United States District Court, D. Minnesota
Richard G. Rose, U.S. DEPARTMENT OF JUSTICE, TAX DIVISION,
Post Office Box 7238, Ben Franklin Station, Washington, D.C.
20044, for plaintiff.
Kenneth W. Ness, Ervin R. Ness, and Mary L, Ness, 18789
350th Street Northeast, Middle River, MN 56737,
pro se defendants.
Michael P. Goodwin, MINNESOTA ATTORNEY GENERAL'S OFFICE,
445 Minnesota Street, Suite 1100, Saint Paul, MN 55101, for
the State of Minnesota.
ORDER OF DEFAULT JUDGMENT
R. TUNHEIM CHIEF JUDGE UNITED STATES DISTRICT COURT
United States brings this civil action to enforce tax liens
encumbering certain real property owned by the defendants.
(Compl. ¶¶ 1, 6-8, Apr. 19, 2017, Docket No. 1.)
Neither Defendant Capital One Bank USA, NA (“Capital
One”) nor Defendant Cavalry SPV 1 LLC
(“Cavalry”) filed an answer to the Complaint or
any other motion in this case. The clerk entered default
against both parties on June 12, 2017. (Clerk's Entry of
Default, June 12, 2017, Docket No. 22); see also
Fed. R. Civ. P. 55(a). The United States moves for default
judgment as to Capital One and Cavalry. (Mot. for Default J.,
Mar. 19, 2018, Docket No. 56.)
a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend . . . the
clerk must enter the party's default.” Fed.R.Civ.P.
55(a). Upon the clerk's entry of default, “the
factual allegations of a complaint (except those relating to
the amount of damages) are taken as true.” Murray
v. Lene, 595 F.3d 868, 871 (8th Cir. 2010).
“When an action presents more than one claim for relief
. . . or when multiple parties are involved, the court may
direct entry of a final judgment as to one or more, but fewer
than all, claims or parties only if the court expressly
determines that there is no just reason for delay.”
Fed.R.Civ.P. 54(b). “A default judgment must not differ
in kind from, or exceed in amount, what is demanded in the
pleadings.” Fed.R.Civ.P. 54(c). The Court will find
that there is no just reason for delay in entering final
judgment against Capital One and Cavalry.
the Court must decide whether the unchallenged facts
constitute a legitimate cause of action for which the Court
can enter default judgment. Murray, 595 F.3d at 871.
The United States may place a tax lien on property owned by
an individual who fails or refuses to pay taxes owed to the
United States. 26 U.S.C. §§ 6321, 6322. The
Internal Revenue Service has assessed federal taxes and
penalties against Kenneth Ness, and Ness has failed to pay
the outstanding amounts. (Compl. ¶¶ 13-17.) The
United States seeks to enforce federal tax liens encumbering
Ness's property in order to satisfy the outstanding
amounts. The Attorney General - or a delegate of the Attorney
General - may bring a civil action to enforce the tax liens.
26 U.S.C. § 7403(a). “All persons having liens
upon or claiming any interest in the property involved in
such action shall be made parties thereto.” 26 U.S.C.
§ 7403(b). Capital One and Cavalry may have an interest
in the property subject to the tax lien. (Compl. ¶¶
10-11.) However, Capital One and Cavalry have not asserted an
interest in the property. Accordingly, the Court will enter
judgment against Capital One and Cavalry because they have
not asserted any interest in the property.
the Court must balance the inequities of delaying default
judgment against the goal of avoiding piecemeal appeals.
Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1,
8 (1980); see also Fed. R. Civ. P. 54(b). Capital
One and Cavalry have been in default for nearly a year. The
Court and the other parties cannot wait an indefinite period
of time for Capital One and Cavalry to respond. Indeed, the
Court cannot even be certain that Capital One and Cavalry
have an interest in the property subject to the tax lien.
(See Compl. ¶¶ 10-11 (stating the
defendants may have an interest).) Further
delay would prejudice the United States by failing to allow
for quick resolution of its claim and by requiring it to
continue to litigate with two parties who have demonstrated
no interest in this case. Entry of default against Capital
One and Cavalry will not prejudice the remaining defendants.
Additionally, the Court finds that the risk of piecemeal
appeal is minimal because Capital One and Cavalry have failed
to litigate this case. Accordingly, the Court concludes that
there is no just reason to delay the entry of default
Based on the foregoing, and all the files, records, and
proceedings herein, IT IS HEREBY ORDERED
1. Plaintiff United States' Motion for Default Judgment
as to Capital One USA, NA, and Cavalry SPV 1 LLC [Docket No.
56] is GRANTED.
2. The Court DECLARES that Capital One and
Cavalry have failed to demonstrate an interest in the real
property at issue in this case. Accordingly, the Court
CONCLUDES that neither Capital One nor
Cavalry has a right, title, lien, claim, or interest in the
real property at issue in this case.
3. The Clerk shall enter judgment against Capital One.
4. The Clerk shall enter judgment against Cavalry.
JUDGMENT BE ...