United States v. David Elmore , 437 F. App'x 543 ( 2011 )

FILED
NOT FOR PUBLICATION JUN 08 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 08-35256
Plaintiff - Appellee, D.C. No. 2:05-cv-00810-JLR
v.
MEMORANDUM*
DAVID L. ELMORE,
Defendant - Appellant.
Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Argued and Submitted May 4, 2011
Seattle, Washington
Before: SCHROEDER, McKEOWN, and CALLAHAN, Circuit Judges.
David Elmore appeals from the District Court’s judgment adjudicating the
amount of his tax liability and foreclosing the government’s lien on his home. The
Government argues that the District Court’s judgment is not final and not
appealable, but otherwise admits that the judgment should be vacated because its
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
motion for summary judgment was not supported by appropriate evidence. We
determine that we have jurisdiction, vacate the district court’s judgment, and
remand for further proceedings.
In April 2005, the Government filed its “Complaint to Reduce Federal Tax
and Penalty Assessments to Judgment and Foreclose Federal Tax Liens.”
Although two individuals other than Elmore were alleged to have an interest in the
underlying real property, they were subsequently dismissed. The district court
entered an order in June 2006 deciding all issues in favor of the Government.
Before the District Court entered a final judgment, Elmore filed an appeal. We
eventually dismissed the appeal as premature.
On March 14, 2008, the District Court entered its judgment, which was
prepared by the Government, finding in favor of the United States against Elmore
in the amount of $614,452.96, plus additional interest and penalties accruing from
February 8, 2008. The final paragraph of the judgment reads:
It is further ORDERED AND ADJUDGED that the federal tax liens
recorded against defendant David L. Elmore’s property in Kent,
Washington, are hereby foreclosed. Pursuant to the Court’s Order
dated June 2, 2006, the United States shall submit a proposed order
for judicial sale of that property within 30 days of entry of judgment.
On March 24, 2008, Elmore filed a timely notice of appeal from the judgment.
The Government asserts that the March 14, 2008 order is not final and
2
appealable because the District Court has yet to have the property sold and to
distribute the proceeds. It is true that the underlying property has yet to be sold,
but this does not render the order unappealable. In 1882, the Supreme Court noted
that “[i]t has also been many times decided that a decree of sale in a foreclosure
suit, which settles all the rights of the parties and leaves nothing to be done but to
make the sale and pay out the proceeds, is a final decree for the purposes of an
appeal.” Grant v. Phoenix Mut. Life Ins. Co., 106 U.S. 429, 431 (1882). In
Budinich v. Becton Dickinson and Co., 486 U.S. 196, 199 (1988), the Supreme
Court reiterated that:
A “final decision” generally is one which ends the litigation on the
merits and leaves nothing for the court to do but execute the
judgment. A question remaining to be decided after an order ending
litigation on the merits does not prevent finality if its resolution will
not alter the order or moot or revise decisions embodied in the order.
(Internal quotation marks and citations omitted). We have followed this approach.
See United States ex rel. Shutt v. Community Home & Health Care Servs. Inc., 550
F.3d 764, 766-67 (9th Cir. 2008)(holding that “a judgment on the merits of an FCA
claim is a separate, final, and appealable decision even where the district court has
retained jurisdiction over the collateral issue of allocating the FCA award between
the United States and the relator”). Our sister circuits appear to be in accord. See
3
United States v. Sayer, 450 F.3d 82 (1st Cir. 2006); United States v. Stute Co., 402
F.3d 820 (8th Cir. 2005). See also 19 Moore’s Federal Practice § 202.02 (3d ed.).
Here, following the entry of the March 14, 2008 judgment, which was
prepared by the Government, there was “nothing to be done but to make the sale
and pay out the proceeds.” The Government has not identified any issue between
it and Elmore, unresolved by the District Court’s judgment, that could be effected
by the sale of the property. We determine that the March 14, 2008 order is
appealable.
We need not consider the merits of Elmore’s challenges to the district
court’s judgment because we determine that the Government’s confession of error
requires that we vacate the judgment and remand for further proceedings. The
Government represents that because the taxes were based not only on unreported
income, but also on income from rental property and from the sale of property,
which were not supported by third party information, the assessment was not
entitled to the “presumption of correctness that attaches to the assessment in . . . a
civil collection suit.” See United States v. Janis, 428 U.S. 433, 440-42 (1976). See
also Weimerskirch v. Commissioner, 596 F.2d 358, 361 (9th Cir. 1979); Palmer v.
IRS, 116 F.3d 1309, 1313 (9th Cir. 1997). Because the district court’s grant of
4
summary judgment was based in part on this presumption of correctness, we accept
the Government’s confession of error and vacate the District Court’s judgment.
We reject Elmore’s contention that the Government’s confession of error
supports the entry of summary judgment in his favor. As noted, the District
Court’s judgment in favor of the Government was based, in part, on the mistaken
conclusion that the assessment was entitled to the presumption of correctness. The
correction of this mistake should not bar the Government from attempting to show,
on the proper evidentiary basis, that Elmore is liable for unreported taxes.
The District Court’s judgment is VACATED and the matter is
REMANDED for further proceedings.
5