United States of America v. Shotkoski, et al

Filing 30

ORDER OF SALE issued regarding Application for Order of Sale 29 pursuant to the Default Judgment 28 . Ordered by Senior Judge Lyle E. Strom. (Copies mailed to defendants) (JSF)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
UNITED STATES OF AMERICA,

)
)
Plaintiff,
)
)
v.
)
)
JOHN W. EWING in his capacity as
)
DOUGLAS COUNTY TREASURER,
)
SI 9, LLC,
)
CAPITAL ONE BANK,
)
ASSET ACCEPTANCE, LLC,
)
DEBT SOLUTIONS, INC.,
)
JAMES J. SHOTKOSKI, and
)
DENISE R. SHOTKOSKI,
)
)
Defendants.
)
_______________________________________)

Case No. 8:14-cv-00218-LES-FG3

ORDER OF SALE
This Court entered a final judgment in this action on October 27, 2015 (Docket Entry No.
28), in favor of Plaintiff, the United States, and against Defendants, James J. Shotkoski and
Denise R. Shotkoski, for unpaid federal income tax liabilities in the amount of $262,469.13 (plus
interest and statutory additions accruing after September 3, 2015) for tax years 1993-1995, 2000,
2001, 2003-2005, and 2007-2009. The judgment also ordered that the federal tax liens associated
with those liabilities be enforced with a judicial sale of the land, along with all improvements,
buildings, and appurtenances at the property commonly known as 6813 N. 122nd Court, Omaha,
NE 68142 (the “Property”), and more fully described as follows:
Unit 10, Building 3, Deer Creek Condominium, a Condominium organized under
the Laws of the State of Nebraska pursuant to Declaration filed September 8,
2005, at Instrument No. 2005112084, of the Records of Douglas County,
Nebraska.

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The Property was conveyed to James J. Shotkoski and Denise R. Shotkoski as joint
tenants with rights of survivorship by a corporation survivorship warranty deed signed on April
9, 2008 and recorded on April 16, 2008 at the Register of Deeds of Douglas County, Nebraska as
instrument number 2008036944.
The Court now ORDERS that the Property be sold, pursuant to 26 U.S.C. § 7403(c) and
28 U.S.C. §§ 2001 and 2002, in order to collect the unpaid federal tax liabilities as follows:
1.

The Internal Revenue Service (“IRS”) Property Appraisal and Liquidation Specialists
(“PALS”) is authorized to offer for public sale and to sell the Property.

2.

The terms and conditions of the sale are set forth below.
a.

The sale of the Property shall be by public auction to the highest bidder, free and
clear of all rights, titles, claims, liens, and interests of all parties to this action,
including Plaintiff, the United States, and Defendants John Ewing (in his capacity
as Treasurer of Douglas County, Nebraska); SI 9, LLC; Capital One Bank; Asset
Acceptance, LLC; Debt Solutions, Inc.; James J. Shotkoski; and Denise R.
Shotkoski, and any successors in interest or transferees of those parties.

b.

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

c.

The sale shall be held either at the courthouse of the county or city in which the
Property is located or on the Property’s premises.

d.

The PALS shall announce the date and time for sale. The IRS, PALS, and their
representatives shall be permitted to enter the Property with prospective buyers in
order to allow prospective buyers to inspect the interior and exterior of the

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Property at such times as the IRS or PALS shall determine are reasonable and
convenient.
e.

Notice of the sale shall be published once a week for at least four consecutive
weeks before the sale in at least one newspaper regularly issued and of general
circulation in Douglas County, Nebraska, and, at the discretion of the PALS, by
any other notice or advertisement that the PALS deems appropriate. The notice of
the sale shall contain a description of the Property and shall contain the material
terms and conditions of sale set forth in this order of sale.

f.

The Property shall be offered for sale “as is,” with all faults and without any
warranties either express or implied, and the sale shall be made without any right
of redemption.

g.

The PALS shall set, and may adjust, the minimum bid. If the minimum bid is not
met or exceeded, the PALS may, without further permission of this Court, and
under the terms and conditions in this order of sale, hold a new public sale, if
necessary, and adjust the minimum bid.

h.

At the time of the sale, the successful bidder(s) shall deposit with the PALS, by
money order, certified check, or cashier’s check made payable to the Clerk of the
United States District Court for the District of Nebraska, a deposit in an amount
between five (5) and twenty (20) percent of the minimum bid as specified by the
PALS in the published notice of sale. The money order or certified or cashier’s
check shall be deposited with the Clerk of this Court. Before being permitted to
bid at the sale, potential bidders shall display to the PALS proof that they are able
to comply with this requirement. No bids will be accepted from any person(s)

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who have not presented proof that, if they are the successful bidders(s), they can
make the deposit required by this order of sale.
i.

The successful bidder(s) shall pay the balance of the purchase price for the
Property within sixty (60) days following the date of the sale. The money order,
certified check, or cashier’s check shall be made payable to the Clerk of the
United States District Court for the District of Nebraska and shall be given to the
PALS, who will deposit the funds with the Clerk of this Court. If the bidder fails
to fulfill this requirement, the sale shall be treated as null and void, and the
deposit shall be forfeited as damages and applied to cover the expenses of the
sale, with any amount remaining applied to the judgment for the federal tax
liabilities entered in this case. The Clerk shall distribute the deposit as directed by
the PALS by check made payable to the “United States Treasury.” The Property
shall be again offered for sale under the terms and conditions of this order of sale
or, in the alternative, sold to the second highest bidder. The successful bidder(s) at
the new sale or second highest bidder, as the case may be, shall receive the
Property free and clear of all rights, titles, claims, liens, and interests of the
defaulting bidder(s).

j.

The Clerk of the Court is directed to accept the deposits and proceeds of the sale
and deposit them into the Court’s registry for distribution as provided for herein
or pursuant to further order of this Court.

k.

The sale of the Property shall be subject to confirmation by this Court. On
confirmation of the sale, ownership and possession of the Property shall transfer
to the successful bidder(s), and all interests in, liens against, and titles and claims

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to, the Property that are held or asserted by the parties to this action are
discharged and extinguished.
l.

After the confirmation of the sale, the IRS shall execute and deliver a deed under
the authority of this Court conveying the Property, effective as of the date of the
confirmation of the sale, to the successful bidder(s). Also, after this Court
confirms the sale, and on receipt of the deed from the successful bidder, the
Register of Deeds of Douglas County, Nebraska shall cause the transfer of the
Property to be reflected upon that county's register of title. The successful
bidder(s) shall pay, in addition to the amount of the bid, any county or local
documentary stamps and registry fees as provided by law.

3.

Up until the date that this Court confirms the sale of the Property, James J. Shotkoski and
Denise R. Shotkoski shall take all reasonable steps necessary to preserve the Property
(including all buildings, improvements, fixtures and appurtenances on the Property) in its
current condition including, without limitation, maintaining a fire and casualty insurance
policy on the Property. James J. Shotkoski, Denise R. Shotkoski, and all occupants of the
Property shall neither commit waste against the Property nor cause or permit anyone else
to do so. Neither shall any of the defendants in this case do anything that tends to reduce
the value or marketability of the Property, nor cause or permit anyone else to do so.
Defendants shall not record any instruments, publish any notice, or take any other action
(such as running newspaper advertisements, posting signs, or making Internet postings)
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 auction,
nor shall they cause or permit anyone else to do so. If the Property is destroyed before its

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sale and James J. Shotkoski and/or Denise R. Shotkoski is entitled to insurance proceeds,
the insurance proceeds shall be paid into the registry of this Court. Violation of this
paragraph shall be deemed a contempt of court and punishable as such.
4.

All persons occupying the Property shall vacate the Property permanently within 45 days
of the date of this order of sale, each taking with them his or her personal property (but
leaving all improvements, buildings, fixtures, and appurtenances to the Property). If any
person fails or refuses to vacate the Property by the date specified in this order of sale, the
PALS is authorized to coordinate with the United States Marshal to take all actions that
are reasonably necessary to have those persons ejected or excluded. The U.S. Marshals
Service is authorized to and directed to take any and all necessary actions, including the
use of reasonable force, to enter and remain on the premises, which includes, but is not
limited to, the land, the buildings, vehicles, and any structures located thereon, for the
purpose of executing this Order. The United States Marshals Service is further authorized
and directed to arrest and/or evict from the premises any and all persons who obstruct,
attempt to obstruct, or interfere or attempt to interfere, in any way with the execution of
this Order.

5.

Any personal property remaining on the Property 45 days after the date of this order of
sale is deemed forfeited and abandoned, and the PALS is authorized to dispose of it in
any manner they see fit, including sale, in which case the proceeds of the sale are to be
applied first to the costs and expenses of sale, and the balance shall be paid into the Court
for further distribution. Money orders and checks for the purchase of the personal
property shall be made payable to the Clerk of the United States District Court for the
District of Nebraska, and the Clerk of the Court is directed to accept cash and checks and

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deposit such items into the Court’s registry for distribution pursuant to further order of
this Court. This order of sale shall also serve as a Writ of Assistance or Writ of
Possession, as appropriate, and no further order from the Court shall be required for these
purposes.
6.

No later than two business days after vacating the Property pursuant to the deadline set
forth in paragraph 4 above, James J. Shotkoski and Denise R. Shotkoski shall provide
counsel for the United States with a forwarding address where they can be reached. They
shall provide the address by contacting the U.S. Department of Justice Tax Division’s
trial attorney at [phone].

7.

Up until the date that this Court confirms the sale of the Property, the IRS, PALS, and
their representatives are authorized to have free and full access to the Property in order to
take any and all actions necessary to preserve the Property, including, but not limited to,
retaining a locksmith or other person to change or install locks or other security devices
on any part of the Property.

8.

After the Court confirms the sale of the Property, the sale proceeds deposited with the
Clerk of this Court should be distributed in the following order of priority:
a.

First, to the PALS, and payable to the “United States Treasury,” for the costs and
expenses of the sale, including any costs and expenses incurred to secure or
maintain the property pending sale and confirmation by the Court;

b.

Second, to the Douglas County Treasurer for unpaid delinquent real property
taxes on the Property for tax years 2013, 2014, and any delinquent or due and
payable taxes for subsequent tax years for which the County has a lien by virtue

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of Neb. Rev. Stat. § 77-203 by the time the sale is confirmed, including interest
under Neb Rev. Stat. §§ 45-104.01 and 77-207;
c.

Third, to SI 9, LLC (“SI 9”), to satisfy or partially satisfy its lien against the
Property as a result of its purchase of tax sale certificate No. 14-03163 for
delinquent real property taxes for tax year 2012. As of October 16, 2015, the
amount of SI 9’s lien against the Property was $6,150.73, which includes the
$5,001.20 that SI 9 paid to the Douglas County Treasurer for the tax sale
certificate and statutory interest calculated up to and including October 16, 2015.
Interest continues to accrue on SI 9’s interest under Neb. Rev. Stat. §§ 45-104.01
and 77-207;

d.

Fourth, to the United States, payable to the “U.S. Department of Justice” (and sent
to the Tax Division, FLU Unit, USDOJ, P.O. Box 310, Ben Franklin Station,
Washington, D.C. 20044) for application to the unpaid federal income tax
liabilities of Defendants James J. Shotkoski and Denise R. Shotkoski for tax years
1993-1995, 2000, 2001, 2003-2005, and 2007-2009, including all accrued
statutory additions (including interest and any penalties);

e.

Any remaining sale proceeds shall be held in the Court’s registry pending further
order of the Court.

9.

After this Court confirms the sale of the Property, neither James J. Shotkoski nor Denise
R. Shotkoski will retain any right to redeem the Property under applicable federal or state
law.

10.

Further, after this Court confirms the sale of the Property, SI 9 will not retain any lien
against or interest in the Property by virtue of tax sale certificate No. 14-03163 or any

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right under state law attributable to tax sale certificate No. 14-03163, including the right
to apply for a deed to the Property under Neb. Rev. Stat. § 77-1837 and to initiate a
foreclosure suit under Neb. Rev. Stat. § 77-1902.
DATED this 30th day of November, 2015.
BY THE COURT:
/s/ Lyle E. Strom
________________________________
LYLE E. STROM, Senior Judge
United States District Court

Agreed as to form and substance:

/s/ Timothy K. Dolan
TIMOTHY K. DOLAN, #20978
Deputy Douglas County Attorney
909 Civic Center
1819 Farnam Street
Omaha, Nebraska 68183
Telephone: [phone]
Fax: [phone]
[e-mail]
Attorney for John W. Ewing in his capacity
as Douglas County Treasurer

/s/ Sherra Wong
SHERRA WONG, NY #4894895
Trial Attorney, Tax Division
U.S. Department of Justice
P.O. Box 7238
Washington, D.C. 20044
Telephone: [phone]
Fax: [phone]
[e-mail]
Attorney for the United States

Date: November 24, 2015

Date: November 25, 2015

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Statement of Agreement by SI 9, LLC:
I, Helen Knosp, am the sole owner and registered agent of SI 9, LLC (“SI 9”), a Nebraska
limited liability company. I admit that SI 9 waived service of the summons and complaint in this
case, but did not answer or otherwise respond to the complaint. I agree to the entry of the
proposed Order of Sale above.
In the event that the United States sells the Property under the terms of this order, I agree
that the Property may be sold free and clear of any interest that SI 9 may currently hold in the
Property. If the Court confirms a sale of the Property held pursuant to this order, SI 9 will not
retain any interest in or lien against the Property, or the right to apply for a deed to the Property
under Neb. Rev. Stat. § 77-1837 or to initiate a foreclosure suit under Neb. Rev. Stat. § 77-1902.

Date:
HELEN KNOSP
Registered Agent and Owner
SI 9, LLC
1258 Glenwood Court
Fremont, NE 68025
Telephone: [phone]
[e-mail]

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