Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01637/USCOURTS-caed-2_04-cv-01637-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

FLOYD A. WRIGHT and ARTHUR

STIGALL,

 Plaintiffs,

v.

DONALD M. SENICK, HAROLD E.

MARTIN, and unknown parties named

as DOES 1-10 claiming any interest

in the real property described in

the complaint,

 Defendants.

CIV. S-04-1637 WBS PAN PS

ORDER and

FINDINGS AND RECOMMENDATIONS

—NFN—

Pending before this court are plaintiffs’ motion to

remand, defendant Harold Martin’s motion to dismiss, and Martin’s

motion to compel plaintiff Arthur Stigall to attend his

deposition and for sanctions. For the following reasons,

plaintiffs’ motion to remand is denied, and I recommend this

action be dismissed, rendering moot defendant’s motion to compel

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1 The following additional cases have been filed in this court alone: 

Edwards v. United States, Don Senick and Bronson Lyle, 96-cv-0477-EJG-JFM,

filed 3/08/96 (dismissed 2/10/97 for lack of standing (Edwards failed to

demonstrate ownership interest in the “M.B. Edwards Trust); affirmed on appeal

2/9/98); Edwards and Stigall v. IRS, 98-cv-1002-LKK-DAD (PS), filed 6/02/98

under Freedom of Information Act (dismissed by stipulation of parties

7/23/99); Edwards and Stigall v. Martin, Senick, New Century Mortgage Company,

and First American Title Insurance Company, 01-cv-2138-LKK-GGH (PS), removed

from state court 11/20/01 (remanded to state court 12/21/01 for lack of

federal jurisdiction due to defendants’ failure to articulate rationale);

Edwards and Stigall v. Martin, Senick and IRS Officer Barbara Lane, 01-mc00238-MLS-GGH (PS), removed from state court 9/18/01 (dismissed as moot

5/29/02); Edwards and Stigall v. Martin, Senick, New Century Mortgage Company,

and First American Title Insurance Company, 02-cv-00450-DFL-GGH (PS), removed

from state court 2/27/02 (dismissed 11/04/02 for failure to join indispensable

party (IRS)); and Edwards v. US Dept of Treasury, et al, 03-cv-0958-MCE-DAD

(PS), complaint for writ of mandate filed 5/08/03 (dismissed for insufficient

service of process).

2

Stigall’s attendance at deposition and for sanctions.

Defendant Donald M. Senick has not been served in this

action. 

Plaintiff Floyd A. Wright has informed the court he is

physically and verbally infirm due to a stroke, requests no

appearances before the court, and joins Stigall’s motion to

remand.

This action is, effectively, between Stigall and Martin,

and is but the most recent of several state and federal actions1

challenging the sale of real property located at 5792 Montclair

Avenue, Marysville, California (“Montclair”), by the Internal

Revenue Service (“IRS”) at auction to satisfy a lien for taxes

owed by Marvin Baysel Edwards.

Stigall filed the complaint April 30, 2004, in Yuba

County Superior Court, asserting jurisdiction pursuant to

California Code of Civil Procedure § 760.040 (equitable actions

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3

to quiet title). The complaint, entitled “Complaint for Quiet

Title to Set-A-Side a Void Deed,” asserts Montclair was sold

“pursuant to an invalid Internal Revenue Service auction.” The

court’s records and files show that in May 1983 the taxpayer,

Edwards, conveyed Montclair to “M.B. Edwards Trust” but continued

to live on the property as a “tenant.” In 1992 and 1995 the IRS

recorded notices of federal tax liens against the trust “as the

Nominee, Alter Ego, or Transferee of Marvin B. Edwards.” In

September 1995, Montclair was auctioned by IRS to Senick to

satisfy Edwards’ tax liability. See Exhibit B to Removal Notice

(First Amended Complaint filed February 2002 in Yuba County

Superior Court in CV 99-445). In this action, plaintiffs allege

Martin is the recipient of a “void deed” from Senick; that 

Wright holds title to Montclair as Trustee of M.B. Edwards Trust;

and Stigall is “successor in interest of Wright pursuant to a

grant deed from Wright.” 

On August 12, 2004, Martin removed this action to this

court pursuant to 28 U.S.C. § 1331 (“The district courts shall

have original jurisdiction of all civil actions arising under the

Constitution, laws, or treaties of the United States”), and 28

U.S.C. § 1441(b)(permitting removal of actions to the district

courts based on original subject matter jurisdiction). Martin

asserts, inter alia, that the IRS is an indispensable party and

plaintiffs’ claims are precluded on res judicata grounds by this

court’s prior ruling in Edwards et al., v. Martin et al., Civ-S02-0450 DFL GGH PS, affirmed by the Ninth Circuit on appeal. 

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4

On August 24, Stigall filed an opposition asserting,

inter alia, that “[p]laintiff is the master of the complaint”

(Opposition, at p. 1) and has purposefully relied on state law in

order to avoid federal court jurisdiction. 

A threshold issue is presented by plaintiff’s assertion 

removal is improper because not made within the 30-day limitation

of 28 U.S.C. § 1446(b). See Maniar v. FDIC, 979 F.2d 782, 786

(9th Cir. 1992) (untimely removal is a procedural defect). 28

U.S.C. § 1446(b) provides in pertinent part:

The notice of removal of a civil action or proceeding shall

be filed within thirty days after the receipt by the

defendant, through service or otherwise, of a copy of the

initial pleading setting forth the claim for relief upon

which such action or proceeding is based, or within thirty

days after the service of summons upon the defendant if such

initial pleading has then been filed in court and is not

required to be served on the defendant, whichever period is

shorter. 

“The burden of establishing federal jurisdiction falls on

the party invoking removal.” Harris v. Provident Life and

Accident Ins. Co., 26 F.3d 930, 932 (9th Cir. 1994) (quoting

Gould v. Mut. Life Ins. Co. of New York, 790 F.2d 769, 771 (9th

Cir. 1986)). Removal statutes are strictly construed against

removal. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062,

1064 (9th Cir. 1979). “Federal jurisdiction must be rejected if

there is any doubt as to the right of removal in the first

instance.” Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). 

Martin states removal is timely because noticed within 30

days after he received the complaint. Notice of Removal, at

para. 2. He further states, “There is no evidence that a summons

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was issued or served, and therefore the purported service of the

complaint may be defective.” Id. Stigall responds that on June

24, 2004, he mailed to Martin the complaint and summons by

certified mail, return receipt requested, and on June 6 Martin

“signed the return Receipt.” Opposition to Removal and Request

for Remand, p. 2; see also Plaintiffs’ Joint Status Report, at p.

2 (same representation without reference to dates). Stigall does

not provide a copy of the receipt and obscures his presentation

of the facts by asserting (1) he sent a copy of the summons and

complaint to Martin’s attorney on September 24, 2004, (2)

“[s]ervice of process was also attempted at Martin’s home address

but was not successful” and (3) “plaintiff’s [sic] may request

publication if the court finds that the service to Martin was

insufficient.” Plaintiff’s Joint Status Report, at p. 2. Not

until November 3, 2004, did plaintiffs file proof ofpersonal

service of summons and complaint upon Martin. See Docket Entry

#30. 

Martin has also failed to provide evidence in support of

his representation. However, Stigall’s conflicting assertions

and continued doubt regarding the adequacy of service weigh in

favor of concluding Martin has met his burden of demonstrating

the notice of removal was filed within 30 days of receiving the

complaint “through service or otherwise” and therefore within the

deadline of 28 U.S.C. 1446(b). Senick’s failure to join in the

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2 All defendants must join a notice of removal provided they are

properly joined and served in the action. Emrich v. Touche Ross & Co., 846

F.2d 1190, 1193, n. 1 (9th Cir. 1988) (citations omitted); see also Parrino v.

FHP, Inc., 146 F.3d 699, 703 (9th Cir. 1998). “Our circuit rule is that a

party not served need not be joined; the defendants summonsed can remove by

themselves.” Salveson v. Western States Bankcard Association, 731 F.2d 1423,

1429-1430 (9th Cir. 1984) (citation omitted).

6

 notice of removal is not material.2

The next inquiry is whether the complaint comes within

the original subject matter jurisdiction of this court and is

therefore appropriate for removal pursuant to 28 U.S.C. §§ 1331

and 1441(b). Martin asserts the IRS is an indispensable party

and that plaintiffs’ complaint and choice of parties is no more

than “artful pleading” designed to obscure federal claims that

have already been ruled upon. 

The question of “artful pleading” was addressed by Judges

Levi and Hollows in Edwards and Stigall v. Martin, Senick, New

Century Mortgage Company, and First American Title Insurance

Company, 02-CV-0450 DFL GGH PS, which challenged defendants’

transfer of Montclair notwithstanding the purportedly invalid IRS

lien and sale. In rejecting plaintiffs’ contention that case

should be remanded to state court, Judge Hollows found (Order and

Findings and Recommendations filed July 3, 2002, at p. 4):

Although the IRS is not named as a defendant and plaintiffs

allege no federal claims per se, plaintiffs are essentially

attacking the federal court judgment permitting the IRS to

forfeit the Montclair property for failure to pay income

taxes. Plaintiffs’ amended complaint is a product of

“artful pleading.” Bright v. Bechtel, 780 F.2d 766 (9th

Cir. 1986). . . . [P]laintiffs are challenging the authority

of the IRS to forfeit the property for the failure to pay

taxes by arguing that defendants should have known that the

IRS lacked authority to impose the lien. Each and every

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3 28 U.S.C. § 1346(a)(1) provides: “The district courts shall have

original jurisdiction, concurrent with the United States Court of Federal

Claims, of . . . Any civil action against the United States for the recovery

of any internal-revenue tax alleged to have been erroneously or illegally

assessed or collected, or any penalty claimed to have been collected without

authority or any sum alleged to have been excessive or in any manner

wrongfully collected under the internal-revenue laws.”

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state court claim depends upon plaintiffs’ assertions that

the IRS acted improperly and defendants should have

understood this. This is quintessential artful pleading. 

Accordingly, the court finds that since this action raises a

federal question, by way of artful pleading, removal was

proper.

The same principles and analysis apply in this case. 

Stigall’s repeated attempt to “quiet title” in a state court

action continues to turn on the validity of the IRS sale. 

Stigall concedes as much by asserting in his complaint, “[s]tate

courts have jurisdiction to determine the validity of federal tax

sales.” Complaint, at p. 2. While Stigall has sought expressly

to avoid the assertion of a federal claim (“The IRS is not a

party of or to this complaint and has no interest in Montclair,”

“There is no United States (Federal) law prohibiting this action

in the California Courts,” id., at pp. 2, 3), the validity of the

IRS sale is central to this dispute and cognizable pursuant only

to the original jurisdiction of the federal district courts.3

Thus, as in 02-CV-0450 DFL GGH PS, this court finds Stigall’s

action comes within the original jurisdiction of this court and

its removal from state court was proper. 

Accordingly, plaintiff’s motion to remand is denied.

The essential federal subject matter underlying this

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4 Fed. R. Civ. P. 19(a) provides in pertinent part: “A person who is

subject to service of process and whose joinder will not deprive the court of

jurisdiction over the subject matter of the action shall be joined as a party

in the action if (1) in the person’s absence complete relief cannot be

accorded among those already parties, or (2) the person claims an interest

relating to the subject of the action and is so situated that the disposition

of the action in the person's absence may (i) as a practical matter impair or

impede the person's ability to protect that interest or (ii) leave any of the

persons already parties subject to a substantial risk of incurring double,

multiple, or otherwise inconsistent obligations by reason of the claimed

interest. If the person has not been so joined, the court shall order that

the person be made a party.”

5 26 U.S.C. § 7426(a)(1) provides: “If a levy has been made on property

or property has been sold pursuant to a levy, any person (other than the

person against whom is assessed the tax out of which such levy arose) who

claims an interest in or lien on such property and that such property was

wrongfully levied upon may bring a civil action against the United States in a

district court of the United States. Such action may be brought without

regard to whether such property has been surrendered to or sold by the

Secretary.”

6 As Judge Hollows found in 02-CV-0450 DFL GGH PS, “Pursuant to § 7426,

plaintiff Stigall may only challenge the validity of the IRS levy on the

Montclair property and its subsequent sale by filing a civil action against

the United States in district court. Therefore, his suit against the

defendants named in this action [any defendants other than the IRS] is not

proper.” Order and Findings and Recommendations filed July 3, 2002, in 02-CV0450 DFL GGH PS, at p. 6.

8

action renders the IRS an indispensable party,4 and a wrongful

levy action pursuant to 26 U.S.C. § 7426(a)(1)5 the exclusive

remedy.6

Accordingly, Stigall’s action against Martin is improper

and should be dismissed. Martin’s motion to compel deposition

and for sanctions should be denied as moot. 

These findings and recommendations should not be read to

encourage further suits regarding the ten-year-old IRS sale of

the Montclair property. Absent a strong showing of merit based

on facts not previously considered and ruled upon by other state

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or federal actions, further actions on this dispute filed in or

removed to this court should be evaluated for abuse of the

judicial process (see Fed. R. Civ. P. 11(b)), and appropriate

sanctions (Fed. R. Civ. P. 11(c)). 

These findings and recommendations are submitted to the

Honorable William B. Shubb, the United States District Judge

assigned to this case. 28 U.S.C. § 636(b)(l). Written

objections may be filed within ten days after being served with

these findings and recommendations. The document should be

captioned “Objections to Magistrate Judge’s Findings and

Recommendations.” The failure to file objections within the

specified time may waive the right to appeal the District Court’s

order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

Dated: May 25, 2005. 

 /s/ Peter A. Nowinski 

 PETER A. NOWINSKI

 Magistrate Judge

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