United States v. Novotny

Decision Date31 July 2003
Docket NumberNo. 02-1417.,02-1417.
PartiesUNITED STATES OF AMERICA, Plaintiff-Appellee, v. EDWARD G. NOVOTNY, in his individual capacity as Trustee of MIDWEST LIMITED and SUNRISE INVESTMENTS, Defendant-Appellant, STATE OF COLORADO; DEPARTMENT OF REVENUE, Defendant-Appellee, and ETTA B. NOVOTNY, Defendant.
CourtU.S. Court of Appeals — Tenth Circuit

For EDWARD G. NOVOTNY, in his individual capacity as Trustee of MIDWEST LITITED and SUNRISE INVESTMENTS, Defendant-Appellant: William Allan Cohan, William A. Cohan, P.C., San Diego, CA. Edward G Novotny, Cortez, CO.

For Etta B. Novotny, Defendant: Etta B. Novotny, Cortez, CA.

For State of Colorado, Department of Revenue, DefendantAppellee: Neil L. Tillquist, Carolyn Lievers, Robert D. Clark, Ken Salazar, Attorney General, State of Colorade, Department of Law, Denver, CO.

Before TACHA, Chief Judge, BRORBY, Senior Circuit Judge, and HARTZ, Circuit Judge.


Deanell Reece Tacha After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.

Defendant Edward G. Novotny, appearing pro se, appeals the district court's adverse judgment in this civil tax matter. He asserts that the district court lacked jurisdiction to hear and determine the case against him. This court exercises its jurisdiction pursuant to 28 U.S.C. § 1291 and affirms.


The United States brought suit to reduce to judgment assessments against Mr. Novotny for income taxes, penalties, and interest from tax years 1989 through 1991 and to foreclose its liens upon seven parcels of real property nominally held by two trusts, Midwest Limited and Sunrise Investments. The United States named as defendants in the action all known parties having an interest in the parcels of property, including the trusts, Etta B. Novotny (the taxpayer's spouse), and the State of Colorado, Department of Revenue (which had filed its own tax liens against the properties). The trusts, Mrs. Novotny, and the State of Colorado filed various counterclaims and crossclaims.

After a series of orders and a bench trial, the district court concluded that: (1) Mr. Novotny was liable to the United States for federal income taxes and statutory assessments in the amount sought by the United States, $ 171,932.76; (2) the transfers of the seven parcels of property to the trusts were void as to the United States, in that the trusts were shams and also alter egos and nominees of Mr. Novotny; (3) the transfers should be set aside and the federal tax liens foreclosed on the properties; (4) Mrs. Novotny was entitled to judgment quieting title to her undivided one-half interest in the properties; and (5) the State of Colorado's tax lien against the properties is valid, subordinate, and junior to that of the United States.

Accordingly, the court entered judgment and ordered the properties sold, with one half of the net sale proceeds to be applied first to Mr. Novotny's federal tax liability, and if this liability is satisfied and funds remain, then to Mr. Novotny's Colorado state tax liability. The other half of the net proceeds was to be paid to Mrs. Novotny. The court also entered a deficiency judgment against Mr. Novotny and in favor of the United States, if the proceeds of the sale did not satisfy the federal tax debt. Only Mr. Novotny has appealed.1


Mr. Novotny's appellate arguments are not entirely clear, but they appear to focus on the district court's jurisdiction. We review the question of the district court's jurisdiction de novo. Kunkel v. Cont'l Cas. Co., 866 F.2d 1269, 1273 (10th Cir. 1989).

Although we liberally construe Mr. Novotny's pro se appellate brief, see Ledbetter v. City of Topeka, 318 F.3d 1183, 1187 (10th Cir. 2003), we will not assume the role of his advocate, see Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). As we decipher the argument section of Mr. Novotny's brief, he makes four jurisdictional challenges. First, he claims that the federal district court lacked jurisdiction to determine the legal status of the trusts for tax purposes, because the ruling "debauched unlawfully the trust laws enacted by the Colorado Legislatu...

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