United States District Court, M.D. Pennsylvania
UNITED STATES OF AMERICA, Plaintiff.
DUSTIN B. BOGART, et al., Defendants.
MATTHEW W. BRANN UNITED STATES DISTRICT JUDGE
satisfy Dustin Bogart's federal income tax deficiency,
the United States of America foreclosed upon and sold
property owned by Dustin and his wife, Marcy Bogart, in
Northumberland County, Pennsylvania. This Court ordered the net
proceeds of that sale to be distributed entirely to the
Government,  and rejected the Bogarts' subsequent
motion to reconsider that decision. The United States Court of
Appeals for the Third Circuit later vacated the order denying
Bogarts allege that June Bogart (Dustin's mother) and
Marcy had cognizable interests in the subject property.
Consequently, since the tax liability was owed exclusively by
Dustin, the Bogarts argue that June and Marcy are entitled to
a share of the property's sales proceeds.
Whether June Bogart Had an Interest in the Subject
Bogarts allege that June had an interest in the subject
property as a result of a loan advanced by June to the trust
that held the property. In support of this claim, the Bogarts
submit two exhibits: an affidavit signed by June and a
promissory note signed by Marcy on behalf of the trust.
affidavit, June states that she provided “$35, 000.00
in gold, silver and cash . . . [in order] to obtain a 33 1/3%
interest” in the property, and that she “was
provided evidence of [that] interest . . . by certificate of
capital units . . . .” The promissory note memorializes
the trust's promise to pay “$35, 000.00 or 1/3 the
fair market sale price of” the property in exchange for
June's loan, and states that, as a “security
interest, ” the trust shall “provid[e] a
certificate of 33 1/3% interest” in the
property. This promissory note, although signed in
2004, was not recorded until 2016.
initial matter, this Court finds this evidence insufficient
to support June's claim to an interest in the subject
property. Both the affidavit and the promissory note indicate
that June should have received a “certificate”
reflecting her interest in the subject property. That
“certificate, ” however, was not submitted with
the Bogarts' papers, and this Court has not be able to
locate it in the record before it. Further, even if this
Court accepts the promissory note itself as the
“certificate, ” that document was not recorded
until 2016, long after the federal tax liens were recorded in
2005 and 2010. Therefore, under Pennsylvania law, the
federal tax liens have priority over June's alleged
Whether Marcy is Entitled to a Portion of the Sales
Third Circuit remanded this case to this Court to determine
whether or not Marcy was entitled to a portion of the sales
proceeds. The Government argues that Marcy has waived her
right to assert an interest in those proceeds.
most of this litigation, the Bogarts have maintained that the
subject property could not be seized and sold to satisfy
Dustin's delinquent tax debts because the property did
not belong to either of them, but instead belonged to an
unincorporated business trust organization. Marcy did not
change her position on this issue-i.e., did not
argue that she was a co-owner of the property entitled to a
portion of its sales proceeds-until after this Court
determined that the business trust was the nominee and alter
ego of the Bogarts, after this Court determined that
the trust's property was therefore Dustin's property,
and after this Court consequently ordered that
property to be sold. At the very least, Marcy should have
raised this argument when this Court was considering whether
or not to order a forced sale of the property. Because she
did not, this Court finds that she has waived it.
reasons discussed above, this Court will again deny the
Bogarts' motion to reconsider its December 2, 2015 Order
distributing the ...