Opinion ID: 4586199
Heading Depth: 2
Heading Rank: 3

Heading: The United States’ Cross Appeal

Text: The United States may bring a civil action to enforce a tax lien in a district court and “to subject any property, of whatever nature, of the delinquent, or in which [the delinquent] has any right, title, or interest, to the payment of such tax or liability.” 26 U.S.C. § 7403(a). The district court must then “adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property” and, if the court concludes the United States has a “claim or interest,” it will generally be obliged to “decree a sale of such property.” Id. § 7403(c); see also United States v. Rodgers, 461 U.S. 677, 706–11 (1983)) (acknowledging that Congress amended § 7403(c) to read that district courts “may decree a sale” in 1936 but holding that district courts do not have “unbridled discretion” to decline to do so). The United States argued in the district court that, whatever the value of Shaun’s senior lien from the BECU Deed of Trust, it must not include the value of payments for which the six-year statute of limitations had run. The district 9 In its response, the United States argues for the first time that the 2005 Deed of Trust could also be found to be a fraudulent transfer under Wash. Rev. Code § 19.40.051(b) (2004), presumably because that subsection requires a lower standard of proof than section 19.40.41(a)(1) (2004). However, because the United States did not raise this issue before the district court, we will not consider it. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010) (“An issue will generally be deemed waived on appeal if the argument was not raised sufficiently for the trial court to rule on it.” (cleaned up)). UNITED STATES V. ALLAHYARI 19 court did not address this argument directly; instead it simply concluded that “Shaun is entitled to the same priority position for the interest accrued on the BECU Loan” and calculated the interest as $127,721.52. Allahyari, 2018 WL 4357487, at . Washington has a six-year statute of limitations for any “liability express or implied arising out of a written agreement.” Wash. Rev. Code § 4.16.040(1). This statute of limitations applies to monthly installment payments under a deed of trust, as was the case with the BECU Deed of Trust. See Edmundson v. Bank of Am., 378 P.3d 272, 277–78 (Wash. Ct. App. 2016) (holding that the six-year statute of limitations begins to run “for each installment [payment] from the time it became due”). The United States argues that the district court erred by failing to calculate and exclude from its valuation of Shaun’s BECU Deed of Trust any payments that would be subject to the relevant statute of limitations. When “subject[ing] any property . . . in which [the tax delinquent] has any right, title or interest”—that is, when identifying assets to be sold in order to satisfy the lien—the United States “steps into the taxpayer’s shoes” and “acquires whatever rights the taxpayer himself possesses.” United States v. Nat’l Bank of Commerce, 472 U.S. 713, 725 (1985) (internal quotation marks omitted). 10 Among the rights that Komron possessed vis-à-vis the BECU Deed of Trust was the ability to assert the defense that some past-due payments 10 Although National Bank of Commerce concerned the ability of the United States to reach funds from a bank account in which the tax delinquent had a shared contractual right to withdraw and was based on a tax levy rather than a lien action, the Supreme Court’s statement that the United States “steps into the taxpayer’s shoes” cited to the section of Rodgers relating to § 7403. 472 U.S. at 725. 20 UNITED STATES V. ALLAHYARI are barred by the six-year statute of limitations. Once the United States stepped into Komron’s shoes, via a § 7403 action, there became no reason why it could not assert that defense. Shaun argues, as he did below, that the United States cannot assert the statute-of-limitations defense because it lacks standing to do so, citing cases relating to third-party enforcement of contracts. This argument is unavailing. The United States is no longer a stranger to the contract between Shaun and Komron. Because the district court determined that the United States has a “claim or interest” in the property, the United States is now standing in Komron’s place relative to any encumbrances upon the property. Although Komron might have chosen not to assert such a defense against his father, there is no legal basis to deny that ability to the United States once it has exercised its rights under § 7403. Because the district court did not consider the effect of the six-year statute of limitations when calculating the value of Shaun’s senior lien under the BECU Deed of Trust, we remand for the district court to properly recalculate the value.