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United States v. Bone

United States District Court, N.D. Alabama, Middle Division

October 12, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
ANDREW J. BONE, SR., et al, Defendants.

          MEMORANDUM OPINION

          VIRGINIA EMERSON HOPKINS, UNITED STATES DISTRICT JUDGE

         This case comes before the Court on the United States of America's “Unopposed Renewed Motion for Default Judgment Against Andrew J. Bone, Sr., Connie C. Bone, Portfolio Recovery Associates, LLC and Cavalry SPV I, LLC.” and the Unopposed Motion for Summary Judgment by the United States Against the Exchange Bank of Alabama, the State of Alabama, and the County of Etowah. (Doc. 28). On May 2, 2017, this Court wrote an extensive Order denying, without prejudice, the government's previous Motion for Default Judgment. (Doc. 26). The Court adopts and incorporates by reference that Order, and all of its findings and holdings, as amended herein.

         I. THE MOTION FOR SUMMARY JUDGMENT

         As between the United States, the Exchange Bank of Alabama, the State of Alabama, and the County of Etowah, the following is stipulated and agreed to:

1. The County of Etowah possesses a first priority interest in the amount of the delinquent ad valorem taxes on the Subject Property for tax year 2016.
2. The Exchange Bank of Alabama possesses a second priority interest in the amount of the unpaid balance, plus interest and fees accruing until the date of payment in full, plus reasonable costs and expenses incurred by The Exchange Bank of Alabama in enforcing or protecting its rights and remedies under the stated security agreements, including, but not limited to, reasonable attorneys' fees, court costs and other legal expenses on-
a. a first mortgage recorded on October 1, 1999, in Book 1999 on Page 274 (Doc. No. M-1999-4083) of the public records of Etowah County; and
b. a second mortgage recorded on May 18, 2000, in Book 2000 on Page 139 (Doc. No. M-2000-1616) of the public records of Etowah County.
3. The United States of America possesses a third priority interest in the amount of the joint federal income tax assessments against Andrew J. and Connie C. Bone for tax years 2005 and 2009, plus interest, penalties, and statutory additions that may accrue until the date of payment in full.
4. The State of Alabama possesses a fourth priority interest in the amount of the joint state income tax assessments against Andrew J. and Connie C. Bone for tax year 2009, plus interest that may accrue on that amount until the date of payment in full.
5. The United States of America possesses a fifth priority interest in the amount of the joint federal income tax assessments against Andrew J. and Connie C. Bone for tax year 2010, plus interest, penalties, and statutory additions that may accrue until the date of payment in full.
6. The State of Alabama possesses a sixth priority interest in the amount of the joint state income tax assessments against Andrew J. and Connie C. Bone for tax year 2010, plus interest that may accrue on that amount until the date of payment in full.
7. The United States of America possesses a seventh priority interest in the amount of the joint federal income tax assessments against Andrew J. and Connie C. Bone for tax years 2011 and 2012, plus interest, penalties, and statutory additions that may accrue until the date of payment in full.
8. The State of Alabama possesses an eighth priority interest in the amount of the joint state income tax assessments against Andrew J. and Connie C. Bone for tax years 2011 through 2013, plus interest that may accrue on that amount until the date of payment in full.

(Doc. 14). There being no genuine issue of material fact as to the priority between these parties, Summary Judgment will be GRANTED, at least as to these parties[1], in the form of an Order setting out the above. See Fed. R. Civ. P. 56.

         II. THE MOTION FOR DEFAULT JUDGMENT

         A. Andrew and Connie Bone

         In its previous Order, this Court held:

Upon due consideration, and based on the foregoing, the United States is entitled to a default judgment in its favor and against Andrew J. Bone, Sr. and Connie Bone, declaring that the federal income taxes assessed, including penalties and interest, against Mr. and Mrs. Bone for tax years 2005 and 2009 to 2012, are valid. However, as noted above, there is some discrepancy between the assessments and what is stated in the Complaint and the Underwood affidavit. Accordingly, at this time the Court will not grant a default judgment.

(Doc. 26 at 19). The Court also held:

Upon due consideration, and based on the foregoing, the United States is entitled to a default judgment in its favor, and against Andrew J. Bone, Sr. and Connie Bone, declaring that [tax] liens attached to the Subject Property and may be enforced against that property through a decree of foreclosure. Again, however, without an exact figure, the Court cannot grant the relief requested.

(Doc. 26 at 20).

         Since this Court's last Order, the United States has served upon Andrew and Connie Bone Requests for Admissions, which ask them first to admit that they “are jointly liable to the United States in the amount of $404, 255.56 as of November 4, 2016, for . . . unpaid income tax liabilities for tax years 2005 and 2009 to 2012, plus statutory additions and interest.” (Doc. 28-6 at 2). In that same document, the United States also asked Mr. and Mrs. Bone to admit:

2. The County of Etowah possesses a first priority interest in the amount of the delinquent ad valorem taxes on the ...

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