USA v. Talmage et al

Filing 241

MEMORANDUM DECISION AND ORDER denying 176 Motion for Partial Summary Judgment. Signed by Judge David Nuffer on 4/24/19 (alt)

Case 1:16-cv-00019-DN-PMW Document 241 Filed 04/25/19 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
UNITED STATES OF AMERICA,
Plaintiff,

MEMORANDUM DECISION AND
ORDER DENYING MOTION FOR
PARTIAL SUMMARY JUDGMENT

v.

Case No. 1:16-cv-00019-DN

RONALD B. TALMAGE, et al.,

District Judge David Nuffer

Defendants.

Defendants Western Land & Livestock LLC and Western Reserve Mortgage LLC
(collectively, the “Western Entities”) filed a motion for partial summary judgment (the
“Motion”) 1 against Plaintiff United States of America regarding the source and nature of certain
funds and related transactions. Because there are genuine issues of material fact, the Motion is
DENIED.
BACKGROUND
This action concerns a dispute between the Western Entities and the United States
regarding the ownership of certain real property, referred to as the “Liberty Property,” on which
the United States seeks to foreclose to satisfy liens arising from the tax obligations of Defendants

1

Motion for Partial Summary Judgment re: Talmage Ponzi Scheme (“Motion”), docket no. 176, filed September 24,
2018; see United States’ Response to Motion for Partial Summary Judgment re: Talmage Ponzi Scheme
(“Response”), docket no. 192, filed November 9, 2018; Sealed Exhibits to United States’ Response to Motion for
Partial Summary Judgment re: Talmage Ponzi Scheme, docket no. 196, filed under seal November 16, 2018; Reply
Memorandum in Support of Motion for Partial Summary Judgment re: Talmage Ponzi Scheme (“Reply”), docket
no. 199, filed November 23, 2018; United States’ Response to Evidentiary Objections in Partial Summary Judgment
Reply Brief, docket no. 227, filed February 21, 2019. “A memorandum in opposition to a motion for summary
judgment must include . . . [a] restatement of each fact the opposing party contends is genuinely disputed or
immaterial.” DUCivR 56-1(c)(3). The Response does not comply with this requirement. Moreover, “a reply brief
cannot exceed . . . twenty (20) pages.” Id. 56-1(g)(1). The Reply does not comply with this requirement. The parties
are instructed to comply with all applicable rules in relation to future filings.

elm

Case 1:16-cv-00019-DN-PMW Document 241 Filed 04/25/19 Page 2 of 4

Ronald B. Talmage and Annette C. Talmage. 2 Although title to the Liberty Property is recorded
in the name of one of the Western Entities, 3 the United States believes this is a nominal
arrangement intended to mask the Talmages’ interests in the Liberty Property. 4
Funds that the Western Entities used to purchase the Liberty Property came, at least in
part, from entities affiliated with the Talmages. 5 The Western Entities deny that any of these
funds ever belonged to the Talmages. 6 According to the Western Entities, “all monies at issue in
this case” belong to “investor victims” whom Ronald Talmage defrauded as part of a Ponzi
scheme. 7 Among these victims, the Western Entities include themselves. 8 As a result, it is the
Western Entities’ position that the United States cannot foreclose on the Liberty Property, as no
funds associated with the Liberty Property ever really belonged to the Talmages, and the United
States’ tax lien could only attach to property that belongs to the Talmages. 9

2

See Memorandum Decision and Order Denying Motion to Amend Complaint, at 1-2, docket no. 209, filed
December 28, 2018. The Talmages failed to appear or defend themselves in this case, and a default judgment was
entered against them on August 26, 2016, in the principal amount of $10,813,740.19. See Default Certificate, docket
no. 25, filed July 18, 2016; Order Granting United States’ Motion for Default Judgment Against Defendants Ronald
B. Talmage and Annette C. Talmage, docket no. 38, filed August 26, 2016.

3

See Complaint ¶¶ 85-86, docket no. 2, filed February 18, 2016; Counterclaim for Quiet Title ¶¶ 5-13, docket
no. 49, filed October 28, 2016.

4

See Complaint, supra note 3, ¶¶ 77-80, 85-89.

5

See Motion, supra note 1, ¶¶ 1-5, at 4-5; Response, supra note 1, at 2; see also Reply, supra note 1, at 10, 12-13
(disputing that “all the money for the Liberty Property” came from the Talmages or affiliated entities).

6

Motion, supra note 1, at 1-4.

7

Id. “A Ponzi scheme is a fraudulent investment scheme in which ‘profits’ to investors are not created by the
success of the underlying business venture but instead are derived from the capital contributions of subsequently
attracted investors.” Sender v. Simon, 84 F.3d 1299, 1301 n.1 (10th Cir. 1996) (citations omitted).

8

Motion, supra note 1, at 3.

9

See id. at 8-10.

2

Case 1:16-cv-00019-DN-PMW Document 241 Filed 04/25/19 Page 3 of 4

DISCUSSION
Summary judgment is appropriate if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” 10 A dispute is “genuine” if “there is
sufficient evidence on each side so that a rational trier of fact could resolve the issue either
way.” 11 A fact is “material” if “it is essential to the proper disposition of [a] claim.” 12 In ruling on
a motion for summary judgment, the evidence and all reasonable inferences are viewed in the
light most favorable to the nonmoving party. 13
With this Motion, the Western Entities seek an order declaring as a matter of law “that all
monies at issue in this case . . . were obtained and utilized by [Ronald Talmage] as part of a
Ponzi scheme,” and that Ronald Talmage “has no right or interest in any of those funds.” 14 But
when the evidence and all reasonable inferences are viewed in the light most favorable to the
United States, it is apparent that there are several genuine disputes as to material fact—any one
of which is sufficient to defeat this Motion. For example, there is a genuine dispute regarding the
nature and significance of transactions related to the Liberty Property. There is a genuine dispute
regarding the nature and extent of the Western Entities’ relationship, dealings, and involvement
with the Talmages and affiliated entities. And there is a genuine dispute regarding the nature and
source of the funds involved in these transactions and dealings. 15

10

FED R. CIV. P. 56(a).

11

Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).

12

Id.

13

Id.

14

Motion, supra note 1, at 2.

15

See, e.g., Memorandum Decision and Order Denying Motion to Exclude Testimony or Limit Testimony of Gary
D. Olsen, docket no. 240, filed April 24, 2019 (evidencing some of these disputed issues).

3

Case 1:16-cv-00019-DN-PMW Document 241 Filed 04/25/19 Page 4 of 4

Although the Western Entities note that a state court judge in a separate proceeding “has
already found that Mr. Talmage perpetrated a Ponzi scheme,” 16 that finding is irrelevant for
purposes of this Motion. For issue preclusion to apply, the party against whom collateral estoppel
is invoked (i.e., the United States) must have been a party, or in privity with a party, to the prior
adjudication. 17 It is undisputed that the United States was not a party to the state court case. 18
Thus, collateral estoppel cannot be invoked against the United States here. Besides, the state
court did not find that the funds used to purchase the Liberty Property came from a Ponzi
scheme. 19
Because a genuine dispute exists as to a material fact, the Western Entities are not entitled
to a judgment as a matter of law, and the Motion must be denied.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Motion 20 is DENIED.
Signed April 24, 2019.
BY THE COURT:

David Nuffer
United States District Judge

16

Id. ¶ 10, at 7.

17
Park Lake Res. Ltd., v. U.S. Dep’t of Agric., 378 F.3d 1132, 1136 (10th Cir. 2004); Macris & Assocs., Inc. v.
Neways, Inc., 2000 UT 93, ¶ 37, 16 P.3d 1214.
18

See Response, supra note 1, at 13, 35-37; Reply, supra note 1, at 21; see also Judgment (“Judgment 1”), docket
no. 176-7, filed September 24, 2018; Judgment (“Judgment 2”), docket no. 176-8, filed September 24, 2018.

19

See Judgment 1, supra note 18; Judgment 2, supra note 18.

20

Docket no. 176, filed September 24, 2018.

4