Uniformly Frivolous TP Loses Home

[The Observer]

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
LUCILLE JANICE OFFILER,
Defendant-Appellant.

Release Date: JULY 08, 2009


[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

Non-Argument Calendar

Appeal from the United States District Court
for the Middle District of Florida

(July 8, 2009)

Before BARKETT, PRYOR and FAY, Circuit Judges.

PER CURIAM:

Lucille Janice Offiler, proceeding pro se, appeals from the district court's grant of summary judgment to the government in its civil action to enforce a federal tax lien, pursuant to 26 U.S.C. section 7403(a). For the reasons set forth below, we affirm.

I.

The United States of America filed the instant civil action against Offiler,/1/ pursuant to 26 U.S.C. sections 7401 and 7403, seeking to reduce to judgment her federal tax liabilities for tax years 1994 through 2000 and foreclose upon the resulting federal tax lien by attaching Offiler's ownership interest in real property located in Kissimmee, Florida.

The government filed a motion for summary judgment and attached documents showing that the government had made valid assessments for unpaid income tax against Offiler for the years 1994 through 2000. The government also attached an affidavit by an employee of the Internal Revenue Service ("IRS"), who confirmed that the government had made valid tax assessments against Offiler and that she had outstanding tax liabilities of almost $ 200,000.

Offiler filed an opposition to the government's summary judgment motion. She did not submit any evidence, but rather attached a self-prepared affidavit, in which she advanced numerous tax-protester legal arguments.

In a brief order, the district court granted the government's summary judgment motion. The court stated: "Offiler, a tax protester, has filed numerous documents in this case, but her arguments are uniformly frivolous, and her response to the instant motion is no exception." After the court subsequently denied Offiler's motion to vacate the summary judgment order, it entered a decree of foreclosure and order of sale of the property. This appeal followed.

II.

"We review de novo questions on the jurisdiction of the district court." Zakrzewski v. McDonough, 490 F.3d 1264, 1267 (11th Cir. 2007). We also review de novo the district court's grant of summary judgment. United States v. Ryals, 480 F.3d 1101, 1104 (11th Cir. 2007).

Under the Internal Revenue Code, when an individual fails to pay an assessed tax, a lien in that amount arises in favor of the United States "upon all property and rights, whether real or personal, belonging to such person." 26 U.S.C. section 6321. That lien "arise[s] at the time the assessment is made and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied . . . ." Id. section 6322. Pursuant to 26 U.S.C. section 7403, the government may file a civil action in the district court to enforce the lien and subject the delinquent taxpayer's property to the payment of such tax liability. 26 U.S.C. section 7403(a); see also id. section 7403(c) (providing that after the district court finds the government's tax lien to be established, it "may decree a sale of such property . . . and a distribution of the proceeds of such sale").

III.

Offiler first contends that the district court lacked subject-matter jurisdiction in this case, but this contention is without merit. See 26 U.S.C. section 7402(a) (granting the district courts jurisdiction over civil actions brought pursuant to section 7403); 28 U.S.C. section 1340 (granting the district courts jurisdiction over "civil action[s] arising under any Act of Congress providing for internal revenue"); 28 U.S.C. section 1345 (granting the district courts jurisdiction over "all civil actions, suits or proceedings commenced by the United States"). In this respect, to the extent that Offiler contends that the Florida courts had exclusive jurisdiction over this action, that argument is plainly incorrect. Furthermore, Offiler's reliance on the federal tax exception to the Declaratory Judgment Act is misplaced because the government was not seeking a declaratory judgment in this case. See 28 U.S.C. section 2201(a). Thus, we conclude that the district court had subject-matter jurisdiction.

Offiler next contends that the district court lacked an evidentiary basis to grant the government summary judgment. However, the government attached evidence to its summary judgment motion indicating that it had in fact made valid tax assessments against Offiler from 1994 to 2000 and that those taxes went unpaid. See United States v. Chila, 871 F.2d 1015, 1017-18 (11th Cir. 1989) ("[T]his Court accepts the document 'Certificate of Assessments and Payments' submitted by the government as presumptive proof of a valid assessment."). Moreover, the government also attached an affidavit by an IRS employee who verified that information. Rather than submit any rebuttal evidence in her response to the government's summary judgment motion, Offiler merely raised frivolous tax-protester legal arguments. See id. at 1018 ("Given that the defendant has produced no evidence to counter this presumption, the Court is satisfied that the government has established that the claimed tax liability was properly assessed against the defendant.").

To the extent that Offiler argues that her property was protected by Florida's homestead exemption, that argument is foreclosed by Supreme Court precedent. See United States v. Rodgers, 461 U.S. 677, 701, 103 S.Ct. 2132, 2146, 76 L.Ed.2d 236 (1983) (noting that the Supremacy Clause "provides the underpinning for the Federal Government's right to sweep aside state-created [homestead] exemptions" under section 7403). We also conclude that Offiler's alleged failure to receive certain documents during the course of the litigation was harmless.

Thus, the district court properly granted the government summary judgment. Accordingly, we affirm.

AFFIRMED.

FOOTNOTE

/1/ The government also named Wells Fargo Home Mortgage, Inc., and Dolphin Bay Holdings, Inc., as defendants in the action, but these defendants are not parties to this appeal.

[mutter]

this is interesting. she doesnt own the home the bank does.
so whom is the gov actually taking from here? Literally they are taking the banks property to satisfy her tax debt.
so the banks get screwed? does this action void the mortgage contract?

[Prof]

this is interesting. she doesnt own the home the bank does.
so whom is the gov actually taking from here? Literally they are taking the banks property to satisfy her tax debt.
so the banks get screwed? does this action void the mortgage contract?

The Bank's lien would generally be superior to the lien of the IRS.

[Quixote]

this is interesting. she doesnt own the home the bank does.
so whom is the gov actually taking from here? Literally they are taking the banks property to satisfy her tax debt.
so the banks get screwed? does this action void the mortgage contract?

The Bank's lien would generally be superior to the lien of the IRS.

And the homeowner must have equity or the IRS wouldn't have foreclosed its lien. So the bank will be paid in full, satisfying the mortgage contract.

[Pottapaug1938]

this is interesting. she doesnt own the home the bank does.

In a "title theory" state, where the mortgagee holds defeasible title to the property, you would technically be correct; but the IRS would only be able to reach the TP's equity in the property. In a "lien theory" state, where the mortgage is a lien on the property and title is not transferred, the IRS levy would be a junior lien and would be satisfied only after all senior liens are satisfied.

Wrong again, Mutter.

[mutter]

this is interesting. she doesnt own the home the bank does.

In a "title theory" state, where the mortgagee holds defeasible title to the property, you would technically be correct; but the IRS would only be able to reach the TP's equity in the property. In a "lien theory" state, where the mortgage is a lien on the property and title is not transferred, the IRS levy would be a junior lien and would be satisfied only after all senior liens are satisfied.

Wrong again, Mutter.

I asked questions I didnt make statements.
I find Q is a good source for learning.
I assumed all mortages were liens. I ve never even heard of title theory state, but I did know there are all kinds of things that can cloud a title.
What interested me was the DOJ named the mortgage company as a defendant. Whom of course would have no knowledge of her tax debt, but did/does have an interest in the property.

so IRS forces the sale of the house so they can get her equity out of it, but the bank gets paid too.

[Quixote]

The order Ms. Offiler was appealing:

ORDER

This matter comes before the Court on the Motion for Summary Judgment (Doc. 46) filed by the Plaintiff, the United States of America, and the responses filed by Defendant Lucille Janice Offiler ("Offiler") (Doc. 50) and Defendant Wells Fargo Home Mortgage, Inc. ("Wells Fargo ") (Doc. 51). Default judgment has been entered against Defendant Dolphin Bay Holdings, Inc. Offiler, a tax protester, has filed numerous documents in this case, but her arguments are uniformly frivolous, and her response to the instant motion is no exception.

The government seeks to reduce to judgment Offiler's tax liability for the years 1994 to 2000 and to foreclose its tax liens against her residence. Wells Fargo holds a mortgage on the property, which the government acknowledges is superior to its tax liens, as it was recorded prior to the tax assessments [*2] at issue. To protect its interest, Wells Fargo requests that the Court require the government to either satisfy its mortgage prior to any foreclosure sale or require that any such sale be made subject to its mortgage.

In consideration of the foregoing, it is hereby

ORDERED that the Motion for Summary Judgment (Doc. 46) is GRANTED. On or before January 15, 2008, the government shall file a proposed form of final judgment that will protect Wells Fargo 's interest in the property either by requiring that the mortgage be satisfied prior to any foreclosure sale, or that such sale be made subject to the mortgage, or by some other method negotiated with and agreed to by Wells Fargo.

DONE and ORDERED in Chambers, Orlando, Florida on December 22, 2008.

/s/ Gregory A. Presnell

GREGORY A. PRESNELL

UNITED STATES DISTRICT JUDGE

[Prof]

this is interesting. she doesnt own the home the bank does.

In a "title theory" state, where the mortgagee holds defeasible title to the property, you would technically be correct; but the IRS would only be able to reach the TP's equity in the property. In a "lien theory" state, where the mortgage is a lien on the property and title is not transferred, the IRS levy would be a junior lien and would be satisfied only after all senior liens are satisfied.

Wrong again, Mutter.

I asked questions I didnt make statements.
I find Q is a good source for learning.
I assumed all mortages were liens. I ve never even heard of title theory state, but I did know there are all kinds of things that can cloud a title.
What interested me was the DOJ named the mortgage company as a defendant. Whom of course would have no knowledge of her tax debt, but did/does have an interest in the property.

so IRS forces the sale of the house so they can get her equity out of it, but the bank gets paid too.

1. There are two types of liens on realty in the US. Some states follow what is called the "lien theory", and allow a borrower to grant a mortgage on realty to the lender, which is filed in the County/Parish Deed Records in order to show that a lender has taken a lien. Other states follow the "title theory." Title theory states require the use of a deed of trust, which is an instrument under the terms of which title is vested in a trustee who takes title to the property and holds the property in trust for the lender. The borrower only has equitable title, not legal title. When the lender is paid, title vests in the borrower. As far as I know, in all title theory/deed of trust states, non-judicial foreclosure is allowed, and the trustee can post the property and sell it to satisfy the lien/debt without judicial intervention.

2. Ordinarily, liens attach to property in some order of priority. Priority is determined by statutute. So, ad valorem tax liens, by law, in all states, as far as I know, attach on the first day of each tax year and have statutory priority over the rights of owners and all other lenders and lien holders, even if the other liens predate the tax lien. Consensual liens attach and have such priority as given by state law; usually, consensual liens are "perfected" for purpose of priority on the date the lien is filed in the deed records. Judgment liens attach when filed in the deed records ("abstracted"). Mechanics and materialmen get liens based upon the date when work began; so, if you are building a house, all M & M liens date from the date work was started and all have the same priority. That is why in construction projects the lender financing the project makes sure that no work has started before the lender's lien has filed.

3. Federal tax liens ordinarily have a priority from the date the lien is filed in the deed records, and so are ordinarily subordinate to a lien of a consensual lender, who will not advance if a tax lien shows up on a title examination.

4. Unlike ad valorem liens, the IRS lien does not prime any prior lien except as to future advances and after acquired property where the advance is made or property acquired more than 45 days after the tax lien is filed. This most affects revolving commercial loans.

[LPC]

What interested me was the DOJ named the mortgage company as a defendant.

I believe it to be a common practice that, in actions involving title to real estate, all persons with any known (i.e., recorded) interest in the property are given notice of the action.

[Tax Man]

1. There are two types of liens on realty in the US. Some states follow what is called the "lien theory", and allow a borrower to grant a mortgage on realty to the lender, which is filed in the County/Parish Deed Records in order to show that a lender has taken a lien. Other states follow the "title theory." Title theory states require the use of a deed of trust, which is an instrument under the terms of which title is vested in a trustee who takes title to the property and holds the property in trust for the lender. The borrower only has equitable title, not legal title. When the lender is paid, title vests in the borrower. As far as I know, in all title theory/deed of trust states, non-judicial foreclosure is allowed, and the trustee can post the property and sell it to satisfy the lien/debt without judicial intervention.

2. Ordinarily, liens attach to property in some order of priority. Priority is determined by statutute. So, ad valorem tax liens, by law, in all states, as far as I know, attach on the first day of each tax year and have statutory priority over the rights of owners and all other lenders and lien holders, even if the other liens predate the tax lien. Consensual liens attach and have such priority as given by state law; usually, consensual liens are "perfected" for purpose of priority on the date the lien is filed in the deed records. Judgment liens attach when filed in the deed records ("abstracted"). Mechanics and materialmen get liens based upon the date when work began; so, if you are building a house, all M & M liens date from the date work was started and all have the same priority. That is why in construction projects the lender financing the project makes sure that no work has started before the lender's lien has filed.

3. Federal tax liens ordinarily have a priority from the date the lien is filed in the deed records, and so are ordinarily subordinate to a lien of a consensual lender, who will not advance if a tax lien shows up on a title examination.

4. Unlike ad valorem liens, the IRS lien does not prime any prior lien except as to future advances and after acquired property where the advance is made or property acquired more than 45 days after the tax lien is filed. This most affects revolving commercial loans.

awesome summary - thank you

[wserra]

a mortgage on realty

It is early morning, I just finished reading Demo's blog on the Brown verdict, and I read this quote as "a mortgage on reality". It occurs to me that, while that isn't what Prof wrote, it's a pretty good description of what these folks do.

BTW, Prof, that's a terrific summary. It's a good part of a first-year property course in four paragraphs.