UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

UNITED STATES OF AMERICA, 

Plaintiff, 

v. 

RONALD D. JOLING, et al., 

Defendants. 

Aiken, District Judge: 

Case No. 6: 14-cv-1444-JR 

OPINION AND ORDER 

Defendants Ronald and Dorothea Joling evaded and failed to pay federal and state taxes 

for many years, resulting in criminal convictions, tax liens against their properties, and this civil 

action brought by the United States to reduce its tax assessments to judgment and foreclose its 

tax liens against several parcels of property. 

On August 31, 2016, this Court entered default judgment in favor of the United States. 

The Court also declared that Antioch Ministries and other unincorporated associations used by 

the Jo lings to obscure their ownership of property were their nominees, and that any transfers of 

property to the nominee associations were fraudulent with respect to the United States. 

1 - OPINION AND ORDER 

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Now before the Court is the United States' Motion for Determination of Lien Priority 

between it and the Oregon Department of Revenue (DOR). The United States contends that the 

federal tax liens against the Jolings' properties are senior and superior to all state tax liens. DOR 

disagrees and maintains that its tax liens became choate as of their recording dates, and that the 

priority of liens should be determined according to the "first in time first in right" rule. See 

United States v. lv!cDermott, 507 U.S. 447 (1993). For the reasons explained below, I agree with 

DOR. 

A lien becomes choate "when the identity of the lienor, the property subject to the lien, 

and the amount of the lien are established." United States v. New Britain, 347 U.S. 81, 84 (1954). 

The first two requirements are not at issue; the government does not dispute that the state tax 

liens identify the lienor and the amount of the liens. Rather, the issue is whether DOR's tax liens 

identify the property subject to the liens. 

From 2008 through 2014, DOR recorded distraint warrants against the Jolings in Coos 

and Linn Counties; the warrants gave DOR liens against the Jolings' interests in real prope1iy 

located in those counties. See Or. Rev. Stat.§§ 205.125(2), 314.430. At the time, however, the 

Jolings purportedly had transferred the interests in their properties to Antioch Ministries. The 

United States argues that the state tax liens against properties held by the Jolings - with no 

identification of Antioch Ministries as nominee - failed to identify the prope1iy subject to the 

liens. As a result, the United States argues that the state tax liens remained inchoate until the 

Court ruled that the Jolings' transfers to Antioch Ministries were fraudulent. The United States 

further emphasizes that the federal notices of tax liens were filed against Antioch Ministries as 

nominee for the Jolings, thus identifying the prope1iy subject to the liens; i.e., the properties 

purportedly transferred to and held by Antioch Ministries. 

2 - OPINION AND ORDER 

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DOR responds that Antioch Ministries never filed articles of incorporation with the 

Oregon Secretary of State, and, as an unincorporated association, it was not a legal entity and 

was incapable of holding title to real property. DOR emphasizes that a "purported transfer to a 

non-existent entity is void." DOR's Surreply at 2 (citing Klo1fine v. Cole, 121 Or. 76, 252 P. 708 

(1927) and Oregon v. Bureau of Land lvfgmt., 876 F.2d 1419 (9th Cir. 1988)). DOR thus 

maintains that the transfers of property to Antioch Ministries were void, and that the Jolings 

retained their interests in the properties when DOR filed its warrants and perfected its liens. 

The United States does not dispute the assertion that Antioch Ministries was 

unincorporated. Further, it is well-established that an unincorporated association cannot hold title 

to real property. Oregon v. Sunbeam Rebekah Lodge No. 180, 169 Or. 253, 266, 127 P.2d 726 

(1942) ("It is our conclusion that Sunbeam Rebekah Lodge No. 180, an unincorporated 

association, was incapable of taking title to or holding the real property here involved."); see 

also Next Step v. Redmon, 879 N.\V.2d 71, 72 (N.D. 2016) (discussing common law rule that 

"unincorporated associations are incapable of holding title to real property because they are not 

legal entities"). 

The United States nonetheless relies on United States v. Ultra Dimensions, 803 F. Supp. 

2d 596 (E.D. Tex. 2011) to support its argument. There, the debtors fraudulently conveyed 

property to Ultra Dimensions, a sham trust. Id. at 597. A judgment creditor filed an Abstract of 

Judgment against the debtors, but not Ultra Dimensions, while the federal government filed 

notices of tax liens against Ultra Dimensions as nominee for the debtors. Id. at 598. The district 

court ruled that the judgment lien did not become choate until the court voided the fraudulent 

transfers to Ultra Dimensions, and it was subordinate to the federal tax liens as a result. Id. at 

600-01. The United States argues that the same analysis should apply in this case. I disagree. 

3 - OPINION AND ORDER 

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In Ultra Dimensions, court specifically noted that "Ultra Dimensions, not the [debtors], 

held title to the Subject Property at the time the Abstract of Judgment was filed." Id. at 600. 

Here, Antioch Ministries was legally incapable of holding title to real property, and it could not 

and did not hold title to any property at the time DOR filed the warrants. Thus, the transfers to 

Antioch Ministries were void and not simply voidable after the fact. See K/01jine, 121 Or. at 81-

84, 252 P. 708 (holding that a debtor's attempted transfer of deed to a dissolved corporation was 

void, and that a lien against the debtor nonetheless attached to the property); Oregon v. Bureau of 

Land J\1gmt., 876 F.2d at 1425 ("Indeed, there is a general rule of property law that a deed made 

out to a fictitious person is void, while a deed to a real person, even if obtained by fraud, is only 

voidable."). Ultra Dimensions is therefore distinguishable and does not support the superiority of 

federal tax liens in this case. 

In sum, Antioch Ministries could not and did not hold title to the Jolings' properties when 

DOR filed its distraint warrants, and DOR's tax liens became choate when the warrants were 

recorded. Or. Rev. Stat.§§ 250.125(2), 314.430. 

CONCLUSION 

Accordingly, the United States' Motion for Lien Priority Determination (doc. 70) is 

DENIED, and lien priority shall be determined according to the "first in time, first in right" rule. 

IT IS SO ORDERED. 

Dated this ~ :{:{/~ day of.Jami~ 201 ~ 

AnnAiken 

United States District Judge 

4 - OPINION AND ORDER 

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