USA v. Ashcroft Homes Corp. et al
Filing
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ORDER granting 30 Defendants Timothy J. Russell and Anita L. Russells Motion for Clarification of Order of Judgment Against Defendant Ashcroft Homes Corporation. The Court will amend its Order of Judgment Against Defendant Ashcroft Homes Corporat ion ECF No. 28 , 29 in a separate written order; Pursuant to that Amended Order, the Court DIRECTS the Clerk of Court to reinstate Defendant Ashcroft Homes Corporation as a Party-Defendant in this action (by undoing its termination from this action on November 30, 2011); and The Courts Order to Show Cause ECF No. 33 is DISCHARGED. by Judge William J. Martinez on 12/20/2011.(ervsl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-02278-WJM-KLM
UNITED STATES OF AMERICA,
Plaintiff,
v.
ASHCROFT HOMES CORP.,
ANITA L. RUSSELL,
TIMOTHY J. RUSSELL,
USAA FEDERAL SAVINGS BANK, and
FIRST HORIZON HOME LOAN CORP.
Defendants.
_____________________________________________________________________
ORDER GRANTING MOTION FOR CLARIFICATION
AND DISCHARGING ORDER TO SHOW CAUSE
_____________________________________________________________________
This matter is before the Court on Defendants Timothy J. Russell and Anita L.
Russell’s (“the Russells”) Motion for Clarification (ECF No. 30) of the Court’s Order of
Judgment Against Defendant Ashcroft Homes Corporation (ECF No. 28), and Plaintiff
United States of America’s (“United States”) Response (ECF No. 39) to this Court’s
Order to Show Cause (ECF No. 33.)
I. BACKGROUND
In the United States’ First Amended Complaint (“the Complaint”), it brought two
claims for relief. (ECF No. 6.) Count I sought to reduce to judgment federal tax
liabilities assessed against former Defendant Ashcroft Homes Corporation (“Ashcroft
Homes”). (Id. at 5-7.) Count II sought to foreclose on the United States’ federal tax lien
against a property located at 560 Paisley Drive, Colorado Springs, Colorado, 80906
(“the Subject Property”), because the United States’ lien allegedly “attaches to all
property and rights to property of Ashcroft Homes, including the Subject Property.” (Id.
at 7-8.) The other named defendants also allegedly currently have, or previously had,
some interest in the Subject Property.
On November 28, 2011, the United States and Ashcroft Homes filed a Stipulation
for Judgment, in which Ashcroft Homes stipulated to entry of judgment against it and in
favor of the United States on Count I in the amount of $286,093.92. (ECF No. 27, ¶ 12.)
The Stipulation also provided that Ashcroft Homes “does not oppose the relief sought in
Count Two of the [operative complaint], which seeks to foreclose federal tax liens on the
Subject Property.” (ECF No. 27, ¶ 14.) Pursuant to the Stipulation, the Court approved
those parties’ proposed order, entered judgment against Ashcroft Homes on Count I,
and also entered judgment “against Ashcroft Homes and in favor of the United States
on Count Two” (“the Order of Judgment”) (ECF No. 28.) Pursuant to the Order of
Judgment, Ashcroft Homes was terminated as a defendant in this action.
II. MOTION FOR CLARIFICATION
On December 5, 2011, the Russells (who allegedly currently live at the Subject
Property) filed their Motion for Clarification, seeking clarification of the Order of
Judgment as to Count II, because they dispute whether the United States has a federal
tax lien that validly attaches to the Subject Property. (ECF No. 30). In the Motion for
Clarification, the Russells argue that Ashcroft Homes “has no present interest in the
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Subject Property and, according to the recorded chain of title relative to the Subject
Property, Ashcroft Homes Corporation has never had a record title interest in the
Subject Property.” (Id. ¶ 5.) Defendant USAA Savings Bank has filed a Notice of
Concurrence with the Motion for Clarification (ECF No. 37), and Defendant First Horizon
Home Loan Corp. has joined in the Motion for Clarification (ECF No. 40, ¶ 5.)
In the United States’ brief and supplemental brief in opposition to the Motion for
Clarification, the United States argues, inter alia, that (1) despite the Order of Judgment
as to Count I, Ashcroft Homes has not paid the amounts owed on the federal tax
liabilities; (2) the Order of Judgment as to Count II only applies to Ashcroft Homes, and
not to the other defendants in the action; (3) the United States is not entitled to an order
authorizing a foreclosure sale until the Court reaches a final adjudication as to the rights
and interests of all parties in this action; and (4) in a separate quiet title action brought
by the Russells against the United States, the Tenth Circuit Court of Appeals
conclusively determined that the United States’ federal tax liens against the Subject
Property are valid, see Russell v. United States, 551 F.3d 1174 (10th Cir. 2008). (ECF
No. 31, 38.)
The Court appreciates the parties’ efforts to more fully inform it of the allegations
underlying this action, the parties’ positions, and the action’s current posture. It appears
that a factual dispute exists between the parties as to whether Ashcroft Homes ever had
an interest in the Subject Property that would warrant the imposition of a lien on the
Subject Property based on Ashcroft Homes’ federal tax liabilities. The Court does not
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find it necessary or appropriate to resolve that issue at this early stage of the
proceedings. At a later date in these proceedings (following discovery), the Court will
be in a better position to resolve that question, and at that time will consider the
potential preclusive effect of the Tenth Circuit’s order in Russell, 551 F.3d 1174.
However, under the hypothetical scenario that Ashcroft Homes never had any
interest in the Subject Property, it is unclear whether the United States’ claim on Count
II of the Complaint would have any merit. Under the hypothetical scenario that the
United States’ claim on Count II lacks merit, any judgment in favor of the United States
on Count II would be improper. Therefore, at this early stage of the proceedings, the
Court determines that the proper and prudent course is to return to the status quo ante
as to Count II of the Complaint. In a separate written order, the Court will amend its
Order of Judgment against Ashcroft Homes so that judgment will only be entered
against Ashcroft Homes as to Count I of the Complaint. Ashcroft Homes therefore
remains a defendant in this action based on the United States’ claim against Ashcroft
Homes on Count II of the Complaint. Nothing in this Order precludes the United States
from moving, at a later date, to enter judgment against Ashcroft Homes on Count II of
the Complaint. The Court presumes that it will be appropriate to adjudicate the rights
and interests of all parties to this action as to Count II of the Complaint at the same
time.
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III. ORDER TO SHOW CAUSE
After receiving the Russell’s Motion for Clarification, this Court ordered the United
States to show cause (1) why the Court should not issue a preliminary injunction
precluding the United States from initiating any attempt to foreclose its federal tax lien
against the Subject Property, and (2) why this action should not be dismissed as to the
remaining defendants in the action. In its Response, the United States has shown good
cause as to both issues, for the reasons explained supra. Therefore, the Court
discharges its Order to Show Cause.
IV. CONCLUSION
In accordance with the foregoing, the Court ORDERS as follows:
(1)
Defendants Timothy J. Russell and Anita L. Russell’s Motion for
Clarification of Order of Judgment Against Defendant Ashcroft Homes
Corporation (ECF No. 30) is GRANTED;
(2)
The Court will amend its Order of Judgment Against Defendant Ashcroft
Homes Corporation (ECF No. 28, 29) in a separate written order;
(3)
Pursuant to that Amended Order, the Court DIRECTS the Clerk of Court
to reinstate Defendant Ashcroft Homes Corporation as a Party-Defendant
in this action (by undoing its termination from this action on November 30,
2011); and
(4)
The Court’s Order to Show Cause (ECF No. 33) is DISCHARGED.
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Dated this 20th day of December, 2011.
BY THE COURT:
_________________________
William J. Martínez
United States District Judge
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