Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-06056/USCOURTS-ca10-90-06056-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 

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✓ 

. FILED 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

Urnted States Court of Appeals 

Tl"nth Cirniit 

P 2 - 1991 

ROBERT 1. HOECKER 

Clerk 

CIMARRON ELEVATOR, INC. 

an Oklahoma corporation, 

Plaintiff-Appellee, 

v. 

VAN STAFFORD, LOIS STAFFORD, 

) 

) 

) 

) 

) 

) 

) 

) 

APHKO, UNINC and UNITED STATES ) 

OF AMERICA ex rel DISTRICT DIRECTOR) 

OF THE INTERNAL REVENUE SERVICE, ) 

and CAMPO HOLDING TRUST, ) 

Defendants-Appellants. 

) 

) 

ORDER AND JUDGMENT* 

No. 90-6056 

(D.C. No. CIV 86-2486-W) 

(W.D. Oklahoma) 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

Defendants Van and Lois Stafford appeal an order entered by 

the district court denying them relief from a default judgment in 

favor of the government for collection of unpaid federal income 

taxes. The Staffords essentially raise three issues on appeal: 

(1) whether the government properly removed the case to federal 

court; (2) whether the Staffords are "taxpayers" within the meaning of the Internal Revenue Code; and (3) whether the Commissioner 

* This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 90-6056 Document: 010110105142 Date Filed: 04/25/1991 Page: 1 
has authority to levy against the Staffords' property to satisfy 

their federal tax liability. We affirm. 

This appeal evolved out of the Commissioner's assessment of 

tax deficiencies and additions again~t the Staffords for the years 

1971, 1974, 1975, 1977, 1979 and 1980. The Commissioner's 

determination was affirmed by both the United States Tax Court and 

the Tenth Circuit. Stafford v. Commissioner, 805 F.2d 893 (10th 

Cir. 1986); Stafford v. Commissioner, 805 F.2d 895 (10th Cir. 

1986). The government sought to satisfy the judgments by levying 

on installment payments the Staffords received from Cimarron 

Elevator, Inc. 1 The Staffords collected the installments through 

a trust they created, Aphko, Uninc. 2 To determine entitlement to 

its installment payments, Cimarron filed an interpleader action in 

an Oklahoma state court. The government removed the action to 

federal district court pursuant to 28 U.S.C. §§ 1444 and 2410. I 

R. tab 1. 

The district court entered a default judgment against the 

Staffords on April 21, 1987, following their failure to respond or 

to participate in any proceedings. The Staffords thereafter filed 

a Fed. R. Civ. P. 60(b) "Motion to Vacate Judgment," claiming that 

they had not been properly served with notice of the government's 

removal. The district court denied the Staffords' motion on 

August 13, 1987, and they did not appeal. Approximately two years 

1 The installment payments resulted from Cimarron's purchase of a 

grain elevator from the Staffords. 

2 The Staffords, as trustees, later purported to assign the 

interest held by Aphko, Uninc to the "Campo Holding Trust," for 

which Van Stafford served as a trustee. IR. tab 48, exh. Hat 2. 

-2-

Appellate Case: 90-6056 Document: 010110105142 Date Filed: 04/25/1991 Page: 2 
later, the Staffords filed several new motions which the district 

court rejected. Finally, on January 23, 1990, the district court 

rejected a new series of motions which are the subject of this 

appeal. 

The Staffords first argue that the government failed to 

provide them with notice of the case's removal to federal court. 

This argument is untimely. The district court, by an order dated 

August 13, 1987, determined that the case had been properly 

removed by the government. The Staffords did not appeal this 

initial determination. Therefore, under Fed. R. App. P. 4(a)(4), 

the Staffords cannot now appeal this decision. See Browder v. 

Director, Dep't of Corrections, 434 U.S. 257, 263 n.7 (1978); 

Morris v. Adams-Millis Corp., 758 F.2d 1352, 1356-57 (10th Cir. 

1985). 

The Staffords' other contentions on appeal are without merit. 

First, they argue that they are not subject to federal income tax 

laws because they are sovereign people. This argument is patently 

frivolous. See Stoecklin v. Commissioner, 865 F.2d 1221, 1224 

(11th Cir. 1989). Equally unmeritorious is their argument that 

the Commissioner does not have the power to levy against payments 

owed to their trust. See Christensen v. Ward, 916 F.2d 1462, 1476 

(10th Cir.) ("Assessment and levy pursuant to statutory procedures 

and subject to j~dicial review do not violate any clearly 

established right to due process."), cert. denied, 111 S. Ct. 559 

(1990); G.M. Leasing Corp. v. United States, 429 U.S. 338, 351 

(1977) (property held by the alter ego of a taxpayer is considered 

property of the taxpayer and subject to lien). 

-3-

Appellate Case: 90-6056 Document: 010110105142 Date Filed: 04/25/1991 Page: 3 
The government requests that we impose a sanction of $1500 

against the Staffords for bringing a frivolous appeal. Although 

this amount will not cover the costs incurred in defending this 

appeal, the government argues that a lump-sum award would deter 

future appeals and avoid the expenditure of additional time 

calculating exact costs. The Staffords have had notice of the 

request and an opportunity to respond. 

After examining the record and the briefs, we agree that the 

Staffords' appeal is legally frivolous and that sanctions are warranted in this case. Accordingly, pursuant to 28 U.S.C. § 1912 

and Fed. R. App. P. 38, we impose sanctions against the Staffords 

in the amount of $1500 for their taking a frivolous appeal. 

AFFIRMED. 

The mandate shall issue forthwith. 

-4-

Entered for the Court 

James K. Logan 

Circuit Judge 

Appellate Case: 90-6056 Document: 010110105142 Date Filed: 04/25/1991 Page: 4