United States of America v. Harvey et al
MEMORANDUM DECISION AND ORDER. Gary Raymond Harveys Motion to Clarify (Dkt. 98 ) is GRANTED in PART and DENIED in PART as described herein. Gary and Bernice C. Harveys Rule 60 Motion (Dkt. 104 ) is DENIED. Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (alw)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
UNITED STATES OF AMERICA,
Case No. 3:16-cv-00046-DCN
MEMORANDUM DECISION AND
GARY R. HARVEY; BERNICE C.
HARVEY; LHS TRUST; and ORGANIC
ASSEMBLY OF CIRCLE JB,
Pending before the Court is Gary Raymond Harvey’s Motion to Clarify (Dkt. 98)
and Gary and Bernice C. Harvey’s “Motion to Prevent Further Injustices From the IRS and
Unite[d] States . . . Pursuant to Rule 60 (a) (b) (4) and (6)” (Dkt. 104). Having reviewed
the record and briefs, the Court finds that the facts and legal arguments are adequately
presented. Accordingly, in the interest of avoiding further delay, and because the Court
finds that the decisional process would not be significantly aided by oral argument, the
Court will decide the Motions without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(1)(B).
For the reasons outlined below, the Court finds good cause to GRANT in PART and DENY
in PART Mr. Harvey’s Motion to Clarify and DENY the Harveys’ Rule Motion for
Additional Relief Pursuant to Rule 60.
The Government initiated this action to reduce certain tax assessments to judgment
MEMORANDUM DECISION AND ORDER-1
and to foreclose the associated tax liens on the real property owned by Mr. Harvey (and as
legally described in the Judgment (Dkt. 68)) (hereinafter “the Property”) pursuant to 26
U.S.C.§§ 7401 and 7403. Dkt. 1. On September 22, 2017, the Court reduced the tax
assessments against Mr. Harvey to judgment in the amount of $319,015.92, plus interest
and other additions from January 13, 2017; reduced the assessments against Mrs. Harvey
to judgment in the amount of $44,267.24, plus additions from January 13, 2017; foreclosed
the United States’ tax liens on the Property; and entered an Order of Sale for the Property.
The Harveys appealed to the Ninth Circuit, and, on October 12, 2017, they moved
for a stay of the sale of the Property until after the Ninth Circuit resolved their appeal. Dkt.
71. The Court granted the motion in part, ordering that a stay would be effective upon
payment of a $5,000 bond. Dkt. 76. Upon the Government’s motion, the Court modified
the stay to order the Harveys to take reasonable steps to preserve the Property (including
maintaining an insurance policy on the Property and making all mortgage, utility, and tax
payments). Dkt. 86. The order also required the Harveys submit a status report to the Court
every 60 days demonstrating compliance and specified that failure to comply with this
requirement would result in the stay being rescinded. Id. The Harveys did not timely file
the required status reports. See generally Docket 3:16-cv-00046-DCN.
On September 18, 2018, the Ninth Circuit affirmed the Court’s judgment. Dkt. 90.
The Harveys filed a petition for rehearing en banc, which was denied. The Ninth Circuit
issued the formal mandate on January 28, 2019. Dkt. 92. The Harveys then filed a petition
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for a writ of certiorari in the Supreme Court (Dkt. 93) but did not move pursuant to Fed.
R. App. P. 41(b) for a stay of the mandate pending the filing of their petition.
Because the stay pending appeal had expired due to the Ninth Circuit’s issuance of
the formal mandate and the Harveys’ failure to comply with the Court’s order by timely
submitting required status reports, the Government moved forward with selling the
Property pursuant to the Court’s Order of Sale. Dkt. 95.
As part of the sale process, Property Appraisal and Liquidation Specialist (“PALS”)
Mary Smith issued a letter instructing the Harveys that they should vacate the Property.
The Harveys vacated the Property, and PALS Smith moved forward with selling the
Property, including by transferring the utilities to the IRS (though it is unclear if Mr.
Harvey is still paying for heat or other utility costs associated with the Property).
Mr. Harvey filed the pending Motion to Clarify on March 5, 2020. The Harveys
filed the pending Rule 60 motion on June 22, 2020. Both motions were filed pro se.
MOTION TO CLARIFY
Mr. Harvey’s motion raises two issues. First, Mr. Harvey states that he continues to
pay “heat and factors for the property the IRS has taken possession of,” to his financial
detriment, and he requests that he no longer be responsible for costs relating to the Property.
Dkt. 98, at 1. The United States responded that it “agrees that Mr. Harvey should no longer
be responsible for actively paying such costs now that he has vacated the subject property
in compliance with the Court’s Order of Sale.” Dkt. 99, at 2. The Court GRANTS Mr.
Harvey’s motion to clarify to the extent that it clarifies Mr. Harvey is no longer responsible
for such costs now that he has vacated the Property in compliance with the Court’s order.
MEMORANDUM DECISION AND ORDER-3
Second, Mr. Harvey complains about a Notice of Levy that the IRS issued to “the
Harvey Family Trust.” Mr. Harvey “contends that the IRS has no authority to seize the
Trust funds as they were not part of this judgment of the Court’s order,” and that the IRS
should sell the subject property before levying upon said trust. Dkt. 98, at 2. Here, the
Government disagrees, arguing that “[t]he IRS has the right to issue a levy in an attempt to
collect upon Mr. Harvey’s substantial tax liabilities, without the need for prior approval
from the Court.” Dkt. 99, at 2.
Section 6331(a) of the Internal Revenue Code of 1986 authorizes the Secretary of
the Treasury (or a delegate) to collect taxes “by levy upon all property and rights to
property” belonging to a person who neglects or refuses to pay any tax liability within ten
days after notice and demand. 26 U.S.C. § 6331(a). Section 6331(b) defines “levy” as
including “the power of distraint and seizure by any means.” Id. at § 6331(b). Both real
estate and personal property, tangible and intangible, are subject to levy under Section
6331(a). See G.M. Leasing Corp. v. United States, 429 U.S. 338, 350 (1977).
The Ninth Circuit considered a similar case in Maisano v. Welcher, 940 F.2d 499
(9th Cir. 1991). In Maisano, pro se litigants challenged the Government’s ability to seize
a Chevrolet Blazer, an asset they claimed belonged to the family trust. The Ninth Circuit
The Maisanos have placed themselves in a no-win situation on this issue. If
the Blazer belongs to the trust, the Maisanos have no standing to sue and their
case must be dismissed. If the Blazer actually belongs to the Maisanos, they
lose their argument that the IRS seized property belonging to the wrong
party. Thus, if none of the plaintiffs’ arguments on the merits can prevail, we
need not resolve the question of whether the trust or the Maisanos actually
MEMORANDUM DECISION AND ORDER-4
owned the vehicle. The plaintiffs lose, provided the agents committed no
Id. at 501. Assuming, without deciding, that the car in Maisano belonged to the plaintiffs,
the Ninth Circuit proceeded to review whether a hearing and judgment was required prior
to seizing the assets. The Ninth Circuit ruled that the plaintiffs’ “contention, that the
assessment of their tax liability was invalid without a hearing and judgment from an Article
III court, is wrong.” Id. Looking at the plain language of statute, the Ninth Circuit held that
26 U.S.C. § 6502 “gives the IRS the option to collect its assessments by either a levy or a
court proceeding, and this court has held that taxpayers do not have the right to a hearing
prior to collection efforts by the IRS.” Id. at 502 (citation omitted) (emphasis in original).
Similar to plaintiffs in Maisano, Mr. Harvey claims that the assets the IRS seeks to
levy are in the family trust. He, like the Maisano plaintiffs, has placed himself in a no-win
situation. If the assets in the Harvey Family Trust belong to said trust, he, as a pro se
litigant, has no standing to represent the trust. If, on the other hand, the assets actually
belong to Mr. Harvey, he loses his argument that the IRS seized property belonging to the
wrong party. Further, his argument that the IRS cannot levy without a court order fails, as
the IRS has the authority under 26 U.S.C. § 6502 to collect assessment by levy without a
The Court therefore DENIES Mr. Harvey’s motion to clarify to the Government
that it may not levy the Harvey Family Trust.
MOTION FOR ADDITIONAL RELIEF PURSUANT TO RULE 60
The Harveys move for relief from judgment pursuant to Federal Rules of Civil
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Procedure 60(a), (b)(4), and (b)(6).
A. Rule 60(a)
Federal Rule of Civil Procedure 60(a) applies to corrections based on clerical
mistakes. The Harveys do not identify what, if any, clerical mistake the Court made in its
judgment against Bernice C. Harvey and Gary Raymond Harvey. Rather, the Harveys
implicitly concede that Rule 60(a) does not apply when they ignored the Government’s
argument regarding Rule 60(a) in their reply brief. Instead, the Harveys rely on Rule
60(b)(4) and (6) to support their motion for relief from final judgment. The Court therefore
denies granting relief pursuant to Rule 60(a).
B. Rule 60(b)
Federal Rule of Civil Procedure 60(b) provides that the Court may reconsider a final
judgment or order based on: “(1) mistake, surprise, or excusable neglect; (2) newly
discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied or discharged judgment;
or (6) extraordinary circumstances which would justify relief.” Mitchell v. San Diego Cty.
Sheriff, 17 F. App’x 697 (9th Cir. 2001) (citation omitted). Rule 60(b) must be used
sparingly as an equitable remedy to prevent manifest injustice; it is utilized only where
extraordinary circumstances prevented a party from taking timely action to prevent or
correct an erroneous judgment. See Lal v. California, 610 F.3d 518, 524 (9th Cir. 2010);
U.S. v. State of Washington, 98 F.3d 1159, 1163 (9th Cir. 1996). The moving party bears
the burden of providing the existence of fraud, misconduct, or any other ground for relief.
Atchison, T & S.F. Ry. Co. v. Barrett, 246 F.2d 846, 849 (9th Cir. 1957).
MEMORANDUM DECISION AND ORDER-6
The Harveys’ arguments in support of their motion of relief primarily relate to the
issue of the release, and subsequent revocation of release, of the federal tax liens that were
in question in this case. They assert the tax liens “are unlawful and the Court’s prior
Judgement was set upon favoritism, due process, deprivations, and Article III violations to
ensure justice unto all without respect to any party.” Dkt. 104, at 2. Specifically, the
Harveys contend that the Court’s ruling unjustly favored the IRS; thus, the Court’s order
is invalid (or void) and attempts to collect on “Mr. Harvey’s substantial tax liabilities,” are
unlawful. Id. The Harveys then proceed to provide a series of what law they think should
have been applied by both this Court and the Ninth Circuit. They principally argue that the
Court misapplied the law on two grounds: (1) that the Uniform Commercial Code
(“UCC”), not the Internal Revenue Code, is controlling, and the revocation is somehow
invalid under the UCC; and (2) that the Court’s (and the Ninth Circuit’s) statutory
interpretation of the revocation statute at issue, 26 U.S.C. § 6325(f), was flawed, because,
among other alleged errors, the Court should have applied the doctrine described in
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
The Government responds that the Harveys’ motion does not meet the standard for
a Rule 60 motion and the Harveys’ arguments regarding both the applicability of the UCC
and proper statutory interpretation of 26 U.S.C. § 6325(f) have already been rejected by
this Court and the Ninth Circuit as lacking merit.
A motion to alter or amend, or for relief from judgment, may be granted only in
limited circumstances. The Harveys have failed to establish that any of those circumstances
apply here. Rather, as the Harveys acknowledge, their motion re-alleges facts and legal
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conclusions previously raised before both this Court and the Ninth Circuit.
First, the Harveys argue that the Court’s decision that the UCC does not apply,
despite the Harveys’ arguments, was “unlawful.” Dkt. 104, at 3 (“This Court and the Ninth
Circuit made an unlawful decision that UCC was ‘frivolous’ even though statutes and
treaties hold the Uniform Commercial Code applies in all Federal Actions, especially
‘revenue laws’ are commercial in nature.”). The Court previously reviewed and dismissed
the Harveys’ contention that the UCC applies, and the Ninth Circuit upheld this Court’s
Second, the Harveys raise arguments concerning 26 U.S.C. § 6325(f) that this Court
has already addressed. See Dkt. 57, at 15–16; Dkt. 67, at 16. The Harveys contend that this
Court applied its “personal political preference,” in interpreting 26 U.S.C. § 6325(f), which
deprived the Harveys of due process. Dkt. 106, at 15, 16; see also Dkt. 104, at 16. Simply
because the Court interprets a statute differently than a party would like does not mean the
Court is impermissibly biased; it is frequently the case that at least one party will be
disappointed with a court’s statutory reading. Here, the Court faithfully interpreted
26 U.S.C. § 6325(f) and applied the law. The Ninth Circuit upheld this Court’s
interpretation of the statute. The Harveys’ arguments simply retread old ground, and they
have not identified either an extraordinary circumstance that would warrant relief or a
legitimate reason for the Court to find its prior order void.
The Harveys also argue that both this Court and the Ninth Circuit should have
applied the principles from Chevron when interpreting 26 U.S.C. § 6325(f). Chevron
applies when “a court reviews an agency’s construction of the statute which it administers,”
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e.g., when a court reviews “the validity of the regulations” issued under such statute.
Chevron, 467 U.S. at 842. Here, the Court itself interpreted Section 6325—the Court’s
decision did not involve the IRS’s interpretation of its own regulations. As such, the
Chevron doctrine does not apply.
Having review the record and briefs, the Court finds the Harveys have not met their
burden of providing the existence of fraud, misconduct, or any other ground for relief under
Rule 60(b). It DENIES the Harveys’ motion to set aside its previous judgment.
IT IS HEREBY ORDRED:
1. Gary Raymond Harvey’s Motion to Clarify (Dkt. 98) is GRANTED in
PART and DENIED in PART as described herein.
2. Gary and Bernice C. Harvey’s Rule 60 Motion (Dkt. 104) is DENIED.
DATED: September 23, 2020
David C. Nye
Chief U.S. District Court Judge
MEMORANDUM DECISION AND ORDER-9
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