United States of America v. Washburn et al

Filing 17

ORDER & DEFAULT JUDGMENT - It is hereby ORDERED that: 1. US' motion 13 for default jdgmt GRANTED.; 2. JDGMT ENTERED in favor of US & against deft Timothy Washburn in amt of $109,248.46 as of 4/18/18 w/ interest & penalties...; 3. JDGMT EN TERED in favor of US & against deft Terri Washburn in amt of $50,542.36 as of 4/18/18 w/ interest & penalties...; 4. JDGMT ENTERED in favor of US & against Washburns on US' claim to foreclose on federal tax liens attached to real property @ 6458 Pamadeva Rd, Hanover, PA arising from liabilities per Paras 2 & 3 supra as well as liabilities of Timothy Washburn for fed tax yr 2001 previously reduced to jdgmt by this court...; 5. Property as more fully described in deed attached to U S' complaint.. shall be sold according to following provisions... (see Paras 5a-5l for specifics).; 6. Beginning 30 days from date of this order PALS authorized to have free access to Property until deed is delivered to ultimate purchaser & to t ake all actions necessary to preserve the Property...; 7. Until Property is sold, Washburns shall take all reasonable steps necessary to preserve Property... (see Para 7 for specifics).; 8. All persons occupying or present on Property... shall vacate it permanently w/in 30 days of date of this order...; 9. USM authorized & directed to enforce this order @ any time he/she deems appropriate after 30 days from date of this order... (see Para 9 for specifics).; 10. When USM concludes that all p ersons have vacated or been evicted from Property he/she shall relinquish possession & custody of Property to PALS except where authorized or req'd by PALS to return to Property. ; 11. Should Washburns or other persons fail to vacate Property by 30 days from date of this order or attempt to enter Property after that date w/out auth from PALS or USM that person shall be found in contempt of this order & subject to arrest and incarceration.; 12. Any personal property remaining on the Property 30 days after date of this order is forfeited & PALS authorized to dispose of it in manner it sees fit... (see Para 12 for specifics).; 13. Proceeds from sale by PALS of the Property shall be distributed in following order... (see Paras 13a-13c for specifics).; 14. The USM shall w/in 10 days of date of this order serve notice of it to the Washburns by delivering copy to Washburns personally or by leaving copy of order @ prominent location on the Property...; 15. Proof of the service des cribed in Para 14 shall be filed through the Court's ECF system.; 16. Clrk of Ct directed to deliver a true copy of this order to the USM.; 17. Ct shall retain jurisdiction over this matter... (See order/jdgmt for complete details.) Signed by Chief Judge Christopher C. Conner on 7/23/18. (ki)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,
Plaintiff
v.
TIMOTHY J. WASHBURN, et al.,
Defendants

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CIVIL ACTION NO: 1:17-CV-2295
(Chief Judge Conner)

ORDER & JUDGMENT
AND NOW, this 23rd day of July, 2018, upon consideration of the motion
(Doc. 13) by the United States of America for default judgment against pro se
defendants Timothy J. Washburn and Terri M. Washburn (collectively, “the
Washburns”), and the court observing that the United States initiated the abovecaptioned action by filing a complaint (Doc. 1) on December 13, 2017, asserting a
claim against Timothy Washburn for federal income tax liability in the amount of
$107,288.76 for tax years 2009 through 2013, (see id. ¶¶ 7, 11), a claim against Terri
Washburn for federal income tax liability in the amount of $49,617.66 for tax years
2010 and 2011, (see id. ¶¶ 12, 16), and a claim for foreclosure of federal tax liens, (see
id. ¶¶ 17-24); that the United States completed service by publication on March 29,
2018, (see Doc. 10), rendering the Washburns’ answer or responsive pleading due on
or before April 19, 2018, see FED. R. CIV. P. 12(a)(1)(A)(i); and that the Washburns
failed to plead or otherwise defend, see FED. R. CIV. P. 12, resulting in the Clerk’s
entry of default (Doc. 12) against them on April 20, 2018, see FED. R. CIV. P. 55(a);
and further upon consideration of the Washburns’ challenge of jurisdiction (Doc.

14), which the court construes as the Washburns’ response in opposition to the
United States’ motion for default judgment, wherein the Washburns oppugn the
court’s subject matter jurisdiction sub judice, as well as assert that “[a]ll
proceedings must stop until jurisdiction has been proven on the record” and that
the entry of default against them should be dismissed, (id.), and the court noting
that the United States Code explicitly confers subject matter jurisdiction upon
federal district courts to issue such orders and to “render such judgments and
decrees as may be necessary and appropriate for the enforcement of the internal
revenue laws,” 26 U.S.C. § 7402(a), and further grants “original jurisdiction” to
district courts over “any civil action arising under any Act of Congress providing for
internal revenue,” 28 U.S.C. § 1340, and the court thus finding that the Washburns’
jurisdictional challenge is wholly meritless, and turning to the Washburns’ request
that the court dismiss the entry of default, (Doc. 14 at 2), the court observing that
the Washburns must demonstrate “good cause” for the court to set aside the entry
of default, FED. R. CIV. P. 55(c), which inquiry tasks the court to consider whether:
(1) the United States will be prejudiced if the default is set aside, (2) whether the
Washburns have a meritorious defense, and (3) whether default resulted from the
Washburns’ culpable conduct, see United States v. $55,518.05 in U.S. Currency, 728
F.2d 192, 194-95 (3d Cir. 1984), and the court finding that no factor favors setting
aside the entry of default, as (1) the United States may be prejudiced if default does
not stand and it is compelled to litigate a matter against uncooperative defendants
who do not deny liability, (2) the Washburns’ defenses are meritless, (see Doc. 14),
and (3) their dilatoriness and blatant disregard for the legal process was
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unquestionably deliberate, (see, e.g., Docs. 5, 7), and the court thus declining to
exercise its discretion to set aside the default; and lastly, turning to the United
States’ motion (Doc. 13) for default judgment, the court observing that entry of
default judgment is appropriate when unchallenged facts of the complaint state a
prima facie cause of action, see Joe Hand Promotions, Inc. v. Yakubets, 3 F. Supp.
3d 261, 270 (E.D. Pa. 2014) (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d
Cir. 1990)), and finding that the undisputed allegata establish that Timothy
Washburn has unpaid federal income tax liability for tax years 2009 through 2013 in
the amount of $109,248.46 as of April 18, 2018, (see Doc. 1 ¶¶ 7, 11; Doc. 13 at 2-3;
Doc. 13-2 ¶¶ 4, 6), that Terri Washburn has unpaid federal income tax liability for
tax years 2010 and 2011 in the amount of $50,542.36 as of April 18, 2018, (see Doc. 1
¶¶ 12, 16, Doc. 13 at 3, Doc. 13-2 ¶¶ 7, 9), that the United States possesses federal tax
liens pursuant to 26 U.S.C. §§ 6321, 6322 that should be foreclosed, (see Doc. 1 ¶¶ 1723), and that the Washburns have not contested that they received the income
reflected in the United States’ notices of assessments and demands for payment,
(see Doc. 1 ¶¶ 7-8, 12-13; Doc. 13-2 ¶¶ 4-6, 7-9), nor do they dispute the accuracy of
the United States’ calculations, (see generally Doc. 14), and the court thus
concluding that entry of default judgment is

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appropriate,1 and that the United States has proven the amount of the requested
judgment against the Washburns with sufficient certainty such that no further
inquiry is required, see FED. R. CIV. P. 55(b)(2); Rhino Assocs. L.P. v. Berg Mfg. &
Sales Corp., 531 F. Supp. 2d 652, 657 (M.D. Pa. 2007), and that the facts establishing
the United States’ entitlement to foreclose on the real property named in the
complaint, (Doc. 1 ¶ 6; see also Doc. 1-2), are “taken as true,” see Comdyne I, Inc. v.
Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990), it is hereby ORDERED that:
1.

The United States motion (Doc. 13) for default judgment is GRANTED.

2.

Judgment is ENTERED in favor of the United States and against
Timothy Washburn in the amount of $109,248.46 as of April 18, 2018,
together with all interest and penalties that will continue to accrue
pursuant to statute after that date, with respect to Timothy
Washburn’s unpaid federal income tax liabilities for the federal tax
years 2009 through 2013.

3.

Judgment is ENTERED in favor of the United States and against Terri
Washburn in the amount of $50,542.36 as of April 18, 2018, together
with all interest and penalties that will continue to accrue pursuant to
statute after that date, with respect to Terri Washburn’s unpaid federal
income tax liabilities for the federal tax years 2010 and 2011.

4.

Judgment is ENTERED in favor of the United States and against the
Washburns on the United States’ claim to foreclose on the federal tax
liens that attach to the real property located at 6458 Pamadeva Road,
Hanover, Pennsylvania 17331 (“the Property”) arising from the
liabilities set forth in paragraphs 2 and 3 supra, as well as the liabilities

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The Third Circuit Court of Appeals encourages district courts to consider
three factors in addition to the claim’s prima facie merit before granting default
judgment, to wit: “(1) prejudice to the plaintiff if default is denied, (2) whether the
defendant appears to have a litigable defense, and (3) whether defendant’s delay
is due to culpable conduct.” Joe Hand Promotions, 3 F. Supp. 3d at 271 (quoting
Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000)). The factors are the
same in all material respects as those considered in determining whether to set
aside an entry of default. Hence, we incorporate our analysis infra appertaining
prejudice, defensibility, and culpability as if fully set forth here.
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of Timothy Washburn for federal tax year 2001 previously reduced to
judgment by this court. See United States v. Washburn, No. 1:16-CV626, Doc. 16 (M.D. Pa. June 23, 2017) (Conner, C.J.).
5.

The Property, as more fully described in the deed attached to the
United States’ complaint, (see Doc. 1-2), shall be sold according to the
following provisions:
a.

The United States Internal Revenue Service (the “IRS”),
through its Property Appraisal and Liquidation Specialist Unit
(“PALS”), is authorized under 28 U.S.C. §§ 2001 and 2002 to
offer for sale at public auction and to sell the Property.

b.

The public auction shall be held at the Property or at any other
place in accordance with the provisions of 28 U.SC. §§ 2001 and
2002.

c.

The sale of the Property shall be free and clear of any liens or
interests held by the Washburns.

d.

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

e.

PALS shall publish notice of the sale, including the time, date,
and location of the sale, once a week for at least four consecutive
weeks before the sale in at least one newspaper of general
circulation in the county in which the property is located. PALS
may publish notice of the sale by any additional method that it
deems appropriate. Any notice of the sale of the Property shall
contain a description of the Property as well as the terms and
conditions of sale as set forth herein.

f.

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

g.

At the time of the sale, the successful bidder(s) shall deposit with
PALS, by money order or by certified or cashier’s check payable
to the Clerk of the United States District Court for the Middle
District of Pennsylvania, a deposit in an amount between five (5)
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and twenty (20) percent of the minimum bid as specified by
PALS in the published notice of sale. PALS may require, at its
discretion, potential bidders to submit to PALS proof that they
are able to comply with this requirement. PALS may refuse to
accept bids from any person(s) who have not presented such
proof.
h.

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 certified or cashier’s check payable to the United
States District Court for the Middle District of Pennsylvania
shall be given to PALS who will deposit the funds with the Clerk
of this court. If the bidder fails to fulfill this requirement, the
deposit shall be forfeited immediately upon expiration of the 60day period and shall be applied to cover the expenses of the sale,
with any additional amount paid into the court for further
distribution pursuant to Paragraph 13 infra. The Property shall
be again offered for sale under the terms and conditions of this
order or, in the alternative and at the discretion of PALS, sold to
the second-highest bidder.

i.

The sale of the Property shall be subject to confirmation by this
court. On confirmation of the sale, the IRS shall execute and
deliver a deed conveying the Property to the purchaser. On
confirmation of the sale, all interests in, liens against, or claims
to, the Property that are held or asserted by all parties to this
action, including parties against whom the Clerk has entered
default, are discharged and extinguished as to the Property.

j.

When this court confirms the sale, the recording official of the
county in which the Property is located shall cause transfer of
the Property to be reflected upon that county’s register of title.
The successful bidder at the sale shall pay, in addition to the
amount of the bid, all costs in connection with such transfer of
title, including transfer fees and taxes.

k.

The sale of the Property is ordered pursuant to 28 U.S.C. § 2001
and is made without right of redemption.

l.

The Clerk of Court is directed to accept the proceeds of the sale
and deposit them into the court’s interest-bearing registry
account for distribution pursuant to further order of this court.

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6.

Beginning 30 days from the date of this order, PALS is authorized to
have free access to the Property until the deed to the Property is
delivered to the ultimate purchaser and to take 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.

7.

Until the Property is sold, the Washburns 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. They shall neither commit
waste against the Property nor cause or permit anyone else to do so.
They shall neither do anything that tends to reduce the value or
marketability of the Property nor cause or permit anyone else to do so.
The Washburns 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.

8.

All persons occupying or present upon the Property, including the
Washburns and any persons acting in concert with or on behalf of
them, shall vacate it permanently within 30 days of the date of this
order, each taking with them his or her personal property (but leaving
all improvements, buildings, fixtures, and appurtenances to the
Property).

9.

The United States Marshal is authorized and directed to enforce this
order at any time that he or she deems appropriate after 30 days from
the date of this order. Such enforcement includes, but is not limited
to, (i) entering the Property, and any and all structures and vehicles
located thereon, (ii) evicting any persons from all locations on the
Property, including but not limited to the structures, vehicles, and
grounds, (iii) using force as necessary to accomplish this mission,
including arrest, and (iv) accompanying PALS personnel (and any
persons authorized by PALS personnel) on the Property.

10.

When the United States Marshal concludes that all persons have
vacated or been evicted from the Property, he or she shall relinquish
possession and custody of the Property to PALS, except where
authorized or requested by PALS to return to the property.

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11.

Should the Washburns, or any other persons, either fail to vacate the
property by 30 days from the date of this order, or attempt to enter the
property after that date without authorization from PALS or the
United States Marshals, that person shall be found in contempt of this
order, and shall be subject to arrest and incarceration.

12.

Any personal property remaining on the Property 30 days after the
date of this order is forfeited, and PALS is authorized to dispose of it in
any manner its sees fit, including disposal or sale. In the case of sale,
the proceeds of the sale are to be applied first to the expenses of sale,
with the balance to be paid into the court for further distribution
pursuant to Paragraph 13 infra. Checks for the purchase of the
personal property shall be made out to the Clerk of Court and the
Clerk is directed to accept these checks and deposit them into the
court’s registry for distribution pursuant to further order of this court.

13.

The proceeds from the sale by PALS of the Property shall be
distributed in the following order:
a.

First, to the IRS, to satisfy any customary and reasonable costs
of sale;

b.

Second, as determined by future order of this court, to any local
taxing authorities, government entities, or utilities, to the extent
that the debts owed to such entities result in a lien that receives
priority under 26 U.S.C. § 6323(b)(6) over the liens held by the
United States; and

c.

Third, of the remaining funds:
i.

ii.

14.

50% to the United States, to be applied towards the
balance of the federal tax liens against Timothy
Washburn set forth in Paragraphs 2 and 4 above, with any
excess amount of this portion distributed to Timothy
Washburn;
The remaining 50% to the United States, to be applied
towards the balance of the federal tax liens against Terri
Washburn as set forth in Paragraphs 3 and 4 above, with
any excess amount distributed to Terri Washburn.

The United States Marshal shall, within 10 days of the date of this
order, serve notice of it to the Washburns by delivering a copy to the
Washburns personally or by leaving a copy of the order at a prominent
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location on the Property, such as but not limited to the front door of
the property.
15.

Proof of the service described in paragraph 14 above shall be filed
through the Court’s ECF system.

16.

The Clerk of Court is DIRECTED to deliver a true copy of this order to
the United States Marshal.

17.

The court shall retain jurisdiction over this matter for the purpose of
granting such orders and decrees as the circumstances may require.

/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania