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United States of America v. Orlun K. Jones

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


March 5, 2012

UNITED STATES OF AMERICA, PLAINTIFF,
v.
ORLUN K. JONES, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Honorable David O. Carter

ANDRE BIROTTE JR. United States Attorney SANDRA R. BROWN Assistant United States Attorney Chief, Tax Division DARWIN THOMAS (SBN 80745) Assistant United States Attorney Room 7211, Federal Building 300 North Los Angeles Street Los Angeles, California 90012 Telephone: (213) 894-2740 Facsimile: (213) 894-0115 E-mail: Darwin.Thomas@usdoj.gov Attorneys for United States of America

JUDGMENT OF FORECLOSURE AND ORDER OF SALE Trial: January 27 and 30, 2012

Courtroom 9-D

This matter was tried to the Court on January 27 and January 30, 2012. Based on the Clerk's record in this action, on the pleadings of the parties, on the pretrial conference order filed by the Court in this action, on the evidence presented at trial, on the judicial notice that has been taken by the Court in this case, on the argument of the parties in connection with the trial of this case, and on the Court's findings of fact and conclusions of law filed herein:

On the second cause of action in the complaint, for foreclosure of federal tax liens,

IT IS ORDERED, ADJUDGED, and DECREED THAT:

1. Defendant ORLUN K. JONES is the owner of the following four parcels of real property (the "four subject properties") -

(i) The property located at and commonly referred to as 15805 Lindina Avenue, Riverside, California, referred to herein as the "Lindina" property, legally described as:

Parcel 2 of parcel map 8694, as shown by map on file in book 36, page 74 of maps, records of Riverside County, California; (ii) The property located at and commonly referred to as 7491 Bonnie Street, San Bernardino, California, referred to herein as the "Bonnie" property, legally described as:

The South one-half of Lot 32, Tract 2289, Wolf and Yates Subdivision, in the County of San Bernardino, State of California, as per Map recorded in Book 33 of Maps, page 14, in the office of the County Recorder of said county; (iii) The property located at and commonly referred to as 21586 Peak Circle, Cedar Pines Park, California, referred to herein as the "Peak Circle" property, legally described as:

Lot 59, Tract 2165, Block 4, Cedarpines Park No. 9, in the County of San Bernardino, State of California as per map recorded in Book 32, Page 10, of Maps, in the Office of the County Recorder of said county.

(iv) The property located at and commonly referred to as 6123 Newcomb Street, San Bernardino, California, referred to herein as the "Newcomb" property, legally described as:

Lot 10 of Tract No. 7294, in the County of San Bernardino, State of California, as per Map recorded in Book 92 of Maps, pages 91 and 92, in the office of the County Recorder of said county.

2. In accordance with applicable provisions of the Internal Revenue Code, Title 26, United States Code, the United States of America, Internal Revenue Service, has assessed federal income taxes against defendant ORLUN K. JONES and his spouse for tax years 1985, 1986, 1987, 1988, 1989, 1990, 1991, and 1992, that pursuant to such assessments the United States of America has valid and existing federal tax liens against the property interests of defendant ORLUN K. JONES in the four subject properties, and that such liens are foreclosed against the interest of defendant ORLUN K. JONES in the four subject properties.

3. The four subject properties are ordered to be sold by the local Area Director of the Internal Revenue Service for the Area including Riverside County and San Bernardino County, California, (hereinafter "Area Director"), or his delegate, in accordance with the provisions of Title 28, United States Code, Sections 2001 and 2002.

4. With respect to each of the four subject properties, any party to this proceeding or any person claiming an interest in such property may move the Court, pursuant to Title 28, United States Code, Section 2001(b), for an order for a private sale of such property in which such party or person claims an interest. Any such motion shall be filed within twenty (20) days of the date of this Judgment of foreclosure and shall set forth with particularity (a) the nature of the moving party's interest in the particular property, (b) the reasons why the moving party believes that a private sale would be in the best interests of the United States of America and any other claimant involved herein, (c) the names of three proposed appraisers and a short statement of their qualifications, and (d) a proposed form of order stating the terms and conditions of the private sale. Any such motion shall comply with Rule 7 of the Local Rules of the District Court for the Central District of California.

5. The Area Director, or his delegate, is ordered to sell each of the four subject properties if such property does not become the subject of a motion pursuant to the preceding paragraph, in accordance with Title 28, United States Code, Sections 2001(a) and 2002. Each of the four subject properties shall be sold at a public sale, with the sale of the Lindina property to be held at the Riverside County Courthouse, 4050 Main Street, Riverside, California, and the sales of the Bonnie, Peak Circle, and Newcomb properties to be held at the San Bernardino County Superior Courthouse, 351 North Arrowhead Avenue, San Bernardino, California. The procedures for each sale shall be as follows:

a. Notice of the sale shall be published once a week for at least four (4) weeks prior to the sale in at least one newspaper regularly issued and of general circulation in the county in which the property to be sold is located. Said notice shall describe the property by both its street address and legal description, and shall contain the terms and conditions of sale as set out herein.

b. The terms and conditions of sale shall be as follows: A minimum bid determined by reference to the current fair market value shall be required. The minimum bid shall be 75% of the current fair market value as determined by an appraisal of the particular property by the Internal Revenue Service. The terms of sale as to all persons or parties bidding shall be cash. The successful bidder shall be required to deposit with the Area Director cash equal to twenty percent (20%) of the bidder's total bid immediately upon the property being struck off and awarded to such bidder as the highest and best bidder; and the remaining eighty percent (80%) of said purchase price is to be paid on or before 5:00 p.m., within three (3) days of the date of sale. Should any person bid off the property at the sale by virtue of this Judgment and Order of Sale, and fail to comply with the terms of the sale, such bidder shall be liable to the United States for twenty percent (20%) of the value of the property thus bid off as a penalty, and said deposit shall be paid over and delivered to the United States to be applied toward payment of said penalty, but payment of said penalty shall not be a credit against the taxes assessed against ORLUN K. JONES.

6. Upon selling each of the four subject properties, the Area Director, or his delegate, shall prepare and file with this Court an accounting and report of sale for each such property, and shall give to the purchaser of the property a Certificate of Sale containing the description of the property sold and the price paid. The accounting and report of the sale shall be filed within ten (10) days from the date of such sale. If no objections have been filed in writing in this cause with the Clerk of the Court within fifteen (15) days of the date of sale, the sale shall be confirmed without necessity of motion, and the Area Director shall be directed by the Clerk of the Court to execute and deliver his deed to the purchaser.

7. Possession of each of the four subject properties which is sold shall be yielded to the purchaser of such property upon the production of the Certificate of Sale and Deed; and if there is a refusal to so yield, a Writ of Assistance may, without further notice, be issued by the Clerk of this Court to compel delivery of the property sold to the purchaser.

8. The Area Director shall first use the proceeds of sale for each of the four subject properties to pay the expenses of sale for the particular property, and then to pay any amount due to the County Assessor and Tax Collector (for real property taxes) for all unpaid real property taxes assessed against the particular property to the date of entry of this Judgment of foreclosure, which payment of real property taxes shall also be considered an expense of sale for the purpose of this judgment.

9. To the extent that there are sales proceeds remaining from the sale of the Lindina property, after the payment of the expenses of sale as set forth in paragraph 8 above, such remaining proceeds shall be treated as a single fund and shall be paid over to the Trustee of the bankruptcy estate of the debtors in the case of In re Orlun and Estela Jones, no. 6:10-bk-27784 (USBC C.D. Ca., Santa Ana Div.) subject to the following lien: (i) A first priority lien in favor of the United States of America for the federal income tax assessments described in paragraph 2 above, in the amount owing on such tax liens at the time of the sale of the Lindina property.

10. To the extent that there are sales proceeds remaining from the sale of the Bonnie property, after the payment of the expenses of sale as set forth in paragraph 8 above, such remaining proceeds shall be treated as a single fund and shall be paid over to the Trustee of the bankruptcy estate of the debtors in the case of In re Orlun

K. Jones and Estela Jones, no. 6:10-bk-27784 (USBC C.D. Ca., Santa Ana Div.) subject to the following liens with the following priorities:

(i) First, the mortgage lien against the Bonnie property in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") , in the amount owing to MERS at the time of sale of the Bonnie property; and

(ii) Second, the tax liens in favor of the United States of America for the federal income tax assessments described in paragraph 2 above, in the amount owing on such tax assessments at the time of the sale of the Bonnie property, which lien is subordinate to the mortgage lien against the Bonnie property in favor of MERS.

11. To the extent that there are sales proceeds remaining from the sale of the Peak Circle property, after the payment of the expenses of sale as set forth in paragraph 8 above, such remaining proceeds shall be treated as a single fund and shall be paid over to the Trustee of the bankruptcy estate of the debtors in the case of In re Orlun K. Jones and Estela Jones, no. 6:10-bk-27784 (USBC C.D. Ca., Santa Ana Div.) subject to the following liens:

(i) First, a first priority lien in favor of The MacPherson Group, P.C., in the amount of $33,172.00 for legal fees and costs owed by ORLUN K. JONES to The MacPherson Group, P.C.; and

(ii) Second, the tax liens in favor of the United States of America for the federal income tax assessments described in paragraph 2 above, in the amount owing on such tax assessments at the time of the sale of the Peak Circle property, which lien is subordinate to the lien against the Peak Circle property in favor of The MacPherson Group, P.C.

12. To the extent that there are sales proceeds remaining from the sale of the Newcomb property, after the payment of the expenses of sale as set forth in paragraph 8 above, such remaining proceeds shall be treated as a single fund and shall be paid over to the Trustee of the bankruptcy estate of the debtor in the case of In re Jayson N. Jones, no. 6:11-bk-27415 (USBC C.D. Ca., Santa Ana Div.) subject to the following liens:

(i) First, the mortgage lien against the Newcomb property in favor of MERS, in the amount owing to MERS at the time of sale of the Newcomb property;

(ii) Second, a second priority lien in favor of The MacPherson Group, P.C., in the amount of $33,172.00 for legal fees and costs owed by ORLUN K. JONES to The MacPherson Group, P.C., which lien is subordinate to the lien against the Newcomb property in favor of MERS; and

(iii) Third, the tax liens in favor of the United States of America for the federal income tax assessments described in paragraph 2 above, in the amount owing on such tax assessments at the time of the sale of the Newcomb property, which lien is subordinate to both the lien against the Newcomb property in favor of MERS, and the lien against the Newcomb property in favor of The MacPherson Group, P.C.

13. The lien claim of The MacPherson Group, P.C., against the Peak Circle and Newcomb properties, in the amount of $33,172.00 as described in paragraphs 11 and 12 above, may ultimately be recovered by The MacPherson Group, P.C., in accordance with the priorities described above, only once, whether such amount is paid to The MacPherson Group, P.C., from the proceeds of the sale of the Peak Circle property, from the proceeds of the sale of the Newcomb property, or partially from the proceeds of the sales of both such properties.

14. The tax lien claims of the United States encumber each of the four subject properties and may ultimately be partially or wholly recovered by the United States, in accordance with the priorities described above, from the proceeds of the sales of each of the properties, up to the total amount due and owing on such tax liens as of the date of sale of each of the four subject properties.

15. The Court hereby retains jurisdiction of this matter for the purpose of approving the Area Director's Accounting and Report of Sale for each property, and ensuring that following such accountings by the Area Director, the remaining proceeds of each such sale, after payment of the expenses of sale as described in paragraph 8 above, is properly distributed to the bankruptcy Trustees as described in paragraphs 9 through 12 above.

IT IS SO ORDERED.

DAVID O. CARTER UNITED STATES DISTRICT JUDGE

Respectfully submitted,

20120305

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