Ingram v. City of Dallas Dept. of Housing & Urban Rehabilitation

Decision Date06 July 1981
Docket NumberNo. 79-3888,79-3888
Citation649 F.2d 1128
Parties81-2 USTC P 9533 Joerene INGRAM and Laurel A. Bates, Trustee, Plaintiffs-Appellants, v. CITY OF DALLAS DEPARTMENT OF HOUSING & URBAN REHABILITATION, et al., Defendants, United States of America (Internal Revenue Service), Defendant-Appellee. . Unit A
CourtU.S. Court of Appeals — Fifth Circuit

L. Lynn Elliott, Charles A. Thompson, Dallas, Tex., for plaintiffs-appellants.

M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews, Chief, Appellate Section, William S. Estabrook, Wynette J. Hewett, Attys., Tax Div., Dept. of Justice, Washington, D. C. for defendant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before CHARLES CLARK, TATE and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

This case involves an appeal from the summary judgment granted the federal government in the government's undertaking to foreclose its federal tax liens on the Texas homestead of one of appellants, Joerene Ingram, and her former spouse, Donald Ingram, for the sole tax liability of Donald Ingram relating to one federal tax and the joint tax liability of Donald and Joerene Ingram relating to another federal tax.

During their marriage, Donald and Joerene Ingram acquired, as community property, a residence located in Dallas, Texas. They claimed this property as their homestead under Texas law. See Tex.Const. Art. XVI, §§ 50-52.

In 1972 and 1973, assessments were made under § 6672 of the Internal Revenue Code of 1954, 26 U.S.C. § 6672 (1976), against Donald Ingram, President of Dallas Auto Damage Appraisers, Inc. (DADA), as the person responsible for the collection and payment of social security and withholding taxes from the wages of the employees of DADA. The assessments related to unpaid taxes withheld from wages of employees of DADA from the first quarter of 1971 through the second quarter of 1972. After payments on account of these liabilities were made, there remains unpaid $9,330.51, plus interest.

In 1973, an assessment was made in the amount of $283.33, plus interest, against both Donald Ingram and Joerene Ingram relating to their unpaid income tax for the taxable year 1971. This amount remains unpaid at present.

On March 19, 1975, around which time the Ingrams were seeking a divorce, the Ingram's residence was destroyed by fire. The home was insured and the proceeds of the policy, approximately $50,000, were deposited into the registry of a Texas Domestic Relations Court. On September 3, 1975, the Ingrams obtained a divorce. Joerene Ingram was awarded custody of the two children of the marriage. In connection with the divorce, the Ingrams entered into a property settlement agreement in which they agreed to the disposition of their community property, including the real property claimed as their homestead. After the payment of sums previously approved by the state Domestic Relations Court, the Ingrams agreed to divide the balance of the proceeds equally. They further agreed that Donald Ingram would convey his interest in the real property to Joerene Ingram in exchange for $1,500.00, to be paid from the proceeds of the sale of the property. With respect to their taxes, the Ingrams agreed that they would file separate income tax returns for the taxable year 1974, that Donald Ingram would pay any income tax on joint income for 1974, and that he would "hold Wife harmless for any deficiencies or assessments for the years 1971 through 1973."

The real property was conveyed to Laurel Bates, as trustee for Joerene Ingram. Joerene Ingram tried to sell the property, but was unable to find a purchaser for it. Joerene Ingram then received notice from the City of Dallas Department of Housing and Urban Rehabilitation that unless she complied with local ordinances the remains of the fire-damaged residence would be demolished. Following a hearing, notice requiring demolition was given. Joerene Ingram and Laurel Bates, appellants here, then instituted this suit in Texas state court to quiet title to the property, to remove the liens, and to enjoin demolition of improvements located on the property. The defendants were the United States, the City of Dallas Department of Housing and Urban Rehabilitation, and several creditors claiming an interest in the property. 1

After the suit was removed to the United States District Court for the Northern District of Texas, the government counterclaimed against appellants and Donald Ingram, added as a defendant on the counterclaim, for, inter alia, foreclosure of the tax liens for the sole liability of Donald Ingram for unpaid withholding taxes and for the joint liability of Donald and Joerene Ingram for unpaid income taxes. The government also cross-claimed against the other creditors. Appellants then sought summary judgment against the government and the other creditors on the ground that, as Joerene Ingram's homestead, the property was insulated from creditors' claims.

Pursuant to a stipulation of the parties that appellants' legal position would not be prejudiced thereby, the property was sold and the proceeds, approximately $16,250.00, were placed in an escrow account pending the outcome of this suit. The stipulation also disposed of all claims except those of the government and E. M. Kahn & Company, a defendant creditor. 2 The government opposed appellants' motion for summary judgment on the ground that, in view of the division of the fire insurance proceeds by the Ingrams and their intent, as allegedly reflected in the divorce decree, to sell the property, 3 there were material questions of fact concerning whether the property remained Joerene Ingram's homestead. In addition, the government sought summary judgment on its counterclaims against Joerene and Donald Ingram on the ground that even if the property were a homestead, the state homestead exemption laws were ineffective against the federal tax liens. 4 The district court denied appellants' motion for summary judgment and granted, without explanation, the government's cross-motion for summary judgment on its counterclaims. 5 Appellants seek review of this judgment.

Today this Court has decided United States v. Rogers, 649 F.2d 1117 (5th Cir. 1981), a case similar to the one at hand in that it too involved an attempt by the government to foreclose its federal tax liens on Texas homestead property to collect unpaid taxes. In Rogers, we discussed at length the law in this and other circuits regarding the enforceability of federal tax liens on state homestead property. Those legal principles are equally valid with respect to the instant case. Accordingly, if both spouses have federal tax liability, and the federal tax assessment was made against both spouses, then the government may foreclose its tax lien against the homestead property owned equally by the spouses. United States v. Estes, 450 F.2d 62 (5th Cir. 1971); Shambaugh v. Scofield, 132 F.2d 345 (5th Cir. 1942). If only one spouse is liable for the federal taxes for which the assessment was made and the lien arose, however, then the question whether the federal government may execute that lien on homestead property of the taxpayer and his or her nontaxpayer spouse depends upon the nature of the homestead interest under state law. If a homestead interest is merely an exemption...

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9 cases
  • McDaniel v. Jones
    • United States
    • United States State Supreme Court of Kansas
    • 24 Marzo 1984
    ...Similar decisions were reached by the Fifth Circuit in United States v. Rogers, 649 F.2d 1117, and Ingram v. City of Dallas Dept. of Housing, etc., 649 F.2d 1128 (5th Cir.1981). In a consolidated appeal the United States Supreme Court reversed these last two cases, holding 26 U.S.C. § 7403 ......
  • United States v. Rodgers, 81-1476
    • United States
    • United States Supreme Court
    • 31 Mayo 1983
    ...right not to have her homestead (which she continued to occupy) subjected to a forced sale. The Court of Appeals affirmed. In the Ingram case, which involved tax assessments made before a divorce both against the husband alone and against both spouses relating to their joint income tax liab......
  • UNITED STATES V. ROGERS
    • United States
    • United States Supreme Court
    • 31 Mayo 1983
    ...right not to have her homestead (which she continued to occupy) subjected to a forced sale. The Court of Appeals affirmed. In the Ingram case, which involved tax assessments made before a divorce both against the husband alone relating to unpaid taxes withheld from employee's wages and agai......
  • U.S. v. Rogers
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 6 Julio 1981
    ...50-52.3 In addition, this case was consolidated for oral argument with the separate case of Ingram v. City of Dallas Department of Housing and Urban Rehabilitation, 649 F.2d 1128 (5th Cir. 1981), which involved the enforcement of a federal tax lien against a Texas homestead when one spouse ......
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