Noske v. Noske
| Decision Date | 20 May 1997 |
| Docket Number | Civ. No. 6-96-342 (JRT/RLE). |
| Citation | 980 F.Supp. 1026 |
| Parties | Esther NOSKE aka E.M. Noske, Plaintiff, v. James L. NOSKE; James Noske and BBCA, Inc., as Alter Ego of James Noske; Joan M. Noske; Joan Noske and BBCA Inc., as Alter Ego of Joan Noske; The Basic Bible Church of America, The Order of Almighty God, Chapter 7024, an unincorporated, unrecorded, assumed name; Basic Bible Church of America, Inc., a Minnesota Non-Profit Corporation; Joan M. Noske, Trustee under the provisions of a certain Trust Agreement dated June 26, 1978; God's Helping Hands, formerly BBCA, Inc., a Minnesota Non-Profit Corporation; State of Minnesota; The United States of America, through its Treasury Department and Internal Revenue Service; and all unknown persons or entities claiming any right, title, estate, interest, or lien in the real estate described in the Complaint herein, as well as unknown heirs of or successors of, anyone who would otherwise be made a Defendant were it not for their Death, whose names or existence's are unascertainable, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Denis E. Hynes, St. Cloud, MN, for Plaintiff.
Lawrence A. Casper, Trial Attorney, Tax Division, U.S. Dept. of Justice, for Defendant.
That plaintiff's motion to remand this matter to the Minnesota District Court for Stearns County [Docket No. 6] shall be, and hereby is, denied.
April 17, 1997.
This matter came before the undersigned United States Magistrate Judge pursuant to a general assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(A) and (B), upon the Plaintiff's Motion to Remand these proceedings to the Minnesota District Court for Stearns County.1
A Hearing on the Motion was conducted on March 13, 1997, at which time the Plaintiff appeared by Denis E. Hynes, Esq., and the Defendant United States of America (the "United States") appeared by Lawrence A. Casper, Trial Attorney with the Tax Division of the United States Department of Justice. The remaining Defendants made no appearance for the purposes of these Motions.
For reasons which follow, we recommend that the Motion to Remand be denied.2
On November 1, 1996, the Plaintiff commenced this action in the Minnesota District Court for Stearns County, as a proceeding to quiet title to certain real estate.3 This property was encumbered by a series of Federal tax liens, which arose from the unpaid Federal tax liabilities of the Plaintiff's children — the Defendants James and Joan Noske.4 The Internal Revenue Service ("IRS") has determined that two entities — specifically, the Defendants Basic Bible Church of America, Chapter 7024 ("Chapter 7024") and BBCA, Inc. ("BBCA") — are the taxpaying alter-egos of James and Joan Noske and, accordingly, the IRS has seized all of the property that has been held in the names of these entities, in order to satisfy James and Joan Noske's unpaid tax liabilities. The real property, which is the subject of this action, was, at different times, conveyed to both Chapter 7024 and BBCA. As a consequence, it is encumbered by the challenged tax liens.
Prior to the filing of the Complaint, the IRS had scheduled an auction sale of the real property, which was to be held on November 26, 1996. On November 20, 1996, pursuant to Title 28 U.S.C. Section 1444,5 the United States removed the action to this Court. The auction sale of the real property was conducted, as scheduled, on November 26, 1996, and the highest and best bidder for the property was Faye Sitzmann ("Sitzmann"), who bid the sum of $52,740.00.6 The United States represents, without contradiction from the Plaintiff, that the sale of the real property has not become finalized, as the local District Director of the IRS has not issued a Director's Deed to Sitzmann. Moreover, the real property is, and shall remain, subject to a right of statutory redemption, in certain interested persons, for a period continuing until 180 days after the November 26, 1996 auction sale. See, Title 26 U.S.C. § 6337(b).7 In addition, the United States represents — again, without contradiction — that the pertinent Federal tax liens still encumber the property.
On December 23, 1996, the Plaintiff filed this Motion to Remand this action to the State District Court. In support of the Motion, she first argues that the United States' Petition for Removal was statutorily defective. In the alternative, she maintains that the sale of the property to Sitzmann has deprived this Court of its subject matter jurisdiction over this action. In response, the United States denies both that its Petition for Removal was deficient, and that Federal jurisdiction is lacking in this matter. As a consequence, the Government opposes the Motion to Remand.
In seeking a remand of this matter, the Plaintiff first contends that the United States' Petition for Removal was defective because it did not facially reflect that all of the Defendants to this action consented to its removal. We disagree.
Of course, if the United States had removed this proceeding pursuant to the general removal provisions of Title 28 U.S.C. § 1441, then we might well be persuaded by the Plaintiff's argument, since it is well-settled that, as a general proposition, all of the defendants to an action must consent to its removal to a Federal Court, when that removal is conducted pursuant to Section 1441. See, e.g., Bradley v. Maryland Cas. Co., 382 F.2d 415, 419 (8th Cir.1967); Moosbrugger v. McGraw-Edison Co., 215 F.Supp. 486, 487 (D.Minn.1963); see also, Balazik v. County of Dauphin, 44 F.3d 209, 213 (3rd Cir.1995); Roe v. O'Donohue, 38 F.3d 298, 301 (7th Cir.1994); Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir.1992). As noted, however, the United States did not proceed pursuant to Section 1441 but, rather, the removal was pursuant to Section 1444 — a Statute which "gives the United States the unqualified option to remove an action originally brought in state court under [Title 28 U.S.C.] § 2410." E.C. Robinson Lumber Co. v. Hughes, 355 F.Supp. 1363, 1368 (E.D.Mo.1972). As a consequence, "[i]n actions involving multiple parties, * * * the Federal Government may remove the entire proceeding under § 1444[,]" and "[t]he other defendants need not join in the petition for removal." Chrysler First Financial Services Corp. v. Greenfield, 753 F.Supp. 939, 941 (S.D.Fla.1991); see also, Country Hill Bank v. General Development, L.P., 1990 WL 168417 * 1 (D.Kan.1990) ().
Next, the Plaintiff argues that the auction sale of the real property — which, as noted, transpired after this action was removed — deprived the United States of any interest which it might have previously had in this proceeding. The argument continues that, since the United States no longer is an interested party, then this action has been transformed, in essence, to a State law quiet title action between private parties, which no longer presents a Federal question over which this Court has jurisdiction. Accordingly, the Plaintiff contends that this matter must be remanded. See, Title 28 U.S.C. § 1447(c) (). Again, we disagree.
First, we cannot accept the proposition that the United States no longer has an interest in the real property at issue. As we have noted, the purchaser of the property has not received a Director's Deed from the IRS, the statutory period of sale redemption has not yet expired, and the challenged federal tax liens still attach to the property. Given all of these considerations, we agree with the United States that it retains a legitimate interest in the real property, which it is entitled to protect by continuing to participate in this proceeding. For this reason alone, the action continues to present a Federal question, over which the Court has jurisdiction, and the Motion to Remand should be denied.
Moreover, assuming, solely for the sake of argument, that the United States had disposed of its entire interest in the real property upon the sale to Sitzmann, that circumstance would not deprive this Court of jurisdiction to entertain the underlying Section 2410(a) quiet title proceeding. In this respect, we agree with those Courts which have concluded that the sale of the subject property, by the IRS, after the filing of a Section 2410(a) proceeding, does not divest the Court of Federal subject matter jurisdiction. See, Kulawy v. United States, 917 F.2d 729, 733-34 (2nd Cir.1990); cf., Goodwin v. United States, 935 F.2d 1061, 1064 (9th Cir.1991) (). The rationale behind these decisions — which we find persuasive — is that the Government should not be able to defeat a taxpayer's Section 2410(a) challenge to a Federal tax lien, by disposing of the subject property after the action is commenced, and thereby "oust the court of jurisdiction validly invoked." Kulawy v. United States, supra at 733-34; Goodwin v. United States, supra at 1064. Of course, here, it is the taxpayer, and not the Government, who is urging the extinction of our jurisdiction, but this is a distinction without a difference, for the rationale, which underlies the decisions in Kulawy and Goodwin, does not present a one-way ratchet. Stated succinctly, the sale of the subject property in a Section 2410(a) proceeding — after the action has been commenced8 — does not "oust the court of jurisdiction...
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