IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Judge William J. Martínez

Civil Action No. 11-cv-02278-WJM-KLM

UNITED STATES OF AMERICA,

Plaintiff,

v.

ASHCROFT HOMES CORP.,

ANITA L. RUSSELL,

TIMOTHY J. RUSSELL,

USAA FEDERAL SAVINGS BANK, and 

FIRST HORIZON HOME LOAN CORP.

Defendants.

_____________________________________________________________________

ORDER GRANTING MOTION FOR CLARIFICATION 

AND DISCHARGING ORDER TO SHOW CAUSE

_____________________________________________________________________

This matter is before the Court on Defendants Timothy J. Russell and Anita L.

Russell’s (“the Russells”) Motion for Clarification (ECF No. 30) of the Court’s Order of

Judgment Against Defendant Ashcroft Homes Corporation (ECF No. 28), and Plaintiff

United States of America’s (“United States”) Response (ECF No. 39) to this Court’s

Order to Show Cause (ECF No. 33.)

I. BACKGROUND

In the United States’ First Amended Complaint (“the Complaint”), it brought two

claims for relief. (ECF No. 6.) Count I sought to reduce to judgment federal tax

liabilities assessed against former Defendant Ashcroft Homes Corporation (“Ashcroft

Homes”). (Id. at 5-7.) Count II sought to foreclose on the United States’ federal tax lien

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against a property located at 560 Paisley Drive, Colorado Springs, Colorado, 80906

(“the Subject Property”), because the United States’ lien allegedly “attaches to all

property and rights to property of Ashcroft Homes, including the Subject Property.” (Id.

at 7-8.) The other named defendants also allegedly currently have, or previously had,

some interest in the Subject Property. 

On November 28, 2011, the United States and Ashcroft Homes filed a Stipulation

for Judgment, in which Ashcroft Homes stipulated to entry of judgment against it and in

favor of the United States on Count I in the amount of $286,093.92. (ECF No. 27, ¶ 12.) 

The Stipulation also provided that Ashcroft Homes “does not oppose the relief sought in

Count Two of the [operative complaint], which seeks to foreclose federal tax liens on the

Subject Property.” (ECF No. 27, ¶ 14.) Pursuant to the Stipulation, the Court approved

those parties’ proposed order, entered judgment against Ashcroft Homes on Count I,

and also entered judgment “against Ashcroft Homes and in favor of the United States

on Count Two” (“the Order of Judgment”) (ECF No. 28.) Pursuant to the Order of

Judgment, Ashcroft Homes was terminated as a defendant in this action.

II. MOTION FOR CLARIFICATION

On December 5, 2011, the Russells (who allegedly currently live at the Subject

Property) filed their Motion for Clarification, seeking clarification of the Order of

Judgment as to Count II, because they dispute whether the United States has a federal

tax lien that validly attaches to the Subject Property. (ECF No. 30). In the Motion for

Clarification, the Russells argue that Ashcroft Homes “has no present interest in the

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Subject Property and, according to the recorded chain of title relative to the Subject

Property, Ashcroft Homes Corporation has never had a record title interest in the

Subject Property.” (Id. ¶ 5.) Defendant USAA Savings Bank has filed a Notice of

Concurrence with the Motion for Clarification (ECF No. 37), and Defendant First Horizon

Home Loan Corp. has joined in the Motion for Clarification (ECF No. 40, ¶ 5.)

In the United States’ brief and supplemental brief in opposition to the Motion for

Clarification, the United States argues, inter alia, that (1) despite the Order of Judgment

as to Count I, Ashcroft Homes has not paid the amounts owed on the federal tax

liabilities; (2) the Order of Judgment as to Count II only applies to Ashcroft Homes, and

not to the other defendants in the action; (3) the United States is not entitled to an order

authorizing a foreclosure sale until the Court reaches a final adjudication as to the rights

and interests of all parties in this action; and (4) in a separate quiet title action brought

by the Russells against the United States, the Tenth Circuit Court of Appeals

conclusively determined that the United States’ federal tax liens against the Subject

Property are valid, see Russell v. United States, 551 F.3d 1174 (10th Cir. 2008). (ECF

No. 31, 38.)

The Court appreciates the parties’ efforts to more fully inform it of the allegations

underlying this action, the parties’ positions, and the action’s current posture. It appears

that a factual dispute exists between the parties as to whether Ashcroft Homes ever had

an interest in the Subject Property that would warrant the imposition of a lien on the

Subject Property based on Ashcroft Homes’ federal tax liabilities. The Court does not

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find it necessary or appropriate to resolve that issue at this early stage of the

proceedings. At a later date in these proceedings (following discovery), the Court will

be in a better position to resolve that question, and at that time will consider the

potential preclusive effect of the Tenth Circuit’s order in Russell, 551 F.3d 1174. 

However, under the hypothetical scenario that Ashcroft Homes never had any

interest in the Subject Property, it is unclear whether the United States’ claim on Count

II of the Complaint would have any merit. Under the hypothetical scenario that the

United States’ claim on Count II lacks merit, any judgment in favor of the United States

on Count II would be improper. Therefore, at this early stage of the proceedings, the

Court determines that the proper and prudent course is to return to the status quo ante

as to Count II of the Complaint. In a separate written order, the Court will amend its

Order of Judgment against Ashcroft Homes so that judgment will only be entered

against Ashcroft Homes as to Count I of the Complaint. Ashcroft Homes therefore

remains a defendant in this action based on the United States’ claim against Ashcroft

Homes on Count II of the Complaint. Nothing in this Order precludes the United States

from moving, at a later date, to enter judgment against Ashcroft Homes on Count II of

the Complaint. The Court presumes that it will be appropriate to adjudicate the rights

and interests of all parties to this action as to Count II of the Complaint at the same

time.

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III. ORDER TO SHOW CAUSE 

After receiving the Russell’s Motion for Clarification, this Court ordered the United

States to show cause (1) why the Court should not issue a preliminary injunction

precluding the United States from initiating any attempt to foreclose its federal tax lien

against the Subject Property, and (2) why this action should not be dismissed as to the

remaining defendants in the action. In its Response, the United States has shown good

cause as to both issues, for the reasons explained supra. Therefore, the Court

discharges its Order to Show Cause. 

IV. CONCLUSION

In accordance with the foregoing, the Court ORDERS as follows:

(1) Defendants Timothy J. Russell and Anita L. Russell’s Motion for

Clarification of Order of Judgment Against Defendant Ashcroft Homes

Corporation (ECF No. 30) is GRANTED;

(2) The Court will amend its Order of Judgment Against Defendant Ashcroft

Homes Corporation (ECF No. 28, 29) in a separate written order;

(3) Pursuant to that Amended Order, the Court DIRECTS the Clerk of Court

to reinstate Defendant Ashcroft Homes Corporation as a Party-Defendant

in this action (by undoing its termination from this action on November 30,

2011); and

(4) The Court’s Order to Show Cause (ECF No. 33) is DISCHARGED.

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Dated this 20th day of December, 2011.

BY THE COURT:

_________________________

William J. Martínez 

United States District Judge

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