Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00830/USCOURTS-caed-1_06-cv-00830-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 28:2410 Quiet Title

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ALPHA LAND COMPANY,

ALLEN CASSELMAN, TRUSTEE,

 Plaintiff,

 v. 

JAMES LITTLE, LORNA LITTLE,

SHAWN RAE ENTERPRISES, NANCY

CASSELMAN, Trustee, MOUNT CARMEL

TRUST, ROBERT HOGUE, Trustee,

NICHOLAS HOFFMAN, R. NELSON

CAIRNS, FRANCHISE TAX BOARD,

INTERNAL REVENUE SERVICE, and

DOES 1 THROUGH 50, inclusive,

 Defendants.

1:06-CV-00830 OWW DLB

ORDER DENYING PLAINTIFF AND

LITTLE DEFENDANTS’ MOTIONS

TO “TRANSFER TO STATE COURT”

(DOCS. 4, 6 & 8) AND

GRANTING THE UNITED STATES’

MOTION TO DISMISS (DOC. 12)

I. INTRODUCTION

This is the second of two cases involving the tax

liabilities of and tax liens against real property of James and

Lorna Little. The Littles placed their 33-acre olive and orange

farm, which is also their residence, in the name of a trust,

Alpha Land Company, naming Allen Casselman as trustee. On

February 4, 2002, the Internal Revenue Service (“IRS”) filed suit

in federal court to reduce tax assessments against the Littles to

judgments and to foreclose on their farm. (United States v.

Little, Case No. 1:02-CV-05141 REC DLB (E.D. Cal.)(“United States

v. Little”).) Partial summary judgment was entered against the

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Allen Casselman objected during oral argument that 1

neither he nor Alpha Land Company had been served with the

government’s opposition to their motion to remand. The

certificate of service indicates that it was mailed to Allen

Casselman at 139 E. Tulare Ave #333, Tulare, California, 93724. 

Moreover, Plaintiff (Alpha Land Trust) filed a “Reply to

Opposition of Petitioner United States of America to Motion to

transfer of Defendants & Opposition to motion to dismiss of

2

Littles in favor of the United States, including a finding that

James Little and Lorna Little are indebted to the United States

for federal income tax assessments of more than $1.7 million

dollars, collectively. In addition, default judgment was entered

against Allen Casselman as trustee for Alpha Land Company. 

On April 25, 2006, the Alpha Land Company (“Plaintiff”)

named the IRS, along with numerous other parties including the

Littles, as a defendant in a quiet title action filed in the

Superior Court for the County of Tulare. (See Doc. 1-2.) On

June 28, 2006, the United States removed the state quiet title

action to federal court pursuant to 28 U.S.C. §§ 1442 and 1444. 

(Doc. 1.) Plaintiff, along with James and Lorna Little, now move

to have the case remanded to state court on the ground that there

is no basis upon which the district court may exercise subject

matter jurisdiction. (Docs. 4, 6 & 8, filed July 28, 2006.) The

United States opposes remand (Doc. 13, filed Aug. 3, 2006) and

moves to dismiss the complaint on two grounds: (1) that Allen

Cassleman lacks standing to represent the Alpha Land Company

trust; and (2) because the claim is barred by res judicata. 

(Doc. 12, filed Aug. 2, 2006.) Plaintiff has filed a reply in

support of its motion to remand, along with an opposition to the

motion to dismiss. (Doc. 19.)1 2

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Defendant/Petitioner United States of America.” (Doc. 18 at 3.) 

The Littles also objected to having a United States 2

Magistrate Judge hear their motion to transfer. (Doc. 20.) This

objection has been mooted by the fact that the hearing was re-set

before the district court. 

3

II. BACKGROUND. 

On February 4, 2002, the United States filed a complaint in

the District Court for the Eastern District of California to

reduce tax assessments to judgments against James and Lorna

Little and to foreclose on their 33-acre olive and orange farm. 

United States v. Little, Case No. 1:02-CV-05141 REC DLB (E.D.

Cal.)(“United States v. Little”). On September 23, 2005, the

district court granted partial summary judgment in favor of the

United States, finding that James Little and Lorna Little are

indebted to the United States for federal income tax assessments

in the amount of $925,016.16 and $806,936.83, respectively, plus

interest, penalties, and other statutory additions. (United

States v. Little, Doc. 130 at 21.) No formal judgment has yet

been entered against the Littles in that case. (There appears to

be an ongoing issue as to the Littles’ representation.)

At some point, the exact date is not clear from the record,

the Littles placed their farm, which is also their residence, in

the name of a trust, Alpha Land Company. The Trust, and its

trustee, Allen Cassleman, were named in United States v. Little

as a party who may claim interest in the property and as a

nominee. Allen Cassleman, the purported trustee, is not an

attorney licensed to practice law in California. 

On October 31, 2005, the district court granted default

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judgment against Allen Cassleman as trustee of Alpha Land Company

in United States v. Little. (United States v. Little, Doc. 135.) 

The October 31, 2005 order, provided in its entirety: 

Judgment by default is hereby entered pursuant to

Fed. R. Civ. P. 55 against defendant Allen Casselman,

as Trustee of Alpha Land Company, based upon failure to

defend. 

The Defendant-Trustee is named in this action as

the trustee of Alpha Land Company, and not in his

individual capacity. Allen Casselman signed the Answer

as Trustee of Alpha Land Company. Mr. Casselman does

not claim to be an attorney, and informed the Court at

the hearing held on August 29, 2005 that he was

attempting to retain an attorney. A further status

conference was set at that time for September 26, 2005

to ascertain whether or not Casselman /Alpha Land

Company had retained counsel. Casselman did not appear

at the September 26, 2005 status conference.

The statute governing representation in the

federal courts is 28 U.S.C. § 1654, which provides:

In all courts of the United States the parties may

plead and conduct their own cases personally or by

counsel as, by the rules of such courts,

respectively, are permitted to manage and conduct

causes therein. 

The portion of the statute granting permission to

the parties to “plead and conduct their own cases

personally” has been uniformly construed as authorizing

individuals who are parties to an action to appear in

propria persona, but only where they are representing

themselves alone, asserting their own personal rights

or interests exclusively. E.g., C.E. Pope Equity Trust

v. United States, 818 F.2d 696, 697 (9th Cir. 1987);

McShane v. United States, 366 F.2d 286, 288 (9th Cir.

1966); Russell v. United States, 308 F.2d 78, 79 (9th

Cir. 1962); Knoefler v. United Bank of Bismarck, 20

F.3d 347, 348 (8th Cir. 1994). If an individual

purporting to appear pro se is not the actual

“beneficial owner of the claims being asserted,” they

are not viewed as a party conducting their “own case

personally” within the meaning of Section 1654. C.E.

Pope Equity Trust, 818 F.2d at 697.

This interpretation of Section 1654--that the

beneficial owner of the claim being asserted is the

only person permitted to appear in propria persona--is

reflected in holdings barring nonattorneys from

representing corporations (e.g., Carr Enterprises, Inc.

v. United States, 698 F.2d 952, 953 (8th Cir. 1983)),

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partnerships (e.g., Eagle Associates v. Bank of

Montreal, 926 F.2d 1305, 1308-10 (2d Cir. 1991)),

unincorporated associations (e.g., Church of the New

Testament v. United States, 783 F.2d 771, 773-74 (9th

Cir. 1986) (church)), and, most importantly here,

trusts (C.E. Pope Equity Trust, 818 F.2d 697; See also

Knoefler, 20 F.3d at 348 (“A nonlawyer, such as these

purported ‘trustee(s) pro se’ has no right to represent

another entity, i.e., a trust, in a court of the United

States.”)). Such entities are, by their very nature,

unable to appear in person and must act through

representatives. Rowland v. California Men's Colony,

506 U.S. 194, 202 (1993) (“28 U.S.C. § 1654...does not

allow corporations, partnerships, or associations to

appear in federal court otherwise than through a

licensed attorney”).

Default judgment is therefore entered against

defendant Allen Casselman, as Trustee of Alpha Land

Company, based upon the trust’s failure to defend.

Accordingly it is ADJUDGED and DETERMINED that Allen

Casselman, as Trustee of Alpha Land Company, and Alpha

Land Company itself have no interest in the subject

property of this action (“the Lemon Cove Property”),

which is located at 23009 Avenue 320, Lemon Cove,

Tulare County, California 93244, and is more

particularly described as follows:

LOTS 8, 9, 10, 11, 13 AND 14 OF LINDCOVE REALTY

COMPANY’S SUBDIVISION OF THE BROWN AND LEVINSON

RANCH, LYING EAST OF PALM AVENUE, AS PER MAP

RECORDED IN BOOK 7 OF MAPS, PAGE 54, TULARE COUNTY

RECORDS, BEING SITUATED IN THE NORTHWEST QUARTER

OF SECTION 16, TOWNSHIP 18 SOUTH, RANGE 27 EAST,

M.D.B.M., IN THE UNINCORPORATED AREA OF THE COUNTY

OF TULARE, STATE OF CALIFORNIA, ACCORDING TO THE

OFFICIAL PLAT THEREOF.

EXCEPTING THEREFROM THAT PORTION LYING EAST OF THE

CENTERLINE OF FOOTHILL DITCH.

TOGETHER WITH THAT PORTION OF THE ABANDONED ROAD

LYING ADJACENT TO LOTS 13 AND 14 ON THE WEST AS

ABANDONED BY THE TULARE COUNTY BOARD OF

SUPERVISORS IN DOCUMENT RECORDED MARCH 15, 1926 IN

BOOK 148, PAGE 143 OF OFFICIAL RECORDS.

IT IS FURTHER ADJUDGED AND DETERMINED as to Allen

Casselman, as Trustee of Alpha Land Company, and Alpha

Land Company, that defendants James and Lorna Marie

Little own the Lemon Cove Property as their community

property, as alleged in the United States’ First

Amended Complaint.

IT IS SO ORDERED:

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Date: October 27, 2005

/s/ ROBERT E. COYLE

ROBERT E. COYLE

UNITED STATES DISTRICT JUDGE

(United States v. Little, Doc. 135 (emphasis added).)

Subsequently, the Littles moved to vacate various rulings

against them in United States v. Little, including Judge Coyle’s

decision on partial summary judgment that they were indebted to

the United States, collectively, for more than $1.7 million. 

(Doc. 133.) United States v. Little was then transferred to the

undersigned district judge. (Doc. 147.) On August 21, 2006, the

motion to vacate was denied. (Doc. 152.)

III. DISCUSSION

A. Motion to remand.

Motions to remand are governed by 28 U.S.C. § 1447, which

provides in pertinent part:

A motion to remand the case on the basis of any defect

other than lack of subject matter jurisdiction must be

made within 30 days after the filing of the notice of

removal under section 1446(a). If at any time before

final judgment it appears that the district court lacks

subject matter jurisdiction, the case shall be

remanded. An order remanding the case may require

payment of just costs and any actual expenses,

including attorney fees, incurred as a result of the

removal....

28 U.S.C. § 1447(c).

The United States removed the state quiet title action to

federal court pursuant to 28 U.S.C. §§ 1442, 1444. Plaintiff and

the Littles argue that the case should be remanded because

neither provision provides a basis for subject matter

jurisdiction under the circumstances. 

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Section 1442 provides in pertinent part:

(a) A civil action or criminal prosecution commenced in

a State court against any of the following may be

removed by them to the district court of the United

States for the district and division embracing the

place wherein it is pending:

(1) The United States or any agency thereof or any

officer (or any person acting under that officer)

of the United States or of any agency thereof,

sued in an official or individual capacity for any

act under color of such office or on account of

any right, title or authority claimed under any

Act of Congress for the apprehension or punishment

of criminals or for the collection of the revenue.

(emphasis added). 

Plaintiff and the Littles argue that § 1442 does not apply

in this case because the United States is not being sued for any

act undertaken “for the collection of the revenue.” In essence,

Plaintiff and the Littles assert that the phrase “any act under

color of such office or on account of any right title or

authority claimed under any Act of Congress” is dependent upon

the phrase “for the apprehension of punishment of criminals or

for the collection of the revenue.” The Little’s parse the

statutory text incorrectly. The provision has been interpreted

in a manner that separates the language “for any act under color

of such office” from the subsequent “or on account of any right,

title or authority claimed under any Act of Congress for the

apprehension or punishment of criminals for the collection of the

revenue.” Those are independent clauses. Accordingly, § 1442

permits removal whenever an agency of the United States is named

as a defendant in a lawsuit by virtue of an act taken under the

color of such office. Numerous courts have permitted removal

under the first clause -- where the agency “act[ed] under color

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of such office” -- in cases which have absolutely no connection

to “the apprehension or punishment of criminals or the collection

of revenue.” See, e.g., California v. NRG Energy Inc., 391 F.3d

1011 (9th Cir. 2004) (permitting removal by federal agencies of

claims alleging conspiracy to fix prices of wholesale

electricity); Kim v. Kang, 154 F.3d 996 (9th Cir. 1998)(seller of

business claiming title to funds held in escrow filed state law

action against various entities, including the lender, the Small

Business Administration, a federal agency; action could be

removed pursuant to section 1442.) Section 1442 permits removal

in this case. 

The United States also argues that removal is justified in

this case pursuant to section 1444, which provides:

Any action brought under section 2410 of this title

against the United States in any State court may be

removed by the United States to the district court of

the United States for the district and division in

which the action is pending.

28 U.S.C. § 2410, entitled “actions affecting property on which

United States has lien,” provides in pertinent part:

(a) Under the conditions prescribed in this section and

section 1444 of this title for the protection of the

United States, the United States may be named a party

in any civil action or suit in any district court, or

in any State court having jurisdiction of the subject

matter--

(1) to quiet title to,

(2) to foreclose a mortgage or other lien upon,

(3) to partition,

(4) to condemn, or

(5) of interpleader or in the nature of

interpleader with respect to, real or personal

property on which the United States has or claims

a mortgage or other lien.

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(b) The complaint or pleading shall set forth with

particularity the nature of the interest or lien of the

United States. In actions or suits involving liens

arising under the internal revenue laws, the complaint

or pleading shall include the name and address of the

taxpayer whose liability created the lien and, if a

notice of the tax lien was filed, the identity of the

internal revenue office which filed the notice, and the

date and place such notice of lien was filed. In

actions in the State courts service upon the United

States shall be made by serving the process of the

court with a copy of the complaint upon the United

States attorney for the district in which the action is

brought or upon an assistant United States attorney or

clerical employee designated by the United States

attorney in writing filed with the clerk of the court

in which the action is brought and by sending copies of

the process and complaint, by registered mail, or by

certified mail, to the Attorney General of the United

States at Washington, District of Columbia. In such

actions the United States may appear and answer, plead

or demur within sixty days after such service or such

further time as the court may allow.

Essentially, Plaintiff argues that because their underlying

quiet title action was brought pursuant to California law, not 28

U.S.C. § 2410 (the federal Quiet Title Act), removal cannot be

grounded upon 1444. But, the United States has not waived

sovereign immunity to a quiet title action under California law

which affects real property in which the United States claims an

interest. The only way Plaintiffs could properly name the IRS as

a defendant in their state lawsuit would be to invoke 28 U.S.C. 

§ 2410. 

B. Motion to Dismiss.

The United States moves to dismiss on the grounds that (1)

Allen Casselman has no standing to represent the interests of

Alpha Land Co. in this case because he is not licensed to

practice law in California; and (2) because Plaintiffs’ state

quiet title action is barred by the prior judgment in United

States v. Little.

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1. Standing.

A motion to dismiss for lack of standing may be treated as a

motion to dismiss for failure to state a claim under Federal Rule

of Civil Procedure 12(b)(6). See Beeman v. TDI Managed Care

Serv., Inc., 449 F.3d 1035, 1038 (9th Cir. 2006). Such motions

are disfavored and rarely granted: “[a] complaint should not be

dismissed unless it appears beyond doubt that plaintiff can prove

no set of facts in support of his claim which would entitle him

to relief.” Van Buskirk v. CNN, Inc., 284 F.3d 977, 980 (9th

Cir. 2002) (citations omitted); see also Gilligan v. Jamco Dev.

Corp., 108 F.3d 246, 249 (9th Cir. 1997) (stating that the issue

is not whether plaintiff will ultimately prevail, but whether

claimant is entitled to offer evidence to support the claim). In

deciding whether to grant a motion to dismiss, the court “take[s]

all of the allegations of material fact stated in the complaint

as true and construe them in the light most favorable to the

nonmoving party.” Rodriguez v. Panayiotou, 314 F.3d 979, 983

(9th Cir. 2002). 

It is undisputed that Allen Casselman is not licensed to

practice law. As discussed in Judge Coyle’s order entering

default against Allen Casselman in United States v. Little, a

trust can only be represented by an attorney in federal court. 

28 U.S.C. § 1654 provides:

In all courts of the United States the parties may

plead and conduct their own cases personally or by

counsel as, by the rules of such courts, respectively,

are permitted to manage and conduct causes therein.

Although individuals who are parties to an action may appear in

propria persona, this exception only to individuals who are

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 Plaintiffs’ and the Littles’ argument that the issue 3

of standing is for the state court to determine is without merit. 

This case has been properly removed to federal court. It is the

federal court that has jurisdiction to determine its own

jurisdiction.

11

asserting their own personal rights or interests. See C.E. Pope

Equity Trust v. United States, 818 F.2d 686, 697 (9th Cir. 1987). 

A trust, for example, must be represented by an attorney. Id.;

see also Knoefler, 20 F.3d 348 (“A nonlawyer, such as these

purported ‘trustee(s) pro se’ has no right to represent another

entity, i.e. a trust, in a court of the United States.”)).

Default judgment was entered against Alpha Land Company in

United States v. Little on this ground. Here, again, Allen

Casselman does not have standing to represent Alpha Land Company.

Alpha Land Company has not indicated its intent to obtain

counsel. For this reason alone, the quiet title action brought 3

by Alpha Land Company against the IRS must be dismissed for lack

of standing. 

2. Res Judicata.

Alternatively, the United States asserts that the order

entering default against Alpha Land Company in United States v.

Little should be given res judicata effect to bar Alpha’s claims

brought against the IRS.

Res judicata is an affirmative defense that is not

specifically enumerated in Rule 12(b). However, where a motion

based on res judicata does not raise facts outside the scope of

the complaint, the court may construe such a motion as one under

Rule 12(b)(6) motion. Scott v. Kuhlmann, 746 F.2d 1377, 1378

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(9th Cir. 1983). 

Res judicata “bars relitigation of all grounds of recovery

that were asserted, or could have been asserted, in a previous

action between the parties, where the previous action was

resolved on the merits. It is immaterial whether the claims

asserted subsequent to the judgment were actually pursued in the

action that led to the judgment; rather, the relevant inquiry is

whether they could have been brought.” Tahoe Seirra Preservation

Council Inc., v. Tahoe Regional Planning Agency, 322 F.3d 1064,

1078 (9th Cir. 2003).

Here, default judgment was entered against Alpha Land

Company in United States v. Little. The Order granting default

judgment specifically states: 

[I]t is ADJUDGED and DETERMINED that Allen Casselman,

as Trustee of Alpha Land Company, and Alpha Land

Company itself have no interest in the subject property

of this action 

The right of Alpha Land Company to assert any right to the

title of the Littles’ land has been previously adjudicated by

this court. This claim has been finally decided and is

foreclosed. 

Plaintiff and the Littles’ appear to raise various arguments

in opposition to the application of res judicata here. In their

only comprehensible argument, they point to language from the

district court’s order denying the Littles’ motion to vacate in

United States v. Little. There, the district court held:

“Neither Rule 59(e) or Rule 60(b) apply to Defendants’ motion

because no judgment has been entered in favor of the United

States.” (United States v. Little, Doc. 152 at 4.) But, in that

order, the district court was responding to a motion filed by the

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Littles. The district court correctly found that no judgment has

been entered in favor of the United States as against the

Littles. However, default judgment had been entered against

Allen Casselman as trustee for the Alpha Land Company. The

judgment did not determine the United States’ interest in the

real property. Rather, it decided that Alpha Land Company had

not title in the subject real property. The language from the

order denying the Littles’ motion to vacate does not preclude the

operation of res judicata against Alpha Land Company’s quiet

title action.

IV. CONCLUSION

For the reasons set forth above, the motion to remand is

DENIED and the motion to dismiss is GRANTED WITH PREJUDICE.

SO ORDERED

Dated: September 27, 2006

 /s/ Oliver W. Wanger 

OLIVER W. WANGER

United States District Judge

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