Mapes v. U.S.

• Decision Date: 26 January 1994
• Docket Number: No. 92-15351,92-15351
• Citation: 15 F.3d 138
• Parties: -1002 David C. MAPES, Jr.; Nancy Dodds; Mary Gail Hentzen, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 138

15 F.3d 138

73 A.F.T.R.2d 94-1002

David C. MAPES, Jr.; Nancy Dodds; Mary Gail Hentzen Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

No. 92-15351.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 10, 1993.

Decided Jan. 26, 1994.

David M. Kirsch, San Jose, CA, for plaintiffs-appellants.

Robert L. Baker, U.S. Dept. of Justice, Tax Div., Washington, DC, for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before: REINHARDT and LEAVY, Circuit Judges, and MERHIGE, ^* District Judge.

LEAVY, Circuit Judge:

In this case we are called upon to determine whether a legatee's purported renunciation of his half-interest in an estate precluded the federal government from asserting a lien against that half-interest as the result of the legatee's nonpayment of taxes. The district court held that the tax lien was valid under federal law because the renunciation failed as a matter of state law. We reverse.

FACTS AND PRIOR PROCEEDINGS

Nell Joyner Mapes died on March 27, 1991, leaving half of her estate to her son, David Mapes, Sr. ("Mapes"). ¹ At the time of his mother's death, Mapes and his wife owed the federal government nearly $500,000 in back taxes and accrued statutory additions to tax. In order to prevent the government from attaching his half-interest in the decedent's estate, Mapes purported to renounce his rights in favor of his three children by executing a document entitled Renunciation of Devise ("Renunciation"), dated April 2, 1991, and filed with the appropriate court on May 16, 1991. The government served a Notice of Levy and, later, a Final Demand, asserting a tax lien against any inheritance payable to Mapes and/or his wife from the estate. The estate representative refused to Mapes's three children, David C. Mapes, Jr., Nancy Dodds, and Mary Gail Hentzen ("Children"), subsequently filed the instant quiet title action in federal district court, alleging that the government had wrongfully levied on their property. The parties filed cross-motions for summary judgment. The district court denied the Children's motion but granted the government's motion, holding that a tax lien arose under federal law because the Renunciation was ineffective under state law. The Children timely appealed from that ruling. For the reasons which follow, we reverse.

honor the levy and demand because of the Renunciation.

ANALYSIS

I Standard of Review

The underlying facts are not in dispute, and this appeal turns solely on our interpretation of two statutes, one federal, the other state. We review de novo a district court's interpretation and application of federal and state law. Spain v. Aetna Life Ins. Co., 13 F.3d 310, 312 (9th Cir.1993) (federal law); Smith v. Hughes Aircraft Co., 10 F.3d 1448, 1451 (9th Cir.1993) (state law).

Discussion

The gist of the government's argument is that, as a matter of federal law, two things happened when Mapes's mother died: Mapes acquired a half-interest in her estate, and a tax lien against that half-interest arose in favor of the government. The Children contend that neither of these things happened because, as a matter of state law, the Renunciation prevented Mapes from acquiring a half-interest in the estate and, in the absence of his having inherited anything, there was nothing to which a tax lien could have attached.

Most of the government's brief, including the majority of the cases cited therein, is devoted to the proposition that federal law is controlling on the question of whether Mapes had a lienable interest in his mother's estate, and the priority of any such (federal) lien against other interests. While correct as far as it goes, this argument misses the point by begging the fundamental question of whether Mapes had any interest in the property, lienable or not. For the answer to that question we must look to state law, not federal law. See Federal Deposit Ins. Corp. v. Soderling (In re Soderling), 998 F.2d 730, 733 (9th Cir.1993) (while federal law controls with respect to determining status and priority of bankruptcy claim involving community property, state law controls with respect to determining whether party has an interest in that property).

We begin our inquiry by examining the relevant section of Arizona's Probate Code. That statute reads, in pertinent part:

A. [An heir] ... may renounce in whole or in part the devolution of an interest in ... property by delivering or filing a written instrument as provided in this section[.]

....

D. ...

1. If an heir ... renounces, ... the interest renounced ... passes as if the person renouncing had predeceased the decedent[.]

....

4. The renunciation relates back for all purposes to the date of death in cases covered by paragraph 1[.]

Ariz.Rev.Stat.Ann. Sec. 14-2801 (Supp.1993) (hereafter, "APC Sec. 2801").

Put simply, APC Sec. 2801 provides that an heir may renounce, in whole or in part, his or her interest in an estate by timely filing with the appropriate court a document in the proper form, and that such renunciation will relate back in time; i.e., it will have the same legal effect as if the heir had predeceased the testator. As the Renunciation was in the proper form and timely filed with the appropriate court, the Renunciation should have had the effect of preventing Mapes from acquiring any interest in the estate.

The question is not so easily answered, however, for "any acceptance of benefits from the property ... made by the person renouncing ... bars the right [of that person] to renounce as to the property." APC Sec. 2801.E.2. Mapes admittedly drove his mother's Buick home from the funeral and retained possession of the car for nearly a year, during which time the estate paid the insurance on the vehicle. The district court concluded from these facts that Mapes had accepted a benefit from the estate which rendered the Renunciation invalid. While we agree with the district court's approach, we disagree with its conclusion.

Our treatment of this issue is hampered somewhat by the fact that there is a dearth of law on the subject. ² However, we can seek guidance from the official comments to the 1969 draft of the Uniform Probate Code as modified by the Uniform Disclaimer of Transfers By Will, Intestacy, or Appointment Act of 1973, because APC Sec. 2801 is based thereon. See Estate of Acord v. C.I.R., 946 F.2d 1473, 1474 (9th Cir.1991) (absent a contrary expression of intent from the Arizona legislature, we will assume that the purposes outlined in the official comments to the Uniform Probate Code were what the Arizona legislature intended).

The official commentary to the relevant section of the Uniform Probate Code states "When a beneficial interest is accepted by a beneficiary, he cannot thereafter disclaim or release it[.] As to what conduct amounts to an acceptance, see In re Wilson's Estate, 298 N.Y. 398, 83 N.E.2d 852 (1949)." Unif.Probate Code Sec. 2-801, comment (d), 8 U.L.A. 167-68 (1983) (internal citation omitted).

The Wilson's Estate case was a 4-2 decision of the New York Court of Appeals in which the majority held that a legatee's attempted renunciation of his one-third interest in an estate failed because his conduct up to the day he filed the renunciation had been consistent with an intent to accept his legacy; i.e., he waited ten months before executing the renunciation and had implied during summary proceedings ³ only a few days earlier that he intended to accept the legacy once a final accounting had been completed. 298 N.Y. at 404-405, 83...