Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_01-cv-02301/USCOURTS-caed-2_01-cv-02301-5/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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ORDER OF SALE AND 

STIPULATION - 1 -

McGREGOR W. SCOTT

United States Attorney

PAUL S. HAM

JUSTIN S. KIM

Trial Attorneys, Tax Division

United States Department of Justice

P.O. Box 683, Ben Franklin Station

Washington, DC 20044-0683

Telephone: (202) 307-6421

Telephone: (202) 307-0977

Facsimile: (202) 307-0054

E-mail: paul.s.ham@usdoj.gov

E-mail: justin.s.kim@usdoj.gov

Attorneys for the United States of America

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES,

Plaintiff,

v.

J. LEONARD PADILLA, NELLY PATINO,

ROSE MORENO-PADILLA, et al.,

 Defendants.

Civil No. 2:01-CV-02301-DFL-GGH

ORDER OF SALE OF 

THE NATOMAS PROPERTY AND 

STIPULATION BETWEEN THE 

UNITED STATES AND JULIE PADILLA 

IT IS HEREBY ORDERED AND ADJUDGED that the Natomas property, in its entirety, shall be

marketed for sale within 45 days of the issuance of this Order. The Natomas property is particularly

described as follows:

LOT 92 AND THE NORTH ONE-HALF OF LOT 91, AS SHOWN ON THE “PLAT OF NATOMAS

CENTRAL SUBDIVISION,” RECORDED IN BOOK 16 OF MAPS, MAP NO. 3, RECORDER OF

SAID COUNTY.

EXCEPTING THEREFROM THE FOLLOWING AS DESCRIBED AS FOLLOWS:

BEGINNING AT THE BOLT SET IN A CONCRETE MONUMENT MARKING THE CORNER

COMMON TO SECTIONS 32, 33, 5, AND 4, TOWNSHIP 9 AND 10 NORTH, RANGE 4 EAST,

M.D.M., AND ALSO MARKING THE NORTHWEST CORNER OF SAID LOT 92 (FROM WHICH

MONUMENT THE 2 1⁄2 INCH IRON PIPE IN A CONCRETE MONUMENT MARKING THE

CORNER COMMON TO SECTIONS 33, 34, 4 AND 3, TOWNSHIP 9 AND 10 NORTH, RANGE 4

Case 2:01-cv-02301-JAM-GGH Document 195 Filed 04/24/06 Page 1 of 5
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ORDER OF SALE AND 

STIPULATION - 2 -

EAST, M.D.M., BEARS NORTH 89 DEGREES 39 FEET 26 INCHES EAST 5185.64 FEET);

THENCE FROM SAID POINT OF BEGINNING ALONG THE WESTERLY LINE OF SAID LOTS 92

AND 91 SOUTH 00 DEGREES 25 FEET 8 INCHES EAST 953.18 FEET; THENCE LEAVING SAID

WESTERLY LINE NORTH 89 DEGREES 45 FEET 00 INCHES EAST 16.75 FEET; THENCE

NORTH 7 DEGREES 44 FEET 11 INCHES EAST 100.98 FEET; THENCE NORTH 67 DEGREES 8

FEET 44 INCHES EAST 52.00 FEET; THENCE NORTH 89 DEGREES 46 FEET 00 INCHES EAST

78.00 FEET; THENCE ALONG A CURVE TO THE LEFT WITH A RADIUS OF 230.00 FEET,

THROUGH AN ANGLE OF 90 DEGREES 00 FEET 00 INCHES AN ARCH LENGTH OF 361.28

FEET (THE CHORD OF WHICH CURVE BEARS NORTH 44 DEGREES 46 FEET 00 INCHES

EAST 325.27 FEET); THENCE NORTH 0 DEGREES 14 FEET 00 INCHES WEST 399.00 FEET;

THENCE ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 170.00 FEET, THROUGH AN

ANGLE OF 90 DEGREES 00 FEET 00 INCHES AN ARCH LENGTH OF 267.04 FEET (THE CHORD

OF WHICH CURVE BEARS NORTH 44 DEGREES 46 FEET 00 INCHES EAST 240.42 FEET TO A

POINT DISTANT SOUTH 0 DEGREES 14 FEET 00 INCHES EAST 181.00 FEET FROM

ENGINEER’S STATION “C” 334-00.00 OF THE DEPARTMENT OF PUBLIC WORKS’ 1961

SURVEY FROM EL CENTRO BOULEVARD TO SACRAMENTO RIVER NEAR ELKHORN,

STATE HIGHWAY III-SAC-236-C (NOW 03-SAC-5); THENCE NORTH 89 DEGREES 46 FEET 00

INCHES EAST 1,100.74 FEET; THENCE FROM A TANGENT THAT BEARS NORTH 89 DEGREES

40 FEET 59 INCHES EAST ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 2,370.00

FEET, THROUGH AN ANGLE OF 13 DEGREES 48 FEET 12 INCHES, AN ARCH LENGTH OF

570.97 FEET (THE CHORD OF WHICH CURVE BEARS SOUTH 83 DEGREES 24 FEET 55

INCHES EAST 569.59 FEET) TO A POINT IN THE EASTERLY LINE OF SAID LOT 92; THENCE

ALONG SAID EASTERLY LINE NORTH 0 DEGREES 32 FEET 57 INCHES WEST 106.05 FEET TO

THE NORTHEAST CORNER OF SAID LOT 92; THENCE ALONG THE NORTH LINE OF SAID

LOT 92, SOUTH 89 DEGREES 39 FEET 26 INCHES WEST 2,225.56 FEET TO THE SAID POINT

OF BEGINNING OF THE LANDS HEREIN DESCRIBED, AS CONVEYED TO THE STATE OF

CALIFORNIA BY DEEDS RECORDED SEPTEMBER 20, 1965, IN BOOK 5331, PAGE 124 OF

OFFICIAL RECORDS.

APN: 225-0030-023

IT IS HEREBY ORDERED AND ADJUDGED that William C. Farley is appointed as the trustee

to market and sell the Natomas property, in its entirety. The Internal Revenue Service shall have the right

of first refusal concerning any sale of the Natomas property. However, the Internal Revenue Service shall

not have any right of refusal regarding the sale of the Natomas property if the sale proceeds generated

would fully satisfy the United States’ claim against (1) Padilla in the amount of $2,158,760.41, plus

accrued interest and penalties since February 29, 2004, for the 1986 through 1998 and 1992 through 1999

tax years and (2) Rose Moreno-Padilla in the amount of $430,489.26, plus accrued interest and penalties

since August 16, 2001, for the 1996 and 1997 tax years. Moreover, the basis of any refusal by the

Internal Revenue Service of a proposed sale of the Natomas property shall be reasonable and not

arbitrary. 

IT IS HEREBY ORDERED AND ADJUDGED that all reasonable offers the trustee receives to

sell the Natomas property shall be forwarded to the Internal Revenue Service for its review. Any sale of

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ORDER OF SALE AND 

STIPULATION - 3 -

the Natomas property shall be subject to confirmation by this Court.

IT IS HEREBY ORDERED AND ADJUDGED that the proceeds generated from the sale of the

Natomas property by William Curtis Farley, as trustee, shall be distributed as follows:

I. First, an amount sufficient to cover the expenses of the sale shall be retained,

including an amount sufficient to cover the expenses of any steps taken to secure

or maintain the Natomas property;

II. Second, to all taxes unpaid and matured that are owed for real property taxes on

the Natomas property;

III. Third, to Nelly Patino as agreed by her stipulation with the United States;

IV. Fourth, the remaining proceeds from the sale shall be divided in half with each 

half distributed to the claimants of Padilla’s and Julie Padilla’s respective 1⁄2

interest in the Natomas property as follows:

A. J. Leonard Padilla’s remaining 1⁄2 share shall be distributed in the following order:

i. First, to the Franchise Tax Board as agreed by its stipulation with the

United States; 

ii. Second, to the United States to be applied against its judgment against J.

Leonard Padilla in the amount of $2,158,760.41, plus accrued interest and

penalties since February 29, 2004, for his outstanding federal tax liabilities

for the 1986 through 1998 and 1992 through 1999 tax years; and

iii. Last, any amounts remaining, if any, to be distributed to J. Leonard Padilla.

B. Julie Padilla’s remaining 1⁄2 share shall be distributed in the following order:

i. First, to Robert Wilkes as agreed by his stipulation with the United States;

ii. Second, $350,000 to the United States to be applied against Rose MorenoPadilla’s outstanding federal tax liabilities in the amount of $430,489.26,

plus accrued interest and penalties since August 16, 2001, for the 1996 and

1997 tax years (the United States will discharge its tax liens encumbering

its claim against Rose Moreno-Padilla for the 1996 and 1997 tax years

from the Natomas property once, and if, it receives the $350,000 in full);

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ORDER OF SALE AND 

STIPULATION - 4 -

and

iii. Last, any amounts remaining, if any, to be distributed to Julie Padilla.

Upon confirmation of the sale by the Court and distribution of the sale proceeds in accordance with this

paragraph, the United States will dismiss this action with prejudice.

IT IS HEREBY ORDERED AND ADJUDGED that if the Natomas property, in its entirety, is not

sold within 210 days of this Order, that Julie Padilla agrees that the United States is entitled to relief as

set forth in its Motion to Enforce its Settlement Agreement and For an Order of Foreclosure

(“Enforcement Motion”), filed on February 21, 2006. In pertinent part as set forth in the Enforcement

Motion, Julie Padilla agrees that the United States has a claim against her in the amount of $2,350,000

derived from her from her agreement to pay $2,000,000 toward Padilla’s and $350,000 toward Rose

Moreno-Padilla’s respective outstanding federal tax liabilities; consequently, the United States may sell

Julie Padilla’s 1⁄2 interest in the Natomas property and apply the proceeds in satisfaction of the United

States’ claim against her for the breach of the settlement agreement. This paragraph does not bind the 

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ORDER OF SALE AND 

STIPULATION - 5 -

United States with respect to its claim against Padilla for its judgment entered against him for the 1986

through 1998 and 1992 through 1999 tax years. However, any recovery the United States receives from

the date of this Order that reduces its claim against Padilla would similarly reduce its claim against Julie

Padilla on her agreement to pay $2,000,000 toward Padilla’s outstanding federal tax liabilities.

IT IS SO ORDERED.

Dated: April 21, 2006 /s/ David F. Levi 

DAVID F. LEVI

CHIEF JUDGE

UNITED STATES DISTRICT COURT

Presented and agreed to by:

McGREGOR W. SCOTT

United States Attorney

 /s/ - Paul Ham 

PAUL S. HAM

Trial Attorney, Tax Division

United States Department of Justice

P.O. Box 683, Ben Franklin Station

Washington, DC 20044-0683

(Attorneys for the United States of America)

 /s/ - Peter Brixie 

PETER BRIXIE

Law Offices of Peter Brixie

410 Twelfth Street, Suite 1 

Sacramento, CA 95814

(Attorney for Julie Padilla)

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