71 F.3d 1496 (10th Cir. 1995), 94-1330, United States v. Gibbons

Docket Nº:94-1330.
Citation:71 F.3d 1496
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. David GIBBONS, Defendant, and Betty J. Gibbons, Defendant-Appellant.
Case Date:December 01, 1995
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1496

71 F.3d 1496 (10th Cir. 1995)

UNITED STATES of America, Plaintiff-Appellee,

v.

David GIBBONS, Defendant,

and

Betty J. Gibbons, Defendant-Appellant.

No. 94-1330.

United States Court of Appeals, Tenth Circuit

December 1, 1995

Page 1497

[Copyrighted Material Omitted]

Page 1498

Fred M. Hamel, Denver, Colorado, for Defendant-Appellant Betty J. Gibbons.

Robert W. Metzler, Attorney, Tax Division (Loretta C. Argrett, Assistant Attorney General, and William S. Estabrook, Attorney, Tax Division; of counsel: Henry Lawrence Solano, United States Attorney, with him on the brief), Department of Justice, Washington, D.C., for Plaintiff-Appellee.

Before HENRY and LOGAN, Circuit Judges, and ELLISON, District Judge. [*]

LOGAN, Circuit Judge.

This case involves a dispute between the United States Internal Revenue Service (IRS) and Betty J. Gibbons, the ex-wife of taxpayer David Gibbons. The IRS brought suit pursuant to I.R.C. Secs. 7401-7403, to reduce to judgment federal tax assessments against David Gibbons and to foreclose federal tax liens against real property in which he held an interest. The district court found that despite a dissolution of marriage decree awarding Betty Gibbons the conditional right to live on the property during her life, David and Betty continued to own the property as joint tenants. Thus, it held she was entitled to only one-half of the proceeds of the foreclosure sale. Betty Gibbons appeals.

I

In 1970, Betty and David Gibbons acquired title to real property in Denver, Colorado (Ogden Street property) "in joint tenancy." Appellant's App. 10, 40. They were divorced in January 1982. The dissolution decree incorporated a separation agreement that provided in relevant part

House at 325 So. Ogden held in Joint Tenancy to be occupied by Betty J. Gibbons and three minor children, and mortgage paid monthly by Betty J. Gibbons. If Betty J. Gibbons remarries and/or moves from said house, house is to be sold and equity divided equally between David J. Gibbons and Betty J. Gibbons.

Id. at 43.

Between 1984 and 1990 the IRS filed notices of federal tax liens 1 against David for nonpayment of taxes. In June 1992 the IRS filed this suit seeking to reduce to judgment federal tax assessments against David and to foreclose the tax liens against the Ogden Street property. Betty evidently neither contested the IRS' right to seek sale of the entire property nor asked the district court to exercise its discretion to decline to order a foreclosure sale. 2 She argued, however, that the separation agreement conveyed to her a life estate interest in the property for which she was entitled to be compensated. The district court rejected Betty's position; it determined that David and Betty continued to hold the Ogden Street property in joint tenancy and that Betty was entitled to only one-half of the proceeds of the forced sale.

The threshold question before us is whether, under Colorado law, the separation agreement severed the joint tenancy and conveyed to Betty a new interest in the Ogden Street property. If we find that it did then we must address whether (based on Colorado recording statutes) her failure to record her interest where deeds are registered rendered it invalid as against the recorded tax liens. Finally, if we find that Betty's interest was valid against the IRS liens, we must determine whether a stipulation of the parties is determinative of the value of her additional interest. We review de novo the district court's interpretation of both federal and Colorado law. See Salve Regina College v. Russell, 499 U.S. 225, 231,

Page 1499

111 S.Ct. 1217, 1220-21, 113 L.Ed.2d 190 (1991).

II

The district court based its determination that the separation agreement did not create a new interest in the property in part upon cases addressing the requirement for delivery of a deed to convey property. These cases, however, addressed whether or not there was actual delivery and acceptance of a deed sufficient to pass title. See, e.g., Sims v. Sperry, 835 P.2d 565, 568 (Colo.App.1992) (when grantor did not intend to unconditionally and presently part with "possession and control or any power over the deed, for the benefit of grantee," delivery of deed did not pass title, even if deed was recorded); Stagecoach Property Owners Ass'n v. Young's Ranch, 658 P.2d 1378, 1380-81 (Colo.App.1982) (differentiating between conveyance and dedication for purposes of statute providing for conveyance of park area by subdividers). Property may be passed in many ways other than by deed, including court orders in probate of a decedent's estate and in final termination of marriages such as the one before us. See, e.g., Baker v. Baker, 667 P.2d 767, 769 (Colo.App.1983) (separation agreement, made part of divorce decree, granted wife life tenancy or leasehold estate). Rule 70 of the Colorado Rules of Civil Procedure provides that "the court ... may enter a judgment divesting the title of any party and vesting it in others and such judgment has the effect of a conveyance...

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