6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE
8 UNITED STATES OF AMERICA, CASE NO. C18-712 RSM
9 Plaintiff, ORDER
10 v.
11 CAROL L. ENGEN, et al.,
12 Defendants.
13 14 I. INTRODUCTION 15 This matter is before the Court on Defendant’s Motion to Dismiss. Dkt. #27. Defendant’s 16 Motion seeks dismissal based on all seven defenses listed in Federal Rule of Civil Procedure 17 12(b). Plaintiff opposes the Motion, maintaining that its action is proper. Dkt. #32. Plaintiff has 18 responded (Dkt. #39) and has made several additional filings (Dkts. #37, #38, and #40) that the 19 Court addresses in this Order. For the reasons below, the Court denies Defendant’s Motion. 20 II. BACKGROUND 21 Plaintiff alleges that Defendant Carol L. Engen (“Ms. Engen” or “Defendant”) filed 22 insufficient tax returns “for the federal income tax years 2004 to 2008.” Dkt. #1 at ¶ 14. As a 23 result, “a duly authorized delegate of the Secretary of the Treasure made timely assessments 24 against [Ms. Engen] for unpaid federal income taxes . . ., civil penalties . . ., penalties, interest, 1 and other statutory additions.” Id. at ¶ 15. As of the filing of this action, those assessments 2 amounted to $250,880.66. Id. at ¶¶ 15, 19. Ms. Engen was provided notice of these assessments, 3 but failed to pay. Id. at ¶¶ 17–19. 4 On or around April 19, 2017, Ms. Engen acquired “a parcel of real property commonly 5 described as 16423 NE 15th Street, Bellevue, WA 98008 (“Subject Property”)” after her husband
6 passed away. Id. at ¶¶ 8–13. Ms. Engen executed and subsequently recorded an “Affidavit Re: 7 Will and Transfer on Death Deed.” Id. at ¶ 13. On November 9, 2017, the United States Internal 8 Revenue Service (“IRS”) recorded, against the Subject Property, “a Notice of Federal Tax Lien 9 (“NFTL”) against [Ms. Engen] with respect to unpaid federal income tax liabilities” for the 10 applicable periods. Id. at ¶ 24. 11 On May 15, 2018, Plaintiff initiated this action “to: (i) reduce to judgment the outstanding 12 federal tax assessments against Defendant Carol L. Engen; and (ii) foreclose federal tax liens on” 13 the Subject Property. Id. at ¶ 1. Ms. Engen shortly thereafter filed for bankruptcy, causing this 14 Court to stay the matter pending resolution of Ms. Engen’s bankruptcy proceedings. Dkts. #5
15 and #6. After Ms. Engen’s bankruptcy action was dismissed, the Court lifted the stay and Ms. 16 Engen’s Motion to Dismiss followed shortly thereafter. Dkts. #12, #16, and #27. 17 III. DISCUSSION 18 A. Motion to Dismiss 19 The Court has thoroughly reviewed the issues raised by Defendant in her Motion to 20 Dismiss but finds that they do not warrant lengthy discussion. The Court applies the law as it is 21 not as Defendant believes it should be. While imaginative, Defendant’s arguments lack a basis 22 in the law. 23 Defendant first claims that this Court lacks subject matter jurisdiction, warranting 24 dismissal under Federal Rule of Civil Procedure 12(b)(1). But Plaintiff’s Complaint plainly 1 invokes federal law and provides Defendant several bases upon which to verify that this action 2 falls within this Court’s subject matter jurisdiction. See Dkt. #1 at ¶ 2–3 (citing federal statutes 3 including 26 U.S.C. §§ 7401 and 7403). Unsurprisingly, a Westlaw search for cases citing 26 4 U.S.C. § 7401 yields 910 cases in federal courts and 12 cases in state courts. Likewise, a Westlaw 5 search for cases citing 26 U.S.C. § 7403 yields 2,015 cases in federal courts and 19 cases in state
6 courts. The Court is satisfied that it has subject matter jurisdiction. 7 Defendant then claims that this Court lacks personal jurisdiction over Defendant under 8 Rule 12(b)(2). But there is no question that Plaintiff’s Complaint contains sufficient allegations 9 establishing this Court’s personal jurisdiction (Dkt. #1 at ¶¶ 1, 4–5) and Defendant herself 10 indicates she is a “native and inhabitant of Washington” (Dkt. #27 at 7, 9). More specifically, 11 the Complaint makes clear that the Subject Property is within the District and alleges that 12 Defendant resides at the Subject Property. Dkt. #1 at ¶¶ 1, 4–5. Defendant does not establish 13 that this action should be dismissed for a lack of personal jurisdiction. 14 Defendant next claims that dismissal is warranted because this Court is not the proper
15 venue under Rule 12(b)(3). However, Plaintiff’s Complaint makes clear that venue is proper in 16 the “judicial district in which a substantial part of the events or omissions giving rise to the claim 17 occurred, or a substantial part of property that is the subject of the action is situated.” 28 U.S.C. 18 § 1391(b)(2) (cited at Dkt. #1 at ¶ 4). Likewise, venue is proper “in the district of the taxpayer’s 19 residence.” 28 U.S.C. § 1396 (cited at Dkt. #1 at ¶ 4); see also 28 U.S.C. § 1391(b)(1) (venue 20 proper in the “judicial district in which any defendant resides” where, as appears to be the case 21 here, “all defendants are residents of the State in which the district is located”). Plaintiff chose 22 an appropriate venue. 23 Defendant also claims that the process itself was deficient and that process was 24 improperly served upon her, warranting dismissal under Rules 12(b)(4) and (5). See Wasson v. 1 Riverside Cty., 237 F.R.D. 423, 424 (C.D. Cal. 2006) (comparing focus of Rule 12(b)(4) and 2 12(b)(5)). Defendant’s primary argument, repeated throughout her briefing, is that there is some 3 legal distinction to be drawn between “Carol Lynn Engen” and “Carol L. Engen.” Dkt. #27 at 4 4–5. Defendant argues that her name is Carol Lynn Engen and that the summons and complaint 5 refer to “Carol L. Engen.” But this argument is wholly without legal support and Plaintiff
6 establishes why the distinction is not legally significant.1 Beyond this “name theory,” Defendant 7 does not point to any error in the process issued or in the service of that process upon her. 8 Dismissal under either subsection is not appropriate. 9 Defendant then argues that the Complaint is deficient as it fails to adequately allege a 10 claim upon which relief can be granted, warranting dismissal under Rule 12(b)(6). This argument 11 is similarly baseless. Rule 8 requires only that a pleading “contain: (1) a short and plain statement 12 of the grounds for the court’s jurisdiction . . .; (2) a short and plain statement of the claim showing 13 that the pleader is entitled to relief; and (3) a demand for the relief sought.” FED. R. CIV. P. 8(a). 14 Even a cursory review of Plaintiff’s Complaint reveals that Rule 8 is satisfied.
15 Further, Plaintiff satisfies Rule 12(b)(6). Under that rule, a plaintiff must plead “factual 16 content that allows the court to draw the reasonable inference that the defendant is liable for the 17 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
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6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE
8 UNITED STATES OF AMERICA, CASE NO. C18-712 RSM
9 Plaintiff, ORDER
10 v.
11 CAROL L. ENGEN, et al.,
12 Defendants.
13 14 I. INTRODUCTION 15 This matter is before the Court on Defendant’s Motion to Dismiss. Dkt. #27. Defendant’s 16 Motion seeks dismissal based on all seven defenses listed in Federal Rule of Civil Procedure 17 12(b). Plaintiff opposes the Motion, maintaining that its action is proper. Dkt. #32. Plaintiff has 18 responded (Dkt. #39) and has made several additional filings (Dkts. #37, #38, and #40) that the 19 Court addresses in this Order. For the reasons below, the Court denies Defendant’s Motion. 20 II. BACKGROUND 21 Plaintiff alleges that Defendant Carol L. Engen (“Ms. Engen” or “Defendant”) filed 22 insufficient tax returns “for the federal income tax years 2004 to 2008.” Dkt. #1 at ¶ 14. As a 23 result, “a duly authorized delegate of the Secretary of the Treasure made timely assessments 24 against [Ms. Engen] for unpaid federal income taxes . . ., civil penalties . . ., penalties, interest, 1 and other statutory additions.” Id. at ¶ 15. As of the filing of this action, those assessments 2 amounted to $250,880.66. Id. at ¶¶ 15, 19. Ms. Engen was provided notice of these assessments, 3 but failed to pay. Id. at ¶¶ 17–19. 4 On or around April 19, 2017, Ms. Engen acquired “a parcel of real property commonly 5 described as 16423 NE 15th Street, Bellevue, WA 98008 (“Subject Property”)” after her husband
6 passed away. Id. at ¶¶ 8–13. Ms. Engen executed and subsequently recorded an “Affidavit Re: 7 Will and Transfer on Death Deed.” Id. at ¶ 13. On November 9, 2017, the United States Internal 8 Revenue Service (“IRS”) recorded, against the Subject Property, “a Notice of Federal Tax Lien 9 (“NFTL”) against [Ms. Engen] with respect to unpaid federal income tax liabilities” for the 10 applicable periods. Id. at ¶ 24. 11 On May 15, 2018, Plaintiff initiated this action “to: (i) reduce to judgment the outstanding 12 federal tax assessments against Defendant Carol L. Engen; and (ii) foreclose federal tax liens on” 13 the Subject Property. Id. at ¶ 1. Ms. Engen shortly thereafter filed for bankruptcy, causing this 14 Court to stay the matter pending resolution of Ms. Engen’s bankruptcy proceedings. Dkts. #5
15 and #6. After Ms. Engen’s bankruptcy action was dismissed, the Court lifted the stay and Ms. 16 Engen’s Motion to Dismiss followed shortly thereafter. Dkts. #12, #16, and #27. 17 III. DISCUSSION 18 A. Motion to Dismiss 19 The Court has thoroughly reviewed the issues raised by Defendant in her Motion to 20 Dismiss but finds that they do not warrant lengthy discussion. The Court applies the law as it is 21 not as Defendant believes it should be. While imaginative, Defendant’s arguments lack a basis 22 in the law. 23 Defendant first claims that this Court lacks subject matter jurisdiction, warranting 24 dismissal under Federal Rule of Civil Procedure 12(b)(1). But Plaintiff’s Complaint plainly 1 invokes federal law and provides Defendant several bases upon which to verify that this action 2 falls within this Court’s subject matter jurisdiction. See Dkt. #1 at ¶ 2–3 (citing federal statutes 3 including 26 U.S.C. §§ 7401 and 7403). Unsurprisingly, a Westlaw search for cases citing 26 4 U.S.C. § 7401 yields 910 cases in federal courts and 12 cases in state courts. Likewise, a Westlaw 5 search for cases citing 26 U.S.C. § 7403 yields 2,015 cases in federal courts and 19 cases in state
6 courts. The Court is satisfied that it has subject matter jurisdiction. 7 Defendant then claims that this Court lacks personal jurisdiction over Defendant under 8 Rule 12(b)(2). But there is no question that Plaintiff’s Complaint contains sufficient allegations 9 establishing this Court’s personal jurisdiction (Dkt. #1 at ¶¶ 1, 4–5) and Defendant herself 10 indicates she is a “native and inhabitant of Washington” (Dkt. #27 at 7, 9). More specifically, 11 the Complaint makes clear that the Subject Property is within the District and alleges that 12 Defendant resides at the Subject Property. Dkt. #1 at ¶¶ 1, 4–5. Defendant does not establish 13 that this action should be dismissed for a lack of personal jurisdiction. 14 Defendant next claims that dismissal is warranted because this Court is not the proper
15 venue under Rule 12(b)(3). However, Plaintiff’s Complaint makes clear that venue is proper in 16 the “judicial district in which a substantial part of the events or omissions giving rise to the claim 17 occurred, or a substantial part of property that is the subject of the action is situated.” 28 U.S.C. 18 § 1391(b)(2) (cited at Dkt. #1 at ¶ 4). Likewise, venue is proper “in the district of the taxpayer’s 19 residence.” 28 U.S.C. § 1396 (cited at Dkt. #1 at ¶ 4); see also 28 U.S.C. § 1391(b)(1) (venue 20 proper in the “judicial district in which any defendant resides” where, as appears to be the case 21 here, “all defendants are residents of the State in which the district is located”). Plaintiff chose 22 an appropriate venue. 23 Defendant also claims that the process itself was deficient and that process was 24 improperly served upon her, warranting dismissal under Rules 12(b)(4) and (5). See Wasson v. 1 Riverside Cty., 237 F.R.D. 423, 424 (C.D. Cal. 2006) (comparing focus of Rule 12(b)(4) and 2 12(b)(5)). Defendant’s primary argument, repeated throughout her briefing, is that there is some 3 legal distinction to be drawn between “Carol Lynn Engen” and “Carol L. Engen.” Dkt. #27 at 4 4–5. Defendant argues that her name is Carol Lynn Engen and that the summons and complaint 5 refer to “Carol L. Engen.” But this argument is wholly without legal support and Plaintiff
6 establishes why the distinction is not legally significant.1 Beyond this “name theory,” Defendant 7 does not point to any error in the process issued or in the service of that process upon her. 8 Dismissal under either subsection is not appropriate. 9 Defendant then argues that the Complaint is deficient as it fails to adequately allege a 10 claim upon which relief can be granted, warranting dismissal under Rule 12(b)(6). This argument 11 is similarly baseless. Rule 8 requires only that a pleading “contain: (1) a short and plain statement 12 of the grounds for the court’s jurisdiction . . .; (2) a short and plain statement of the claim showing 13 that the pleader is entitled to relief; and (3) a demand for the relief sought.” FED. R. CIV. P. 8(a). 14 Even a cursory review of Plaintiff’s Complaint reveals that Rule 8 is satisfied.
15 Further, Plaintiff satisfies Rule 12(b)(6). Under that rule, a plaintiff must plead “factual 16 content that allows the court to draw the reasonable inference that the defendant is liable for the 17 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. 18 Twombly, 550 U.S. 544, 555 (2007)). In considering the issue, a plaintiff further enjoys the 19 benefit of the court accepting all facts alleged in the complaint as true and drawing all inferences 20 in the light most favorable to the non-moving party. Baker v. Riverside County Office of Educ., 21 584 F.3d 821, 824 (9th Cir. 2009) (citations omitted). Observing these guidelines, the Court 22
23 1 The Court notes as well that Defendant’s hyper focus on use of the proper name is undercut by her own use of both “Carol Lynn Engen” and “Carol L. Engen” in identifying and signing her 24 filings. See e.g., Dkt. #27 at 1, 17. 1 again has no difficulty determining that dismissal pursuant to Rule 12(b)(6) is not warranted in 2 this case. 3 Lastly, Defendant does not establish that Plaintiff has failed to join a party under Rule 19 4 such that dismissal is appropriate under Rule 12(b)(7). Defendant maintains that the United 5 States, the IRS, and “Carol Lynn Engen” are necessary parties to this action. Dkt. #27 at 9–17.
6 But the Court is sufficiently satisfied that Defendant United States of America may maintain this 7 action and does not see any legal distinction between Plaintiff proceeding as the “United States 8 of America” or the “United States” or between Defendant being named as “Carol L. Engen” or 9 “Carol Lynn Engen.” Defendant’s arguments fail. 10 Overall, Defendant’s Motion to Dismiss reads like historical fiction or an ill-conceived 11 threequel to the National Treasure2 film franchise. Defendant builds her arguments on a winding 12 path of historical statutes, presumed intents, and perceived mistakes. The Court does not entirely 13 discount Defendant’s arguments, but many of them would be better suited for a later junction 14 with an adequate factual record. N. Star Int’l v. Arizona Corp. Comm’n, 720 F.2d 578, 581 (9th
15 Cir. 1983) (“The purpose of a motion to dismiss under rule 12(b)(6) is to test the legal sufficiency 16 of the complaint.”) (citing Peck v. Hoff, 660 F.2d 371, 374 (8th Cir. 1981)). “[A] case should be 17 tried on the proofs rather than the pleadings.” Rennie & Laughlin, Inc. v. Chrysler Corp., 242 18 F.2d 208, 213 (9th Cir. 1957) (citation omitted); Von Saher v. Norton Simon Museum of Art at 19 Pasadena, 592 F.3d 954, 969 (9th Cir. 2010) (basis for dismissal must be clear on the face of the 20 complaint). 21 Plaintiff similarly recognizes that Defendant’s arguments are “nonsensical tax defier 22 rhetoric that should be summarily rejected” Dkt. #32 at 2 (citing Crain v. Commissioner, 737 F. 23
24 2 See https://en.wikipedia.org/wiki/National_Treasure_(film_series). 1 2d 1417 (5th Cir. 1984) (“We perceive no need to refute these arguments with somber reasoning 2 and copious citation to precedent; to do so might suggest that these arguments have some 3 colorable merit.”)). However, unable to risk reliance on such generalities, Plaintiff methodically 4 addresses Defendant’s arguments and establishes that each is contrary to the law. See Dkt. #32. 5 Defendant does not attempt to respond to Plaintiff’s arguments on reply. See generally Dkt. #39.
6 For the reasons above and the numerous reasons set forth by Plaintiff and adopted by the Court, 7 Defendant’s Motion to Dismiss is denied. 8 B. Defendant’s Additional Filings 9 The Court briefly addresses Defendants additional filings. See Dkts. #37, #38; and #40. 10 These filings oscillate wildly. Defendant objects to the Court’s prior decision to treat one of her 11 filings as a request for recusal. Dkt. #37. At the same time, Defendant indicates that she has not 12 sought “the recusal of any officer of this court,” was merely seeking “proper administration of 13 justice and review [of] evidence,” and requests that the Court consider her matter fairly. Dkt. #38 14 at 1–2). Yet Defendant then again reverses course and alleges that “Judge Ricardo S. Martinez
15 abandoned his judicial capacity and assumed a personal capacity” and must “cleanse the Record 16 of his unauthorized filings” or “resign as judge” and obtain private counsel. Dkt. #40 at 1–2. 17 The Court is unable to discern Defendant’s request. To the extent Defendant informs the Court 18 of her desire for a fair hearing, she is afforded a fair hearing without needing to seek relief from 19 the Court. The Court therefore denies “Defendant’s Motion for a Fair and Impartial Hearing 20 Docket No. 34” (Dkt. #38) as moot and disregards Defendant’s additional filings (Dkts. #37 and 21 #40). 22 IV. CONCLUSION 23 Having reviewed Defendant’s Motion and filings, the briefing of the parties, the 24 supporting declarations and exhibits, and the remainder of the record, the Court ORDERS that 1 Defendant’s Motion to Dismiss (Dkt. #27) is DENIED and “Defendant’s Motion for a Fair and 2 Impartial Hearing Docket No. 34” is DENIED as moot. 3 Dated this 14th day of May, 2020. 4 5 A 6 RICARDO S. MARTINEZ 7 CHIEF UNITED STATES DISTRICT JUDGE
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