1 NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CARRIE LOOMIS, as Trustee of the LOST CREEK TRUST

Plaintiff

- Appellant,

v. UNITED STATES INTERNAL REVENUE SERVICE
Defendant

- Appellee, No. 22

- 36055
D.C. No. 2:22

- cv - 00099

- RCT

MEMORANDUM *

Appeal from the United States District Court

for the District of Idaho Richard C. Tallman, Senior Circuit Judge Sitting by Designation, Presiding

Argued and Submitted March 28, 2024 Seattle, Washington Before: WARDLAW, PARKER, * * and MILLER, Circuit Judges. Carrie Loomis, the trustee of the Lost Creek Trust (the “Trust”) , appeals the
district court’s dismissal of her suit seeking a refund of taxes alleged to have been

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3.

** The Honorable Barrington D. Parker, Jr., United States Circuit Judge for the U.S. Court of Appeals for the Second Circuit, sitting by designation. 

# FILED

JUN 4 2024
MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

improperly collected

. See 28 U.S.C. § 1346(a)(1). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. In 2003, non - party Christopher Close and another individual purported to transfer property (the “Property”) to the Trust. Close was subsequently indicted
and convicted of various crimes . In 2005 in a forfeiture proceeding , the d istrict

c ourt concluded that Close had an interest in the Property , even though he had
caused it to be held in the name of the T rust

. United States v. Close , No. 3

- cr - 69 (D. Idaho Mar. 11, 2005) , Dkt. No. 176 at 10 (“ Close I ”). The district court accordingly entered a preliminary order of forfeiture against the Property. Id. at
15. In a Tax Court proceeding in 201 4 against Close and his wife, the IRS
contended that the Trust was a sham and sought taxes on income derived from logging activities on the Prope rty

. Close v. Comm’r , 107 T.C.M. (CCH) 1124, *7, *10 (T.C. 2014 ) (“ Close Tax Court ”). Finding that the IRS failed to meet its burden of proof on the sham theory under federal tax law , the Tax Court rejected it
without deciding who , under Idaho law , owned the Property

. Id. at *12. Shortly after the 2005 preliminary order of forfeiture , the Trust initiated an ancillary proceeding pursuant to 21 U.S.C. § 853(n) in the district court, contending that it had an interest in the Property. After an unexplained gap of eleven years, the d istrict c ourt held in 2016 that the Trust failed to allege any plausible facts or legal basis that established its ownership interest in the Property ,3

and that , under Idaho law, the transfer of the Property to the Trust was fraudulent
because Close “ had the actual intent to hinder, delay, or defraud creditors

. ” United
States v. Close , No. 3

- cr - 69 ( D. Idaho Nov. 30, 2016) , Dkt. No. 376 at 17, 20 (“ Close II ”) . We affirmed

. United States v. Close , 755 F. App ’ x 626 (9th Cir. 2018) (“ Close III

”). Following the conclusion of the forfeiture proceedings, the Property was sold, with $224,557. 5 3 of the proceeds paid to the IRS to satisfy Close’s various outstanding tax obligation s
. In 2022, Loomis commenced this action on behalf of the Trust , seeking a
refund of proceeds collected by the IRS

. She argued that the Trust, not Close, owned the Property. See 28 U.S.C. § 1346(a)(1)

. The government moved to
dis miss on the basis of

, inter alia , i ssue preclusion , contending that the Trust was barred from claiming it had an interest in the Property because that issue was litigated and decided against it in Close II

. T he district court granted the motion , holding that Close II precluded the Trust’s suit

. 1. The district court correctly concluded that issue preclusion applies against the Trust. “We review whether issue preclusion is available de novo and the district court’s decision to apply issue preclusion for abuse of discretion.” Love
v. Villacana , 73 F.4th 751, 754 (9th Cir. 2023) (citing Sec. & Exch. Comm ’ n v. Stein , 906 F.3d 823, 828 (9th Cir. 2018)).4

I ssue preclusion applies if : “(1) the issue at stake was identical in both proceedings; (2) the issue was actually litigated and decided in the prior proceedings; (3) there was a full and fair opportunity to litigate the issue; and (4) the issue was necessary to decide the merits.” Howard v. City of Coos Bay , 871 F.3d 1032, 1041 (9th Cir. 2017) (quoting Oyeniran v. Holder , 672 F.3d 800, 806 (9th Cir. 2012)). We conclude that each of the four factors was satisfied

. T he Trust concedes that the second and third requirements a re met but
contends that the first and fourth a re not met. As to the first, the district court properly concluded that the issues at stake in Close II and th is case a re the same

. See id. I n Close II

, the Trust contended it had a legal interest in the Property, and
in this case , the Trust contended that it was the owner of the Property

. Further,
both cases turned on the application of Idaho law

. Additionally, pretrial preparation and discovery in Close II could have reasonably been expected to
embrace the issue of whether the Trust owned the Property. Id.
As to the fourth requirement , the district court correctly determined that the Trust’s interest in the Property was necessary for deciding Close II because a litigant proceeding under § 853(n) must be able to “assert[] a legal interest in [the forfeited] property [.]” 21 US.C. § 853(n)(2)

. Accordingly, the court appropriately applied issue preclusion against the Trust.5

2. We also conclude that the district court correctly declined to apply issue preclusion against the government. As the district court noted in Close II , the Tax Court determined Close’s tax liability under the tax code, not his ownership interest in the Property in relation to the interests of other parties. Close II at 11

. Consequently, Close Tax Court did not provide a basis for precluding the government from arguing that Close owned the Property.
AFFIRMED.