Metropolitan Nat. Bank v. US
| Decision Date | 07 July 1989 |
| Docket Number | Civ. A. No. S88-0540(R). |
| Citation | 716 F. Supp. 946 |
| Parties | METROPOLITAN NATIONAL BANK, James M. Oberlies, and Robert E. Ryan, Plaintiffs, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Southern District of Mississippi |
Woodrow W. Pringle, III, Gulfport, Miss., for plaintiffs.
William D.M. Holmes, Trial Atty., Dept. of Justice, Tax Div., Washington, D.C., for defendant.
This cause is before this Court on a Motion for Summary Judgment by plaintiffs Metropolitan National Bank, James M. Oberlies and Robert E. Ryan asking that this Court enter judgment, cancelling a federal tax lien of the defendant and quieting title to certain property in the plaintiffs. The defendant United States of America (hereinafter "USA") through its agency, Internal Revenue Service (hereinafter "IRS"), filed its Motion for Partial Summary Judgment in which the defendant moves this Court to deny plaintiffs' Motion and adjudge that the parcels of real property, which are the subject of this proceeding, are encumbered by federal tax liens. The defendant further moves this Court that said federal tax liens be foreclosed against the parcels of real property and that these parcels be sold and the proceeds of sale necessary to satisfy the outstanding balance of the federal tax liens be distributed to the USA.
On February 23, 1978, and for some time before this date, the property which is the subject of this cause was owned by Weaver and Sons, Inc. The property, as a whole, is described as follows:
The South Twenty feet (S 20') of Lot Five (5), all Lot Six (6), the North Five feet (N 5') of Lot Seven (7), the South Twenty feet (S 20') of Lot Seven (7), all of Lots Eight (8), Nine (9), Ten (10), Twenty-one (21), Twenty-two (22), Twenty-three (23), Twenty-four (24), and Twenty-five (25), Block Twenty-eight (28), ORIGINAL GULFPORT, according to the official map or plat thereof on file and of record in the office of the Chancery Clerk of the First Judicial District of Harrison County, Mississippi, in Plat Book 11, Page 9 thereof.
On February 23, 1978, Weaver and Sons, Inc., by its president, S. Albert Weaver, executed a deed of trust in favor of First State Bank and Trust (now known as Metropolitan National Bank) in the amount of $400,000.00, and which deed of trust was secured by the above described property.1 The deed of trust was acknowledged by Robert L. Taylor who, as trustee under the terms of the deed of trust, was not a proper officer to acknowledge the deed of trust. The deed of trust was filed for record in the office of the Chancery Clerk of the First Judicial District of Harrison County, Mississippi, on February 24, 1978, and recorded in Deed of Trust Book 812, page 82.
On February 23, 1987, March 2, 1987, March 9, 1987, March 16, 1987, and June 2, 1987, assessments for unpaid federal withholding, Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) taxes were made against Weaver and Sons, Inc. and notices of federal tax liens, resulting from these assessments, were enrolled with the Clerk of the Chancery Court of Harrison County, Mississippi, on May 7, 1987, and August 27, 1987. The unpaid balance of these assessments amount to $195,621.61, plus interest and statutory additions as provided by law.
On March 8, 1988, Weaver and Sons, Inc., by its president, S. Albert Weaver, executed a corrected deed of trust in favor of First State Bank and Trust in the amount of $400,000.00 which was secured by the hereinabove described property. The corrected deed of trust was properly acknowledged and recorded March 9, 1988, in the office of the Chancery Clerk of the First Judicial District of Harrison County, Mississippi, in Deed of Trust Book 1231, Page 669. Weaver and Sons, Inc. defaulted in payment of the deed of trust and corrected deed of trust and subsequently filed a Chapter 7 bankruptcy proceeding.
At the time Weaver and Sons, Inc. defaulted on the deed of trust and promissory note to Metropolitan National Bank, Weaver and Sons, Inc. owed the sum of $268,833.55.
Pursuant to an Agreed Order Abandoning Collateral and Lifting Stay issued by the United States Bankruptcy Court for the Southern District of Mississippi, Metropolitan National Bank was authorized to repossess and liquidate the collateral of Weaver and Sons, Inc., and hence the subject property was foreclosed upon.
Metropolitan National Bank, through its trustee, Robert L. Taylor, began foreclosure proceedings under the terms of the deed of trust. Notice of foreclosure was posted in the Harrison County Courthouse in the First Judicial District of Harrison County in Gulfport, Mississippi, and published in the Sun Herald Newspaper on March 25th, April 1st, April 8th and April 15, 1988. In addition to the foregoing notices, Metropolitan National Bank forwarded a Notice of Foreclosure to the IRS by certified mail.
The foreclosure sale was held April 19, 1988. At the foreclosure sale, Metropolitan National Bank purchased the following property:
Metropolitan National Bank paid $31,500.00 for Parcel 1 and $72,100.00 for Parcel 2.
During the foreclosure sale on March 19, 1988, Robert E. Ryan purchased a portion of the property, described as follows:
The South Twenty feet (S 20') of Lot Seven (7) and all of Lots Eight (8), Nine (9), and Ten (10), Block Twenty-eight (28), ORIGINAL GULFPORT, according to the official map or plat thereof on file and of record in the office of the Chancery Clerk of the First Judicial District of Harrison County, Mississippi, in Plat Book 11, Page 9 thereof.
Mr. Ryan paid $31,000.00 for said property.
Metropolitan National Bank, after the foreclosure sale and after obtaining its Trustee's Deed, conveyed a portion of its property to James M. Oberlies, said property is described as follows:
Lots Twenty-one (21), Twenty-two (22), Twenty-three (23), Twenty-four (24), and Twenty-five (25), Block Twenty-eight (28), ORIGINAL GULFPORT, according to the official map or plat thereof on file and of record in the office of the Chancery Clerk of the First Judicial District of Harrison County, Mississippi, in Plat Book 11, Page 9 thereof.
The defendant, through the IRS, took no action to stop the foreclosure, prevent the sale of the property to the bank or the individuals named herein, nor did it bid at the foreclosure sale. After the conveyances to the bank and the individuals stated hereinabove, the defendant, through its agency, IRS, claimed that its federal tax liens filed May 7, 1987, and August 27, 1987, were entitled to priority over the deed of trust given by Weaver and Sons, Inc. to First State Bank and Trust Company, subsequently Metropolitan National Bank, said instrument being dated February 23, 1978.
The plaintiff Metropolitan National Bank is a bank institution doing business in the State of Mississippi; plaintiffs Robert E. Ryan and James M. Oberlies are both adult resident citizens of Harrison County, Mississippi; and the defendant is the United States of America through its agency, the IRS. Jurisdiction of this Court is pursuant to 28 U.S.C. § 2410.
Summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. St. Amant v. Benoit, 806 F.2d 1294 (5th Cir.1987). It is the law that "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, 477 U.S. 242, 247-248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original).
In determining what constitutes a "genuine" issue, the Fifth Circuit has stated that:
An issue is genuine if the evidence supporting its resolution in favor of the party opposing summary judgment, together with any inferences in such party's favor that the evidence allows, would be sufficient to support a verdict in favor of that party. If, on the other hand, the evidence offered by both the moving and opposing parties would support only one conclusion and, even if all the evidence to the contrary is fully credited, a trial court would be obliged to direct a verdict in favor of the moving party, the issue is not genuine.
Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218, 222 (5th Cir.1986) (footnotes omitted).
The United States Supreme Court further stated in Liberty Lobby that as to materiality, Anderson v. Liberty Lobby, 477 U.S. at 248, 106 S.Ct. at 2510.
The Supreme Court has noted that the standard for summary judgment mirrors the standard for a directed verdict, the main difference between the two being when they are used, as the inquiry under each is the same. See Celotex Corporation v. Catrett, 477...
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