(ECF Nos. 115, 116, 118, 119)
DECREE OF FORECLOSURE AND ORDER OF SALE
On April 12, 2013, an order issued granting Plaintiff's motion for summary judgment, foreclosing on the tax liens against Chris and Carrie Capriotti, and ordering Plaintiff to file a proposed order to effectuate the foreclosure and sale of real property. (ECF No. 113.) On April 16, 2013, Plaintiff filed a proposed order re sale; and the Capriottis filed an objection to the order on April 18, 2013. (ECF No. 116.) On April 24, 2013, the State of California filed an objection to the order. (ECF No. 118.) Plaintiff filed a reply and amended order on April 26, 2013.*fn1 (ECF No. 119.)
Defendants object to the proposed order on the grounds that it seeks relief and injunctions that have not been adjudicated. Specifically, Defendants object to the eviction of all occupants from the property, allowing the United States Marshal to enter the property to remove any occupants or prevent them from returning, deem abandoned any personal property not removed from the property and allow its disposal by the Marshal,*fn2 requiring property preservation by Defendants, and restraints on free speech in the form of potential recorded instruments. Defendants argue that these requests for relief were not litigated or awarded by the motion for summary judgment and the Court does not have the right to award relief for claims not made. Further, Defendants contend that any execution of judgment must follow state law and Plaintiff is required to file an ejectment action in order to gain possession of the property. Defendants claim that since Plaintiff does not have title to the property it cannot seek ejectment and having failed to raise such a claim, it has been waived.
The failure of any person to pay outstanding tax liabilities creates a lien in the amount owed "in favor of the United States upon all property and rights to property, whether real or personal belonging to such person." 26 U.S.C. § 6321. It has long been established that, although the definition of the underlying property interests is defined by state law, the consequences that attach to the property interests is a matter of federal law. United States v. Rodgers, 461 U.S. 677, 683 (1983). "There is no doubt that the district court has the jurisdiction in a civil action to render any judgment necessary to enforce the internal revenue laws." Miller & Miller Auctioneers, Inc. v. G. W. Murphy Industries, Inc., 472 F.2d 893, 895 (10th Cir. 1973).
The United States Codes describes the authority of the federal court in enforcing federal tax liens and to subject properties to the payment of taxes. The Internal Revenue Code provides in part:
The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States.
26 U.S.C. § 7403(c). Additionally, the Internal Revenue Code provides:
The district courts of the United States at the instance of the United States shall have such jurisdiction to make and issue in civil actions, writs and orders of injunction, and of ne exeat republica, orders appointing receivers, and such other orders and processes, and to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws. The remedies hereby provided are in addition to and not exclusive of any and all other remedies of the United States in such courts or otherwise to enforce such laws.
The United States brought this action to reduce to judgment federal tax liens against the Capriottis, set aside the fraudulent transfer of the Capriottis' residence, and foreclose the tax liens against real property, the residence at issue here. The claims have been litigated by the parties and an ordered issued granting summary judgment in favor of the United States and the order of sale is appropriately before this Court to enforce the judgment.
The Capriottis object to paragraphs 3 and 6 of the proposed order which seek eviction of residents of the property, access of government officials to enter the property to change locks, and to use necessary force to evict any resident and prevent them from returning. The Capriottis argue that Federal Rule of Civil Procedure 69 requires that execution of judgments must follow state law unless a federal statute applies. Since the Internal Revenue Code does not provide any detailed procedures for executing a foreclosure judgment, Plaintiff's contend that state law foreclosure proceedings would apply and it would be for the successful bidder to pursue an action to remove the Capriottis from the property.
Plaintiff replies that pursuant to the summary judgment order, the United States is entitled to a judicial order to sell the subject property under the judgment foreclosing the tax liens. Federal courts may direct the enforcement of judgments by judicial sale, and an order of judicial sale is an appropriate post judgment remedy. Further, Plaintiff contends that the court has broad discretion in setting the terms and conditions of a sale under 28 U.S.C. § 2001. Plaintiff states that the terms contained in the order are necessary to ...