* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 24 1998 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff - Appellee, No. 98-4109

v. (D.C. No. 98-CV-140-S) H. EUGENE LYMAN and ARLENE W. LYMAN, individually, and as trustees of both the G.A.L. Trust and Equity Associates, Defendants - Appellants, and FRANK WILLIAM LEONESIO, (D. Utah)

Intervenor.

ORDER AND JUDGMENT *

Before ANDERSON , McKAY , and LUCERO , Circuit Judges.

After examining the briefs and the appellate record , this panel has determined unanimously that oral argument would notmaterially assist the-2-

determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without ora l argument. Appellants H. Eugene Lyman and Arlene W. Lyman, pro ceeding pro se, appeal an order of the United States District Courtfor the District of Utah denying their motion to reconsider, set aside, and vacate the district court’s default judgment entered against them on April 23, 1997. Additionally, Intervenor Frank William Leonesio, also proceeding pro se, filed a Motion to Set Aside Default Judgment for Misjoinder. He appeals the district court’s joining him as an intervenor/defendant and asks this court to set aside the default judgment for want of jurisdiction and misjoinder. On February 13, 1996, the United States filed a complaint against the Lymans seeking three results: (1) to reduce to jud gment federal income tax assessments for the years 1981 and 1983 through 198 9; (2) to set aside the fraudulent transfer of two parcels of real propertyknown as the Ashby and Cannon properties, or to determine that the Lymans held title to those two parcels of real property as trustees of two trusts, Equity Associates and G.A.L. Trust; and (3) to foreclose federal tax liens against that rea l property. See R., Vol. I, Doc. 1. The action was brought at the request and with the authorization of the Internal Revenue Service pursuant to 26 U.S.C. §§ 7401 and 7 403 and was based on assessments against each of the Lymans for $606,785 .10 which had been-3-

outstanding since July 19, 1993. The Lymans respon ded by filing a Motion to Quash in the form of a Non-Statutory Abatement and Clarification of Record, a memorandum in support of that motion, and a second Non-Statutory Abatement in which they claimed that they were “state Citizens o f the Republic of Utah” and had never been citizens of the United States, which rendered the assessments “null and void nunc pro tunc.” Id. , Doc. 8 at 2; Docs. 12, 18. They also made other arguments including declarations that the dis trict court lacked jurisdiction to hear the case and that the federal government was e ngaging in collusion and conspiracy and had committed fraud and many other v iolations of the state and federal constitutions and the Utah Penal Code. On June 3, 1996, the court granted the government’s first motion to strike the Lymans’ motion to quash, holding that the Lyman s’ arguments were “frivolous and without legal merit.” Id. , Doc. 15. After a hearing on November 25, 1996, at which the Lymans did not appear, the d istrict court granted the government’s second motion to strike the Lymans’ mo tions and it ordered the Lymans to file a proper answer, or a default judgme nt would be entered against them. See id. , Doc. 32. The Lymans did not file an answer or any other response, but the government subsequently filed a Motion for Entry of Default Judgment. On January 23, 1997, instead of issuing a default j udgment, the district court issued an order to the Lymans to personally appear before the court and to show-4-

cause why a default judgment should not be entered against them. See id. , Doc. 36. Following the second hearing on February 7, 19 97, at which the Lymans also did not appear but the court heard evidence from th e government, the court entered a default judgment on April 23, 1997, again st the Lymans personally and in their capacities as trustees of Equity Associate s and the G.A.L. Trust. See id. , Doc. 39. The court then found that the Lymans held title to the two real properties at issue, and it set aside the two trans fers complained of as fraudulent transfers and ordered the sale of the properties an d the distribution of the proceeds in accordance with the priority of the lie ns and claims of all parties.
See id. , Docs. 40, 41. In response to these orders, Mr. Leonesio filed a N otice of Amicus Curiae in which he claimed that, as trustee for Thunderbir d Management, he was the owner of the Ashby and Cannon parcels of real prope rty at issue, and he asserted a claim to that property. In an Order dated June 1 3, 1997, the district court treated Mr. Leonesio’s Notice of Amicus Curiae as amotion to intervene and joined him as an intervenor/defendant in the action , even though Mr. Leonesio may not have intended to become a party. See id. , Doc. 46 at 4. The court then determined that Mr. Leonesio’s individual claim was inferior to the government’s tax liens and that the property would sell free and clear of his claims upon foreclosure, but that any surplus proceeds would be paid to the court registry to-5-

determine Mr. Leonesio’s interest pending further o rder of the court. While the government proceeded with the foreclosure and sale of the properties, the Lymans filed two bankruptcy petitions, both of which were later dismissed. Eight months after the entry of the default judgmen t against them, the Lymans filed a Motion to Reconsider, Set Aside and Vacate the default judgment pursuant to Federal Rule of Civil Procedure 60(b), a Motion to Rescind and Vacate Eviction Order, a Motion to Set Aside Order Compelling Discovery, and a Motion for Imposition of Sanctions. The governmentfiled a Motion to Amend Order of Sale. The Lymans alleged “Inadvertence; E xcusable Neglect; Newly Discovered Evidence; and Fraud on the part of the P laintiff” as grounds for their Rule 60(b) motion. Id. , Vol. II, Doc. 69 at 2. On June 18, 1998, the dis trict court denied all of the Lymans’ motions. Specifically, t he court found that their “unsupported allegation of fraud on the part of the United States [was] not sufficient to set aside the default judgment.” Id. , Vol. III, Doc. 81 at 4. It also determined that, because the motion to reconsider w as brought eight months after entry of the default judgment and no explanation wa s offered for the delay, it was not brought within a “reasonable time” under Rule 6 0(b). Id. In response to the motion to rescind the eviction order, which the cou rt denied, the court ordered the Lymans to refrain from any action that would frustr ate or hinder the sale of the property at issue. The court also denied the Lyman s’ motion for sanctions, which1 The record indicates that the bankruptcy petition t o which this stay related

was dismissed by the bankruptcy court for bad faith

.

2 On July 21, 1998, Mr. Leonesio filed a Motion of Intervention in this appeal which was granted by the Clerk of the Court on July 27, 1998. -6- was based on the alleged violation of a bankruptcy stay. 1 The court stated that it did not believe that the government attorney or the United States Marshal had willfully violated the bankruptcy stay, but that th e bankruptcy court is the proper forum for such a motion in any event. The court gr anted the government’s motion to amend the order of sale, but it ordered the Lyma ns to submit a survey by a registered land surveyor setting forth new legal de scriptions of the property and delineating any errors in the government’s survey. To the extent that Mr. Leonesio appeals the distric t court’s orders joining him as intervenor/defendant and entering a default judgment, both of which were filed in 1997, we reject these appeals as untimely. See Fed. R. App. P. 4(a)(1)(B) (requiring filing notice of appeal “within 60 days after judgment or order appealed from is entered”). To the extent that Mr. Leonesio appeals the denial of the Lymans’ Rule 60(b) motion, 2 we address his arguments in conjunction with the Lymans’ arguments. Therefore, we refer to H. E ugene Lyman, Arlene W. Lyman, and Frank William Leonesio collectively as “ Appellants.” On appeal, Appellants advance arguments similar to those presented to the district court. These arguments reflect hackneyed tax protester refrains that the-7-

federal government has no jurisdiction over Appellants, the government’s complaint is fraudulent, and the government has com mitted collusion and fraud against Appellants. See United States v. Collins , 920 F.2d 619, 629 (10th Cir. 1990), cert. denied , 500 U.S. 920 (1991). Appellants also claim that the district court erred in dismissing the Rule 60(b) motion bas ed on untimeliness. They argue that the grounds alleged for the Rule 60(b) m otion, “Inadvertence; Excusable Neglect; Newly Discovered Evidence; and F raud on the part of the Plaintiff,” R., Vol. II, Doc. 69 at 2, are all reas ons listed under subsections (1), (2), or (3) of Rule 60(b), which mandates that theyhave one year in which to file such a motion. We review the district court’s denial of Appellants ’ Rule 60(b) motion for abuse of discretion. See Stubblefield v. Windsor Capital Group , 74 F.3d 990, 994 (10th Cir. 1996). We do not examine the underlying judgment because the scope of our review is limited to the order on the Rule 6 0(b) motion. See id. Upon our review of the briefs, the district court’s many ord ers, and the entire record on appeal, we affirm the district court’s decision forall the reasons stated in its Order filed June 18, 1998, and for several reasons that we think should be explicitly stated. First, we add that Appellants’ interpretations of the statutes which confer jurisdiction in actions relating to internal revenu e laws are patently incorrect.-8-

There is no doubt in our minds when we declare that26 U.S.C. § 7402 and 28 U.S.C. §§ 1340 and 1345 explicitly vest federal dis trict courts with jurisdiction over civil actions involving the enforcement of int ernal revenue laws and over any civil action commenced by the United States as plaintiff. Efforts by Appellants to challenge the authority of the federa l courts to preside over actions such as that filed by the United States in this cas e defy credulity. See Collins , 920 F.2d at 629. While we hesitate to give Appellants’ arguments anyfurther attention, we think it important to reaffirm that the federal cou rts have jurisdiction over Appellants. “All citizens of the United States are liable for income taxes and every person born in the United States is a citizen of the United States.” Cox v. Commissioner of Internal Revenue , 99 F.3d 1149 (10th Cir. 1996) (Table); see also 26 C.F.R. § 1.1-1(b) & (c); Lonsdale v. United States , 919 F.2d 1440, 1448 (10th Cir. 1990) (rejecting argument that individua l who is a citizen of a state is not a “person” subject to taxation under Internal R evenue Code as “completely lacking in legal merit and patently frivolous”); Un ited States v. Dawes , 874 F.2d 746, 750-51 (10th Cir.) (characterizing statement t hat defendants are not taxpayers because they are citizens of Kansas as fr ivolous), cert. denied , 493 U.S. 920 (1989), overruled on other grounds , United States v. Allen , 895 F.2d 1577, 1580 (10th Cir. 1990). Since 1916, the Supreme Cou rt has recognized that “the-9-

Sixteenth Amendment authorizes a direct nonapportio ned tax upon United States citizens throughout the nation, not just in federal enclaves.” See Cox , 99 F.3d 1149 (citing Brushaber v. Union Pac. R.R. Co. , 240 U.S. 1, 12-19 (1916)). Additionally, Appellants’ argument that the defaultjudgment was inappropriate because they were inexperienced in matters of litigation and had difficulty obtaining counsel is without merit. Whi le we construe pleadings of pro se litigants liberally, see Haines v. Kerner , 404 U.S. 519, 520 (1972); Riddle v. Mondragon , 83 F.3d 1197, 1202 (10th Cir. 1996), “an appellan t’s pro se status does not excuse the obligation of any litigant to c omply with the fundamental requirements of the Federal Rules of Civil and Appe llate Procedure.” Ogden v. San Juan County , 32 F.3d 452, 455 (10th Cir. 1994), cert. denied , 513 U.S. 1090 (1995). Further, it is evident from the record that Appellants disregarded clear statements from the district court not only orderin g them to appear at hearings and to come forth with valid arguments which would supp ort a defense but also stating that their arguments on jurisdiction and th e government’s alleged fraud were “frivolous and without legal merit.” R., Vol. I, Doc. 15 at 1; see also id. , Docs. 32, 36. We will not entertain this argument in light of such obvious abuses. Finally, we think it worthwhile to address the ques tion of the timing of the Rule 60(b) motion. In addition to the court’s dete rmination that the merits of Appellants’ arguments did not warrant setting aside the default judgment, it also-10-

found that the motion to reconsider was not broughtwithin a reasonable time because Appellants had not offered any valid explan ation for why they waited eight months after the entry of judgment before fil ing the motion. See id. , Vol. III, Doc. 81 at 4-5. Rule 60(b) states that “[t]he motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment . . . was entered.” Fed. R. Civ. P. 60(b) . The government is correct in its assessment that the one-year time frame is an o uter limit which is secondary to the requirement that the motion be made within a re asonable time. Contrary to Appellants’ assertion, a Rule 60(b) “motion is not timely merely because it has been filed within one year of the judgment.” White v. American Airlines, Inc. , 915 F.2d 1414, 1425 (10th Cir. 1990). Whether a Ru le 60(b) motion is made within a reasonable time “depends on the facts of e ach case,” Ashford v. Steuart , 657 F.2d 1053, 1055 (9th Cir. 1981), taking into co nsideration several factors including the reason for the delay and the prejudic e to the other parties. See id. ;
see, e.g. , Security Mut. Cas. Co. v. Century Cas. Co. , 621 F.2d 1062, 1067-68 (10th Cir. 1980) (upholding denial of a Rule 60(b) motion on the ground that it was untimely because of unexplained 115-day delay b etween date of judgment and date motion filed); accordKagan v. Caterpillar Tractor Co. , 795 F.2d 601, 610-11 (7th Cir. 1986) (holding that delay of four months after plaintiff learned of dismissal was unreasonable under the circumstanc es); Central Operating Co. v.3 We do not address the substance of any of the othermotions filed by

Appellants and denied by the district court in its Order filed June 18, 1998, because Appellants do not raise such issues in thei r briefs. -11- Utility Workers of Am., AFL-CIO , 491 F.2d 245, 253 (4th Cir. 1974) (finding no abuse of discretion in denying relief from judgmentwhen defendants waited almost four months after receiving notice of defaul t judgments before filing motions to vacate and provided no satisfactory expl anation for delay). In light of our conclusion above concerning Appellants’ pro se status, Appellants’ claim that they were inexperienced in m atters of litigation and had difficulty obtaining counsel does not provide a val id reason for the delay. Further, based on our review of Appellants’ lengthyand convoluted filings in this case, we think it significant that the district cou rt went beyond its duty by giving Appellants every opportunity to respond to the gove rnment’s filings. Therefore, because Appellants have not offered sufficient just ification for the eight-month delay, we conclude that the court did not abuse its discretion in determining that the Rule 60(b) motion was untimely.

For the foregoing reasons, we affirm the district c ourt in all respects. 3-12-

AFFIRMED

. Entered for the Court

Monroe G. McKay Circuit Judge