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United States v. Washburn

United States District Court, M.D. Pennsylvania

July 23, 2018

UNITED STATES OF AMERICA, Plaintiff
v.
TIMOTHY J. WASHBURN, et al., Defendants

          ORDER & JUDGMENT

          Christopher C. Conner, Chief Judge.

         AND NOW, this 23rd day of July, 2018, upon consideration of the motion (Doc. 13) by the United States of America for default judgment against pro se defendants Timothy J. Washburn and Terri M. Washburn (collectively, “the Washburns”), and the court observing that the United States initiated the above-captioned action by filing a complaint (Doc. 1) on December 13, 2017, asserting a claim against Timothy Washburn for federal income tax liability in the amount of $107, 288.76 for tax years 2009 through 2013, (see Id. ¶¶ 7, 11), a claim against Terri Washburn for federal income tax liability in the amount of $49, 617.66 for tax years 2010 and 2011, (see Id. ¶¶ 12, 16), and a claim for foreclosure of federal tax liens, (see Id. ¶¶ 17-24); that the United States completed service by publication on March 29, 2018, (see Doc. 10), rendering the Washburns' answer or responsive pleading due on or before April 19, 2018, see Fed.R.Civ.P. 12(a)(1)(A)(i); and that the Washburns failed to plead or otherwise defend, see Fed.R.Civ.P. 12, resulting in the Clerk's entry of default (Doc. 12) against them on April 20, 2018, see Fed.R.Civ.P. 55(a); and further upon consideration of the Washburns' challenge of jurisdiction (Doc. 14), which the court construes as the Washburns' response in opposition to the United States' motion for default judgment, wherein the Washburns oppugn the court's subject matter jurisdiction sub judice, as well as assert that “[a]ll proceedings must stop until jurisdiction has been proven on the record” and that the entry of default against them should be dismissed, (id.), and the court noting that the United States Code explicitly confers subject matter jurisdiction upon federal district courts to issue such orders and to “render such judgments and decrees as may be necessary and appropriate for the enforcement of the internal revenue laws, ” 26 U.S.C. § 7402(a), and further grants “original jurisdiction” to district courts over “any civil action arising under any Act of Congress providing for internal revenue, ” 28 U.S.C. § 1340, and the court thus finding that the Washburns' jurisdictional challenge is wholly meritless, and turning to the Washburns' request that the court dismiss the entry of default, (Doc. 14 at 2), the court observing that the Washburns must demonstrate “good cause” for the court to set aside the entry of default, Fed.R.Civ.P. 55(c), which inquiry tasks the court to consider whether: (1) the United States will be prejudiced if the default is set aside, (2) whether the Washburns have a meritorious defense, and (3) whether default resulted from the Washburns' culpable conduct, see United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 194-95 (3d Cir. 1984), and the court finding that no factor favors setting aside the entry of default, as (1) the United States may be prejudiced if default does not stand and it is compelled to litigate a matter against uncooperative defendants who do not deny liability, (2) the Washburns' defenses are meritless, (see Doc. 14), and (3) their dilatoriness and blatant disregard for the legal process was unquestionably deliberate, (see, e.g., Docs. 5, 7), and the court thus declining to exercise its discretion to set aside the default; and lastly, turning to the United States' motion (Doc. 13) for default judgment, the court observing that entry of default judgment is appropriate when unchallenged facts of the complaint state a prima facie cause of action, see Joe Hand Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261, 270 (E.D. Pa. 2014) (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)), and finding that the undisputed allegata establish that Timothy Washburn has unpaid federal income tax liability for tax years 2009 through 2013 in the amount of $109, 248.46 as of April 18, 2018, (see Doc. 1 ¶¶ 7, 11; Doc. 13 at 2-3; Doc. 13-2 ¶¶ 4, 6), that Terri Washburn has unpaid federal income tax liability for tax years 2010 and 2011 in the amount of $50, 542.36 as of April 18, 2018, (see Doc. 1 ¶¶ 12, 16, Doc. 13 at 3, Doc. 13-2 ¶¶ 7, 9), that the United States possesses federal tax liens pursuant to 26 U.S.C. §§ 6321, 6322 that should be foreclosed, (see Doc. 1 ¶¶ 17-23), and that the Washburns have not contested that they received the income reflected in the United States' notices of assessments and demands for payment, (see Doc. 1 ¶¶ 7-8, 12-13; Doc. 13-2 ¶¶ 4-6, 7-9), nor do they dispute the accuracy of the United States' calculations, (see generally Doc. 14), and the court thus concluding that entry of default judgment is appropriate, [1] and that the United States has proven the amount of the requested judgment against the Washburns with sufficient certainty such that no further inquiry is required, see Fed.R.Civ.P. 55(b)(2); Rhino Assocs. L.P. v. Berg Mfg. & Sales Corp., 531 F.Supp.2d 652, 657 (M.D. Pa. 2007), and that the facts establishing the United States' entitlement to foreclose on the real property named in the complaint, (Doc. 1 ¶ 6; see also Doc. 1-2), are “taken as true, ” see Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990), it is hereby ORDERED that:

         1. The United States motion (Doc. 13) for default judgment is GRANTED.

         2. Judgment is ENTERED in favor of the United States and against Timothy Washburn in the amount of $109, 248.46 as of April 18, 2018, together with all interest and penalties that will continue to accrue pursuant to statute after that date, with respect to Timothy Washburn's unpaid federal income tax liabilities for the federal tax years 2009 through 2013.

         3. Judgment is ENTERED in favor of the United States and against Terri Washburn in the amount of $50, 542.36 as of April 18, 2018, together with all interest and penalties that will continue to accrue pursuant to statute after that date, with respect to Terri Washburn's unpaid federal income tax liabilities for the federal tax years 2010 and 2011.

         4. Judgment is ENTERED in favor of the United States and against the Washburns on the United States' claim to foreclose on the federal tax liens that attach to the real property located at 6458 Pamadeva Road, Hanover, Pennsylvania 17331 (“the Property”) arising from the liabilities set forth in paragraphs 2 and 3 supra, as well as the liabilities of Timothy Washburn for federal tax year 2001 previously reduced to judgment by this court. See United States v. Washburn, No. 1:16-CV-626, Doc. 16 (M.D. Pa. June 23, 2017) (Conner, C.J.).

         5. The Property, as more fully described in the deed attached to the United States' complaint, (see Doc. 1-2), shall be sold according to the following provisions:

a. The United States Internal Revenue Service (the “IRS”), through its Property Appraisal and Liquidation Specialist Unit (“PALS”), is authorized under 28 U.S.C. §§ 2001 and 2002 to offer for sale at public auction and to sell the Property.
b. The public auction shall be held at the Property or at any other place in accordance with the provisions of 28 U.SC. §§ 2001 and 2002.
c. The sale of the Property shall be free and clear of any liens or interests held by the Washburns.
d. The sale of the Property shall be subject to all laws, ordinances, and governmental regulations (including building and zoning ordinances) affecting the Property and easements and restrictions of record, if any.
e. PALS shall publish notice of the sale, including the time, date, and location of the sale, once a week for at least four consecutive weeks before the sale in at least one newspaper of general circulation in the county in which the property is located. PALS may publish notice of the sale by any additional method that it deems appropriate. Any notice of the sale of the Property shall contain a description of the Property as well as the terms and conditions of sale as set forth herein.
f. PALS shall set the minimum bid. If the minimum bid is not met or exceeded, PALS may, without further permission of this court, and pursuant to the terms and conditions in this order, hold a new public sale, if necessary, and reduce the minimum bid.
g. At the time of the sale, the successful bidder(s) shall deposit with PALS, by money order or by certified or cashier's check payable to the Clerk of the United States District Court for the Middle District of Pennsylvania, a deposit in an amount between five (5) and twenty (20) percent of the minimum bid as specified by PALS in the published notice of sale. PALS may require, at its discretion, potential bidders to submit to PALS proof that they are able ...

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