106 F.3d 1333 (7th Cir. 1997), 96-1299, United States v. Davenport

Docket Nº:96-1299.
Citation:106 F.3d 1333
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Amos D. DAVENPORT, Jr. and Norma L. Davenport, Defendants-Appellants.
Case Date:February 11, 1997
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 1333

106 F.3d 1333 (7th Cir. 1997)

UNITED STATES of America, Plaintiff-Appellee,

v.

Amos D. DAVENPORT, Jr. and Norma L. Davenport, Defendants-Appellants.

No. 96-1299.

United States Court of Appeals, Seventh Circuit.

February 11, 1997

Argued Oct. 24, 1996.

Gary R. Allen, David I. Pincus, Annette M. Wietecha (argued), Department of Justice, Tax Division, Appellate Section, Washington, DC, Douglas W. Snoeyenbos, Department of Justice, Tax Division, Washington, DC, Thomas P. Walsh, Samuel D. Brooks, Office of the United States Attorney, Civil Division, Chicago, IL, for Plaintiff-Appellee.

Andrew B. Spiegel (argued), Wheaton, IL, for Defendants-Appellants.

Page 1334

Before CUMMINGS, ESCHBACH, and FLAUM, Circuit Judges.

ESCHBACH, Circuit Judge.

From 1980-1987, Amos Davenport chose not to file federal income tax returns. Although the transgression was his alone, the consequences extended to his wife, Norma Davenport, when the district court ordered the sale of the Davenports' marital residence to satisfy the federal tax liens that had allegedly attached to the property. The Davenports argue for reversal of the district court's order on the grounds that the sale of their residence violates Illinois homestead law, the Illinois tenancy by the entirety statute, and Internal Revenue Service procedural regulations. Although we sympathize with Norma Davenport's unenviable position, the law requires affirmance for the reasons below.

I. BACKGROUND

The Davenports have owned their residence at 443 Luella, Calumet City, Illinois (the "marital residence") since April 2, 1955. In 1989, the tax man came knocking: the United States assessed taxes and penalties totalling $168,429.26 for Amos' failure to pay federal income taxes from 1980-1987. Notices of assessments and demands for payment dated December 11, 1989, were sent to Mr. Davenport, but the demands were ignored. Finally, on August 16, 1994, the United States initiated this action in district court seeking to reduce the assessments to judgment and to foreclose its liens on Amos' interest in the marital residence.

At the time the demands for payment were made, the Davenports owned the marital residence as joint tenants. However, on March 20, 1995 (after commencement of the government's foreclosure suit) the Davenports transferred the property to a tenancy by the entireties under Illinois law, presumably in hopes that the estate would then be impervious to Amos' creditors, including the United States taxing authorities.

On December 12, 1994, in response to the government's motion for summary judgment, the district court issued an order 1) entering judgment in favor of the United States in the amount of $208,003.72, 1 2) foreclosing the federal tax liens, and 3) ordering the sale of the marital residence in satisfaction of the liens. The court reserved ruling on whether Amos was also liable for fraud penalties for the years 1981-1987. In addition, the court refrained from specifying a specific dollar amount or percentage due Norma Davenport as a portion of the proceeds of the sale.

The Davenports appeal the partial summary judgment order decreeing the sale of the marital residence. We review this order de novo, drawing all reasonable inferences in the non-movant's favor. Hoornstra v. United States, 969 F.2d 530, 532 (7th Cir.1992).

II. JURISDICTION

As a threshold matter, we must determine whether the district court's order is reviewable at this juncture. Although appellants' brief relies on § 1291 jurisdiction, the government correctly discerns that the December 12 order did not dispose of all claims against all parties. When questioned at oral argument, the parties finally agreed that jurisdiction existed under the finality doctrine enunciated in Forgay v. Conrad, 47 U.S. (6 How.) 201, 12 L.Ed. 404 (1848). 2 Despite the parties' ultimate agreement, however, we are obliged to independently confirm the basis of our appellate jurisdiction. See Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278, 97 S.Ct. 568, 571-72, 50 L.Ed.2d 471 (1977); Stearnes v. Baur's Opera House, Inc., 3 F.3d 1142, 1144 (7th Cir.1993).

The courts of appeal have jurisdiction over "all final decisions of the district courts of the

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United States ... except where a direct review may be had in the Supreme Court." 28 U.S.C. § 1291. The government correctly points out that, under conventional doctrine, the district court's order was not a final decision because it did not dispose of all claims against all parties. Specifically, the court left unresolved the issues of additional fraud penalties for 1981-1987 and Norma Davenport's apportioned share of the judicial sale proceeds.

Nevertheless, we take jurisdiction over this appeal under the finality doctrine first announced in Forgay v. Conrad:

[W]hen the decree decides the right to the property in contest, and directs it to be delivered up by the defendant to the complainant, or directs it to be sold ... and the complainant is entitled to have such decree carried immediately into execution, the decree must be...

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