Opinion ID: 799600
Heading Depth: 5
Heading Rank: 3

Heading: Prejudice to Third Party

Text: Third, the court should consider the likely prejudice to the non-liable third party both in personal dislocation costs and the sort of practical undercompensation described [in the context of the sale of a homestead interest]. Rodgers, 461 U.S. at 711, 103 S.Ct. 2132. Although § 7403 allows for the conversion of a non-delinquent spouse's homestead estate into its fair cash value, the Court recognized that in practical terms financial compensation may not always be a completely adequate substitute for a roof over one's head. Id. at 704, 103 S.Ct. 2132. The problem of undercompensation is particularly acute in the case of a homestead interest, which may have a value less than the price of a lifetime interest in an equivalent home and must be based on actuarial statistics that will unavoidably undercompensate those who live longer than average. Id. Finding that this factor favored Barbara Winsper, the district court explained that the relatively small amount of proceeds ..., estimated at no more than $71,500, will not permit Mrs. Winsper to relocate to other reasonable housing. The government argues that this is mere speculation unsupported by the record. Barbara Winsper's declaration represented her future income as limited and asserted that if forced from her home she would be unable to purchase another. It is not self-evident, however, that the expected distribution of $71,500 would be insufficient to allow her to find other reasonable housing. Nor is there any indication of how much she could expect to incur in substantial moving expenses. It may be that Barbara Winsper would suffer prejudice in the form of practical undercompensation, but there is no support for such a finding on this record. Barbara Winsper also attested that her home of some 30 years had irreplaceable sentimental value to her that made it a home and not just a house or a piece of `Real Property.' However, this third factor envisions some special circumstances of prejudice to the non-liable third party. Bierbrauer, 936 F.2d at 376. Such circumstances would include personal dislocation costs that were greater than in any other foreclosure against a residence to satisfy a tax lien. Id. at 375. However, if `the inherent indignity and inequity of being removed from one's home' should automatically tip the scales in [the third party's] favor, ... the government could never foreclose against a jointly owned residencea result clearly untenable under § 7403. Id. at 375-76; see also United States v. Barr, No. 11717, 2008 WL 4104507 (E.D.Mich. Sept. 2, 2008), aff'd 617 F.3d 370 (6th Cir.2010). The hardship of having to leave a home with enormous sentimental value itself would not present special circumstances of prejudice that weigh against foreclosure of the entire property.