WANGER, District Judge.
The matters before the court are: 1) Plaintiff's motion for summary judgment for foreclosure of federal tax liens against real property allegedly owned by Glen D. Bell and Jeanette Bell, husband and wife, ("Defendants Bell") 2) Defendants Bell Fed.R.Civ.P. 60(b) motion to reconsider based on a claim of new evidence and fraud 3) Co-defendant mortgage holder Stockton Financial Corporation's request for payment of attorney's fees by Defendants Bell.
On April 29, 1997, this court reduced to judgement tax assessments against Glen D. Bell in the amount of $2,680,283.30 plus interest and against Jeanette Bell in the amount of $1,022,865.20 plus interest from March 15, 1993, the plaintiff United States now seeks to foreclose its tax lines against real property claimed to be beneficially owned by defendants.
In this action, the government alleges a personal residence and surrounding 30-acre ranch were held by Stark Management Company as the "nominee and alter ego" for Defendants Bell, when the federal tax liens arose.
The government seeks to enforce its liens against the property and distribute its proceeds to senior mortgagee Stockton Financial Corporation with remainder to the United States.
Stockton Financial Corporation has filed a notice of non-opposition to the government's motion for summary judgment and has requested Defendants Bell pay its attorney's fees.
On September 14, 1998, the Bells, proceeding without counsel, filed an "EMERGENCY EX PARTE MOTION" with the "Article III circuit court of appeals" requesting a "STAY" of this proceeding, a "NOTICE OF GROSS JUDICIAL MISCONDUCT", and a "WRIT OF ERROR" in response to the September 1, 1998 order denying assorted demands regarding the court's jurisdiction.
II. LEGAL STANDARD
A. Summary Judgment
Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c); see Maffei v. Northern Ins. Co. of New York, 12 F.3d 892, 899 (9th Cir.1993). A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor viewing the record as a whole in light of the evidentiary burden the law places on that party. Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir.1995); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-moving party cannot simply rest on its allegations without any significant probative evidence tending to support the complaint. U.A. Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir.), cert. denied, 516 U.S. 912, 116 S.Ct. 297, 133 L.Ed.2d 203 (1995).
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The more implausible the claim or defense asserted by the opposing party, the more persuasive its evidence must be to avoid summary judgment. United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810, 815 (9th Cir.), cert. denied, 516 U.S. 1043, 116 S.Ct. 700, 133 L.Ed.2d 657 (1996). Nevertheless, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in its favor." Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505. A court's role on summary judgment, however, is not to weigh the evidence, i.e., issue resolution, but rather to find genuine factual issues. Abdul-Jabbar v. General Motors Corp., 85 F.3d 407, 410 (9th Cir.1996).
Evidence submitted in support of or in opposition to a motion for summary judgment must be admissible under the standard articulated in 56(e). See Keenan v. Hall, 83 F.3d 1083, 1090 n. 1 (9th Cir.1996); Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 345 n. 4 (9th Cir.1995). Properly authenticated documents, including discovery documents, although such documents are not admissible in that form at trial, can be used in a motion for summary judgment if appropriately authenticated by affidavit or declaration. United States v. One Parcel of Real Property, 904 F.2d 487, 491-492 (9th Cir.1990). Supporting and opposing affidavits must be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Fed. R.Civ.P. 56(e); Conner v. Sakai, 15 F.3d 1463, 1470 (9th Cir.1993), rev'd on other grounds sub nom. Sandin v. Conner, 515 U.S. 472, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995). Any doubts regarding admissibility are resolved in favor of the party opposing summary judgment. Western Land Corp. v. Crawford-Merz Co., 62 F.R.D. 550 (D.Minn. 1973).
A. Plaintiff's Motion for Summary Judgment
Success on summary judgment in the instant case requires the government to demonstrate
The government seeks to establish this control by arguing Stark Management Company held the property as a "nominee and alter ego" for the Bells. "In seeking to satisfy legitimate tax debts, the government may levy on property held by a corporation or other business entity, when the corporation or other business entity is determined to be the alter ego or nominee of the taxpayer." Valley Fin., Inc. v. United States, 629 F.2d 162, 171 (D.C.Cir.1980); "Property held in the name of an entity which is the alter ego of a taxpayer may be levied on to satisfy the tax liabilities of the taxpayer." F.P.P. Enters. v. United States, 830 F.2d 114, 118 (8th Cir.1987). "Property of the ... alter ego of a taxpayer is subject to the collection of the taxpayer's tax liability." Shades Ridge Holding Co., Inc. v. United States, 888 F.2d 725, 728-29 (11th Cir.1989) citing G.M. Leasing Corp. v. United States, 429 U.S. 338, 350-51, 97 S.Ct. 619, 626, 50 L.Ed.2d 530 (1977).
Nominee status is determined by the degree to which a party exercises control over an entity and its assets. Ridge at 729 (11th Cir.1989); LiButti v. United States, 107 F.3d 110, 119 (2nd Cir.1997).
"Courts have considered the following factors to be relevant in determining whether a business entity is the nominee of an individual:
Towe Antique Ford Foundation v. I.R.S., 791 F.Supp. 1450, 1454 (D.Mont.1992) citing United States v. Miller Bros. Constr. Co., 505 F.2d 1031 (10th Cir.1974) (legal title holder was merely the nominee of the taxpayer); United States v. Williams, 581 F.Supp. 756, 759 (N.D.Ga.1982) (legal title holder was nominee of debtor); United States v. Code Prod. Corp., 216 F.Supp. 281 (E.D.Pa.1963) (title holder was nominee of corporate taxpayer); Tato Int'l Corp. v. United States, 64 A.F.T.R.2d (P-H) para. 89-5124 (S.D.Fla. 1989) (United States' levy against assets of corporation was proper since corporation was taxpayer's nominee).
Based on four affidavits and findings of fact from a prior Bankruptcy Court proceeding
Although pro se litigants are held to less stringent standards than those applicable to licensed attorneys, Meade v. Grubbs, 841 F.2d 1512, 1526 (10th Cir.1988), they must nevertheless "`follow the same rules of procedure that govern other litigants.'" Oklahoma Federated Gold and Numismatics, Inc. v. Blodgett, 24 F.3d 136, 139 (10th Cir.1994) (quoting Green v. Dorrell, 969 F.2d 915, 917 (10th Cir.1992)). Even liberally construed, the Bells' response does not contest any specific undisputed facts made by the government.
If the moving party meets its initial burden showing "the absence of a material and triable issue of fact," "the burden then moves to the opposing party, who must present significant probative evidence tending to support its claim or defense." Intel Corp. v. Hartford Acc. & Indem. Co., 952 F.2d 1551, 1558 (9th Cir.1991) (quoting Richards v. Neilsen Freight Lines, 810 F.2d 898, 902 (9th Cir.1987)). The necessary significant and probative evidence "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
The Bells have not provided specific evidence that dispute any of the 23 undisputed facts listed above, or that create any disputed issues of material fact regarding the nominee status of the subject property as presented by the government. The Bells' "Opposition to United States' Motion for Summary Judgment" alleges as conclusions of law, "constructive fraud", "extortion", and
The Bells "must come forward with sufficient evidence demonstrating to the Court that there are genuine issues of material fact to be decided at trial." Rand v. Rowland, 154 F.3d 952 (9th Cir.1998). The existence of a genuine issue of material fact may be demonstrated through the use of affidavits, depositions, answers to interrogatories, and admissions. The defendant's sole affidavit
"The constitutionality of the taxing system is not a gray area, but one delineated in ...
B. The Bells' Motion to Reconsider
Defendants Glen D. Bell and Jeanette Bell base their Fed.R.Civ.Proc. 60(b) motion to reconsider the order made by this court on September 1, 1998 on an allegation that the declarations of Randy Reese and G. Patrick Jennings are "fraudulent" indicia of an "executive cabal". (Def. Brief, p. 20 and p. 20, item (f))
Federal Rule of Civil Procedure 60(b) governs the reconsideration of final orders of the district court. The Rule permits a district court to relieve a party from an order or judgment on grounds of: "(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party ... or (6) any other reason justifying relief from the operation of the judgment." Fed.R.Civ.P. 60(b). The motion for reconsideration must be made within a reasonable time, in any event "not more than one year after the judgment, order, or proceeding was entered or taken." Id.
Motions to reconsider are committed to the discretion of the trial court. Combs v. Nick Garin Trucking, 825 F.2d 437, 441 (D.C.Cir.1987); Rodgers v. Watt, 722 F.2d 456, 460 (9th Cir.1983) (en banc). To succeed, a party must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision. See, e.g., Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), aff'd in part and rev'd in part on other grounds, 828 F.2d 514 (9th Cir.1987), cert. denied, 486 U.S. 1015, 108 S.Ct. 1752, 100 L.Ed.2d 214 (1988). The Ninth Circuit has stated that "[c]lause 60(b)(6) is residual and `must be read as being exclusive of the preceding clauses.'" Lafarge Conseils et Etudes, S.A. v. Kaiser Cement, 791 F.2d 1334, 1338 (9th Cir.1986), quoting Corex Corp. v. United States, 638 F.2d 119 (9th Cir.1981). Accordingly, "the clause is reserved for `extraordinary circumstances.'" Id.
Defendants Bell have alleged fraud. Their legal conclusion that the Assistant United States Attorney and revenue agent assigned to this case are part of an "executive cabal" is insufficient to create a disputed issue of material fact. No facts are offered in support of these argumentative legal conclusions. Beyond their spurious theory of extra-jurisdictional action
C. Stockton Financial Corporation's request for Attorney's fees
Stockton Financial Corporation is the successor in interest to Guaranty Federal Bank, doing business as Stockton Savings Bank, the beneficial owner of the Deed of Trust on the subject property of which Glen D. Bell and Jeanette Bell are the named and signed borrowers.
Stockton Financial Corporation retained counsel to defend its interest in the subject property and is seeking reimbursement for those expenditures. Local Rule 293 governs the award of attorney fees in this District.
The motion for fees must show the following:
The basic fee, or "lodestar," is calculated by multiplying the number of hours reasonably expended by a reasonable hourly rate. Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir.1992). The prevailing party has the burden of documenting the hours expended and submitting evidence in support of the hours worked. Id. at 1397-98. "It is an abuse of discretion for the court to award fees for hours that are not properly documented." Stewart v. Gates, 987 F.2d 1450, 1453 (9th Cir.1993). Hours that are "excessive, redundant, or otherwise unnecessary" are to be excluded from the fee request. Id. at 1452. The reasonable hourly rate typically is based on "prevailing market rate[s] in the community" for similar work. Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir.1987). Exhibit C from the Declaration of Morris Knight (Vice President, Stockton Financial Corporation) lists attorney expenses of $5,527.32 based on an average hourly rate of $150 to the Stockton, California law firm Bray, Geiger, Rudquist, & Nuss.
According to Mr. Knight's declaration as drafted by Stockton Financial Corporation's attorneys, reasonable "[f]ees, late charges, and and [sic] costs are recoverable under paragraphs 5 and 7 of the Deed of Trust and paragraph 7 of the Promissory Note," if any action materially affecting the property were to arise, (Decl. of Morris Knight, p. 2, In. 5, emphasis not added). In fact, only Item 7, In. 6; Item 18, In. 12 of the August 15, 1984 Deed of Trust and Item 7(E), In. 3 of the August 9, 1984 promissory note include signed promises by the Bells to repay reasonable attorney's fees.
As the successor in interest, Stockton Financial Corporation has been required to be a named party in the lien and lien foreclosure proceeding concerning the Bells' tax liability. As deed of trust holder, Stockton Financial Corporation has necessarily incurred attorney's fees in this case. It is entitled to reasonable attorney's fees with respect to this litigation for protecting the priority of its lien under its loan agreement with the Bells. The government has acknowledged the seniority of Stockton Financial Corporation's lien on the subject property, See 26 U.S.C. § 6323(e).
The hourly rate of $150.00 per hour charged by the attorney for Stockton Financial Corporation is reasonable and well within prevailing hourly rates for attorneys before the court in the field of debt collection and real estate security transactions. The time expended in representing Stockton Financial Corporations's interest in this case, 36 hours over 3 years of litigation, was reasonably required to protect its senior lien interest, as were the legal services set forth in Exhibit C of the Knight Declaration. "A strong presumption exists that the lodestar (reasonable number of hours times reasonable hourly rate) represents a reasonable fee," G. & G. Fire Sprinklers, Inc. v. Bradshaw, 136 F.3d 587, 98 C.D.O.S. 7080, 7085 (9th Cir.1998). Further findings beyond the lodestar are not required in this case. Stockton Financial
"Nominee" status is a sufficient basis to attach tax liability to the subject property. Plaintiff has proved the existence of a nominee relationship between Defendants Bell and Stark Management Company. Defendants have provided no evidence that disputes plaintiff's specific statement of undisputed facts. The evidence establishes defendants retained all benefits and control of the subject real property at the time the federal liens arose and since that time. The Bells admitted in Bankruptcy Court they are the beneficial owners of the real property. Without significant probative evidence to the contrary, as a matter of law, there is no genuine issue as to any material fact. Plaintiff's motion for summary judgment is GRANTED. Defendant's motion to reconsider is DENIED. The request for reasonable attorney's fees in the amount of $5,977.32 payable to the Stockton Financial Corporation by Defendants Bell is GRANTED. Proceeds of the foreclosure of the property shall be distributed first to satisfy the claims of Stockton Financial Corporation, the United States, with the balance if any to Defendants.
Defendants Bell also argue the Secretary of Treasury's authority is limited by a definition of the "United States" that encompasses only territories and possessions such as the "Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa" (Def.Brief, p. 6, 11) but not the contiguous 48 states, Hawaii and Alaska. Defendants Bell reach this outcome "by interpreting the term `include' [as used in the tax code] as a term of limitation rather than of definition", United States v. Ward, 833 F.2d 1538, 1539 (11th Cir.1987) "This claim ... has no semblance of merit." In re Becraft (United States v. Nelson), 885 F.2d 547, 549 n. 2 (9th.Cir.1989) citing Ward.