United States of America v. Hawthorne et al
Memorandum of Opinion and Order granting USA's Motion for order of sale and to vacate property (Related Doc # 32 ); denying Defendants' Motion to stay (Related Doc # 37 ). Judge Dan Aaron Polster on 7/9/14.(P,R)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
UNITED STATES OF AMERICA,
NATHANIEL HAWTHORNE, et al.,
CASE NO. 1:12 CV 3041
JUDGE DAN AARON POLSTER
MEMORANDUM OF OPINION
Pending before the Court are two motions:
Plaintiff United States of America’s Motion for Order of Sale and to Vacate Property
(“the Government’s Motion”) (Doc #: 32), and
Defendants’ Motion for Stay (“Defendants’ Motion) (Doc #: 37).
For the following reasons, the Government’s Motion is GRANTED and Defendants’
Motion is DENIED.
On December 13, 2012, the United States filed this action to reduce to judgment federal
tax assessments against Nathaniel Hawthorne and to foreclose on his one-half interest in real
property located at 16590 Snowshoe Trail, Chagrin Falls, Ohio (“the Snowshoe property”).
(Doc #: 1.)
More than 16 months later (April 17, 2014), following a Case Management Conference,
eight months of discovery, and counsel’s efforts to settle this case, the Government filed a
Motion for Summary Judgment that explained, in clear terms and citing relevant case law, why
the Court should grant judgment in its favor. (Doc #: 25.) Hawthorne filed an opposition brief
that disputed neither the amount he owed on his federal income taxes; the fact that he was
assessed $344,808.66 on June 23, 2003; the fact that a statutory lien attached to all property and
rights to property he owned on that date; and the fact that any transfer of his property to his wife
or anyone else after that date was subject to the prior tax lien. (Doc #: 28.)
Rather than file a reasoned response to the Government’s Motion, Hawthorne used the
opportunity to take a pot shot at the Government. (Id. at 1 (“As is the custom with the Federal
Government, facts are not relevant.”)) Moreover, Hawthorne, a lawyer, contended that it was
the Government’s burden to show that he intended to defraud the Government when he
transferred his one-half interest in the Snowshoe property to his “innocent” spouse – without
citing a single case supporting that proposition. (Id at 1.) And finally, Hawthorne ignored
altogether the four factors, established by the Supreme Court in United States v. Rodgers, 461
U.S. 677 (1983), which the Court must consider when deciding whether to exercise its discretion
to enforce the tax lien via foreclosure.
In a Memorandum of Opinion and Order dated May 28, 2014, the Court explained, citing
relevant case law, that the Government did not have to prove that Hawthorne intended to defraud
the Government when he transferred his interest in the Snowshoe property to his wife – only that
the transfer was subject to the prior federal tax lien. (See Doc #: 30 at 5-6.) That said, the Court
articulated in detail why the undisputed facts painted a compelling picture of fraud. (See id. at
6-7.) The Court also explained, citing relevant case law, why the Government did not waive its
right to foreclose on Hawthorne’s interest in the Snowshoe property. (See id. at 7.) The Court
then analyzed the Rodgers factors in deciding to enforce the tax lien via foreclosure of the
Snowshoe property. (See id. at 7-10 (citing Rodgers, 461 U.S. at 710-11).
On May 30, 2014, the Government filed the pending Motion for Order of Sale and to
Vacate Property. (Doc #: 32.) On June 25, 2014, Hawthorne filed a document entitled
“Response to Plaintiff’s Motion and Separate Motion for Stay,” where he begins:
Assuming, arguendo, that plaintiff is correct in its levy claim, the levy only
relates to defendant Nathaniel Hawthorne, not Sylvia Hawthorne. If so, why is
the Plaintiff seeking to take Sylvia’s real estate by demanding that she vacate the
(Doc #: 37 at 1.) Apparently, Mr. Hawthorne did not read the Court’s Memorandum of Opinion
Again, instead of filing a reasoned response to the Government’s Motion, Hawthorne
used the opportunity to repeatedly bash the Government. (See, e.g., id. at 2 (“It’s well settled
that the plaintiff’s [sic] are adept at fabrications. The IRS has a problem with credibility no
matter what was filed under oath.”)) The only legal argument he makes is that “[a] federal tax
lien may not attach to property held by a taxpayer who owes no taxes and has received the real
estate pursuant to a general warranty deed.” (Id. (citing O.R.C. § 5302.05).) Notably missing is
a single case supporting this proposition. That is because there is no case supporting this
proposition. Hawthorne ignores the essential premise of a general warranty deed which is that,
at the time of delivery, the grantor “covenants” that the property to be conveyed is “free from all
encumbrances” and that he has “good right to sell and convey” the property. O.R.C. § 5302.05.
It is undisputed, however, that Hawthorne’s one-half interest in the Snowshoe property was in
fact encumbered by a federal tax lien at the time he attempted to convey it to his wife – which
lien remains effective today. Thus, the Government’s Motion is granted.
Hawthorne asks the Court to stay foreclosure of the Snowshoe property “while this
matter is on appeal.” (Doc #: 37, at 3.) His entire argument supporting this request is comprised
Plaintiff demands that Sylvia Hawthorne vacate property that she owns; if you
believe the plaintiff and defendant Sylvia legally does not owe taxes, the motion
to vacate does not relate to her. If it does, where is due process?
Doc #: 37, at 3.)
A party seeking a stay pending an appeal must show (1) likelihood of success on the
merits, (2) irreparable injury if the stay is not granted, (3) absence of substantial harm to the
other parties from granting the stay, and (4) service to the public interest from granting the stay.
See, e.g., Titan Tire Corp. of Bryan v. Local 890L, United Steelworkers of Am., 673 F.Supp.2d
588 (N.D. Ohio 2009).
While Mrs. Hawthorne will suffer irreparable injury if the stay is not granted, there is
absolutely no likelihood of success on the merits. As previously determined, the transfer of
Hawthorne’s interest in the Snowshoe property after June 23, 2003 was “encumbered” as it was
subject to the prior federal tax lien. Hawthorne does not show how a sale is any more disruptive
now than following what can only be characterized as a frivolous appeal. The United States
specifically, and the public generally, has a paramount interest in the collection of taxes. Further
delay in collecting Hawthorne’s tax liability serves to protect only the private interests of
Hawthorne and his wife, Sylvia. Accordingly, Defendant’s Motion is denied.
Based on the foregoing, the Government’s Motion (Doc #: 32) is GRANTED, and
Defendant’s Motion (Doc #: 37) is DENIED. The Court will separately issue an Order of Sale
and To Vacate Property.
IT IS SO ORDERED.
/s/ Dan A. Polster July 8, 2014
Dan Aaron Polster
United States District Judge
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