U.S.A. v. Williams

Citation:
13-2359 (7th Cir. August 10, 2015)
Tag(s):
Ruling:
Affirmed. Judgment foreclosing a Federal Tax Lien and specifying how proceeds should be applied is "final and appealable" because it ends litigation and leaves nothing but execution of the judgment to be accomplished.
Procedural context:
In HSBC Bank USA, N.A. v. Townsend, No. 13-10172 (7th Cir. July 16, 2015) the Court held that an Illinois judgment of foreclosure was not "final and appealable" under 28 U.S.C. §1291 or Fed. R. Civ. P. 54(b) because the amount of deficiency judgment depends on price realized at sale, while the validity of the sale itself is contestable, and finally Illinois provides multiple opportunities to redeem before a transfer takes effect. However, in this case Federal law applies because First, foreclosure in this case is authorized by IRC 7403(c) - 26 USC 7403(c) which, unlike the Illinois statute, does not provide for deficiency judgments. Instead the debt is deemed to be independently established by the Judgment Order and all proceeds applied to the tax debt No shortage or overage can result. Second, Federal law applicable here does not contain an equitable "catch-all" section like ILCS 5/15-1508(b)(iv) that permits Courts to stop the transfer of the foreclosed property if "justice was not done." Finally, unlike Illinois law, IRC 7403(c) does not create a right of redemption on the part of the Debtors.
Facts:
The lien at issues is IRS tax lien of about $1.3 Million filed with Clark County Indiana Recorder of Deeds. The State of Indiana and County also filed tax liens. The Indiana District Court ruled as to the amounts due, the order of payment, and that the Appellees' real property should be foreclosed and sold to pay those amounts. The Order was marked "final and appealable." The Debtors appealed from that Order.
Judge(s):
Cuday, Easterbrook, Rovner

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