Travelers Ins. Co. v. Lawrence

• Decision Date: 23 December 1974
• Docket Number: No. 73--1812,73--1812
• Citation: 509 F.2d 83
• Parties: TRAVELERS INSURANCE COMPANY, a Connecticut Corporation, Plaintiff-Appellant, v. M. T. LAWRENCE, Jr., et al., Defendants-Appellants, and Everett R. Langford, United States Marshal for the District of Oregon, Appellee, and Wolfsen M. C. Ranch, a limited partnership, Assignee of Judgments and Purchaser at Marshal's Sale, Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 83

509 F.2d 83

TRAVELERS INSURANCE COMPANY, a Connecticut Corporation, Plaintiff-Appellant, v. M. T. LAWRENCE, Jr., et al., Defendants-Appellants, and Everett R. Langford, United States Marshal for the District

of Oregon, Appellee,

and

Wolfsen M. C. Ranch, a limited partnership, Assignee of

Judgments and Purchaser at Marshal's Sale, Appellant.

No. 73--1812.

United States Court of Appeals, Ninth Circuit.

Dec. 23, 1974.

John H. Buttler (argued), Cake, Hardy, Buttler, McEwen & Weiss, Portland, Or., for plaintiff-appellant.

Kathryn H. Baldwin, Atty. (argued), Dept. of Justice, Civ. Div., Washington, D.C., for appellee.

Before KILKENNY and SNEED, Circuit Judges, and JAMESON, ^* District Judge.

OPINION

JAMESON, District Judge:

Appellants, the plaintiff and defendants in an action to foreclose a mortgage on real property and the purchaser at foreclosure sale, challenge the validity of a commission of appellee, the United States Marshal for the District of Oregon, in the amount of $75,765, taxed as costs for selling the property pursuant to the decree of foreclosure. The commission was computed pursuant to 28 U.S.C. § 1921. The appeal is from an order overruling appellants' objections and confirming the Marshal's commission.

I. BACKGROUND

Plaintiff, Travelers Insurance Company, brought this suit in federal court, on the basis of diversity jurisdiction, to foreclose its mortgage on the 'M. C. Ranch' located in Lake and Harney Counties, Oregon. Cross claims were filed by the holders of two subsequent mortgages. A judgment and decree was entered on July 31, 1972 in favor of the plaintiff and the two subsequent mortgage holders for the foreclosure of the three mortgages and directing that the property

'. . . shall be sold as a unit by the United States Marshal on execution at the Court house door in Lake County, Oregon, after giving notice required by law; . . . that the United States Marshal give to such purchaser a certificate of sale, and after the time allowed by law for redemption, unless said property be redeemed, a deed.'

The court also ordered that the proceeds of the sale be distributed '(f)irst, to pay the costs and expenses of sale'.

On September 17, 1972 the clerk of court signed a writ of execution commanding the Marshal to sell the property 'described in the attached judgment and decree as therein directed'. ¹ On September 20, the Marshal issued a 'Notice of Marshal's Sale', prepared by counsel for plaintiff, describing the property and setting the sale for November 1, 1972. As required by Oregon law, the notice was published in local newspapers.

Prior to the sale, the judgments of Travelers and the second mortgage holders were sold and assigned to Wolfsen M. C. Ranch, a limited partnership. The sale was held on November 1, 1972, in Lakeview, Oregon. The Marshal drove to Lakeview the day before the sale, conducted the sale between 10:00 and 10:30 A.M. on November 1, and returned to Portland. Wolfsen was the only bidder at the sale, bidding $5,050,000.00, the approximate amount of the two judgments it held. The Marshal filed his 'Return on Execution', indicating his compliance with the 'writ of execution, judgment and decree'. ² The sale to Wolfsen was then confirmed. No money was paid to the Marshal by Wolfsen or anyone else in connection with the purchase at the sale.

Thereafter, the Marshal filed his 'Statement of Costs' in which he claimed his statutory commission of $75,765 out of the proceeds of the sale pursuant to 28 U.S.C. § 1921. ³ It is undisputed that had the action been conducted in state court (as it could have been) the officer making the sale would have been limited to a fee of $10.00 for conducting the sale, plus $2.00 for making a certificate of sale and $5.00 for a sheriff's deed. ⁴

Objections to the commission were filed by the appellants. ⁵ In overruling the objection, the court held that the taxation of marshals' costs is discretionary, but if costs are taxed, the court must follow the formula in 28 U.S.C. § 1921; the Marshal had seized or levied on property and received and paid over money as required by § 1921; and the prescribed fees or commissions apply to judicial as well as execution sales.

Appellants contend that (1) the provision for a marshal's commission in 28 U.S.C. § 1921 is not applicable because there was no seizure or levy and the Marshal did not receive or pay over any money; (2) under the Erie doctrine the commission is unauthorized because it is in conflict with the substantive law of Oregon, which protects redemption rights by limiting the sheriff's fee to $10.00 on a foreclosure sale; (3) if § 1921 is applicable, the court had discretion to fix the commission at a lesser sum, or (4) if not, the imposition of a commission bearing 'no relationship to the value of the services rendered' was an abuse of discretion.

II. APPLICABILITY OF 28 U.S.C. § 1921

Prior to 1962, the statute establishing marshals' fees had remained relatively unchanged since its enactment in 1853. The statute read in pertinent part:

'Only the following fees of United States marshals shall be collected and taxed as costs, except as otherwise provided:

'For serving a writ of possession, partition, execution, or any final process, the same mileage as is allowed for the service of any other writ, and for making the service, seizing or levying on property, advertising and disposing of the same by sale, set off, or otherwise according to law and receiving and paying over the money, the same fees and poundage as are or shall be allowed for similar services to the sheriffs of the States, respectively, in which the service is rendered . . ..' (emphasis added).

In 1962 Congress amended this provision of § 1921 to read:

'Only the following fees of United States marshals shall be collected and taxed as costs, except as otherwise provided:

For serving a writ of . . . execution . . ., $3;

'For the preparation of any notice of sale . . . or bill of sale, $3;

'For seizing or levying on property (including seizures in admiralty), disposing of the same by sale, setoff, or otherwise and receiving and paying over money, commissions of 3 percentum on the first $1,000 of the amounts collected and 1 1/2 per centum on the excess of any sum over $1,000. If not disposed by marshal's sale, the commission shall be in such amount as may be allowed by the court.' (emphasis added). ⁶

A comparison of the old statute with the new indicates that the only substantial change made by the 1962 amendment was to substitute a uniform 'commission' for the marshal's services for the provision that the marshal should be paid the fees 'allowed for similar services to the sheriffs of the States'. Both expressly provide that the marshal is required to do three things before he is entitled to a commission. He must (1) seize or levy on the property; (2) dispose of it by sale; and (3) receive and pay over money. Appellants contend that requirements (1) and (3) were not met in this case.

Does the sale of real property pursuant to a decree of mortgage foreclosure involve a seizure or levy within the meaning of § 1921? In finding § 1921 applicable, the district court relied on Hill v. Whitlock Oil Services, Inc., 450 F.2d 170 (10 Cir. 1971). In Hill, as in this case, a United States Marshal sold real property pursuant to an order in a foreclosure action. Refusing to grant the marshal's commission of $117.81 that was subsequently assessed, the lower court held that under Kansas law, the sale was a judicial rather than an execution sale and did not involve a levy or seizure as required by § 1921.

In reversing, the Tenth Circuit agreed that 'under Kansas law no seizure or levy was made', but held that 'federal, not local, law applies in the interpretation and application of federal statutes'. Id. at 173. Recognizing that the 'controlling consideration here is legislative intent', the court concluded that in using the words 'seizing or levying' Congress intended to include judicial sales. Id. at 174.

The court noted that "Levy' is an ambiguous word, with its meaning dependent on the context in which it is used'. Id. It relied on the general definition in the Uniform Enforcement of Foreign Judgment Acts, § 1(c) which defines 'levy' as follows:

"Levy' means to take control of or create a lien upon property under any judicial writ or process whereby satisfaction of a judgment may be enforced against such property'.

Applying that definition, the court concluded that the Marshal 'took control of the land under a court order', and thereby in effect levied on the land. The court stressed that the 'purpose of the pertinent provisions of § 1921 is to reimburse the federal government for services rendered to private litigants by United States marshals' and that the 1962 amendment established a uniform formula for computing the fees. The court concluded that uniformity in the fee structure would be 'impossible if the right of the Marshal depends on the fine distinction which state law may draw.' Id.

We agree that in amending § 1921, Congress intended to establish a uniform fee for services rendered by United States marshals. As stated in House Report No. 1724, the purpose of setting a uniform fee was 'to increase the charges to private litigants for the services of U.S. marshals'. ⁷ We agree also that § 1921 prescribes the fees which may be collected for services performed by a United States marshal, including the sale of property. We cannot agree, however, that state law is to be ignored in determining whether the commission prescribed in § 1921 is applicable. The fees assessed pursuant to § 1921 are based on the nature of the services performed by the marshal. Here the marshal was charged with the responsibility of conducting a mortgage foreclosure sale pursuant to a writ of execution.

All parties to this action agree that pursuant to Rule 69(a) of the Federal Rules of Civil Procedure, Oregon law governs the practice and...