Dahn v. U.S.

• Decision Date: 21 October 1997
• Docket Number: No. 96-4183,96-4183
• Citation: 127 F.3d 1249
• Parties: -7631, 97-2 USTC P 50,847, 97 CJ C.A.R. 2419 Karen DAHN and David L. Dahn, dba Karen's Auto Upholstery and Glass, Plaintiffs-Appellants, and Claims, Inc., Plaintiff, v. UNITED STATES of America; Internal Revenue Service, Maureen Ames, Keith Finley, Lodging Rustler, Nupetco Associates and Neuman C. Petty, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1249

127 F.3d 1249

80 A.F.T.R.2d 97-7631, 97-2 USTC P

50,847, 97 CJ C.A.R. 2419

Karen DAHN and David L. Dahn, dba Karen's Auto Upholstery and Glass, Plaintiffs-Appellants, and Claims, Inc., Plaintiff, v. UNITED STATES of America; Internal Revenue Service, Maureen

Ames, Keith Finley, Lodging Rustler, Nupetco

Associates and Neuman C. Petty,

Defendants-Appellees.

No. 96-4183.

United States Court of Appeals,

Tenth Circuit.

Oct. 21, 1997.

Karen Dahn, David Dahn, pro se.

Bruce R. Ellisen and Curtis C. Pett, Tax Division, Department of Justice, Washington, DC, for Defendant-Appellee United States of America.

Before ANDERSON, BARRETT and MURPHY, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R.App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument.

This appeal encompasses three of four cases consolidated in district court. The first, 93-C-953W, is a quiet title action under 28 U.S.C. § 2410, in which plaintiff Karen Dahn initially objected to enforcement of a tax penalty against her property, but later sought to substitute a claim for its wrongful encumbrance and sale for tax liabilities of her husband, Roy Dahn. In the second, 95-C-1120B, plaintiff David Dahn invoked several remedial sources in challenging the seizure of his property to pay tax debts of Roy and Karen Dahn, his parents. The third, 96-C-24C, began as a state action by David to quiet title to property involved in 95-C-1120B, but was removed by the United States pursuant to 28 U.S.C. § 1446. The district court dismissed Karen Dahn's claim for failure to allege the statutory requisites for a quiet title action. As for David Dahn, the court held the wrongful levy statute, 26 U.S.C. § 7426, was his exclusive remedy and dismissed his claims as untimely under 26 U.S.C. § 6532(c) (prescribing nine-month limitations period for § 7426 action). On plaintiffs' joint appeal, we affirm.

I

Section 2410(a) expressly authorizes quiet title actions affecting property on which the United States has a lien only "[u]nder the conditions prescribed in this section," which include the following mandatory pleading requirements:

The complaint or pleading shall set forth with particularity the nature of the interest or lien of the United States. In actions or suits involving liens arising under the internal revenue laws, the complaint or pleading shall include the name and address of the taxpayer whose liability created the lien and, if a notice of the tax lien was filed, the identity of the internal revenue office which filed the notice, and the date and place such notice of lien was filed.

28 U.S.C. § 2410(b). A noncomplying complaint does not invoke the statutory waiver of sovereign immunity and, consequently, cannot state a claim upon which relief could be granted. See Clark v. United States, 760 F.Supp. 664, 665 (W.D.Mich.1991) (dismissing quiet title complaint for noncompliance with § 2410(b)); City Bank v. Eagleston, 110 F.Supp. 429, 430 (D.Alaska 1953) (same); United States v. Rotzinger, 47 F.3d 1174, 1175 (7th Cir.1995) (same).

Karen Dahn's original complaint failed to satisfy the conditions prescribed in § 2410(b), as she has conceded. See Opening Br. of the Appellant at 16-17; Reply Br. of the Appellant at 3. However, in response to the government's motion to dismiss, she attempted to amend her complaint, and it is the adverse treatment of that effort with which she now takes issue. We review for an abuse of discretion. See Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir.1992).

The district court did not peremptorily preclude Karen Dahn's effort to salvage her case by amendment. On the contrary, it afforded her full opportunity to correct her pleading deficiencies, but ultimately denied her motion to amend because the proffered amendment was still insufficient under § 2410(b). See Appellants' App. at 24-25, 27. We agree with the district court's assessment of the amended complaint, and affirm its denial of the attendant motion, ¹ see Ketchum 961 F.2d at 920 ("The district court was clearly justified in denying the motion to amend if the proposed amendment could not have withstood a motion to dismiss or otherwise failed to state a claim.") (quotation omitted); see also Tiberi v. CIGNA Corp., 89 F.3d 1423, 1431-32 (10th Cir.1996).

Karen Dahn appears also to be objecting that she was not given another, unrequested opportunity to correct her defective pleadings after the district court found her amended complaint wanting. However, by that point in the proceeding, the district court had properly (1) rejected her original complaint, (2) denied her motion to amend, and (3) dismissed the action on defendants' motion. If she desired yet another chance, post-judgment, to save/resurrect her cause of action by amendment, it was incumbent upon her to seek leave from the district court to make the attempt. Instead, she elected to appeal the case as it stood. She cannot now complain of a non-ruling with respect to an amendment she did not give the court a chance to consider. As explained under somewhat similar circumstances in Glenn v. First National Bank, 868 F.2d 368, 371 (10th Cir.1989):

Under the facts of this case, we hold that Appellant did not move the court for leave to amend the complaint [following dismissal for failure to state a claim] and therefore the district judge committed no error in not ruling thereon.... After a motion to dismiss has been granted, plaintiffs must first reopen the case pursuant to a motion under [Fed.R.Civ.P.] 59(e) or [Fed.R.Civ.P.] 60(b) and then file a motion under Rule 15, and properly apply to the court for leave to amend by means of a motion which in turn complies with [Fed.R.Civ.P.] 7.... Appellants availed themselves of none of their legal options. Appellants' failures are well beyond "mere technicalities" and this court will not protect them from their own inaction.

See also Nulf v. International Paper Co., 656 F.2d 553, 563 (10th Cir.1981) (rejecting appellate argument based on amendment never sought in district court, noting "[a] trial court cannot be expected to read litigants' minds").

II

Plaintiff David Dahn challenges the dismissal of his pleadings as untimely under § 6532. This statutory time-bar qualifies a waiver of sovereign immunity and, thus, constitutes a limitation on subject matter jurisdiction. See Dieckmann v. United States, 550 F.2d 622, 623 (10th Cir.1977); see also United States v. Dalm, 494 U.S. 596, 608, 110 S.Ct. 1361, 1368, 108 L.Ed.2d 548 (1990). Accordingly, our review is de novo. See Franklin v. United States, 992 F.2d 1492, 1495 (10th Cir.1993).

Under § 6532(c)(1), a person subject to a wrongful tax levy has nine months "from the date of the levy" to seek judicial relief pursuant to § 7426. By David Dahn's own allegation, the property involved herein was overtly seized years before he filed suit. However, he now contends that the limitations period commences only with the service of a notice of levy, that he did not receive such notice, and, therefore, that his action cannot be untimely, regardless of the delay between seizure and suit. The government states, without contradiction from David Dahn, that this argument--entailing both legal and factual questions--was not advanced in district court. Nor have we have found any trace of it in the record. Under the circumstances, we deem the contention waived. See generally Tele-Communications, Inc. v. Commissioner, 104 F.3d 1229, 1232-33 (10th Cir.1997) (discussing waiver of issues not presented to and considered by district court); Harolds Stores, Inc. v. Dillard Dep't Stores, Inc., 82 F.3d 1533, 1540 n. 3 (10th Cir.) (discussing waiver of issues unsupported by reference "to where in the record the issue was raised and ruled upon," quoting 10th Cir. R. 28.2(b)), cert. denied, --- U.S. ----, 117 S.Ct. 297, 136 L.Ed.2d 216 (1996). Accordingly, without implying any general view with respect to commencement of the limitations period in § 6532, cf. Winebrenner v. United States, 924 F.2d 851, 856 (9th Cir.1991) (noting but not resolving issue whether service of notice of levy on owner was necessary to commence § 6532 limitations period), we shall not disturb the district court's determination that this wrongful levy action was time-barred.

As noted at the outset, David Dahn invoked several other remedial sources for his claim against the government. For the reasons that follow, we reject this attempt to circumvent the § 7426/ § 6532 time-bar through multiplicious pleading.

After enactment of § 7426, the circuits held it was the exclusive remedy for a third party seeking redress against the IRS for levying on his property to satisfy the tax liability of another. See, e.g., Williams v. United States, 947 F.2d 37, 39 (2d Cir.1991); Kirk v. United States, 961 F.2d 211, 212 (4th Cir.1992); United Sand & Gravel Contractors, Inc. v. United States, 624 F.2d 733, 738-39 (5th Cir.1980); Rosenblum v. United States, 549 F.2d 1140, 1144-45 (8th Cir.1977); Winebrenner, 924 F.2d at 854-55; Trust Co. v. United States, 735 F.2d 447, 448 (11th Cir.1984). This rule effectuated Congress' judgment "that a short nine-month limitations period is desirable for disputes involving tax levies because the government needs to know sooner rather than later whether it must look to other assets of the taxpayer to satisfy the taxpayer's liability." Fidelity & Deposit Co. v. City of Adelanto, 87 F.3d 334, 337 (9th Cir.1996); see United Sand & Gravel, 624 F.2d at 738 ("intent of Congress to set a short time limit for wrongful levy actions will be completely undercut" if alternate remedy allowed).

David Dahn argues, however, that the Supreme Court's recent decision in United States v. Williams, 514 U.S. 527, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995),...