Anselmo v. James, Civ. A. No. 78-400-F.

• Citation: 449 F. Supp. 922
• Decision Date: 24 April 1978
• Docket Number: Civ. A. No. 78-400-F.
• Parties: Andrew ANSELMO, Francis J. DiMento and James J. Sullivan, Jr. v. Richard J. JAMES and Dawn James.
• Court: U.S. District Court — District of Massachusetts

449 F. Supp. 922

Andrew ANSELMO, Francis J. DiMento and James J. Sullivan, Jr. v. Richard J. JAMES and Dawn James.

Civ. A. No. 78-400-F.

United States District Court, D. Massachusetts.

April 24, 1978.

Thomas C. Cameron, Boston, Mass., for plaintiffs.

Leonard Pass, William M. Appel, Revere, Mass., for defendants.

OPINION

FREEDMAN, District Judge.

In this action for declaratory and injunctive relief, the Court is asked to decide whether the Great Blizzard of 1978¹ extended the statutory period for redemption of real estate seized and sold by the Internal Revenue Service (the "IRS").²

The essential facts are not in dispute. On October 12, 1977, undeveloped coastal land in Revere, Massachusetts (the "Land")³ owned by the plaintiff Anselmo⁴ was sold at public auction by the IRS to satisfy Anselmo's tax indebtedness as transferee of his deceased father. The Land was purchased at the auction by the defendants Richard and Dawn James⁵ who paid $3,000⁶ and received a certificate of sale.

Anselmo had a statutory right to redeem the Land within 120 days of the sale⁷ by paying to the Jameses the amount paid by them for the Land plus interest at the rate of 20% per annum. 26 U.S.C. § 6337(b).⁸ Anselmo claims that he intended to redeem the Land on Tuesday, February 7, 1978, but was unable to travel from his home in Winchester, Massachusetts to the James' residence in Revere because of the Blizzard.

The Court takes judicial notice of the Great Blizzard and its effects. Travel during the storm itself was nearly impossible. Coastal areas suffered from severe flooding as well as high winds and deep snow. The Governor of the Commonwealth⁹ proclaimed a state of emergency¹⁰ on February 7, 1978, banning all non-essential vehicular traffic. On February 9, the Governor issued Executive Order No. 142¹¹ entitled "State of Emergency Executive Order" which extended the earlier proclamation, declared February 7 through 12, 1978 to be legal holidays in certain counties of the Commonwealth, including those in which Winchester and Revere are located, and banned the use of private passenger vehicles.¹² The ban in seven communities, including Revere, was extended until midnight on Monday, February 13, 1978.

Anselmo was able to reach the James' residence in Revere by public transportation on Monday, February 13. His tender of three thousand, two hundred and ten dollars ($3,210)¹³ was refused. Anselmo then tendered the same sum to Robert E. Cuoco, who, on behalf of the District Director of the IRS, also refused to accept the tender. Both attempts at tender were refused because the 120-day period provided for in section 6337(b) of the Internal Revenue Code of 1954¹⁴ ("Section 6337(b)") expired on Thursday, February 9, 1978.

Plaintiffs filed this action on February 14, 1978.¹⁵ The matter was heard before me on February 17, 1978, at which time the parties agreed to an order restraining the Jameses from tendering their certificate of sale to the IRS in exchange for a deed to the Land pending this Court's decision on the merits. The parties further agreed that the sole issue presented is the timeliness of the February 13th tenders.¹⁶ While not so labelled by the parties, the action presents itself to the Court in the framework of cross-motions for summary judgment and it will therefore be so treated.¹⁷

The owner's right to redeem property seized by the United States for nonpayment of taxes has long been recognized. E. g., Bennett v. Hunter, 76 U.S. (9 Wall.) 326, 19 L.Ed. 672 (1869). The Supreme Court has stated that:

It is the general rule of courts to give to statutes authorizing redemption from tax sales a construction favorable to owners, particularly when they provide, as in the present case, full indemnity to the purchaser, and impose a penalty on the delinquent.

Corbett v. Nutt, 77 U.S. (10 Wall.) 464 at 474-475, 19 L.Ed. 976 (1870) (footnote omitted). While the general rule is one of leniency to the owner, e. g., United States v. Lowe, 268 F.Supp. 190 at 192 (N.D.Ga. 1966),¹⁸ and while I am sympathetic to plaintiffs, I cannot rule in their favor.

Plaintiffs' first argument that their tender was timely is based upon the general rule of leniency to the owner. They argue in effect that equitable considerations should persuade the Court to rule that their February 13 tender was timely even though the 120-day statutory period expired on February 9. Plaintiffs cite Guthrie v. Curnutt, 417 F.2d 764 (10th Cir. 1969), in support of their contention. In Guthrie, the plaintiff was the owner of an undivided one-half interest in certain real property. Plaintiff's interest in the property was seized for nonpayment of taxes and was purchased at the tax sale by the defendant who owned the other undivided one-half interest in the property. The efforts of plaintiff's attorney to effect tender ". . . were frustrated by the actions and attitudes of the defendant." On the last day for redemption,¹⁹ plaintiff's agent offered tender to an officer of the IRS who refused it and said that redemption would have to be effected the following day from the defendant himself. The defendant refused the tender on that day because the redemption period had expired. The trial court found that plaintiff's inability to redeem was the result of "purposeful action by the defendant." The tender to the IRS was therefore held to be effective under the provision in Section 6337(b) permitting tender to the IRS in the case that the purchaser cannot be found in the county in which the property to be redeemed is located. 417 F.2d at 765. The Court of Appeals for the Tenth Circuit affirmed. Id. at 766.

The Guthrie reasoning is inapplicable to the case at bar. First, the Guthrie court's finding that the defendant could not "be found in the county where the property was located" was premised on the conclusion that the defendant had purposefully evaded tender. Such wrongdoing on the part of the defendants at bar is conspicuously absent. Second, even assuming that defendants at bar could not "be found within the county," plaintiffs' tender to the IRS was not, like the tender in Guthrie, within the relevant statutory time period.²⁰

The broad equitable powers of the federal courts do not include the power to extend the time for redemption under the internal revenue laws. Ballard v. United States, 67-2 USTC ¶ 9652 (D.Colo.1967). The Supreme Court stated in Keely v. Sanders, 99 U.S. 441, 25 L.Ed. 327 (1878):

While it may be admitted that a statutory right of redemption is to be favorably regarded, it is nevertheless true that it is a statutory right exclusively, and can only be claimed in the cases and under the circumstances prescribed. Courts cannot extend the time, or make any exceptions not made in the statute. Redemption cannot be had in equity (Mitchell v. Green, 10 Metc. (Mass.) 101), except as it may be permitted by statute, and then only under such conditions as it may attach. Craig v. Flanagan Flanagin, 21 Ark. 319. Thus it has been held that the pendency of the civil war, and the fact that the owner resided in another State then in rebellion, cannot enlarge his right to redeem. Finley v. Brown, 22 Iowa 538. It is enough, however, for the present case that there was no attempt or even offer to redeem.

99 U.S. at 445-46, 25 L.Ed. 327 (emphasis added). The terms of redemption after sale are set forth in Section 6337(b). No provision for extension of the 120-day period is contained therein.

Plaintiffs next argue that the case at bar falls within section 7503 of the Internal Revenue Code of 1954, 26 U.S.C. § 7503 (Section 7503), which provides:

When the last day prescribed under authority of the internal revenue laws for performing any act falls on Saturday, Sunday, or a legal holiday, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday, or a legal holiday. For purposes of this section, the last day for the performance of any act shall be determined by including any authorized extension of time; the term "legal holiday" means a legal holiday in the District of Columbia; and in the case of any return, statement, or other document required to be filed, or any other act required under authority of the internal revenue laws to be performed, at any office of the Secretary or his delegate, or at any other office of the United States or any agency thereof, located outside the District of Columbia but within an internal revenue district, the term "legal holiday" also means a Statewide legal holiday in the State where such office is located.

26 U.S.C. § 7503. Plaintiffs argue that since defendants' residence was unreachable until February 13, the Court should rule that the defendants could not be "found" within the county in which the land is situated. This would entitle plaintiffs to tender upon the IRS. That being so, the declaration of February 7 through 12 as legal holidays would, plaintiffs argue, make the February 13 tender timely.²¹

Plaintiffs' argument is ingenious, but faulty. As noted above, the Court does not believe that defendants could not be "found" within the county in which the land is situated.²² Assuming, however, that the defendants could not be "found" within the county and that plaintiffs were therefore entitled to tender the monies to the IRS, there remain two problems with plaintiffs' reasoning. The first is that there may be some question as to whether Section 7503 is applicable to Section 6337(b) redemptions. Cf. Silver Bell Industries, Inc. v. United States, 76-1 USTC ¶ 9432 (10th Cir. 1976) (mailing provisions of 26 U.S.C. § 7502 not applicable to Section 6337 redemption payments where such payments are to individual purchasers). The second, and more certainly fatal problem for the plaintiffs is that even if the defendants could not be "found" in the county, and even if Section 7503 is applicable, February 7 through 12 are not of the type of legal holiday described in...