[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED ________________________ U.S. COURT OF APPEALS ELEVENTH CIRCUIT November 8, 2007 No. 07-10531 THOMAS K. KAHN ________________________ CLERK
D.C. Docket No. 04-00695-CV-1-WS-B
LISA CLEWIS MAY,
Plaintiff-Appellant,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee. __________________________
Appeal from the United States District Court for the Southern District of Alabama _________________________ (November 8, 2007)
Before MARCUS, PRYOR, Circuit Judges, and HANCOCK,* District Judge.
PER CURIAM:
In this action to quiet title on two related parcels of land in Magnolia Springs,
* Honorable James Hughes Hancock, United States District Judge for the Northern District of Alabama, sitting by designation. Alabama, Lisa Clewis May appeals from a final order of summary judgment entered
in favor of the United States of America. The district court concluded that a federal
tax lien attached to the residence of Lisa May and her husband James May, a
delinquent taxpayer, even though the property was titled solely in Lisa May’s name
because she held title as her husband’s nominee. After thorough review, we affirm
based upon the district court’s comprehensive and well-reasoned opinion of
September 6, 2006. May v. A Parcel of Land, 458 F. Supp. 2d 1324 (S.D. Ala. 2006).
We add these observations.
We review the district court’s entry of summary judgment de novo, “applying
the same legal standards as the district court did and viewing all of the facts in the
light most favorable to the non-moving party.” Cooper v. Southern Co., 390 F.3d 695,
723 (11th Cir. 2004). Summary judgment is appropriate where “there is no genuine
issue as to any material fact and [] the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c).
Under the Tax Code, “[i]f any person liable to pay any tax neglects or refuses
to pay the same after demand, the amount . . . shall be a lien 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. The language of that statute “is broad and reveals
on its face that Congress meant to reach every interest in property that a taxpayer
2 might have.” United States v. Nat’l Bank of Commerce, 472 U.S. 713, 719-20
(1985). “Stronger language could hardly have been selected to reveal a purpose to
assure the collection of taxes.” Id. (quoting Glass City Bank v. United States, 326
U.S. 265, 267 (1945)).
“Property” and “rights to property” for the purposes of 26 U.S.C. § 6321
include “not only the property and rights to property owned by the delinquent
taxpayer, but also property held by a third party if it is determined that the third party
is holding the property as a nominee . . . of the delinquent taxpayer.” Spotts v. United
States, 429 F.3d 248, 251 (6th Cir. 2005); Holman v. United States, -- F.3d --, 2007
WL 2823480, at *4 (10th Cir. Oct. 1, 2007) (quoting Spotts for that principle with
approval and holding that an actual transfer of title between the nominee and
delinquent taxpayer is not required for the imposition of a nominee lien); Macklin v.
United States, 300 F.3d 814, 818 n.2 (7th Cir. 2002) (“In the case of a nominee lien,
the IRS proceeds against an alter ego or nominee of a delinquent taxpayer for the
purposes of satisfying the taxpayer’s obligations.”) (internal quotation marks
omitted).
“A nominee is one who holds bare legal title to property for the benefit of
another.” Scoville v. United States, 250 F.3d 1198, 1202 (8th Cir. 2001) (citing
Black’s Law Dictionary (7th ed. 1999)); see also United States v. Gilbert, 244 F.3d
3 888, 902 n.37 (11th Cir. 2001) (“[N]ominee in its commonly accepted meaning
connotes the delegation of authority to the nominee in a representative or nominal
capacity only, and does not connote the transfer or assignment to the nominee of any
property in or ownership of the rights of the person nominating him.”) (internal
quotation marks omitted). The nominee theory has been utilized by the Eleventh
Circuit for the purposes of imposing federal tax liens; it focuses on the delinquent
taxpayer’s relationship to the property, because the “[p]roperty of the nominee . . . of
a taxpayer is subject to the collection of the taxpayer’s tax liability.” Shades Ridge
Holding Co. v. United States, 888 F.2d 725, 728 (11th Cir. 1989).
Since the federal tax lien statute “itself creates no property rights but merely
attaches consequences, federally defined, to rights created under state law,” we are
obliged to “look initially to state law to determine what rights the taxpayer has in the
property the Government seeks to reach, then to federal law to determine whether the
taxpayer’s state-delineated rights qualify as ‘property’ or ‘rights to property’ within
the compass of the federal tax lien legislation.” United States v. Craft, 535 U.S. 274,
278 (2002) (internal quotation marks and citations omitted). As the district court
pointed out, under Alabama law, an individual has rights to property titled in his
spouse’s name when that individual has the “real intent,” as “reflected in the
conditions and circumstances attending the transaction,” to be the beneficial owner
4 of the property. Cone v. Cone, 331 So.2d 656, 658 (Ala. 1976) (internal quotation
marks omitted); Taylor v. Peoples Fertilizer Co., 117 So.2d 180, 188 (Ala. 1959)
(holding individual who transferred property title to spouse had rights to that property
because his real intent in making the transfer was to prevent creditors from levying
on the property); see also McLain v. McLain, 409 So.2d 852, 854 (Ala. Civ. App.
1981) (finding an individual had rights to property after transferring title to spouse
because the individual continued to reside at the property and it appeared his real
intent in transferring title was to effect a marital reconciliation); Cox v. Cox, 395
So.2d 1027, 1029-30 (Ala. Civ. App. 1981) (finding an individual had rights to
property after transferring title to spouse because the real intent of the transfer was
to preclude a former spouse from obtaining a lien on the property).
However, since Alabama law fails to delineate a test for determining the “real
intent” of a title transfer between spouses, we are guided by the common-law factors
generally applied by federal courts to determine the existence of a nominee
relationship. See Battle v.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED ________________________ U.S. COURT OF APPEALS ELEVENTH CIRCUIT November 8, 2007 No. 07-10531 THOMAS K. KAHN ________________________ CLERK
D.C. Docket No. 04-00695-CV-1-WS-B
LISA CLEWIS MAY,
Plaintiff-Appellant,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee. __________________________
Appeal from the United States District Court for the Southern District of Alabama _________________________ (November 8, 2007)
Before MARCUS, PRYOR, Circuit Judges, and HANCOCK,* District Judge.
PER CURIAM:
In this action to quiet title on two related parcels of land in Magnolia Springs,
* Honorable James Hughes Hancock, United States District Judge for the Northern District of Alabama, sitting by designation. Alabama, Lisa Clewis May appeals from a final order of summary judgment entered
in favor of the United States of America. The district court concluded that a federal
tax lien attached to the residence of Lisa May and her husband James May, a
delinquent taxpayer, even though the property was titled solely in Lisa May’s name
because she held title as her husband’s nominee. After thorough review, we affirm
based upon the district court’s comprehensive and well-reasoned opinion of
September 6, 2006. May v. A Parcel of Land, 458 F. Supp. 2d 1324 (S.D. Ala. 2006).
We add these observations.
We review the district court’s entry of summary judgment de novo, “applying
the same legal standards as the district court did and viewing all of the facts in the
light most favorable to the non-moving party.” Cooper v. Southern Co., 390 F.3d 695,
723 (11th Cir. 2004). Summary judgment is appropriate where “there is no genuine
issue as to any material fact and [] the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c).
Under the Tax Code, “[i]f any person liable to pay any tax neglects or refuses
to pay the same after demand, the amount . . . shall be a lien 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. The language of that statute “is broad and reveals
on its face that Congress meant to reach every interest in property that a taxpayer
2 might have.” United States v. Nat’l Bank of Commerce, 472 U.S. 713, 719-20
(1985). “Stronger language could hardly have been selected to reveal a purpose to
assure the collection of taxes.” Id. (quoting Glass City Bank v. United States, 326
U.S. 265, 267 (1945)).
“Property” and “rights to property” for the purposes of 26 U.S.C. § 6321
include “not only the property and rights to property owned by the delinquent
taxpayer, but also property held by a third party if it is determined that the third party
is holding the property as a nominee . . . of the delinquent taxpayer.” Spotts v. United
States, 429 F.3d 248, 251 (6th Cir. 2005); Holman v. United States, -- F.3d --, 2007
WL 2823480, at *4 (10th Cir. Oct. 1, 2007) (quoting Spotts for that principle with
approval and holding that an actual transfer of title between the nominee and
delinquent taxpayer is not required for the imposition of a nominee lien); Macklin v.
United States, 300 F.3d 814, 818 n.2 (7th Cir. 2002) (“In the case of a nominee lien,
the IRS proceeds against an alter ego or nominee of a delinquent taxpayer for the
purposes of satisfying the taxpayer’s obligations.”) (internal quotation marks
omitted).
“A nominee is one who holds bare legal title to property for the benefit of
another.” Scoville v. United States, 250 F.3d 1198, 1202 (8th Cir. 2001) (citing
Black’s Law Dictionary (7th ed. 1999)); see also United States v. Gilbert, 244 F.3d
3 888, 902 n.37 (11th Cir. 2001) (“[N]ominee in its commonly accepted meaning
connotes the delegation of authority to the nominee in a representative or nominal
capacity only, and does not connote the transfer or assignment to the nominee of any
property in or ownership of the rights of the person nominating him.”) (internal
quotation marks omitted). The nominee theory has been utilized by the Eleventh
Circuit for the purposes of imposing federal tax liens; it focuses on the delinquent
taxpayer’s relationship to the property, because the “[p]roperty of the nominee . . . of
a taxpayer is subject to the collection of the taxpayer’s tax liability.” Shades Ridge
Holding Co. v. United States, 888 F.2d 725, 728 (11th Cir. 1989).
Since the federal tax lien statute “itself creates no property rights but merely
attaches consequences, federally defined, to rights created under state law,” we are
obliged to “look initially to state law to determine what rights the taxpayer has in the
property the Government seeks to reach, then to federal law to determine whether the
taxpayer’s state-delineated rights qualify as ‘property’ or ‘rights to property’ within
the compass of the federal tax lien legislation.” United States v. Craft, 535 U.S. 274,
278 (2002) (internal quotation marks and citations omitted). As the district court
pointed out, under Alabama law, an individual has rights to property titled in his
spouse’s name when that individual has the “real intent,” as “reflected in the
conditions and circumstances attending the transaction,” to be the beneficial owner
4 of the property. Cone v. Cone, 331 So.2d 656, 658 (Ala. 1976) (internal quotation
marks omitted); Taylor v. Peoples Fertilizer Co., 117 So.2d 180, 188 (Ala. 1959)
(holding individual who transferred property title to spouse had rights to that property
because his real intent in making the transfer was to prevent creditors from levying
on the property); see also McLain v. McLain, 409 So.2d 852, 854 (Ala. Civ. App.
1981) (finding an individual had rights to property after transferring title to spouse
because the individual continued to reside at the property and it appeared his real
intent in transferring title was to effect a marital reconciliation); Cox v. Cox, 395
So.2d 1027, 1029-30 (Ala. Civ. App. 1981) (finding an individual had rights to
property after transferring title to spouse because the real intent of the transfer was
to preclude a former spouse from obtaining a lien on the property).
However, since Alabama law fails to delineate a test for determining the “real
intent” of a title transfer between spouses, we are guided by the common-law factors
generally applied by federal courts to determine the existence of a nominee
relationship. See Battle v. United States, No. 9:06CV109, 2007 WL 1424553, at *5
(E.D. Tex. Feb. 7, 2007) (“As noted by the Government, however, Texas courts have
not set forth factors for determining whether an entity is a nominee of another. When
Texas law applies to an issue, but Texas law does not address that issue, federal
courts will look to federal law for guidance.”); Cody v. United States, 348 F. Supp.
5 2d 682, 694 (E.D.Va. 2004) (“[F]ederal courts sitting in states whose law of nominee
ownership is similarly undeveloped have typically looked to nominee ownership
criteria employed in other federal tax collection cases.”); Towe Antique Ford Found.
v. I.R.S. Dep’t of Treasury, United States, 791 F. Supp. 1450, 1454 (D. Mont. 1992),
aff’d on other grounds, 999 F.2d 1387 (9th Cir. 1993) (applying case law from other
jurisdictions because state law did not set forth what factors would be used to
determine when a nominee relationship arises); cf. Grippo v. Perazzo, 357 F.3d 1218,
1222 (11th Cir. 2004) (“Because Florida law does not answer the question that we
examine today, we look to federal law for guidance.”).
Viewing the evidence in the light most favorable to Lisa May, the district court
determined that she is the nominee of James May regarding the two parcels of land
in Magnolia Springs, Alabama. On this undisputed record, we agree. First, Lisa May
paid no consideration in exchange for the transfer of title to her name; in fact, James
May paid the entire $9,000 consideration for the title transfer. See, e.g., Scoville, 250
F.3d at 1202, Towe Antique Ford Found., 791 F. Supp. at 1454; Baum Hydraulics
Corp. v. United States, 280 F. Supp. 2d 910, 917 n.14 (D. Neb. 2003); Cody, 348 F.
Supp. 2d at 694-95; United States v. Towne, 406 F. Supp. 2d 928, 937 (N.D. Ill.
2005), aff’d sub. nom. United States v. Swan, 467 F.3d 655 (7th Cir. 2006). Second,
James May used his personal funds to purchase the property, have the title transferred
6 from his former wife to Lisa May, make all mortgage payments on the property, pay
all property taxes, pay all utility bills, and pay for all renovations and repairs to the
property. See e.g., Cody, 348 F. Supp. 2d at 694-95; Baum Hydraulics Corp., 280 F.
Supp. 2d at 917 n.14. Third, the evidence is undisputed that James May has enjoyed
full beneficial ownership and control over the property since 1985; not only has he
resided uninterrupted on the property for over two decades, he has also mortgaged the
property in his name and controlled and provided all of the finances necessary to
maintain and renovate the property. See, e.g., Shades Ridge, 888 F.2d at 729;
Scoville, 250 F.3d at 1202; Oxford Capital Corp. v. United States, 211 F.3d 280, 284
(5th Cir. 2000); Towe Antique Ford Found., 791 F. Supp. at 1454; Cody, 348 F.
Supp. 2d at 694-95. Fourth, James May and Lisa May, as a co-habitating married
couple raising two children, have a close relationship. See, e.g., Scoville, 250 F.3d
at 1202; Towe Antique Ford Found., 791 F. Supp. at 1454; Cody, 348 F. Supp. 2d at
694-95. Finally, there is no evidence that James May’s use of the property has been
restricted or interfered with in any way. See, e.g., Cody, 348 F. Supp. 2d at 694-95;
United States v. Schaeffer, 245 B.R. 407, 415 (D. Colo. 1999); Simpson v. United
States, Nos. 87-526-CIV-J-12, 87-837-CIV-J-12, 1989 WL 73212, at *6 (M.D. Fla.
Apr. 6, 1989). As a result, James May has rights to the property (and is a beneficial
owner) under Alabama law notwithstanding that the property is titled solely in the
7 name of Lisa May. On this undisputed record, the district court properly concluded
that, because Lisa May is James May’s nominee, a federal tax lien arising out of his
indebtedness may attach to the property. In short, we can find no error in the district
court’s grant of final summary judgment and, accordingly, affirm.
AFFIRMED.