IN RE: ESTATE OF FREDERICK ALAN SIMMONS, DECEASED

Filing 56

ORDER - For the aforementioned reasons, the Court OVERRULES Spiekhout's objections. (Filing No. 53.) As a result, the Court ADOPTS the recommendations in the Magistrate Judge's Report and Recommendation. (Filing No. 49.) Accordingly, the Court DENIES the motion to remand, (Filing No. 6), and the motion to dismiss, (Filing No. 30). In addition, the Court GRANTS the motion to vacate, (Filing No. 8), the motions to remove claims of interest (Filing No. 27; Filing No. 28), and the mo tion to appoint a receiver, (Filing No. 38). Consistent with this Order, the Court will enter a separate order appointing Pam Jones as the receiver and authorizing her to sell the decedent's residence, as proposed by the United States. Signed by Judge Tanya Walton Pratt on 3/8/2016. (JLS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
IN THE MATTER OF THE ESTATE OF:

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FREDERICK ALAN SIMMONS, DECEASED )

UNITED STATES OF AMERICA,

Case No. 1:15-cv-01097-TWP-TAB

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Plaintiff,
vs.
RAELINN M. SPIEKHOUT individually and
as personal representative of the Estate of
Frederick Alan Simmons, Deceased,
CAPITAL ONE,
CLARK, QUINN, MOSES, SCOTT &
GRAHN, LLP,
BOONE COUNTY INDIANA,
JAMES M. SIMMONS,
CAROL ANN SMEDLEY,
DEBORAH SCOTT also known as
DEBBIE SCOTT,
JAMES W. CURTIS,
FIREHOUSE PROPERTIES, LLC,
RICHARD ALLEN GREEN,
INDIANA DEPARTMENT OF REVENUE,
Defendants.

ORDER
This matter is before the Court on Defendant Raelinn Spiekhout’s (“Spiekhout”) objection
to Magistrate Judge Baker’s Report and Recommendation. (Filing No. 53.) Spiekhout is the
Personal Representative of the Estate of Frederick Alan Simmons (“Estate”). On January 22, 2016,
Magistrate Judge Baker issued his Report and Recommendation, resolving six pending motions.
(Filing No. 49.) The Report and Recommendation resolved motions which contested the removal
of this action to federal court, the state court’s entry of a final order, and addressed the sale and
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maintenance of the decedent’s residence.

For the following reasons, the Court overrules

Spiekhout’s objection and adopts the Magistrate Judge’s Report and Recommendation.
I. BACKGROUND
The Court adopts the Magistrate Judge’s recitation of the facts which was not objected to
Spiekhout, making only slight modifications for clarity. The Boone County Superior Court
probated the Estate. The only asset of the Estate is the decedent’s residence, which is encumbered
by a federal tax lien. Prior to initiating this removal action, the United States and the Estate
attempted to collaborate on a plan to sell the residence and satisfy the lien, but they were unable
to agree.
On July 10, 2015, absent any agreement with the United States, the state court entered an
order closing the Estate as insolvent. The order provided for distribution of the proceeds from the
sale of the decedent’s residence. The distribution lists the federal tax lien as seventh in priority
among creditors and the lien is not ordered to be paid in full. A few days later, the United States
filed a notice of removal, challenging the state court’s disposition of its tax lien. This prevented
Spiekhout from selling the decedent’s residence and making distributions.
The decedent’s residence is currently sitting vacant, and Spiekhout has been paying what
she can to maintain the property from her personal funds. However, both Spiekhout and the Estate
claimed that their resources would be exhausted by February 2016.
II. LEGAL STANDARD
A district court may assign dispositive matters to a magistrate judge, in which case the
magistrate judge may submit to the district judge only a report and recommended disposition,
including any findings of fact. Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 760 (7th Cir.
2009). See also 28 U.S.C. § 636(b)(1)(B) (2012); Fed. R. Civ. P. 72(b)(1). The magistrate judge’s

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recommendation on a dispositive matter is not a final order, and the district judge makes the
ultimate decision to “accept, reject, or modify” the findings and recommendations, and the district
court need not accept any portion as binding. 28 U.S.C. § 636(b)(1) (2012) (“A judge of the court
may accept, reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge. The judge may also receive further evidence or recommit the matter to the
magistrate judge with instructions”); Fed. R. Civ. P. 72(b)(3). See also Schur, 577 F.3d at 760-61.
After a magistrate judge makes a report and recommendation, either party may object
within fourteen days of being served with a copy of the same. 28 U.S.C. § 636(b)(1); Fed. R. Civ.
P. 72(b)(2). When a party raises specific objections to findings and recommendations made within
the magistrate judge’s report, the district court is required to review those elements de novo,
determining for itself whether the Commissioner’s decisions as to those issues are supported by
substantial evidence or were the result of an error of law. 28 U.S.C. § 636(b)(1) (2012); Fed. R.
Civ. P. 72(b)(3). See also Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999). The
court may, however, defer to those conclusion to which timely objections have not been raised by
a party. Schur, 577 F.3d at 760-61. Further, if a party fails to object to a magistrate judge’s report
and recommendation, or objects on some issues and not others, he waives appellate review of the
issues to which he has not objected. Johnson, 170 F.3d at 739.
III. DISCUSSION
Spiekhout’s first objection relates to dicta in the Magistrate Judge’s Report and
Recommendation, purportedly faulting Spiekhout for not being able to meet the financial
responsibilities of the decedent’s residence. In making this argument, Spiekhout does not appear
to object to the Magistrate Judge’s recommendation that a receiver be appointed nor does she
challenge the Magistrate’s conclusion that such action is necessary because the Estate’s assets are

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depleted. However, Spiekhout objects to any suggestion that the financial issues facing the Estate
were the result of her lack of diligence and good faith administration of the Estate. Not to be
outdone, the Government raises a similar objection in a footnote, contending that it was similarly
not responsible for the failure to sell the decedent’s residence.
Both arguments are immaterial to the resolution of the pending motion to appoint a
receiver. As the Magistrate Judge noted, no party filed a response in opposition to the motion to
appoint a receiver, and the Court finds the financial issues facing the Estate, regardless of blame,
are sufficient to justify granting the motion. Accordingly, Spiekhout’s objection to dicta in the
Magistrate Judge’s Report and Recommendations, purportedly assigning fault to her
administration of the Estate, is overruled on account of being irrelevant to the resolution of the
motion to appoint a receiver.
Spiekhout’s second objection challenges the Magistrate Judge’s recommendation that the
motion to dismiss be denied. In this regard, Spiekhout repeats the argument, made by the
decedent’s ex-spouse, Deborah Scott, in support of remand (Filing No. 6), that the United States’
removal to federal court was untimely. However, unlike Ms. Scott’s motion which claimed that
service was proper on account of having served the IRS in the state court proceeding, Spiekhout
argues for the first time that the United States received notice of the Petition to Close Insolvent
Estate, notice of the corresponding hearing, and notice of Administration from the Boone Superior
Court, all of which Spiekhout contends was sufficient to satisfy service of process on the United
States.1

Because Spiekhout did not raise this factual argument prior to the Magistrate Judge’s issuing his Report and
Recommendation, it would be proper for the Court to consider the argument to be waived. See Woodall, 2015 WL
417660, at *2 (“[a]rguments not raised before the magistrate judge and raised for the first time in objections filed
before the district judge are waived.”) Nevertheless, because Spiekhout’s argument is factually similar to the factual
argument initially raised by Deborah Scott, the Court will address it.
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The Magistrate Judge correctly addressed the issue of service on the United State in his
Report and Recommendation, noting that “[i]n actions or suits involving liens arising under the
internal revenue laws, … service upon the United States shall be made by serving … the United
States attorney for the district in which the action is brought.” 28 U.S.C.A. § 2410(b).

The

Magistrate Judge’s analysis regarding the inadequacy of service of process on the IRS is equally
applicable with regard to the inadequacy of the United State receiving state court probate notices.
In particular, the Magistrate Judge noted that, “while the U.S. attorney ultimately received
copies of the probate proceedings, the thirty-day clock for removal does not begin running until
formal service is made.” See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344,
347-48 (1999); Quality Loan Serv. Corp. v. 24702 Pallas Way, Mission Viejo, CA 92691, 635 F.3d
1128, 1133 (9th Cir. 2011); Collins v. Pontikes, 447 F. Supp. 2d 895, 897 (N.D. Ill. 2006).
Because formal service was never made upon the United States, the Magistrate Judge concluded
correctly that “the clock never ran”. In her six-sentence objection, Spiekhout presents no new
facts to suggest that formal service of the complaint was, in fact, made upon the United States; and
she cites no legal authority to suggest that notice of the probate proceedings constituted adequate
service upon the United States. As a result, this objection is also overruled.
Spiekhout’s third objection is that appointing a receiver is not necessary because she is
“capable of concluding the administration of the estate and executing the duly entered order of the
Boone Superior Court.” To begin, the Court notes that neither Spiekhout nor any other party filed
a response to the United States’ motion to appoint a receiver. Accordingly, the Court need not
entertain this argument, as it is waived. See Woodall v. Jo-Ann Stores, Inc., No. 1:14-cv-00263SEB-DKL, 2015 WL 417660, at *2 (S.D. Ind. Jan. 30, 2015) (“[a]rguments not raised before the

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magistrate judge and raised for the first time in objections filed before the district judge are
waived.”)
However, even entertaining Spiekhout’s objection regarding the appointment of a receiver,
the objection is not persuasive.

First, Spiekhout did not object to the Magistrate Judge’s

recommendation that the motion to vacate the Boone Superior Court order should be granted
because of a lack of subject matter jurisdiction. As such, the motion to vacate will be granted;
and, thereafter, there will be no state court order for Spiekhout to execute, as she asserts.
Second, the Magistrate Judge noted that appointment of a receiver was both “necessary
and appropriate” because the Estate’s liquid assets would be depleted by February 2016. In making
this conclusion, the Magistrate Judge additionally pointed out that Spiekhout reported that, as of
that date, she would no longer be able to advance additional funds for maintaining the property,
and that “utility services to the residence will be disconnected, general maintenance to the
residence will cease, and homeowner’s insurance coverages will lapse”. (See Filing No. 38-4;
Filing No. 48.) In her objection, Spiekhout offers no evidence or argument to contradict her prior
assertions regarding extreme financial difficulties maintaining the estate. The Court is interested
in moving this case forward and preserving the asset which is at the heart of the litigation.
Accordingly, this objection is also overruled.
Finally, Spiekhout’s fourth objection is that the Magistrate Judge’s Report and
Recommendation does not provide sufficient guidance regarding the appointment of the receiver.
Because the Court does not consider this request to be a legal objection to the Report and
Recommendation, the Court neither affirms nor overrules it. Instead, the Court notes that the
Magistrate Judge recommended, albeit in a footnote, that the Court should adopt the proposed
order submitted by the Government, appointing Pam Jones as receiver of the decedent’s residence

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and authorizing her to sell the decedent’s residence. (Filing No. 38-1.) Noting no objection to the
Magistrate Judge’s recommendation or to the United States’ proposed order which was attached
to its motion to appoint a receiver, the Court will adopt the proposed order, consistent with the
Magistrate Judge’s recommendation. In addition, to the extent Spiekhout and her attorney are
requesting guidance on their roles going forward, the Court notes that it is not at liberty to provide
legal counsel. Accordingly, the Court overrules Spiekhout’s objection regarding the motion to
dismiss and adopts the Magistrate Judge’s recommendation to deny that motion.
In addition, the Court overrules Spiekhout’s objection regarding the motion to appoint a
receiver and adopts the Magistrate Judge’s recommendation to grant that motion. Finally,
Spiekhout did not object to the Magistrate Judge’s additional recommendations that the motion to
remand should be denied and that the motion to vacate and the motions to remove the claims of
interest should be granted. Absent any objection, the Court adopts those portions of the Report
and Recommendation as well. See Johnson, 170 F.3d at 739.
IV. CONCLUSION
For the aforementioned reasons, the Court OVERRULES Spiekhout’s objections. (Filing
No. 53.) As a result, the Court ADOPTS the recommendations in the Magistrate Judge’s Report
and Recommendation. (Filing No. 49.) Accordingly, the Court DENIES the motion to remand,
(Filing No. 6), and the motion to dismiss, (Filing No. 30). In addition, the Court GRANTS the
motion to vacate, (Filing No. 8), the motions to remove claims of interest (Filing No. 27; Filing
No. 28), and the motion to appoint a receiver, (Filing No. 38). Consistent with this Order, the
Court will enter a separate order appointing Pam Jones as the receiver and authorizing her to sell
the decedent’s residence, as proposed by the United States.

Date: 3/8/2016
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Distribution:
Sean A. Brown
CLARK, QUINN, MOSES, SCOTT & GRAHN
[e-mail],[e-mail]
E. Davis Coots
COOTS HENKE & WHEELER, P.C.
[e-mail],[e-mail],[e-mail]
James W. Curtis , Jr
JAMES W. CURTIS, JR., ATTORNEY AT LAW
[e-mail],[e-mail]
Brandi A. Gibson
COOTS HENKE & WHEELER, P.C.
[e-mail],[e-mail],[e-mail]
Charles R. Grahn
CLARK QUINN MOSES SCOTT & GRAHN
[e-mail],[e-mail],[e-mail]
Jeffrey L. Hunter
UNITED STATES ATTORNEY'S OFFICE
[e-mail],[e-mail],[e-mail]
Joel Kirk LeBlanc
LEBLANC NETTLES DAVIS
[e-mail],[e-mail]
Michael P Maxwell , Jr
CLARK QUINN MOSES SCOTT & GRAHN LLP
[e-mail],[e-mail]
Nelson A. Nettles
LEBLANC NETTLES DAVIS
[e-mail],[e-mail],[e-mail],kim@india
nalawgroup.com
Bradley A. Sarnell
US DEPARTMENT OF JUSTICE
[e-mail],[e-mail]

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