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United States v. Dase

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

September 23, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID SCOTT DASE, doing business as Advance Tooling, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE

         Before the court are cross-motions for summary judgment filed by Plaintiff United States (doc. 45), Defendant Rachel Kleinatland (doc. 47), and Defendant David Scott Dase, doing business as Advance Tooling (doc. 49).

         A person’s failure “to pay any tax” after the government’s demand for payment creates “a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.” 26 U.S.C. § 6321. The government may enforce the lien by requesting that the court order a judicial sale of that property. Id. § 7403(c); United States v. Rodgers, 461 U.S. 677, 680 (1983).

         In this case, it is undisputed that the government has obtained a default judgment against Mr. Dase for unpaid taxes. (Doc. 45-2 at 3; see also United States v. Dase, No. 4:16-cv-01957-KOB, Doc. 13 (M.D. Ala. Sept. 27, 2017)). As a result, the government requests that the court order the sale of property that it contends Mr. Dase owns. (See Doc. 21 at 4). The parties agree that Mr. Dase has an interest in the property at issue, but they dispute how much of an interest. The government contends that Mr. Dase owns the property in full; Mr. Dase and Ms. Kleinatland contend that each of them has a one-half interest.

         The government seeks summary judgment on its own claims that Mr. Dase owns the property in full and that it is entitled to seek a forced sale of the property under § 7403. (Doc. 45). Ms. Kleinatland seeks partial summary judgment on the government’s claim that Mr. Dase owns the property in full, and requests that the court either enter an order preventing the government from foreclosing on her interest in the property, or order the government to compensate her for the loss of her use of the whole property. (Doc. 47). Mr. Dase seeks partial summary judgment on the government’s claim that he owns the property in full, and requests a finding that the government cannot enforce its lien against the property. (Doc. 49).

         As the court will discuss in more detail below, under Alabama’s intestacy laws, the undisputed evidence establishes that Mr. Dase and Ms. Kleinatland each have a one-half interest in the land. Accordingly, the court DENIES the government’s motion for summary judgment. The court GRANTS IN PART Mr. Dase’s and Ms. Kleinatland’s motions for partial summary judgment and ENTERS SUMMARY JUDGMENT in their favor and against the government on the government’s claim that Mr. Dase owns the property in full. But the court DENIES IN PART Mr. Dase’s and Ms. Kleinatland’s motions for partial summary judgment as to their other requests. The three parties to this case must do further briefing on those issues before the court can rule on them.

         I. BACKGROUND

         On cross-motions for summary judgment, the court “draw[s] all inferences and review[s] all evidence in the light most favorable to the non-moving party.” Fort Lauderdale Food Not Bombs v. City of Fort Lauderdale, 901 F.3d 1235, 1239 (11th Cir. 2018) (quotation marks omitted). In this case, the parties agree on all of the facts; they disagree only about the legal import of those facts.

         Mr. Dase and Ms. Kleinatland’s parents, Walter and Anita Dase, [1] jointly owned the property at issue in this case, each with a right of survivorship. (Doc. 45-3; see also Doc. 47-1 at 16–17). Mr. Dase and his wife have lived on the property continuously since the mid-2000s, while Ms. Kleinatland has lived elsewhere. (Doc. 47-1 at 17, 23, 36). In 2004, Walter and Anita Dase entered into a lease sale contract with Mr. Dase. (Doc. 45-5). Mr. Dase agreed to make monthly payments of $677.51 to his parents until he had paid $63, 703.03, and his parents agreed that once he had paid in full, “the rent paid under this Lease shall be considered a payment for said property, and [they] shall make and execute a warranty deed conveying said property to [Mr. Dase].” (Id. at 1–2).

         Mr. Dase made each monthly payment directly to the mortgagee of the property. (Doc. 47-1 at 30–31). While Mr. Dase was making the promised payments, Anita Dase died, followed several years later by Walter Dase. (Doc. 47-1 at 29–31). After Walter Dase died, Ms. Kleinatland produced a handwritten document signed by “W Dase, ” which stated: “All possessions belonging to myself or my passed wife Anita will be split and distributed between Scott [Dase] and Rachel [Kleinatland]. These possessions are at the farm, ” the farm being the property at issue in this case. (Doc. 55-1).

         Mr. Dase and Ms. Kleinatland did not open a probate estate for either of their parents’ estates (see Doc. 47-1 at 34), but Mr. Dase continued to make mortgage payments directly to the mortgagee. (Id. at 30, 32). He completed the payments required under the sale lease contract in 2012 and paid off the mortgage on the property in July 2018. (See Doc. 45 at 4 ¶ 10; Doc. 45-6; Doc. 45-7; Doc. 49 at 4 ¶ 10; Doc. 47-1 at 30–31, 67).

         In October 2017, the government obtained a default judgment against Mr. Dase in the amount of $293, 114.93 for federal employment taxes, federal unemployment taxes, and a federal civil penalty, plus statutory fees and interest. (Doc. 45-2 at 3; see also United States v. Dase, No. 4:16-cv-01957-KOB, Doc. 13 (M.D. Ala. Sept. 27, 2017)). Mr. Dase has not satisfied that judgment, although the parties dispute whether he has made any payments toward the judgment. (See Doc. 45-2 at 4). In March 2018, the government filed this lawsuit against Mr. Dase and Ms. Kleinatland, along with several other defendants who have been dismissed. (Docs. 1, 18, 34).

         After Mr. Dase paid off the mortgage on the property, the government filed an amended complaint, seeking an order that Mr. Dase owns the property, that the government’s tax liens be foreclosed on his interest in the property, that the property be sold under 26 U.S.C. § 7403, and that the proceeds of the sale be distributed to the government and Defendants in accordance with the priority of their claims or interests. (Doc. 21 at 4).

         II. ...


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