UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION
August 18, 2012
UNITED STATES OF AMERICA, PLAINTIFF,
GREGORY WOLFLICK, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Percy Anderson United States District Judge
Judgment Resolving All Claims for Relief in Favor of the United States
The Court, having considered the Stipulation as to Lien Priority between the United States of America and Provident Funding Associates, L.P. (document number 20) and the Stipulation between the United States, Gregory Wolflick, and Rachel Wolflick Resolving All Claims for Relief in Favor of the United States:
A. First Claim for Relief: Reduce Federal Tax Assessments to Judgment
As of October 31, 2011, Gregory Wolflick had a balance due to the United States of $1,056,465.25 for unpaid individual income taxes, penalties, interest, fees and collection costs, for tax years 1998 through 2004.
As of October 31, 2011, Gregory and Rachel Wolflick had a balance due to the United States of $257,254.54 for unpaid joint income taxes, penalties, interest, fees and collection costs, for tax years 2006, 2008, and 2009. Gregory and Rachel are jointly and severally liable for these liabilities.
Interest on the liabilities will run in accordance with the laws of the United States.
This resolves the first claim for relief in favor of the United States.
B. Second Claim for Relief: Foreclosure of Cloudcrest property
Gregory and Rachel Wolflick own the real property located at 3107 Cloudcrest Road, La Crescenta, California (Cloudcrest property), APN 5867‐005‐ 022, and is legally described as follows:
Parcel(s) 1 of Parcel Map No. 20255, in the County of Los Angeles, State of California, as per map recorded in Book 243 Page(s) 39 to 41 inclusive of Parcel Maps, in the office of the County Recorder of said County, and as amended by a Certificate of Correction recorded February 20, 1992 as Instrument No. 92‐282618, of Official Records.
An easement for ingress and egress, sanitary sewers, water line and utility purposes over Parcels 2 and 3 of Parcel Map No. 20255 shown and depicted as "Reciprocal Variable Width Easements." The United States has federal tax liens on all the property and rights to property owned by Gregory Wolflick for the amount of his unpaid individual balance due.
The United States has federal tax liens on all the property and rights to property owned by Gregory and Rachel Wolflick for the amount of their unpaid joint balance due.
The tax liens described above attach to the Cloudcrest property. The United States has the right to judicial foreclosure of its Federal tax liens against the Cloudcrest property.
Stay of the United States' Right to Foreclose
The United States will stay its right to foreclose on the Cloudcrest property for 2 years from the date this Judgment is signed by the Court, so long as Gregory and Rachel Wolflick comply with the following requirements:
a. Lump sum payment. Within one year of the date the Judgment is signed by the Court, Gregory Wolflick will pay by cashier's check $200,000 to the United States.
b. Monthly payments.
i. Gregory and Rachel Wolflick will make monthly payments of $7,500 to the United States.
ii. Gregory and Rachel Wolflick may not designate how the payments are to be applied.
iii. The United States will apply the payments to the unpaid income tax liabilities described above in the best interest of the United States in accordance with Revenue Procedure 2002‐26.
iv. Payments must be made in the form of a cashier's check, made payable to the United States Treasury, and sent to Gavin Greene, Assistant United States Attorney 300 N. Los Angeles St., Room 7211 Los Angeles, CA 90012
v. Payments are due and must be received by the United States on the 21st day of the month beginning the month after the Judgment is entered.
c. Filing Requirements. Gregory and Rachel Wolflick must timely file all tax returns with the IRS as required by law, including but not limited to U.S. Individual Income Tax Return (Form 1040).
d. Estimated Tax payments. Gregory and Rachel Wolfick must make timely payments to the IRS as required by law, including but not limited to estimated income tax payments as required by law.
The United States will have sole, non‐reviewable, discretion to determine whether Gregory and Rachel Wolflick are in compliance with the requirements listed above.
If the United States determines that Gregory and Rachel Wolflick are not in compliance with the requirements of this agreement, the United States will give Gregory and Rachel Wolflick written notice of such non‐compliance by certified mail and the opportunity to cure within 15 days of the mailing of such notice.
If the United States determines that Gregory and Rachel Wolflick have failed to cure the non‐compliance within 15 days of the mailing of the notice, the United States may proceed to foreclose on the Cloudcrest property and neither Gregory Wolflick nor Rachel Wolflick may oppose such relief.
In the period after entry of the Judgment, but before the United States forecloses on the Cloudcrest Property, defendants Gregory and Rachel Wolflick will maintain the Cloudcrest property in good condition, and will timely pay all mortgage payments and real property taxes. Furthermore, defendants Gregory and Rachel Wolflick have a duty to prevent waste or damage to the property during this period. Failure to comply with any of these requirements will result, after application to the Court by the United States, in a further order permitting immediate execution of foreclosure on the Cloudcrest property before the expiration of the 2 year period.
This Judgment pertains only to the tax liabilities specified herein. Nothing in this agreement restricts the United States from recording further tax liens pertaining to present or future tax liabilities that are not specified herein.
This resolves the second claim for relief in favor of the United States. Foreclosure Procedure The Area Director, or his delegate, is ordered to sell the Cloudcrest property in accordance with 28 U.S.C. §§ 2001(a) and 2002.
The Cloudcrest property shall be sold at a public sale to be held at the Los Angeles County Courthouse, 111 North Hill Street, Los Angeles, California.
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 Los Angeles, California. Said notice shall describe the property by both its street address and its legal description, and shall contain the terms and conditions of sale as set out herein.
The terms and conditions of sale shall be as follows:
a. The Internal Revenue Service shall appraise the current fair market value of the subject property (appraised value).
b. The minimum bid shall be 75% of the appraised value.
c. The United States of America may bid a credit against its judgment and interest thereon, costs, and expenses, without tender of cash.
d. The terms of sale as to all other 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.
e. Should the successful bidder 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 as a penalty, and said deposit shall be paid over and delivered to the United States to be applied toward payment of said penalty. Payment of said penalty shall not be a credit on the judgment of the United States.
Upon selling the subject real property, the Area Director, or his delegate, shall prepare and file with this Court an accounting and report of sale and shall give to the purchaser a Certificate of Sale containing the description of the property sold and the price paid. The accounting and report of sale shall be filed within ten (10) days from the date of sale. If no objections have been filed in writing in this case 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 said purchaser.
Possession of the property sold shall be yielded to the purchaser upon the production of the Certificate of Sale and Deed. 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.
The Area Director shall apply the proceeds of sale to expenses of sale and then in the following order of priorities: first to Provident Funding Associates, L.P.; second to the United States; and third to Gregory and Rachel Wolflick.
The Court hereby retains jurisdiction for the purpose of making proper distribution of any surplus of the proceeds of sale, pursuant to the Area Director's Accounting and Report of Sale.
The parties will each bear their own costs and attorney's fees in connection with this case.
IT IS SO ORDERED.
Respectfully submitted, ANDRE BIROTTE JR. United States Attorney SANDRA R. BROWN Assistant United States Attorney Chief, Tax Division GAVIN L. GREENE Assistant United States Attorney Attorneys for United States of America
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