RC Smithfield v. United States

• Court: Court of Appeals for the Tenth Circuit
• Decided: July 6, 2026
• Docket: 24-4057
• Status: Unpublished

Opinion

Appellate Case: 24-4057 Document: 54-1 Date Filed: 07/06/2026 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT July 6, 2026 _________________________________ Christopher M. Wolpert Clerk of Court RC SMITHFIELD, LLC,

Plaintiff - Appellant,

v. No. 24-4057 (D.C. No. 1:21-CV-00090-JNP) UNITED STATES OF AMERICA, (D. Utah)

Defendant - Appellee. _________________________________

ORDER AND JUDGMENT * _________________________________

Before TYMKOVICH, EID, and CARSON, Circuit Judges. _________________________________

Real property has both a legal owner and a beneficial owner. The legal owner

appears to be the obvious owner of the property for the simple reason that his name

appears on the deed. The beneficial owner’s name, however, may not appear on the

deed, yet he has the benefits of ownership—use, occupancy, and profits to name a

few. Often, the same person has both legal title and beneficial title. But that’s not

always the case. Sometimes, when the legal owner buys the property using funds

from the beneficial owner and the beneficial owner then receives the benefits of

ownership, the legal owner has created a resulting trust in favor of the beneficial

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 24-4057 Document: 54-1 Date Filed: 07/06/2026 Page: 2

owner. Thus, a legal owner may find that the IRS attached a federal tax lien to the

property when the beneficial owner owes federal tax.

Plaintiff holds legal title to certain property in Utah a now-defunct

construction company partially paid for. The government filed notices of tax liens on

the property, and Plaintiff sued to quiet title. The district court held that, despite

having legal title to the parcels at issue, Plaintiff holds the parcels, at least in part, for

the benefit of the defunct construction company and ruled for the government. Our

jurisdiction arises under 28 U.S.C. § 1291. We affirm.

I.

Sidney Crookston (“Sid”) owned the now-defunct Sid Crookston Construction

(“SCC”), which operated from 2009 to 2016. Because of SCC’s failure to fully pay

federal taxes, the IRS assessed SCC and sought to enforce the assessment by placing

notices of lien upon properties in which it believed SCC owned an interest.

The IRS claimed a lien upon two parcels of land located in Cache County,

Utah. Sid, in his individual capacity, signed a real estate purchase contract for the

two parcels in March 2016. But Sid did not pay the earnest-money himself. Instead,

the same day, Sid’s wife, Julie Crookston, signed a $5,000 check drawing on SCC’s

account to pay the earnest-money for the parcels. Ultimately, because of financial

difficulties, Sid needed a partner to complete the purchase of the lots—so he

contacted Scott Richins. According to Richins, Sid asked him to partner with Sid’s

son, Aldon Crookston (“Aldon”), to buy the parcels.

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In April 2016, the IRS notified SCC that it owed unpaid federal taxes,

penalties, and interest. Around that same time, Richins and Aldon formed a limited

liability company—Plaintiff, RC Smithfield, LLC. Nine days after the IRS sent the

notice to SCC, Sid signed an addendum to the purchase contract, changing the buyer

from himself to Plaintiff. Plaintiff bought the parcels in May 2016. After Plaintiff

bought the parcels, Aldon and Richins were each responsible for half of the

payments. SCC wrote a check for Aldon’s first payment. Richins made Aldon’s

second purchase payment. ACI Construction—SCC’s successor-in-interest—

reimbursed Richins for Aldon’s share.

Because Richins had trouble securing Aldon’s payments for half of the

property taxes, Richins contacted Sid. After contacting Sid, ACI Construction began

paying fifty percent of the property taxes for the parcels. Sid continued his

individual involvement with the parcels. Specifically: (1) Sid participated in a

meeting regarding the future of the parcels; (2) the combination to the lock on the

property was set to Sid’s preferred lock combination; (3) Sid visited the parcels with

Richins more than Aldon; (4) Richins contacted Sid frequently to ensure that Sid’s

company, ACI Construction, paid Aldon’s share of the property taxes; (5) Richins

emailed ACI Construction to ask that it pay its half of the property taxes on the

parcels; (6) Richins’ accountant remarked, “Sid should let you take care of the

paperwork” when the 2017 property taxes were late; (7) Sid’s company, ACI

Construction, dumped garbage from its construction sites on the parcels; (8) no one

presented evidence that anyone used the parcels for any other purpose than for

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investment and to dump garbage; and (9) Richins suggested that ACI Construction

“short pay” an invoice for a project Sid and Aldon worked on for one of Richins’

companies to effectively reimburse Richins for covering Aldon’s half of the property

tax payments.

SCC stopped operating in June 2016 because of unpaid taxes and an

outstanding judgment. That same month, Sid filed for personal bankruptcy.

The IRS assigned an agent to collect SCC’s unpaid employment,

unemployment, heavy highway usage, and corporate taxes. The IRS recorded

Notices of Federal Tax Liens against Julianne Crookston as a nominee of SCC,

against ACI Construction as a successor-in-interest of SCC, and against Plaintiff as a

nominee of SCC. In August 2018, the IRS recorded with Cache County the Notice of

Federal Tax Lien against Plaintiff as nominee of SCC to the extent of Aldon’s

interest in the parcels. Chris Crookston—Sid’s other son—wrote on an IRS form and

signed under penalty of perjury that the parcels were an asset of ACI Construction.

Plaintiff filed this civil action in the United States District Court for the

District of Utah seeking quiet title to real property by challenging the validity of the

federal tax liens. The district court held a bench trial. It found that Sid, Aldon, and

Chris Crookston were not credible witnesses. The district court described Sid, Chris,

and Aldon’s testimonies as reflecting selective memories and being inconsistent with

each other, prior testimony, evidence in the record, and the testimony of disinterested

parties. The district court concluded that the money SCC and ACI Construction paid

towards the parcels was not for wages, bonuses, or other compensation, gifts, or

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loans to Aldon. The district court analyzed SCC’s interest in the parcels under a

resulting trust theory, a constructive trust theory, and a nominee doctrine theory. The

district court found for the government on all three theories. After concluding that

SCC beneficially owned the parcels under Utah law, the district court applied federal

law and concluded that the federal tax liens could attach to the beneficial interests

SCC held in the parcels. The district court thus found for the government on

Plaintiff’s quiet-title claim, holding that the federal tax liens validly encumbered the

parcels

Plaintiff timely appealed.

II.

Our well-settled case law sets forth the legal framework for enforcing federal

tax liens. “[T]he IRS may satisfy a tax deficiency by imposing a lien on any property

or rights to property belonging to the taxpayer.” United States v. Tingey, 716 F.3d

1295, 1300 (10th Cir. 2013) (quoting Holman v. United States, 505 F.3d 1060, 1065

(10th Cir. 2007)). “The property may be ‘not only property and rights to property

owned by the 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.’” Id.

(quoting Holman, 505 F.3d at 1065). To determine whether a “third party holds the

property as a nominee,” we examine whether “the taxpayer has engaged in a legal

fiction by placing legal title to property in the hands of a third party while actually

retaining some or all of the benefits of true ownership.” Id. (quoting Holman, 505

F.3d at 1065). That inquiry proceeds in two steps.

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First, we look “to state law to determine what rights the taxpayer has in the

property the Government seeks to reach.” Id. (quoting Drye v. United States, 528

U.S. 49, 58 (1999)). Second, we “‘determine whether the taxpayer’s state-delineated

rights qualify as “property” or “rights to property”’ under federal tax law.” Id.

(quoting Drye, 528 U.S. at 58). Applying this framework, the district court

determined that, under Utah law, SCC had property rights in the parcels under three

theories: a general nominee theory, a resulting trust theory, and a constructive trust

theory. It then held that SCC’s rights in the parcels qualified under federal tax law

and thus the tax liens were valid, a holding Plaintiff does not challenge on appeal.

Plaintiff raises two challenges to the district court’s ruling. First it challenges

the district court’s ruling that SCC had any property rights in the parcels. In support

of this argument, Plaintiff argues that the district court improperly disregarded its

limited-liability-company status and erred in finding the SCC held an interest under

the resulting trust, constructive trust, and nominee theories. Second, Defendant

challenges the district court’s ruling that the language of the liens was irrelevant to

their validity. We address each issue in turn, reviewing the district court’s legal

conclusions de novo. Holman, 505 F.3d at 1065. Plaintiff does not challenge the

district court’s factual findings.

A.

We begin with the district court’s determination that SCC held an interest in

the parcels under a resulting trust theory. For resulting trusts, Utah law follows the

Restatement (Second) of Trusts. In re Hock’s Est., 655 P.2d 1111, 1115 (Utah 1982).

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Thus, “[w]here a transfer of properties is made to one person and the purchase price

is paid by another, a resulting trust arises in favor of the person by whom the

purchase price is paid . . . .” Id. (quoting Restatement (Second) of Trusts § 440

(1959)). The crucial fact for a resulting trust: “one party paid the purchase price for

property and another party was given legal title.” Id. This is so unless the party who

paid the purchase price manifested intent that no resulting trust should arise. See

Restatement (Second) of Trusts § 441. The proof required to impose a resulting trust

“must be strong, clear, and convincing, such as to leave no doubt of the existence of

the trust . . . .” In re Taylor, 133 F.3d 1336, 1341 (10th Cir. 1998) (quoting

Chambers v. Emery, 45 P. 192, 195 (Utah 1896)). And that intention regarding the

beneficial interest must have been at the time of the transfer. Id. (citing Restatement

(Second) of Trusts § 443 cmt. a).

Following the bench trial, the district court found that SCC (together with its

successor-in-interest, ACI Construction) paid half of the purchase price for the

parcels (Richins paid the other half). It also found that Plaintiff took legal title to the

parcels. It found no evidence that SCC manifested any intent that no resulting trust

should arise. In fact, it found that SCC demonstrated intent to maintain a beneficial

interest in the parcels by Sid being involved with the parcels after the purchase and

by ACI using the parcels as a dumping ground, thereby exercising dominion and

control of the parcels. Based on these findings, the court determined that a resulting

trust arose in SCC’s favor such that the government could impose liens on SCC’s

interest in the parcels.

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On appeal, Plaintiff argues that no resulting trust could arise because the

exchange was not a gratuitous transfer. According to Plaintiff, it received the funds

to purchase the parcels, and, in exchange, it issued Aldon a membership interest in

the limited liability company. But Plaintiff argued the opposite to the district court.

There, Plaintiff argued that Sid intended to gift SCC’s interest in the parcels to

Aldon—an argument the district court rejected. Moreover, Plaintiff’s argument

conflicts with the evidence, which supports the district court’s findings. SCC wrote

two checks for the parcels signed by Julie Crookston. Those checks covered the

deposit and the first payment. SCC’s successor then paid the second installment by

writing Richins a check to reimburse him for paying Aldon’s second installment.

SCC did not write these checks to Plaintiff or Aldon. And no evidence in the record

shows that Aldon or Plaintiff reimbursed SCC or ACI Construction for these

payments. The evidence simply does not support Plaintiff’s argument that an

exchange of value occurred between Plaintiff, the legal title holder, and SCC, the

beneficial title holder. The evidence before the district court was “strong, clear, and

convincing” and “leave[s] no doubt” as to the existence of a resulting trust. See id.

(quoting Chambers, 45 P. at 195).

Plaintiff also argues that the district court disregarded Plaintiff’s corporate

form and improperly “looked through” the limited liability company to its members.

Plaintiff contends that the government asks us to nullify Utah law on limited liability

companies. We disagree.

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In making this argument, Plaintiff misunderstands the concept of beneficial

title. Plaintiff’s argument assumes that the district court pierced the corporate veil to

reach the property of one of its members. But the district court did not pierce the

corporate veil to satisfy the debt of one of Plaintiff’s members. The IRS is not taking

Aldon’s interest (assuming he has any) in the LLC but is, instead, attaching a lien to

SCC’s beneficial interest in the parcels. Whether Plaintiff is a limited liability

company makes no difference to the analysis. Plaintiff undisputedly is the legal

owner of the parcels. SCC, however, is a beneficial owner of the parcels because

SCC paid for half of the parcels. Had Aldon, or any other individual for that matter,

been the legal owner of the parcels rather than a limited liability company, Sid’s,

Aldon’s, and SCC’s conduct would still create a resulting trust with SCC as the

beneficial owner of a portion of the parcels. 1

B.

Plaintiff labels the last section of its argument “The Language of the Filed

Liens Determines Their Validity.” The entire section consists of two paragraphs.

The first asserts our review is de novo. The second cites one case for the proposition

that the purpose of a federal quiet title action is to remove a specific, particularly

described, cloud upon a plaintiff’s property. Plaintiff further argues that the IRS

liens are the only filings that put third parties on notice of the encumbrance on its

1 Because we conclude that a resulting trust exists and that SCC holds a portion of the parcels as a beneficial owner, we need not address Plaintiff’s arguments regarding a constructive trust and a general nominee theory. 9 Appellate Case: 24-4057 Document: 54-1 Date Filed: 07/06/2026 Page: 10

parcels and prevents Plaintiff from transferring marketable title. Plaintiff contends

that the district court erred in holding “that the language of the actually filed Liens

was not relevant to their validity.”

We conclude Plaintiff inadequately briefed this argument. The portion of the

district court’s findings of fact and conclusions of law addressing the relevancy of the

language of the liens focused on the district court’s standard of review. Plaintiff’s

one-paragraph argument in its opening brief does not squarely address the district

court’s opinion. And its summary treatment of the issue in the opening brief fails to

convince us that the district court erred. Because Plaintiff did not adequately develop

this issue in its opening brief, it has effectively waived it. See United States v.

Cooper, 654 F.3d 1104, 1128 (10th Cir. 2011) (citing Adler v. Wal-Mart Stores, Inc.,

144 F.3d 664, 679 (10th Cir. 1998)).

AFFIRMED.

Entered for the Court

Joel M. Carson III Circuit Judge