United States of America v. Luther et al
MEMORANDUM AND ORDER - IT IS ORDERED: Any pending claims against the United States in the above-captioned matter are dismissed with prejudice. Any pending claims between defendants in the above-captioned matter are dismissed without prejudice. Mic hael S. Luther's Motion to Dismiss (Filing No. 220 ); Laura Dodge Luther's joinder to Michael S. Luther's Motion to Dismiss (Filing No. 223 ); and the Objections submitted by Defendant Gerald C. Korth (Filing No. 224 ) and Defendant Atelier Partners (Filing No. 225 ) are denied as moot. A separate judgment will follow. Ordered by Chief Judge Laurie Smith Camp. (TCL )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
UNITED STATES OF AMERICA,
CASE NO. 8:12CV80
MICHAEL S. LUTHER, LAURA DODGE
LUTHER, ATELIER PARTNERS,
CYCLONE ASSETS, SCOTT J. ESPARZA,
BARRY FEINER, GARY FROMM, JOSEPH
M. HALLER, as trustee for the Joseph E.
Haller Family Trust, KLEINWORT
BENSON (USA), INC., DRESDNER
KLEINWORT HOLDINGS, INC., GERALD
C. KORTH, PORTFOLIO RECOVERY
ASSOCIATES, LLC, TAG VIRGIN
ISLANDS, INC., ACCREDITED
COLLECTION SERVICE, INC., and
MSW CAPITAL, LLC,
This matter is before the Court on its own motion to dismiss. Federal Rule of
Civil Procedure 12(h)(3) provides, “[i]f the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the action.”
In the process of
reviewing the pending Motion to Dismiss filed by Michael S. Luther and joined by Laura
Dodge Luther (Filing Nos. 220 and 223), the Court has attempted to verify its subjectmatter jurisdiction over any remaining claims filed by defendants who were made
parties to this action pursuant to 26 U.S.C. § 7403.
The Court’s original jurisdiction over this case appears to have been founded on
28 U.S.C §§ 1340 and 1345, and 26 U.S.C. §§ 7402 and 7403. Sections 1340 and
1345 of Title 28 give the federal district courts original jurisdiction over civil actions
“commenced by the United States, or by any agency or officer thereof expressly
authorized to sue by Act of Congress,” and arising “under any Act of Congress providing
for internal revenue . . . .” Under 26 U.S.C. § 7402(e), the federal district courts have
original jurisdiction over “any action brought by the United States to quiet title to
property if the title claimed by the United States to such property was derived from
enforcement of a lien under this title.” Pursuant to 26 U.S.C. § 7403(b), “[a]ll persons
having liens upon or claiming any interest in the property involved in such action shall
be made parties thereto.”
The United States brought this action against Michael S. Luther and Laura
Dodge Luther to foreclose on its federal tax liens against real property (the “Property”)
allegedly acquired by Laura Dodge Luther, as Michael S. Luther’s nominee. In bringing
this action, the United States sought to satisfy, or partly satisfy, Michael S. Luther’s
unpaid tax obligations. The remaining defendants, Atelier Partners; Cyclone Assets;
Scott J. Esparza; Barry Feiner; Gary Fromm; Joseph M. Haller, as trustee for the
Joseph E. Haller Family Trust; Kleinwort Benson (USA), Inc.; Dresdner Kleinwort
Holdings, Inc.; Gerald C. Korth; Portfolio Recovery Associates, LLC; TAG Virgin Islands,
Inc.; Accredited Collection Service, Inc.; and MSW Capital, LLC, were all made parties
to this action pursuant to 26 U.S.C. § 7403 as persons that may claim an interest in the
The United States has dismissed with prejudice all claims against Michael S.
Luther and Laura Dodge Luther. (Order of Dismissal, Filing No. 219.) Therefore, it
appears the Court no longer has jurisdiction over claims against the United States by
the remaining defendants made parties to this action pursuant to 26 U.S.C. §7403.
On April 21, 2014, this Court issued an Order to Show Cause (Filing No. 229)
requiring each party with any pending claim to file a memorandum showing cause why
the claim should not be dismissed by this Court due to lack of subject-matter
jurisdiction, and why this Court should not enter a final judgment in this case. The
deadline for filing has passed, and none of the remaining parties filed a response to the
Because the United States no longer seeks to foreclose on its federal tax liens
against the Property, the Court lacks jurisdiction over claims made by parties added
under 26 U.S.C. § 7403, because there is no longer a controversy between the United
States and persons claiming interest in the Property.1
IT IS ORDERED:
Any pending claims against the United States in the above-captioned matter
are dismissed with prejudice;
Any pending claims between defendants in the above-captioned matter are
dismissed without prejudice;
Michael S. Luther’s Motion to Dismiss (Filing No. 220); Laura Dodge Luther’s
joinder to Michael S. Luther’s Motion to Dismiss (Filing No. 223); and the
Even if this Court had supplemental jurisdiction over such claims, dismissal is proper
under 28 U.S.C. (c)(3). (“The district courts may decline to exercise supplemental jurisdiction”
when “the district court has dismissed all claims over which it has original jurisdiction . . . .”).
Objections2 submitted by Defendant Gerald C. Korth (Filing No. 224) and
Defendant Atelier Partners (Filing No. 225) are denied as moot; and
A separate judgment will follow.
Dated this 12th day of May, 2014.
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge
Filing No. 222 was submitted as a responsive brief, rather than an objection,
consistent with this Court’s local rules. See NECivR 7.1(b).
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?