United States of America v. Engen et al

Filing 138

ORDER re Parties' 136 Stipulation Regarding Priority. The Stipulation between the United States, King County, and State of Washington Department of Revenue is APPROVED. Signed by Judge Ricardo S. Martinez. (SB)

The Honorable Ricardo S. Martinez

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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UNITED STATES OF AMERICA,

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Plaintiff,
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v.
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CAROL L. ENGEN, et al.,
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Defendants.
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_______________________________________)

Case No. 2:18-cv-00712-RSM
FIRST AMENDED STIPULATION
REGARDING PRIORITY
Noting Date: November 5, 2021

The United States of America (“United States”), King County, and Washington State

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Department of Revenue (“Washington State”) (collectively “the Parties”), by and through their

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respective undersigned counsel, agree and stipulate as follows:

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1.

On May 16, 2018, the United States commenced this action, seeking, inter alia, to

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reduce federal tax assessments against Carol L. Engen to judgment, and foreclose federal tax

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liens on real property located in King County (“Subject Property”). Dkt. No. 1.

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2.

The Subject Property is commonly referred to as 16423 NE 15th Street, Bellevue,

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WA 98008, bearing King County Assessor’s Parcel No. 329830-0450, and legally described as

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follows:

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LOT 26, BLOCK 2, HIGHLAND HILLS NO. 2, ACCORDING TO THE
PLAT THEREOF RECORDED IN VOLUME 62 OF PLATS, PAGE 74,
RECORDS OF KING COUNTY, WASHINGTON.
First Am. Stip. Re Priority
(Case No. 2:18-cv-00712-RSM)

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U.S. DEPARTMENT OF JUSTICE
Tax Division, Western Region
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone]

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See Dkt. No. 1, at ¶ 8.

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3.

King County was named as a defendant in this matter pursuant to 26 U.S.C. §

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7403(b) because it may have an interest in the Subject Property. Dkt. No. 1, at ¶ 6; Dkt. No. 102,

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at ¶ 6.

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4.

On June 23, 2021, the United States filed a first amended complaint solely to add

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Washington State as a defendant in this matter pursuant to 26 U.S.C. § 7403(b) because it may

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have an interest in the Subject Property. Dkt. No. 102, at ¶ 8.

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5.

Washington State’s interest in the Subject Property is based on a deferred

property tax lien pursuant to RCW 84.60.010, 84.38.100, and is due and payable upon the sale of

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the Subject Property pursuant to RCW 84.38.130. The lien was recorded on December 3, 2020

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with the King County Recorder’s office. The Parties agree that Washington State’s lien has

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priority over King County’s liens through December 31, 2021, and that on January 1, 2022, King

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County’s tax lien for the taxes due in 2022 (assessed in 2021) will have priority over the

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Washington State lien, provided that if a deferral is applied for and granted by the Washington

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State Department of Revenue for the 2021 taxes (due in 2022), the Washington State liens will

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maintain priority over the King County tax liens, described below, and the United States’ federal

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tax liens and judgment lien against the Subject Property.

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6.

King County’s interest in the Subject Property is for any unpaid real property

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taxes, which are secured by liens that encumber the Subject Property pursuant to RCW

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84.60.020. To the extent there is any unpaid amount owed to King County to which 26 U.S.C.

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§ 6323(b)(6) applies, on the date of the sale of the Subject Property, the Parties agree that such

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amount will be pro-rated through the date of the sale confirmation, and will have priority over

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the United States’ federal tax liens and judgment lien against the Subject Property.

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7.

In the event the Court orders the sale of the Subject Property, the Subject Property

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will be sold free and clear of all the interests of the parties to this case. The proposed Order of

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Foreclosure and Judicial Sale submitted by the United States shall provide that the sale proceeds

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will be distributed first to the Internal Revenue Service to the extent of its costs and expenses of
First Am. Stip. Re Priority
(Case No. 2:18-cv-00712-RSM)

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U.S. DEPARTMENT OF JUSTICE
Tax Division, Western Region
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone]

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the sale; second to Washington State to satisfy its lien described in Paragraph 5, above; third to

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King County to satisfy any amounts described in Paragraph 6, above; fourth to the United States

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for federal tax liens; and fifth to the Clerk of the Court for any balance remaining after the above

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payments until further order of the Court. If the affected parties cannot stipulate to the amounts

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of their liens, the Parties shall file written briefs setting forth their positions and the Court shall

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determine the amounts of the liens.

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8.

In the event King County and/or Washington State initiate collection procedures

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on account of their liens against the Subject Property while this action is pending, including but

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not limited to, assignment of the property tax liens, King County and/or Washington State shall

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notify counsel for the United States, in writing, prior to initiating such action.
9.

The United States, King County, and Washington State agree to bear their own

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respective costs related to this litigation, including any possible attorney’s fees, except costs of

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sale, which are paid out of the sale proceeds, ahead of any other party, as detailed in Paragraph 7,

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above. In addition, King County and Washington State will be bound by the Court’s Order of

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Sale of the Subject Property, and the United States will not seek any monetary judgment against

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King County or Washington State.

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(signatures on next page)

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First Am. Stip. Re Priority
(Case No. 2:18-cv-00712-RSM)

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U.S. DEPARTMENT OF JUSTICE
Tax Division, Western Region
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone]

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DATED: November 5, 2021

DAVID A. HUBBERT
Acting Assistant Attorney General

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/s/ Yen Jeannette Tran
YEN JEANNETTE TRAN
RIKA VALDMAN
Trial Attorneys, Tax Division
U.S. Department of Justice
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone] (Tran)
202-514-6056 (Valdman)
Fax: [phone]
Email: [e-mail]
[e-mail]

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Attorneys for the United States of America

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DATED: November 4, 2021

/s/ Jennifer H. Atchison via E-Mail
JENNIFER H. ATCHISON
King County Prosecuting Attorney’s Office (3rd
Ave.)
516 3rd Ave.
W400 King County Courthouse
Seattle, WA 98104
Telephone: [phone]
Email: [e-mail]

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Attorney for King County

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DATED: November 5, 2021

/s/ Susan Edison via E-Mail
SUSAN EDISON
Office of the Attorney General
Bankruptcy & Collections Unit
800 Fifth Ave., Ste. 2000
Seattle, WA 98104-3188
Telephone: [phone]
Fax: [phone]
Email: [e-mail]

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Attorney for the State of Washington Department of
Revenue

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First Am. Stip. Re Priority
(Case No. 2:18-cv-00712-RSM)

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U.S. DEPARTMENT OF JUSTICE
Tax Division, Western Region
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone]

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ORDER
The foregoing Stipulation between the United States, King County, and State of
Washington Department of Revenue is APPROVED. IT IS SO ORDERED.

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DATED this 9th day of November, 2021.

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A

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RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

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CERTIFICATE OF SERVICE
I hereby certify that on this 5th day of November, 2021, I electronically filed the
foregoing with the Clerk of Court using the CM/ECF system, which will send notice of such
filing to the following CM/ECF participant(s):
Jennifer H. Atchison ([e-mail])
Attorney for King County
Carol L. Engen ([e-mail])
Pro Se Defendant
Susan Edison ([e-mail])
Attorney for State of Washington Department of Revenue

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/s/ Yen Jeannette Tran
YEN JEANNETTE TRAN
Trial Attorney, Tax Division
U.S. Department of Justice

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First Am. Stip. Re Priority
(Case No. 2:18-cv-00712-RSM)

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U.S. DEPARTMENT OF JUSTICE
Tax Division, Western Region
P.O. Box 683
Washington, D.C. 20044
Telephone: [phone]