959 F.2d 243 (9th Cir. 1992), 91-55415, U.S. v. Vacant Land Known as Palm Estates, Ltd.
|Citation:||959 F.2d 243|
|Party Name:||UNITED STATES of America, Plaintiff, v. VACANT LAND KNOWN AS PALM ESTATES, LTD., aka Palm Estates Subdivision, Assessment No. 628-101-18, County of San Diego, CA., et al, Defendants, Max WEXLER, Counter-Claimant/Appellant, v. UNITED STATES of America; Alan J. Le Zalla; Sandra Le Zalla; Kevin O'Neill, Counterclaim-Defendants/Appellees.|
|Case Date:||March 31, 1992|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted Feb. 7, 1992.
Appeal from U.S. District Court for the Southern District of California, No. CV-84-2178-N; Leland C. Nielsen, Senior Judge, Presiding.
Before BRUNETTI, O'SCANNLAIN and T.G. NELSON, Circuit Judges.
Appellant Max Wexler appeals the denial of his motion challenging the federal magistrate judge's findings and the district court's order directing payment of specified funds to Appellee, the United States of America. The specified funds were to be the proceeds of a forfeiture sale of property the United States seized from Appellees Alan and Sandra LeZalla. The funds were to be distributed in accordance with a 1986 Stipulation Agreement with the LeZallas which was to account for all claims of lien holders.
The district court rejected Wecler's claim that he is a recognized lien holder under the stipulation on the ground that Wexler filed his judgment lien against the property after the stipulation and after the United States entered into a land sale contract with Appellee Kevin O'Neill. The district court also rejected Wexler's other claims to the sales proceeds and his procedural challenges to the forfeiture sales process.
We AFFIRM the district court's decision, DENY Appellee O'Neill's motion for attorneys' fees, and REMAND the case to the district court to enable it to consider entry of an order requiring Wexler to execute any and all documents necessary to allow the United States to consummate the sale of the property and to convey clear title to O'Neill.
STATEMENT OF FACTS & PROCEDURAL HISTORY
This appeal arises from a Complaint for Forfeiture filed by Appellee the United States of America ("the United States" or "government") against Defendant Vacant Land Known as Palm Estates, Ltd. ("Property"). The forfeiture proceeding resulted from a criminal action prosecuted by the United States against Robert Max Capras ("Capras"), the original owner of the Property. Shortly before his arrest, Capras transferred the Property to the present titleholders, Appellees Alan J. and Sandra LeZalla ("LeZallas").
On September 25, 1984, the United States filed a complaint for forfeiture against the Property and, on October 1, 1984, recorded a Notice of Lis Pendens against the Property. AT that time there were four liens recorded against the Property (Jon Jentz, South Bay Union District School, Sweetwater Union High School District and Duffy Collections, Inc.).
On May 8, 1986, the United States and the LeZallas entered into a court-approved Stipulation for Interlocutory Sale in which they agreed, inter alia, that the government would retain fifty percent of the net proceeds and the remaining fifty percent of the net proceeds would be returned to the LeZallas. The Stipulation Agreement defined net proceeds as follows:
The "net proceeds" of the sale shall include all monies received from the sale of the defendant, excluding: (1) The principle amount of fifty thousand dollars ($50,000.00) owing to Jon Jentz, as reflected in a recorded deed of trust in favor of Jon Jentz, San Diego, California; and (2) one half of any real estate commissions, fees and other expenses and costs of the sale; and (3) any other lien recorded against the property.
Pursuant to a court-approved amended stipulation, in 1988, the United States Marshals Service retained a broker to sell the Property. The Property was appraised at $218,000 and publicly listed for several months.
On January 23, 1989, the Government entered into a contract with Appellee Kevin O'Neill ("O'Neill") to sell the property to him for $210,000. O'Neill placed $5,000 in escrow as consideration for the contract.
On January 30, 1989, seven days after the United States entered into its contract with O'Neill, Appellant Max Wexler ("Wexler") domesticated a judgment against the LeZallas and recorded a judgment lien against the Property for $171,062.51.
On August 28, 1989, the United States, finding that it was unable to convey clear title to O'Neill because of various liens (including Wexler's), moved the district court for an Order Directing Payment of Specified Funds to the United States, in order to enable the government to consummate the sale. The purpose of the government's motion was to put all lien holders, including those who had recorded their claims after the United States recorded its Notice of Lis Pendens, on notice of the priority of their...
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