Court Opinion

ID: 612522
Source: CourtListenerOpinion
Date Created: 2011-08-24 20:50:44+00
Date Added: 2024-06-11T17:50:20.322529
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                         FILED
                            FOR THE NINTH CIRCUIT                           AUG 24 2011

                                                                        MOLLY C. DWYER, CLERK
                                                                         U .S. C O U R T OF APPE ALS

ANSEL CAPITAL INVESTMENT, LLC,                   No. 10-35489
a Tennessee limited liability company,
                                                 D.C. Nos.    9:08-cv-00057-DWM
              Plaintiff - Appellee,                           9:08-cv-00093-DWM

  v.
                                                 MEMORANDUM *
UNITED STATES OF AMERICA,
through its agency, Internal Revenue
Service,

              Defendant - Appellee,

BRIAN MARCHANT and MARY
MARCHANT,

              Defendants - Appellants,

  and

RAVALLI COUNTY,

              Defendant.

                    Appeal from the United States District Court
                            for the District of Montana
                    Donald W. Molloy, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                         Argued and Submitted June 9, 2011
                                 Portland, Oregon

Before: FISHER, GOULD, and PAEZ, Circuit Judges.

      Appellants Brian and Mary Marchant appeal from the district court’s

judgment ordering the sale of certain real property pursuant to 28 U.S.C. § 2410.

The Marchants contend that, because they had an interest in the property and they

never agreed to the sale, the district court violated their due process rights when it

ordered the sale the of property as stipulated by the United States and the owner of

the property. They also argue that the district court erred in ordering sale of the

property to satisfy a federal tax lien because the lien had been discharged under 26

U.S.C. § 7425 when the United States failed to redeem the property. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

      The Marchants concede they had notice of the pending litigation in the

district court between the United States and the owner of the property upon reading

the notice of lis pendens filed in the county where the property was located. See

Mont. Code Ann. § 70-19-102. Despite this notice, the Marchants did not

intervene immediately in the lawsuit to assert their rights in the property. Had the

Marchants intervened when they obtained their interest, they could have

challenged the factual basis on which the United States relied to obtain a judgment

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ordering the sale of the property. Instead, the Marchants chose not to intervene in

the litigation until after the court had entered judgment, and only then complained

that they were bound by a stipulation to which they were not a party. Because the

Marchants had ample opportunity to intervene in the district court litigation prior

to entry of the district court’s judgment ordering judicial sale of the property, there

was no deprivation of the Marchants’ due process rights. See Mathews v. Eldrige,

424 U.S. 319, 333 (1976) (“The fundamental requirement of due process is the

opportunity to be heard at a meaningful time and in a meaningful manner.”

(internal quotation marks and citation omitted)). Even though the Marchants did

not receive the process they preferred, they were afforded the process that was

constitutionally required.

      Moreover, the district court correctly concluded that the federal tax lien had

not been discharged before the sale of the property. The Marchants argue that their

notice to the United States that they intended to take title to the property together

with the United States’ subsequent failure to redeem its interest in the property

discharged the federal tax lien pursuant to 26 U.S.C. § 7425. This argument is

without merit. As the district court properly determined, the Marchants could not

circumvent the court’s valid judgment ordering sale of the property by utilizing the

procedure for discharging liens under § 7425. The United States was under no

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obligation to redeem the property under § 7425(d) because it had already asserted

its rights through the suit in district court, and the court had already determined the

validity of the federal tax lien and ordered the sale. See I.R.C. § 7403(c)

(providing that in an action brought under section 7403, the court “shall . . .

proceed to adjudicate all matters involved therein and finally determine the merits

of all claims to and liens upon the property”); see also Fox v. Clarys, 738 P.2d 104,

105 (Mont. 1987) (explaining that a notice of lis pendens “generally renders third

persons who subsequently purchase or encumber an interest in the subject property

bound by the final disposition of the action”). Accordingly, the court did not err in

ordering the sale of the property or in denying the Marchants’ motions to set aside

the judgment.

      AFFIRMED

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