2016, several months after his opposition was due. In light of the pending

6

appeal, defendant had reason to believe what he said in the civil proceeding could be used against

7

him in the pending criminal proceeding and he raised this issue before the magistrate judge on

8

several occasions. See ECF Nos. 17 at 6, 25 at 3; see also ECF No. 83 at 37 (“Defendant is faced

9

with the Hobbesian Choice of waiving his Fifth Amendment privilege now to present admissible

10

evidence to contradict the government's evidence in regard to the alleged assessments or maintain

11

the privilege and decline to present his rebuttal declaration on the merits.”). That his case was on

12

appeal before the Ninth Circuit following conviction did not make his fear of prosecution any less

13

reasonable. See e.g., United States v. Duchi, 944 F.2d 391, 394 (8th Cir. 1991) (“Government

14

may not convict a person and then, pending his appeal, compel him to give self-accusatory

15

testimony relating to the matters involved in the conviction”) (citing Frank v. United States, 347

16

F.2d 486, 441 (D.C.Cir. 1965)); Taylor v. Best, 746 F.2d 220, 222 (4th Cir. 1984) (“[I]t is

17

possible that post-conviction incriminating evidence could be used against an inmate who had

18

been convicted and sentenced but whose conviction was being appealed.”); Mills v. United States,

19

281 F.2d 736, 741 (4th Cir. 1960) (“Witness could not be compelled to testify where “at the time

20

of these proceedings in the case at bar, the period within which [witness] could prosecute an

21

appeal of her own conviction had not expired.”); see also MCCORMICK ON EVID. § 121 (7th ed.

22

2016) (“If direct appeal from a conviction is pending or remains available, a convicted defendant

23

might, despite his conviction, harbor hope that his conviction will be reversed on appeal and that

24

any disclosures he makes would be used to incriminate him upon any retrial that follows.

25

Because of this possibility, the courts have generally held that a convicted defendant retains the

26

protection of the privilege until appeal is exhausted or until the time for appeal expires.”). This

27

factor favors granting relief.

28
10

1

b)

2

Length of Delay and Potential Impact on the Judgment

This second factor considers whether relief would amount to a “disruption to

3

efficient judicial administration posed by the late filings.” Pioneer Inv. Servs. Co., 507 U.S. at

4

397. “Late filings” include those made after entry of judgment. Briones v. Riviera Hotel &

5

Casino, 116 F.3d 379, 380 (9th Cir. 1997). The reason for defendant’s late filing is uncontested:

6

there was a pending criminal appeal reasonably precluding him from presenting an adequate

7

defense in the civil proceeding. Within a month of the Supreme Court’s denying a writ of

8

certiorari, defendant promptly filed a motion to amend the judgment, thereby lessening the chance

9

of disruption to efficient judicial administration. See Briones, 116 F.3d at 382 (Under Rule

10

60(b)(1), filing opposition to motion for summary judgment three and one-half months after

11

deadline could constitute excusable neglect). This factor favors granting relief.

12

c)

13

Danger of Prejudice

This first factor considers the potential prejudice to plaintiff if the court grants

14

defendant’s request for relief. Pioneer Inv. Servs. Co., 507 U.S. at 397; Ryan, 833 F.3d at 1098.

15

Here, the court finds the danger of prejudice to be insubstantial. Plaintiff and the court have been

16

on notice of defendant’s desire to challenge the civil case on its merits once criminal proceedings

17

ended. Indeed, as noted above, throughout the civil case, defendant repeatedly contended he

18

could not produce evidence in opposition to plaintiff’s claims until his reasonable fear of criminal

19

prosecution abated. See MSJ Opp’n at 8; Obj. to MSJ F&R at 4, ECF No. 93. Plaintiff will not

20

be prejudiced if its claim is assessed on the merits, particularly given the court’s strong tradition

21

of favoring such resolution. See Ryan, 833 F.3d at 1098 (Rule 60(b)(4) relief warranted where

22

state had been on notice of opposing party’s contentions, even if untimely filed); see also

23

Andrews v. PRIDE Indus., No.14–02154, 2017 WL 119803, at *7 (E.D. Cal. Jan. 12, 2017) (In

24

absence of opposition to defendant’s motion for summary judgment on plaintiff’s federal and

25

state civil rights claims, the court takes “care to consider the merits.”). This factor favors granting

26

relief.

27
28
11

1
2
3

d)

No one contends defendant did not move to vacate the judgment in good faith, and
the record does not otherwise make any such showing. This factor favors granting relief.

4
5

Good Faith

e)

Summary

On balance, the court finds defendant’s failure to present evidence in opposition to

6

plaintiff’s motion for summary judgment falls under the rubric of “excusable neglect.”

7

Accordingly, the court vacates the judgment in this case under Rule 60(b)(4) and remands the

8

matter to the magistrate judge to reassess plaintiff’s motion for summary judgment, taking into

9

consideration defendant’s declaration filed after his criminal proceedings were finally resolved.

10

The magistrate judge in his discretion may of course set a new briefing schedule or schedule any

11

proceedings he deems necessary to resolve the matter in light of this order.

12

2.

13

Defendant also contends this court lacks jurisdiction over this matter because: (1)

Judgment Void

14

the action was not properly authorized; and (2) defendant’s prior bankruptcy proceeding

15

precluded this case under the doctrine of res judicata. Mot. at 20–21.

16

Defendant’s first contention is belied by the record; official letters attached to the

17

December 18, 2015 declaration of W. Carl Hankla, counsel for the United States, demonstrate the

18

action was authorized by appropriate delegates of the Secretary of the Treasury and the Attorney

19

General of the United States. ECF No. 67, Exs. 1, 2; Palmer v. United States Internal Revenue

20

Service, 116 F.3d 1309, 1311 (9th Cir. 1997) (“The government has produced redacted copies of

21

two letters, which taken together, show that the government complied with these statutory

22

requirements” that “civil actions for the collection of taxes and enforcement of liens be instituted

23

at the direction of delegates of the Attorney General and the Secretary of the Treasury.”).

24

Defendant’s second contention is similarly unavailing. His bankruptcy discharge, authorized

25

under 11 U.S.C. § 727, “did not discharge an individual debtor from any debt—for a tax . . . with

26

respect to which the debtor made a fraudulent return or willfully attempted in any manner to

27

evade or defeat such tax . . .” under 11 U.S.C. § 523(a)(1)(C), the statute undergirding plaintiff’s

28

civil claim. See Compl. at 6 (requesting that “the Court find, determine, and adjudge that,
12

1

pursuant to 11 U.S.C. § 523(a)(1)(C), Wanland’s tax debts are excepted from discharge in his

2

Chapter 7 bankruptcy case because Wanland willfully attempted to evade or defeat payment of

3

such tax.”). The court does not grant relief based on voidness.

4

III.

SUMMARY AND CONCLUSION

5

The court DENIES defendant’s motion for relief under Rules 59(e) and 60(b)(4).

6

The court, however, GRANTS relief under Rule 60(b)(1). The case is REOPENED, this court’s

7

order adopting the magistrate judge’s findings and recommendations is hereby VACATED, and

8

proceedings on summary judgment are REMANDED to the magistrate judge for reconsideration

9

in light of defendant’s declaration filed at ECF No. 99.

10

This Order resolves ECF No. 99.

11

IT IS SO ORDERED.

12

DATED: August 28, 2017.

13
14

UNITED STATES DISTRICT JUDGE

15
16
17
18
19
20
21
22
23
24
25
26
27
28
13