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Sawyer v. United States

United States District Court, D. Massachusetts

January 6, 2015

LAURA SAWYER, individually, as Trustee of M.A.W. Revocable Trust, and as Trustee of 14 Avon Place Realty Trust, MELISSA JORDAN, JENNIFER SAWYER, and KATE SAWYER, Plaintiffs,
v.
UNITED STATES OF AMERICA, Defendant

Page 354

For Laura Sawyer, individually, as Trustee of M.A.W. Revocable Trust, and as Trustee of 14 Avon Place Realty Trust, Melissa Jordan, Jennifer Sawyer, Kate Sawyer, Plaintiffs: Edward DeFranceschi, LEAD ATTORNEY, Edward DeFranceschi Law Offices, Boston, MA; James H Everett, LEAD ATTORNEY, DeFrancheschi and Klemm, PC, Boston, MA.

For United States of America, Defendant: Michael R. Pahl, United States Department of Justice, Tax Division, Washington, DC.

Page 355

ORDER

WILLIAM G. YOUNG, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

In 1996, Albion Sawyer (" Albion" ) and his wife, Maria Sawyer (" Maria" ), granted a second mortgage on their property to secure a debt owed by Albion. Compl. ¶ 27, ECF No. 1. After Albion failed to pay taxes related to his business, the Internal Revenue Service (" IRS" ) put a lien on the couple's property. Id. ¶ ¶ 29-32. In order to sell the property, an escrow account was established in an amount equal to the tax lien. Id. ¶ ¶ 38-43. Pursuant to the language

Page 356

of the second mortgage, one-half of the proceeds from the sale of the property were used to pay off the mortgages on the property. See id. ¶ ¶ 46-48.

The Plaintiffs, the Trustee of the M.A.W. Revocable Trust and Maria's daughters, assert that Albion's half-interest in the property was exhausted through payment of the mortgages and, therefore, the money in escrow belongs to Maria's half-interest - the M.A.W. Revocable Trust. Id. ¶ ¶ 57-59. The United States asserts that the monies used to pay the first and second mortgages came from Albion's and Maria's respective half-interests and, therefore, the money in escrow is a residue of Albion's half-interest subject to the federal lien. U.S.' Mem. Reasons Supp. Mot. Summ. J. (" Def.'s Mem." ), ECF No. 27.

A. Procedural Posture

On April 1, 2008, Albion and Maria, individually and as trustees of the 14 Avon Place Realty Trust (" Avon Trust" ), entered into a stipulated judgment with the United States, where judgment was entered against Albion, pursuant to United States tax law. United States v. Sawyer, No. 06-cv-11686 (D. Mass. April 1, 2008) (Gertner, J.). In December 2012, the Avon Trust and the IRS entered in an agreement (the " Escrow Agreement" ) to place $291,678.71 of the proceeds of the sale of the Sawyers' property into escrow to remove a tax lien the IRS had placed on the property following the earlier judgment. Compl., Ex. E, Escrow Agreement, ECF No. 1-7. The funds were set to be released to the IRS on March 14, 2013, unless an action was commenced in District Court. Id. ¶ 8. Laura Sawyer - individually, as Trustee of the M.A.W. Revocable Trust, and as Trustee of the Avon Trust - along with Melissa Jordan, Jennifer Sawyer, and Kate Sawyer (collectively the " Plaintiffs" ), brought this suit March 13, 2013. Compl.

On May 7, 2014, the United States moved for summary judgment. U.S.' Mot. Summ. J., ECF No. 26; Def.'s Mem. On June 20, the Plaintiffs filed a cross motion for summary judgment. Pls.' Mot. Summ. J., ECF No. 34; Pls.' Mem. Supp. Mot. Summ. J. (" Pls.' Mem." ), ECF No. 35. The same day, the Plaintiffs filed their opposition to the motion of the United States. Pls.' Opp'n U.S.' Mot. Summ. J., ECF No. 36; Pls.' Mem. Supp. Opp'n Def.'s Mot. Summ. J. (" Pls.' Opp'n" ), ECF No. 37. The United States filed its opposition to the Plaintiffs' motion on July 10, 2014. U.S.' Mem. Law Opp'n Pls.' Mot. Summ. J. (" Def.'s Opp'n" ), ECF No. 40. The Plaintiffs also filed a supplement on September 23, 2014. Pls.' Supplement Mem. Supp. Summ. J., ECF No. 47.

B. Case Stated

In lieu of summary judgment, the parties have agreed to proceed with a " case stated" hearing, after which the Court will make findings of fact and rulings of law based on the record. Electr. Notice, ECF No. 45. Case stated hearings provide an efficacious procedural alternative to cross motions for summary judgment. See Continental Grain Co. v. Puerto Rico Mar. Shipping Auth.,972 F.2d 426, 429 n.7 (1st Cir. 1992). " In a case stated, the parties waive trial and present the case to the court on the undisputed facts in the pre-trial record." TLT Constr. Corp. v. RI, Inc.,484 F.3d 130, 135 n.6 (1st Cir. 2007). In contrast to summary judgment, where the Court must draw all reasonable inferences in favor of the nonmovant, in a ...


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