Kasdon v. GW ZIERDEN LANDSCAPING

• Citation: 541 F. Supp. 991
• Decision Date: 29 March 1982
• Docket Number: K-80-1062 and K-80-1795.,Civ. No. K-80-149
• Parties: Lawrence I. KASDON v. G. W. ZIERDEN LANDSCAPING, INC., et al. PRINCE GEORGE'S COUNTY, MARYLAND, etc. v. POTOMAC IRON WORKS, INC., etc., et al. PRINCE GEORGE'S COUNTY, MARYLAND, etc. v. MID-ATLANTIC CONSTRUCTION & DEVELOPMENT CORP., etc., et al.
• Court: U.S. District Court — District of Maryland

541 F. Supp. 991

Lawrence I. KASDON v. G. W. ZIERDEN LANDSCAPING, INC., et al.

PRINCE GEORGE'S COUNTY, MARYLAND, etc. v. POTOMAC IRON WORKS, INC., etc., et al.

PRINCE GEORGE'S COUNTY, MARYLAND, etc. v. MID-ATLANTIC CONSTRUCTION & DEVELOPMENT CORP., etc., et al.

Civ. Nos. K-80-149, K-80-1062 and K-80-1795.

United States District Court, D. Maryland.

March 29, 1982.

Y. Hillel Abrams, Silver Spring, Md., for plaintiff Lawrence I. Kasdon.

Robert B. Ostrom, County Atty. for Prince George's County, Md., Carl A. Harris, Deputy County Atty. for Prince George's County, Md., Barbara J. Lampe, Michael H. Bereston and Michael P. DeGeorge, Associate County Attys. for Prince George's County, Md., Upper Marlboro, Md., for Prince George's County, et al.

Garland C. Tanks, S. Martin Teel, Jr., and Paige E. Reffe, Trial Attys., Tax Div., U. S. Dept. of Justice, Washington, D. C., and Paul R. Kramer, Deputy U. S. Atty., D. Md., Baltimore, Md., for defendant, U. S.

FRANK A. KAUFMAN, Chief Judge.

Each of these cases involves a parcel of property in Prince George's County, Maryland ("County") upon which the United States holds one or more tax liens. Each plaintiff bought the property in question at a tax sale conducted by the County on May 8, 1978. Thereafter, each plaintiff brought suit in the Circuit Court for Prince George's County pursuant to Md.Ann.Code Art. 81, § 100(a),¹ to foreclose all equities of redemption in the properties, naming as defendants all persons, including the United States, shown by the County records as claiming any interest in the property in question. The United States removed all three actions to this Court pursuant to 28 U.S.C. §§ 1441, 1444. In a prior opinion filed in two of these cases, this Court held that those removals were appropriately and properly accomplished. Kasdon v. G. W. Zierden Landscaping, Inc., 512 F.Supp. 172 (D.Md.1981). After said prior opinion was filed, these cases were consolidated for all purposes pursuant to Federal Civil Rule 42(a). Presently pending in each case is a motion of the United States to dismiss the complaint as to itself on the ground that it has not waived its sovereign immunity.

The sovereign immunity issue present herein turns upon whether 28 U.S.C. § 2410(a) is applicable. By that statute, the United States has consented to be sued in certain actions affecting property on which it asserts a lien. The statute, in pertinent part, provides:

(a) ... The United States may be named a party in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter —

(1) to quiet title to, or

(2) to foreclose a mortgage or other lien upon,

....

real or personal property on which the United States has or claims a mortgage or other lien.

28 U.S.C. § 2410(c) provides, with respect to § 2410(a)(2). as follows:

However, an action to foreclose a mortgage or other lien, naming the United States as a party under this section, must seek judicial sale.

Plaintiffs² contend that these actions are both quiet title actions and foreclosure actions and that viewed as the latter the tax sale at which the properties in question were purchased is the judicial sale required by 28 U.S.C. § 2410(c). Therefore, say plaintiffs, both of subsections (a)(1) and (a)(2) of 28 U.S.C. § 2410 are applicable and thus the United States has waived its sovereign immunity. Accordingly, plaintiffs further say that they may proceed under Md. Ann.Code Art. 81, § 100(a)³ to foreclose all interests of defendants, including those of the United States as tax lienor. Additionally, plaintiffs assert that if the United States may assert sovereign immunity herein and thus deny to plaintiffs the opportunity under Section 100(a) to foreclose the tax liens of the United States, such denials amount to unconstitutional takings of the properties in question. The United States, in response, contends that plaintiffs have instituted, in terms of 28 U.S.C. § 2410(a), foreclosure actions and not quiet title actions, that no "judicial sale" within the meaning of 28 U.S.C. § 2410(a)(2) and (c) has taken place, that therefore the United States has not waived sovereign immunity and that the existence of such immunity has not caused any unconstitutional taking.

Choice of Law

At the outset, there is presented a choice of law issue. In Aqua Bar & Lounge, Inc. v. United States, 539 F.2d 935, 938 (3d Cir. 1976), a quiet title action brought under § 2410, Chief Judge Seitz concluded: "Although suits to quiet title have traditionally involved real property, this particular action is governed by federal rather than state law." Earlier, in United States v. Brosnan, 363 U.S. 237, 241-2, 80 S.Ct. 1108, 1111, 4 L.Ed.2d 1192 (1960), Justice Harlan had written:

We ... believe it desirable to adopt as federal law state law governing divestiture of federal tax liens, except to the extent that Congress may have entered the field. It is true that such liens form part of the machinery for the collection of federal taxes, the objective of which is "uniformity, as far as may be." citation omitted. However, when Congress resorted to the use of liens, it came into an area of complex property relationships long since settled and regulated by state law. We believe that, so far as this Court is concerned, the need for uniformity in this instance is outweighed by the severe dislocation to local property relationships which would result from our disregarding state procedures.

Judge Harlan's approach evidenced a general federal policy to rely on state law, when not inconsistent with federal law, as Judge Seitz recognized in Aqua Bar. However, Congress, when it enacted the Federal Tax Lien Act of 1966, 26 U.S.C. §§ 6321-6326, provided that federal procedures should govern the divestiture of federal tax liens. While the passage of that legislation does not compel the conclusion that state law doctrines have no effect in cases such as these, the 1966 legislative action does seemingly limit the application of Justice Harlan's views as expressed in Brosnan. In essence, it would seem that federal law controls the construction of § 2410, but that state law retains some persuasive value as a guide to the determination of federal law. Fortunately, those fine line distinctions are not, in these cases, too troubling, as the discussion infra indicates, since federal and state law would seem to require the same results herein.

Quiet Title Actions

Plaintiffs concede that they do not have actual or constructive possession of the properties in question. Usually, a plaintiff bringing a quiet title action must have possession of the property which is the subject of the action. 74 C.J.S., Quieting Title § 27 at 53 (1951). Few jurisdictions disagree with that general proposition. Md. Real Prop.Code Ann. § 14-108 provides that a quiet title action may be maintained by

any person in actual peaceable possession of property, or, if the property is vacant and unoccupied, in constructive peaceable possession of it ....

In Wood v. Phillips, 50 F.2d 714 (4th Cir. 1931), a pre-Erie⁴ case in which the Fourth Circuit was formulating federal law, Judge Parker concluded (at 716):

A federal court of equity will not entertain a bill to quiet title by a plaintiff not in possession against a defendant in possession not only because such plaintiff has a plain, adequate and complete remedy at law in an action of ejectment, but also because defendant has the constitutional right to have the issue of title tried by a jury.

This Court knows of no case involving 28 U.S.C. § 2410 in which the question has arisen as to whether a plaintiff may seek to quiet title thereunder if he lacks actual and constructive possession. However, in the face of near-unanimous judicial authority requiring a quiet title action to be brought by a plaintiff-in-possession, it is unlikely that the Congress intended, when it passed § 2410, to permit a quiet title action by a plaintiff who was not in possession, actual or constructive. It is true that very broad construction has been given to the quiet title provisions of § 2410. Thus, in United States v. Coson, 286 F.2d 453, 457 (9th Cir. 1961), the Court wrote:

It is plain that the words "quiet title" used in subdivision (a) in that section are not intended to refer to a suit to quiet title in the limited sense in which that term is sometimes used, (see the discussion in Hopkins v. Walker, ... 244 U.S. 486, 490-91, 37 S.Ct. 711, 713-14, 61 L.Ed. 1270 (1917)), but that as used in the section here referred to it comprehends a suit to remove a cloud upon the title of a plaintiff. This is made plain both by the text and the history of the provision. Subdivision (b) of § 2410 makes it mandatory that "the complaint shall set forth with particularity the nature of the interest or lien of the United States." Plainly that stamps the action as one to remove a specific, particularly described, cloud upon the plaintiff's property. In a strictly limited type of suit to quiet title, such a particularization is never necessary. Not only does this language disclose that the words "quiet title" were used in a broad sense to cover a suit to remove a cloud on title but the legislative history of the insertion of this provision in the section demonstrates that it was intended to cover a suit of the character here before us.

....

The language relating to suits to quiet title was inserted by amendment ... in 1942 of the predecessor statute to § 2410. That amendment followed a report, H.R. 1191, 77th Cong. First Session, dated August 15, 1941. Another amendment then provided for was designed to include actions with respect to personal property as well as those relating to real property, but the language relating to suits to quiet title was inserted pursuant to the recommendation of the then Attorney General of the United States later-Justice Jackson who noted that at that time there was "no provision whereby the owner of real estate may

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