Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02176/USCOURTS-caed-2_05-cv-02176-12/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7401 IRS: Tax Liability

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

No. 2:05-cv-2176-MCE-CMK

Plaintiff,

v. ORDER

MICHAEL CAREY, et al.,

Defendants.

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Upon consideration of the United States’ Motion for an Order

of Foreclosure; the Court’s money judgment entered against

defendants Michael and Leone Carey; the Court’s determination

that Michael and Leone Carey are the true and beneficial owners

of the Palo Cedro, Redding, and Bella Vista properties despite

any interest purportedly held by the Ranch Holding Trust, Hidden

Meadows Holding Trust, and Pamela Graff; the disclaimer of State

of California Department of Industrial Relations; the United

States’ stipulations with the State of California Franchise Tax

Board and Pamela Welch; the Court hereby finds and orders as

follows: 

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IT IS HEREBY ORDERED AND ADJUDGED that Michael and Leone

Carey remain indebted to the United States in the amount of

$7,475,749.08 (as of February 28, 2007) for their federal income

tax liabilities for 1995 through 2000 (“tax years at issue”),

plus any interest and penalties accruing thereafter.

IT IS HEREBY ORDERED AND ADJUDGED that Michael and Leone

Carey are the true and beneficial owners of the Palo Cedro,

Redding, and Bella Vista properties despite any interest

purportedly held by the Ranch Holding Trust, Hidden Meadows

Holding Trust, and Pamela Graff. Consequently, the United States’

tax liens against Michael and Leone Carey for their unpaid

federal incomes tax liabilities, plus penalties and interest, for

the tax years at issue attach to the Palo Cedro, Redding, and

Bella Vista properties.

IS HEREBY ORDERED AND ADJUDGED that the United States may

enforce its tax liens against Michael and Leone Carey against the

Palo Cedro, Redding, and Bella Vista properties which are

particularly described as follows:

A. Palo Cedro Property, located at 22510 Heartwood Lane,

Palo Cedro, California 96073:

Parcel A as shown on the map entitled “Parcel Map No.

26-73 in the unincorporated territory of Shasta County

California. A portion of the N.W. 1/4 of the N.W. 1/4

of Section 4 Township 31 North, Range 3 West, M.D.B. &

M., FOR ROBERT SILVA” recorded in the office of the

County Recorder August 16, 1972 in Book 1 of Parcel

Maps at page 110, Shasta County Records. Together with

a non-exclusive easement for road and utility purposes

over, under and across a strip of land 30.00 feet in

width, lying Southerly of and adjoining the South line

of said Parcel A. Said easement is for the benefit of

and appurtenant to said Parcel A or any parts or

portions thereof.

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B. Redding Property, located at 3041 Lawrence Road,

Redding, California 96002:

A portion of the NW of 1/4 of Section 8, Township 31

North, Range 4 West, M.D.M. Commencing at the Section

corner common to Sections 5, 6, 7, & 8, Township 31

North, Range 4 West, M.D.M., thence South 89 Degrees

18' East, 1340.09 feet; thence South 0 Degrees 41' 16"

East, 223.85 feet to the true point of beginning of

this description; thence, continuing from said point of

beginning South 0 Degrees 41' 16" East 90.00 feet to a

point from whence an iron pin witness corner bears

South 8 Degrees 21' East 20.00 feet, thence South 89

Degrees 21' East, 134.53 feet; thence 0 Degrees 41' 16"

West 90.00 feet; thence North 89 Degrees 21' West

134.53 feet to the point of beginning. All iron pins

referred to are marked R.E. 5438.

C. Bella Vista Property, located at 23658 Highway 299E,

Bella Vista, California 96008:

All that portion of the North one-half of the Southwest

one-quarter of Section 35, Township 33 North, Range 3

West, M.D.B. & M., lying North of the California State

Highway No. 299E. 

Excepting therefrom all that portion conveyed in the

deed to Kenneth E. Spencer and Ruth Melba Spencer,

husband and wife, recorded March 16, 1970 in Book 1022

of Official Records, Page 270, Shasta County Records. 

Also excepting therefrom “All mineral lands except coal

or iron lands” as excepted in the patent from the

United States of America, recorded April 7, 1896 in

Book 5 of patents, page 275, Shasta County Records.

Also excepting therefrom one-third of all minerals or

other hydrocarbon substances in said above described

property with the right to enter upon said land and

remove the same as reserved in the deed recorded April

28, 1960 in book 633 official records at page 292,

Shasta County Records.

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Accordingly, and pursuant to, inter alia, Sections 7402(a)

and 7403 of 26 U.S.C., and Sections 2001 and 2002 of 28 U.S.C.,

the federal tax liens underlying the money judgment entered

Michael and Leone Carey are hereby enforced against the Palo

Cedro, Redding, and Bella Vista properties, and all improvements,

buildings, and appurtenances thereon or thereto. This Order

shall act as a special writ of execution and no further orders or

process from the Court shall be required. The terms and

conditions of sale shall be as follows:

1. The United States Marshal for the Eastern District of

California, his/her representative, or an Internal Revenue

Service Property Appraisal and Liquidation Specialist (“PALS”),

is authorized and directed under 28 U.S.C. §§ 2001 and 2002 to

offer for public sale and to sell the Palo Cedro, Redding, and

Bella Vista properties. The United States may choose either the

United States Marshal or a PALS to carry out the sale under this

Order and shall make the arrangements for any sale as set forth

in this Order.

2. The Marshal, his or her representative, or a PALS

representative is authorized to have free access to the Palo

Cedro, Redding, and Bella Vista properties and to take all

actions necessary to preserve the property, including, but not

limited to, retaining a locksmith or other person to change or

install locks or other security devices on any part of the

property, until the deed to the property is delivered to the

ultimate purchaser.

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3. The terms and conditions of the sale of the Palo Cedro,

Redding, and Bella Vista properties are as follows:

a. The sale shall be free and clear of the interests

of Michael and Leone Carey, the Ranch Holding Trust, Hidden

Meadows Holding Trust, Pamela Graff, and all other parties named

in this case.

b. The sale shall be subject to building lines, if

established, all laws, ordinances, and governmental regulations

(including building and zoning ordinances) affecting the

property, and easements and restrictions of record, if any;

c. The sale shall be held at the courthouse of the

county or city in which the property is located, on the

property's premises, or at any other place in accordance with the

provisions of 28 U.S.C. §§ 2001 and 2002;

d. The date and time for sale are to be announced by

the United States Marshal, his/her representative, or a PALS;

e. Notice of the sale shall be published once a week

for at least four consecutive weeks before the sale in at least

one newspaper regularly issued and of general circulation in

Shasta County, and, at the discretion of the Marshal, his/her

representative, or a PALS, by any other notice deemed

appropriate. The notice shall contain a description of the

property and shall contain the terms and conditions of sale in

this order of sale;

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f. The minimum bid will be set by the Internal

Revenue Service. If the minimum bid is not met or exceeded, the

Marshal, his or her representative, or a PALS may, without

further permission of this Court, and under the terms and

conditions in this order of sale, hold a new public sale, if

necessary, and reduce the minimum bid or sell to the second

highest bidder;

g. The successful bidder(s) shall be required to

deposit at the time of the sale with the Marshal, his/her

representative, or a PALS a minimum of ten percent of the bid,

with the deposit to be made by certified or cashier's check or

cash payable to the United States District Court for the Eastern

District of California. Before being permitted to bid at the

sale, bidders shall display to the Marshal, his/her

representative, or a PALS proof that they are able to comply with

this requirement. No bids will be received from any person(s) who

have not presented proof that, if they are the successful

bidders(s), they can make the deposit required by this order of

sale;

h. The balance of the purchase price for the property

is to be paid to the United States Marshall or a PALS (whichever

person is conducting the sale) within 20 days after the date the

bid is accepted, by a certified or cashier's check payable to the

United States District Court for the Eastern District of

California. 

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If the bidder fails to fulfill this requirement, the deposit

shall be forfeited and shall be applied to cover the expenses of

the sale, including commissions due under 28 U.S.C. § 1921(c),

with any amount remaining to be applied to the income tax

liabilities of Michael and Leone Carey at issue herein. The

realty shall be again offered for sale under the terms and

conditions of this order of sale. The United States may bid as a

credit against its judgment without tender of cash;

i. The sale of the property shall be subject to

confirmation by this Court. The Marshal or a PALS shall file a

report of sale with the Court, together with a proposed order of

confirmation of sale and proposed deed, within 20 days from the

date of receipt of the balance of the purchase price;

j. On confirmation of the sale, the Marshal or PALS

shall execute and deliver a deed of judicial sale conveying the

property to the purchaser;

k. On confirmation of the sale, all interests in,

liens against, or claims to, the property that are held or

asserted by all parties to this action are discharged and

extinguished;

l. On confirmation of the sale, the recorder of deeds

for Shasta County, California shall cause transfer of the

property to be reflected upon that county’s register of title;

and

m. The sale is ordered pursuant to 28 U.S.C. § 2001,

and is made without right of redemption.

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4. Until the Palo Cedro, Redding, and Bella Vista

properties are sold, Michael and Leone Carey and all other

defendants to this action shall take all reasonable steps

necessary to preserve the property (including all buildings,

improvements, fixtures and appurtenances on the property) in its

current condition including, without limitation, maintaining a

fire and casualty insurance policy on the property. They shall

neither commit waste against the property nor cause or permit

anyone else to do so. They shall neither do anything that tends

to reduce the value or marketability of the property nor cause or

permit anyone else to do so. The defendants, or any other parties

claiming an interest in the property, shall not record any

instruments, publish any notice, or take any other action (such

as running newspaper advertisements or posting signs) that may

directly or indirectly tend to adversely affect the value of the

property or that may tend to deter or discourage potential

bidders from participating in the public auction, nor shall they

cause or permit anyone else to do so.

5. All persons occupying the Palo Cedro, Redding, and

Bella Vista properties shall leave and vacate the properties

permanently within 30 days of the date of this Order, each taking

with them his or her personal property (but leaving all

improvements, buildings, fixtures, and appurtenances to the

property). 

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If any person fails or refuses to leave and vacate the property

by the time specified in this Order, the United States Marshal’s

Office, alone, is authorized to take whatever action they deem

appropriate to remove such person from the premises, whether or

not the sale of such property is being conducted by a PALS. If

any person fails or refuses to remove his or her personal

property from the property by the time specified herein, the

personal property remaining on the property thereafter is deemed

forfeited and abandoned, and the United States Marshal’s Office

is authorized to remove it and to dispose of it in any manner

they deem appropriate, including sale, in which case the proceeds

of the sale are to be applied first to the expenses of sale and

the balance to be paid into the Court for further distribution.

6. The proceeds arising from sale of the Palo Cedro and

Redding properties are to be paid to the Clerk of this Court and

applied, as far as they shall be sufficient to the following

items, in the order specified:

a. To the United States Marshal or the PALS

(whichever person conducted the sale as arranged by the United

States) for the costs of the sale;

b. To all taxes unpaid and matured that are owed to

Shasta County for real property taxes on the property;

c. To the State of California Franchise Tax Board and

the United States as set forth in their stipulation; and

d. Any balance remaining after the above payments

shall be held by the Court’s Registry until further order of this

Court.

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7. The proceeds arising from sale of the Bella Vista

property are to be paid to the Clerk of this Court and applied,

as far as they shall be sufficient to the following items, in the

order specified:

a. To the United States Marshal or the PALS

(whichever person conducted the sale as arranged by the United

States) for the costs of the sale;

b. To all taxes unpaid and matured that are owed to

Shasta County for real property taxes on the property;

c. To Pamela Welch for amounts owed to her as set

forth in her stipulation with the United States;

d. To the State of California Franchise Tax Board and

the United States as set forth in their stipulation; and

e. Any balance remaining after the above payments

shall be held by the Court’s Registry until further order of this

Court.

IT IS SO ORDERED.

Dated: February 11, 2008

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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