United States of America v. Welch et al

Filing 115

ORDER granting The United States' 114 Motion for Order of Foreclosure and Sale. This Order of Foreclosure and Sale is entered pursuant to the provisions of 28 U.S.C. §§ 2001 and 2002 and 26 U.S.C. §§ 7402 and 7403. By Judge Christine M. Arguello on 07/28/2014. (athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 11-cv-02292-CMA-KLM
UNITED STATES OF AMERICA,
Plaintiff,
v.
JAMES D. WELCH,
AMRA WELCH, as nominee/alter ego of James D. Welch,
JAMES D. WELCH, as Executive Trustee of Celestial Pursuits Trust, and
CIT GROUP/EQUIPMENT FINANCING, INC.,
Defendants.

ORDER OF FORECLOSURE AND SALE

The United States’ Motion for Order of Foreclosure and Sale (Doc. # 114) is
hereby GRANTED and this Order of Foreclosure and Sale is entered pursuant to the
provisions of 28 U.S.C. §§ 2001 and 2002 and 26 U.S.C. §§ 7402 and 7403. The Court
hereby ORDERS as follows:
1.

Jim D. Welch is indebted to the United States of America (“United States”)

for unpaid assessed balances of federal income taxes for tax years 1998 and 1999, plus
interest and statutory additions accruing after the dates of assessment pursuant to 26
U.S.C. §§ 6601, 6621 and 6622, and 28 U.S.C. § 1961(c) until paid. On September 19,
2013, the Court entered judgment in favor of the United States and against Jim
D. Welch for his federal income tax liabilities for tax years 1998 and 1999, calculated

through September 30, 2013, in the amount of $6,795,746.96, plus such additional
statutory additions, including interest, as continue to accrue until paid in full.
2.

The parcel of real property upon which foreclosure is sought is residential

real property located at 11420 Teachout Road, Colorado Springs, Colorado 80908
(“Property”), legally described as follows:
Lot 2, in Black Forest Square Filing No. 1, in El Paso County
Colorado, according to the plat thereof recorded August 28,
1998 at Reception No. 98123605
3.

Jim D. Welch obtained title to the Property via a Warranty Deed

transferring title to his nominee, Celestial Pursuits Trust, on February 19, 1999.
4.

The United States has valid and subsisting tax liens on all property and

rights to property of Jim D. Welch, including the Property, arising from the assessments
described in paragraphs 31 and 32 of the Complaint, which tax liens are effective as of
the dates of those assessments. The United States further protected its liens by filing
Notices of Federal Tax Lien with the County Recorder’s Office for El Paso County,
Colorado.
5.

Section 7403 of Title 26 (U.S.C.) entitles the United States to enforce

its liens against the real property at issue in order to apply the proceeds towards the
federal income tax liabilities of Jim D. Welch.
6.

The United States’ federal tax liens against the Property are hereby

foreclosed. The United States Marshal for the District of Colorado, his/her
representative, or an Internal Revenue Service Property Appraisal and Liquidation

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Specialist (“PALS”) representative is authorized and directed under 28 U.S.C. §§ 2001
and 2002 to offer for public sale and to sell the Property, free and clear of the right, title
and interest of all parties to this action and any successors in interest or transferees
of those parties. The United States may choose either the United States Marshal or a
PALS representative to carry out the sale under this Order of Foreclosure and Judicial
Sale and shall make the arrangements for any sale as set forth in this Order. This
Order of Foreclosure and Judicial Sale shall act as a special writ of execution and
no further orders or process from the Court shall be required.
7.

The United States Marshal for the District of Colorado, his/her

representative, or a PALS representative is authorized to have free access to the
Property and to take all actions necessary to preserve it including without limitation
retaining a locksmith or other person to change or install locks or other security devices
on any part thereof, until a deed thereto is delivered to the ultimate purchaser(s).
8.

The terms and conditions of the sale are as follows:
a.

Except as otherwise stated herein, the sale of the Property shall
be by public auction to the highest bidder, free and clear of all liens
and interests.

b.

The sale shall be subject to all laws, ordinances, and governmental
regulations (including building and zoning ordinances), affecting the
premises, and easements and restrictions of record, if any.

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c.

The sale shall be held at the courthouse of the county or city in
which the Property is located, on the Property’s premises, or at any
other place in accordance with the provisions of 28 U.S.C. §§ 2001
and 2002, at a date and time announced by the United States
Marshal, his/her representative, or a PALS representative.

d.

Notice of the sale shall be published once a week for at least four
consecutive weeks before the date fixed for the sale in at least one
newspaper regularly issued and of general circulation in El Paso
County, Colorado, and, at the discretion of the Marshal, his/her
representative, or a PALS representative, by any other notice that
it or its representative may deem appropriate. State law notice
requirements for foreclosures or execution sales do not apply
to this sale under federal law. The notice of sale shall describe
the Property and contain the material terms and conditions of sale
in this Order of Foreclosure and Sale.

e.

The minimum bid will be set by the Internal Revenue Service. If the
minimum bid is not met or exceeded, the Marshal, his or
her representative, or a PALS representative may, without further
permission of this Court, and under the terms and conditions in
this Order of Foreclosure and Sale, hold a new public sale, if and

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reduce the minimum bid, or, in the alternative, sell the Property
to the second highest bidder at the first sale;
f.

Bidders shall be required to DEPOSIT at the time of sale with
the Marshal, his/her representative, or a PALS representative,
a minimum of five percent of the bid with the deposit to be made
by a certified or cashier’s check payable to the United States
District Court for the District of Colorado. Before being permitted
to bid at the sale, bidders shall display to the Marshal, his/her
representative, or a PALS representative satisfactory proof of
compliance with this requirement.

g.

The balance of the purchase price of the Property in excess of
the deposit tendered shall be paid to the Marshal or a PALS
representative (whichever person is conducting the sale) within
thirty (30) days after the date the bid is accepted by a certified
or cashier’s check payable to the United States District Court for
the District of Colorado. If the successful bidder fails to fulfill this
requirement, the deposit shall be forfeited and shall be applied to
cover the expenses of the sale, including commissions due under
28 U.S.C. § 1921(c), with any amount remaining to be applied to
the federal tax liabilities of Jim D. Welch at issue herein. The

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Property shall be again offered for sale under the terms and
conditions of this Order of Foreclosure and Judicial Sale.
h.

The United States may bid as a credit against its judgment without
tender of cash.

i.

The sale of the real property at issue shall not be final until
confirmed by this Court. The United States shall file a report of sale
with the Court, together with a proposed order of confirmation of
sale and proposed deed, within 30 days from the date of receipt
of the balance of the purchase price.

j.

Upon confirmation of the sale, the Marshal or PALS representative
shall promptly execute and deliver a deed of judicial sale conveying
the real property at issue to the purchaser.

k.

Upon confirmation of the sale, the interests of, liens against, or
claims to the real property at issue held or asserted by the United
States in the Complaint and any other parties to this action or any
successors in interest or transferees of those parties shall be
discharged and extinguished. The sale is ordered pursuant to
28 U.S.C. § 2001. Redemption rights under state law shall
not apply to this sale under federal law.

l.

Upon confirmation of the sale, the purchaser shall have the
recorder of deeds, El Paso County, State of Colorado, to cause

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transfer of the real property at issue to be reflected upon that
county’s register of title.
9.

Until the real property at issue is sold, Jim D. Welch shall take all

reasonable steps necessary to preserve the Property (including all buildings,
improvements, fixtures and appurtenances thereon) including, without limitation,
maintaining fire and casualty insurance policies on the Property. He shall not commit
waste against the Property, nor shall he cause or permit anyone else to do so. Jim
D. Welch shall not do anything that tends to reduce the value or marketability of the
Property, nor shall he cause or permit anyone else to do so. He shall not record any
instruments, publish any notice, or take any other action that may directly or indirectly
tend to adversely affect the value of the Property or that may tend to deter or
discourage potential bidders from participating in the public sale, nor shall he cause
or permit anyone else to do so. Violation of this paragraph shall be deemed a
contempt of court and punishable as such.
10.

All persons occupying the Property shall leave and vacate permanently

such property no later than 30 days after entry of this Order, each taking with them
his or her personal property (but leaving all improvements, buildings, fixtures, and
appurtenances) when leaving and vacating. If any person fails or refuses to leave
and vacate the Property by the time specified in this Order, the United States Marshal’s
Office or the Sheriff of El Paso County is authorized to take whatever action they deem
appropriate to remove such person or persons from the premises, whether or not the

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sale of such property is being conducted by a PALS representative. If any person fails
or refuses to remove his or her personal property from the Property by the time
specified herein, the personal property remaining on the Property thereafter is deemed
forfeited and abandoned, and the United States Marshal’s Office or the PALS
representative is authorized and directed to remove and dispose of it in any manner
they see fit, including sale, in which case the proceeds of sale are to be applied first
to the expenses of sale, and then to the tax liabilities at issue herein.
11.

Notwithstanding the terms of the immediately preceding paragraph, if,

after the sale of the Property is confirmed by this Court, the Property remains occupied,
a writ of assistance may, without further notice, be issued by the Clerk of Court pursuant
to Rule 70 of the Federal Rules of Civil Procedure to compel delivery of possession of
the Property to the purchaser(s) thereof.
12.

Jim D. Welch shall file a forwarding address with the Court within 30 days

of the date of this Order, and serve a copy of the same upon the United States and all
other parties to this litigation. If Jim D. Welch, and any other persons occupying the
Property, vacates the Property prior to the deadline set forth in paragraph 10, above,
such person shall notify counsel for the United States no later than 2 business days
prior to vacating the Property of the date on which he or she is vacating the Property.
Notification shall be made by leaving a message for said counsel, Rick Watson, at (202)
353-0300.

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13.

The Marshal, his or her representative, or a PALS representative,

shall deposit the amount paid by the purchaser into the registry of the court. Upon
appropriate motion for disbursement or stipulation of the parties, the court will disburse
the funds in the following partial order of preference until these expenses and liens
are satisfied: first, to the IRS, for allowed costs and expenses of sale, including any
commissions due under 28 U.S.C. § 1921(c) and including an amount sufficient to cover
the costs of any steps taken to secure or maintain the Property pending sale and
confirmation by the Court; and second, to El Paso County, Colorado, for any and all
liens it may have on the real property at issue for unpaid real property taxes or special
assessments at the time of the sale. Finally, distribution of the remaining proceeds
should be made to the United States in partial satisfaction of the federal tax liabilities
of Jim D. Welch at issue herein.
DATED this

28th

day of July, 2014.
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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