Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-4_18-cv-00501/USCOURTS-alnd-4_18-cv-00501-1/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7403 Suit to Enforce Federal Tax Lien

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

MIDDLE DIVISION

UNITED STATES OF AMERICA, ]

]

Plaintiff, ]

]

v. ] 4:18-cv-00501-ACA

]

DAVID SCOTT DASE, doing business ]

as Advance Tooling, et al., ]

]

Defendants. ]

MEMORANDUM OPINION AND ORDER

Before the court is the government’s motion for entry of a decree of 

foreclosure and order of sale. (Doc. 60). 

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, even when an innocent third party also holds an interest in the 

property. Id. § 7403(c); United States v. Rodgers, 461 U.S. 677, 680 (1983). 

Here, the government obtained a default judgment against Defendant David 

Scott Dase, doing business as Advance Tooling, for unpaid taxes in the amount of 

$293,114.93, plus any statutory fees and interest that have accrued since September 

1, 2017. (Doc. 45-2 at 3; see also United States v. Dase, case no. 4:16-cv-01957-

FILED

 2020 Feb-27 PM 01:52

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 4:18-cv-00501-ACA Document 64 Filed 02/27/20 Page 1 of 13
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KOB, Doc. 13 (M.D. Ala. Sept. 27, 2017)). Mr. Dase’s only asset is his one-half 

interest in real property located in Alabama, which he shares as a tenant in common 

with his sister, Defendant Rachel Kleinatland. (See Doc. 57 at 10). The government 

requests that the court order the sale of the real property and apportion the proceeds 

between it and Ms. Kleinatland. (See Doc. 60 at 5). Mr. Dase and Ms. Kleinatland 

oppose a forced sale and request that the court exercise its limited discretion to deny 

the government’s motion. (Docs. 61, 62).

I. BACKGROUND

The property at issue in this case is a plot of land located at 4624 Greensport 

Road, Asheville, Alabama 35953.

1

 (See Doc. 21 at 2–3 ¶ 10; Doc. 45-3 at 1). More 

specifically, the property is described as:

Part of the NE 1⁄4 of NE 1⁄4 of Section 14, Township 14 South, Range 4

East, more particularly described as follows: From a 1⁄2 inch rod at the

point where the East line of the NE 1⁄4 of NE 1⁄4 intersects the South

boundary of the Beaver Valley Road, the point of beginning of property

herein described; thence S 1 degrees 01 min. E 562.79 feet to a 1⁄2 inch

rod; thence S 70 degrees 02 min. W 821.52 feet to a 1⁄2 inch rod; thence 

N 0 degrees 11 min. E 560.35 feet to a 1⁄2 inch rod on the South 

boundary of Beaver Valley Road; thence N 69 degrees 50 min. E along 

said boundary 820.77 feet to the point of beginning, being a part of the 

NE 1⁄4 of NE 1⁄4 of Section 14, Township 14 South, Range 4 East, St. 

Clair County, Alabama.

1 The exact size of the lot is unclear. Mr. Dase testified that it is “[s]even acres, something 

like that.” (Doc. 45-1 at 23). The government contends—without any supporting evidence—that 

the property is a five acre lot. (See Doc. 60 at 5).

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(Doc. 45-3 at 1).

This court has previously found that Mr. Dase and Ms. Kleinatland each have 

a one-half interest in the property, which they inherited by intestacy from their father. 

(Doc. 57 at 12–13). Although they each hold a one-half interest on the property, 

only Mr. Dase and his wife live on the property. (Doc. 47-1 at 17, 23, 36). 

Ms. Kleinatland has not lived on the property since the 1980s, when she was a child. 

(Id. at 36). Mr. Dase has made all of the mortgage payments on the property since 

2004, and paid off the mortgage in July 2018. (Doc. 47-1 at 30–32, 34; see also

Doc. 45 at 4 ¶ 10; Doc. 45-5; Doc. 45-6; Doc. 49 at 4 ¶ 10). 

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 agree that he has made some payments toward the judgment in unspecific 

amounts. (See Doc. 45-2 at 4; Doc. 60 at 5). In March 2018, the government filed 

this lawsuit against Mr. Dase and Ms. Kleinatland, along with several other 

defendants who have been dismissed, seeking a forced sale of the property and 

distribution of the proceeds, to satisfy part of Mr. Dase’s tax delinquency. (Docs. 1, 

18, 34). 

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The court declined the government’s earlier request to order a forced sale of 

the property because the record was insufficient to allow the court to determine 

whether a forced sale was appropriate under these circumstances. (Doc. 57 at 11). 

The parties have now briefed the issue whether a forced sale of the property to satisfy 

the government’s tax lien is appropriate. (Docs. 60–63). 

II. DISCUSSION

The government has obtained against Mr. Dase a default judgment in the 

amount of $293,114.93 for federal employment taxes, federal unemployment taxes, 

and a federal civil penalty, plus statutory fees and interest. See United States v. Dase, 

No. 4:16-cv-01957-KOB, Doc. 13 (M.D. Ala. Sept. 27, 2017). Under 26 U.S.C. 

§ 6321, the government automatically acquires a lien on “all property and rights to 

property, whether real or personal, belonging to” someone who has failed or refuses 

to pay a tax after demand. Accordingly, the court FINDS that the government has 

a valid lien against Mr. Dase’s interest in the St. Clair County property. And because 

the government has a valid lien against the property, 26 U.S.C. § 7403(c) permits 

the court to “decree a sale of such property, . . . and a distribution of the proceeds of 

such sale.” 

But “§ 7403 does not require a district court to authorize a forced sale under 

absolutely all circumstances, and . . . some limited room is left in the statute for the 

exercise of reasoned discretion.” United States v. Rodgers, 461 U.S. 677, 706 

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(1983).

2

 “[T]he exercise of limited equitable discretion in individual cases can take 

into account both the Government’s interest in prompt and certain collection of 

delinquent taxes and the possibility that innocent third parties will be unduly harmed 

by that effort.” Id. at 709. This case involves an innocent third party: Mr. Dase’s 

sister, Ms. Kleinatland, who also owns a one-half interest in the property at issue and 

opposes the sale of that property.

“[W]hen the interests of third parties are involved, . . . a certain fairly limited 

set of considerations will almost always be paramount.” Rodgers, 461 U.S. at 709–

10. The court must consider, among other circumstances, (1) “the extent to which 

the Government’s financial interests would be prejudiced if it were relegated to a 

forced sale of the partial interest actually liable for the delinquent taxes”; 

(2) “whether the third party with a non-liable separate interest in the property would, 

in the normal course of events, . . . have a legally recognized expectation that that 

separate property would not be subject to forced sale by the delinquent taxpayer or 

his or her creditors”; (3) “the likely prejudice to the third party, both in personal 

dislocation costs and in the sort of practical undercompensation described [earlier in 

2 Mr. Dase and Ms. Kleinatland argue that Rodgers is inapplicable because that case related 

to a different type of interest in property: a homestead interest instead of a tenancy in common. In 

doing so, they rely on a district court decision that made a similar distinction between property 

interests. (Doc. 61 at 6; Doc. 62 at 4); United States v. Jones, 877 F. Supp. 907, 919 (D.N.J. 1995). 

The court finds both the distinction and the Jones decision unpersuasive. As the Supreme Court 

held in Rodgers, the plain language of § 7403 permits the government to enforce a tax lien against

“any property . . . of the delinquent . . . in which he has any right, title, or interest.” 26 U.S.C. 

§ 7403 (emphasis added); Rodgers, 461 U.S. at 691–94.

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the Rodgers opinion]; and (4) “the relative character and value of the non-liable and 

liable interests held in the property.” Rodgers, 461 U.S. at 710–11. In considering 

those factors, the court must keep in mind that its discretion under § 7403 is limited 

and that the government has a “paramount interest in prompt and certain collection 

of delinquent taxes.” Id. at 711.

1. First Factor

The first factor enumerated in the Rodgers decision is “the extent to which the 

Government’s financial interests would be prejudiced if it were relegated to a forced 

sale of the partial interest actually liable for the delinquent taxes.” Rodgers, 461 

U.S. at 710. The government contends that this factor weighs in its favor because 

“[t]he forced sale value of the Subject Property is approximately $180,000,” and 

although it would receive only half of that amount (the other half being distributed 

to Ms. Kleinatland), $90,000 would be a substantial payment toward Mr. Dase’s tax 

liability. (Doc. 60 at 5). The government argues that selling anything other than the 

entire property would be prejudicial because a one-half interest would result in a 

lower recovery for the government, and there is no evidence that the property 

actually can be partitioned for sale. (Id.). Ms. Kleinatland and Mr. Dase do not 

dispute the government’s assertion that the property as a whole would sell for 

approximately $180,000, but they contend that the government has not presented 

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sufficient evidence to determine whether a partial sale would be prejudicial. (Doc. 

61 at 4–5; Doc. 62 at 5). 

Other courts have recognized that “[p]artial interests in property often sell for 

less than an equivalent pro rata share of the whole property.” United States v. Davis, 

228 F. Supp. 3d 756 (W.D. La. 2017); see also United States v. Anderson, No. 08-

cv-6426-MAT, 2010 WL 5072958, at *3 (W.D.N.Y. Dec. 10, 2010) (“Courts have 

held, and common sense dictates, that the sale of a partial interest in property, 

particularly where the remaining interest is held by someone who resides at the 

property, will generally yield less than if entire property is sold.”). Indeed, in 

Rodgers, the Supreme Court stated: “It requires no citation to point out that interests 

in property, when sold separately, may be worth either significantly more or 

significantly less than the sum of their parts.” 461 U.S. at 694. And when the 

property is worth more as a whole, “it makes considerable sense to allow the 

Government to seek the sale of the whole, and obtain its fair share of the proceeds, 

rather than satisfy itself with a mere sale of the part.” Id.

This court agrees with the common sense proposition that attempting to sell 

Mr. Dase’s one-half interest in the property while allowing Ms. Kleinatland to retain 

her one-half interest would result in a lower price than selling the entire property and 

dividing the proceeds in half. Thus, attempting a sale of Mr. Dase’s interest alone 

would prejudice the government. 

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The question of partition of the property, however, is different. No party in 

this case has presented any evidence about whether the property can be partitioned 

and, if it can be partitioned, whether that would increase or decrease the value of that 

share. See, e.g., Anderson, 2010 WL 5072958, at *3. Thus, the court cannot 

determine whether partition of the property would prejudice the government’s 

interest in collecting the delinquent taxes.

2. Second Factor

The second Rodgers factor is “whether the third party with a non-liable 

separate interest in the property would, in the normal course of events, . . . have a 

legally recognized expectation that that separate property would not be subject to 

forced sale by the delinquent taxpayer or his or her creditors.” Rodgers, 461 U.S. at 

710–11.

The government contends that this factor is neutral because under Alabama 

law, one tenant in common can force a sale over the opposition of the other tenant 

in common. (Doc. 60 at 5–6). Mr. Dase and Ms. Kleinatland do not respond to that 

argument, instead asserting that Mr. Dase’s payment of the mortgage in full gave 

Ms. Kleinatland an expectation that the property would not be subject to a forced 

sale (doc. 62 at 5), and that under Alabama law a creditor would not be able to force 

a partition or sale of the property (doc. 61 at 5–6).

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Under Alabama law, “[e]ach joint owner has the right to have the property 

partitioned in kind; or if that cannot be accomplished in an equitable fashion, each 

has a right to force a sale of the property and a division of the proceeds derived 

therefrom.” Folsom v. United States, 306 F.2d 361, 365 (5th Cir. 1962), abrogated 

on other grounds by Rodgers, 461 U.S. 677; see also Smith v. Smith, 114 So. 192, 

193 (1927) (“Joint owners or tenants in common are entitled as a matter of right to 

partition in kind, if the lands can be equitably divided, while the right to a sale for 

division depends upon the fact, which must be averred and proved, that the lands 

cannot be equitably divided.”). 

In other words, even if creditors of one joint owner may not force a partition 

or sale of property, the joint owner himself can force a partition or sale of the 

property. Thus, Ms. Kleinatland cannot have had a “legally recognized expectation 

that [the] separate property would not be subject to forced sale by the delinquent 

taxpayer.” Rodgers, 461 U.S. at 710–11. To the contrary, Ms. Kleinatland could 

have forced a partition or sale of the property herself. This factor weighs in favor of 

the government. 

3. Third Factor

The third Rodgers factor is “the likely prejudice to the third party, both in 

personal dislocation costs and in the sort of practical undercompensation described 

[earlier in the Rodgers opinion].” Rodgers, 461 U.S. at 711. The Supreme Court 

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described two types of “practical undercompensation” in its decision, neither of 

which is relevant to the type of property interest at issue in this case. See id. at 704 

(explaining that the value of a homestead interest may be valued less than the price 

of an equivalent home and that the cash value of a homestead interest must be based 

on actuarial statistics relating to life expectancies).

The government contends that this factor weighs in its favor because 

Ms. Kleinatland does not live on the property, and she would be compensated for 

her interest in the property. (Doc. 60 at 5). Mr. Dase and Ms. Kleinatland concede 

that Ms. Kleinatland will not incur any “personal dislocation costs” from a forced 

sale, but they argue that the government has not presented evidence that she will be 

adequately compensated because it has not pointed to actuarial computations, proof 

of the appraised value, or the projected selling price of the property.3

 (Doc. 61 at 6–

7; Doc. 62 at 6). 

The court finds that this factor weighs in favor of the government. 

Ms. Kleinatland has not lived on the property since the 1980s, and will not incur any 

moving costs based on a forced sale. And the cases where actuarial statistics were 

necessary involved different types of property interests, such as homestead interests, 

tenancies by the entirety, or life estates. See Rodgers, 461 U.S. at 704–05 

3 The court will discuss Ms. Kleinatland’s argument about her sentimental attachment to 

the property after addressing the enumerated Rodgers factors.

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(homestead interest); United States v. Cardaci, 856 F.3d 267, 273 (3d Cir. 2017)

(tenancy by the entirety); Anderson, 2010 WL 5072958, at *4–5 (tenancy by the 

entirety); United States v. Johnson, 943 F. Supp. 1331, 1333 (D. Kan. 1996)

(homestead interest). 

Unlike the property interests at issue in Rodgers, Cardaci, Anderson, and 

Johnson, Ms. Kleinatland’s interest in the property as a joint tenant does not carry 

with it a right of survivorship. Actuarial statistics are not necessary to compute her 

exact interest in the property: her interest is one-half. And finally, neither Mr. Dase 

nor Ms. Kleinatland dispute the government’s contention that the property will likely 

sell for approximately $180,000. Accordingly, the court finds that Ms. Kleinatland 

will not suffer prejudice in the form of personal dislocation costs or the type of 

practical undercompensation discussed in Rodgers, and this factor weighs in favor 

of the government.

4. Fourth Factor

The fourth Rodgers factor is “the relative character and value of the non-liable 

and liable interests held in the property.” Rodgers, 461 U.S. at 711. If “the third 

party has no present possessory interest or fee interest in the property, there may be 

little reason not to allow the sale[.]” Id.

The government contends that this factor weighs in favor of the forced sale 

because only Mr. Dase lives at the property and Ms. Kleinatland has not indicated 

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that she ever plans to live on the property. (Doc. 60 at 6–7). Ms. Kleinatland

contends that her residence on the property is irrelevant (doc. 61 at 7), but the 

Supreme Court’s statements in Rodgers about possessory interests indicate 

otherwise. See Rodgers, 461 U.S. at 711. The court finds that, in light of the fact 

that Mr. Dase is the only owner residing on the property and paid most of the 

mortgage, this factor weighs in favor of the government.

5. Remaining Factors

The Supreme Court in Rodgers noted that its list of factors is not exhaustive. 

461 U.S. at 711. In her brief, Ms. Kleinatland argues that the court should consider 

her sentimental attachment to the land. (Doc. 61 at 6). Although the court is 

sympathetic to Ms. Kleinatland’s position, her sentimental attachment to the land 

alone cannot outweigh the statutory directive contained in § 7403 that the 

government may enforce its lien against “any property, of whatever nature, of the 

delinquent, or in which he has any right, title, or interest.” 26 U.S.C. § 7403(a). 

Ms. Kleinatland has not pointed to any other circumstance that would warrant the 

court exercising its very limited discretion in this case. 

At least three of the enumerated Rodgers factors weigh in favor of allowing 

the forced sale, and in light of the limited evidence presented to the court, the court 

cannot determine that the remaining factor favors either side. Accordingly, the court 

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FINDS that a forced sale of the entire property is appropriate under these 

circumstances. 

III. CONCLUSION

The court GRANTS the government’s motion for entry of a decree of 

foreclosure and order of sale. The court FINDS that the United States has a valid 

tax lien attaching to Mr. Dase’s interest in the property located at 4624 Greensport 

Road, Ashville, Alabama 35953, as described above, supra at 2.

The court DIRECTS the government to submit, on or before March 12, 

2020, a proposed judgment of foreclosure and judicial sale of the property, which 

sets forth the manner in which the sale proceeds are to be distributed, the publication 

requirements, bidding procedures, and the manner and time of said sale.

DONE and ORDERED this February 27, 2020.

 _________________________________

 ANNEMARIE CARNEY AXON

 UNITED STATES DISTRICT JUDGE

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