The opinion of the court was delivered by: DANA SABRAW, District Judge
ORDER GRANTING RESPONDENT UNITED STATES' MOTION FOR SUMMARY
JUDGMENT AND DIRECTING INTERPLEADER FUNDS TO BE DISBURSED
This suit arises from an interpleader action in which CTC Real
Estate Services ("CTC") seeks to determine the proper claimants
to the surplus funds from the sale of George and Betty Woolman's
(the "Woolmans") home, located at 2225 Victoria Park Terrace,
Alpine, California 91901 ("Subject Property"). The United States
of America ("United States"), on behalf of the Internal Revenue
Service ("IRS"), now moves for summary judgment, and requests
that the Court direct payment from the surplus proceeds to the
United States, for unpaid federal taxes the IRS assessed against
the Woolmans in 1996. The Woolmans filed an Opposition to the
motion for summary judgment on October 3, 2005. Thereafter, the
United States filed a Reply. The Court finds this matter suitable
for submission without oral argument pursuant to Local Civil Rule 7.1(d)(1). For
the reasons discussed below, the Court grants the United States'
motion for summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
On June 19, 2001, James L. Juby ("Juby") conveyed his interest
in the Subject Property by quitclaim deed to his mother, Betty
Woolman. Thereafter, on April 4, 2002, Betty Woolman recorded the
deed to the Subject Property in her name as sole owner of the
After Betty Woolman recorded the deed, a dispute arose between
Juby and Betty Woolman as to whether the transfer of interest in
the Subject Property was valid. Notwithstanding the dispute, on
July 2, 2004, Betty Woolman conveyed her interest in the Subject
Property by quitclaim deed to her husband, George Woolman. On
that same day, George Woolman filed for Chapter 7 bankruptcy
protection and the Subject Property was subsequently sold at a
non-judicial trustee's sale.
On November 8, 2004, CTC initiated an interpleader action in
the Superior Court of the State of California in San Diego, to
determine the proper claimants to the surplus funds from the sale
of the Subject Property. CTC deposited a total of $101,504.97 in
the registry of the Superior Court. On December 9, 2004, the
United States removed this action to the District Court pursuant
to 28 U.S.C. §§ 1444 and 2410.*fn1 After removal, four
parties answered the Complaint and claimed a right to the surplus
proceeds from the sale: the Woolmans, the United States, the
California Franchise Tax Board ("FTB"), and Northwest Funding
On May 18, 2005, a portion of the excess proceeds in the amount
of $34,600.00 was released to Northwest pursuant to a stipulation
signed by the parties and subsequently approved by this Court.
Thereafter, Northwest was dismissed from the case. In addition,
after the FTB received the Woolmans' state tax returns for the periods of 1999 to 2001, it
notified the United States Magistrate Judge in this matter that
the only liabilities owed by the Woolmans for the relevant tax
years are not covered by the FTB's liens. Accordingly, the FTB
acknowledged that it no longer has a valid claim to the excess
proceeds. (See Attachment A to the Woolmans' Affidavit in
Support of the Opposition to Motion for Summary Judgment.)
On August 31, 2005, the United States, on behalf of the IRS,
filed a motion for summary judgment, contending that it is
entitled to $52,830.55 of the excess proceeds from the sale of
the Woolmans' home, due to unpaid federal taxes that the IRS
assessed against them in 1996.*fn3 The IRS' assessments of
the Woolmans' federal tax liabilities covered the periods of
1991, 1992, 1994 and 1995. (See Exhibits A, B, C, and D to
United States' Motion for Summary Judgment). All of the IRS'
notices of tax deficiencies were served at the Woolmans' last
known address. (See Opposition to Motion for Summary Judgment at
5.) In addition, a declaration provided by the United States
indicates that on February 2, 1997, a delegate of the Secretary
of the Treasury filed a Notice of Federal Tax Lien against the
Woolmans with the San Diego County Recorder's Office. (See
Exhibit E to United States' Motion for Summary Judgment).
According to the United States, despite being properly notified
of their tax deficiencies, the Woolmans have failed to pay the
taxes assessed. (See United States' Motion for Summary Judgment
On October 3, 2005, the Woolmans filed an Opposition to the
United States' motion for summary judgment, contending that
genuine issues of material fact exist as to the validity of the
federal tax lien. Specifically, the Woolmans raise three
contentions in support of their opposition. First, they contend
there are genuine issues of material fact as to whether the IRS
properly notified them of their tax liabilities, because the
notices of deficiencies were mailed to their last known address
after they were evicted from that residence. (Id.) Second, they
contend the IRS' assessments of their tax liabilities is
incorrect as to the amount owed. (Id. at 5-6.) Finally, the
Woolmans also argue that the principles of equity, justice, and
economy weigh in favor of this Court's denial of the motion for
summary judgment. (Id.) II.
Summary judgment is appropriate under Rule 56 of the Federal
Rules of Civil Procedure on "all or any part" of a claim where
there is an absence of a genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. See
Fed.R.Civ.P. 56(a) & (c); Celotex Corp. V. Catrett,
477 U.S. 317, 322 (1986). A fact is material when, under the governing
substantive law, it could affect the outcome of the case.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute
about a material fact is genuine if "the evidence is such that a
reasonable jury could return a verdict for the nonmoving party."
Anderson, 477 U.S. at 248.
A party seeking summary judgment bears the initial burden of
establishing the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323. The moving party can satisfy this
burden in two ways: (1) by presenting evidence to negate an
essential element of the nonmoving party's case; or (2) by
demonstrating that the nonmoving party failed to make a showing
sufficient to establish an element to that party's case on which
that party will bear the burden of proof at trial. Id. at
322-23. If the moving party fails to discharge this initial
burden, summary judgment must be denied and the court need not
consider the nonmoving party's evidence. Adickes v. S.H. Kress &
Co., 398 U.S. 144, 159-60 (1970).
If the moving party meets this initial burden, the nonmoving
party cannot defeat summary judgment by merely demonstrating
"that there is some metaphysical doubt as to the material facts."
Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986); see also Triton Energy Corp. v. Square D.
Co., 68 F.3d 1216, 1221 (9th Cir. 1995) ("The mere existence of
a scintilla of evidence in support of the nonmoving party's
position is not sufficient.") (citing Anderson,
477 U.S. at 252). Rather, the nonmoving party must "go beyond the pleadings
and by [his or] her own affidavits, or by `the depositions,
answers to interrogatories, and admissions on file,' designate
`specific facts showing that there is a genuine issue for
trial.'" Celotex, 477 U.S. at 344 (quoting Fed.R.Civ.P. 56(e)).
"Disputes over irrelevant or unnecessary facts will not preclude
a grant of summary judgment." T.W. Elec. Serv. Inc. v. Pacific
Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Moreover, "the district court may limit its review to
the documents submitted for purposes of summary judgment and
those parts of the record specifically referenced therein."
Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030
(9th Cir. 2001). The Court is not obligated "to scour the records
in search of a genuine issue of triable fact." Keenan v. Allen,
91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. Combined
Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)).
When making its determination, the Court must view all
inferences drawn from the underlying facts in the light most
favorable to the party opposing the motion. See Matsushita,
475 U.S. at 587. "Credibility determinations, the weighing of
evidence, and the drawing of legitimate inferences from the facts
are jury functions, not those of a ...