United States District Court, E.D. Michigan, Northern Division
ORDER DIRECTING SUPPLEMENTAL BRIEFING ON SALE OF
L. LUDINGTON UNITED STATES DISTRICT JUDGE
March 1, 2017, default judgment was entered against Defendant
Wagster for tax liability in the amount of $920, 129.57. ECF
No. 36. It was further ordered that the tax lien attached to
the Property located at 3136 N U.S. Highway 23, Oscoda, MI.
Id. The Court entered an order on March 30, 2017,
directing sale of the Property and appointing Marissa L.
Binkowski as receiver. ECF No. 38. On August 25, 2017,
Plaintiff filed a Motion for Order Authorizing Sale of
Property. ECF No. 40.
motion indicates that the receiver researched comparable
properties in the area, prepared a market analysis, listed
the property for sale, and entered into a purchase agreement
with Wahbememe Management, Inc. pending approval by this
Court has exchanged email correspondence with Plaintiff's
counsel regarding the applicability of 28 U.S.C. §§
2001-2002 to sales of realty subject to a federal tax lien
conducted by a receiver pursuant to 26 U.S.C. §§
7402-7403. Section 2001 applies to judicial sales of realty
generally, and delineates two processes by which a Court may
direct the sale of realty with each containing different
procedural requirements: a public sale pursuant to §
2001(a) and a private sale pursuant to § 2001(b).
Section 2002 directs publication of notice for public sales.
By its terms, § 2001 applies to “[a]ny
realty or interest therein sold under any order or
decree of any court of the United States” and
to “[p]roperty in possession of a receiver or receivers
appointed by one or more district courts.” 28 U.S.C.
§ 2001(a) (emphasis added).
the case law interpreting 28 U.S.C. § 2001 and 26 U.S.C.
§ 7402-7403 in the tax foreclosure context is less than
conclusive. Some courts have suggested that it is permissible
for a receiver to sell the property by listing it on the open
market in lieu of conducting a public auction under §
2001(a) or complying with the appraisal and notice
requirements of a private sale under § 2001(b). See,
e.g. United States v. Barr, 2008 WL 4104507, at *4 (E.D.
Mich. Sept. 2, 2008), aff'd, 617 F.3d 370 (6th
Kerner, however, the court ordered a public auction
of real property pursuant to § 2001(a) to satisfy a tax
lien, without indicating that sale of the real property could
be accomplished by any means other than the procedure set
forth in § 2001. United States v. Kerner, 2003
WL 22905202, at *1 (E.D. Mich. Oct. 24, 2003). The court did
determine that a judicial sale of personalty under
§ 2004 could, subject to the court's discretion, be
sold without implicating the procedures outlined in §
2001, although the court noted that § 2001 “does
express a preferential course to be followed in connection
with a court authorized sale of property and that the
district court should not order otherwise except under
extraordinary circumstances.” Id.at 2 (citing
Tanzer v. Huffines, 412 F.2d 221, 222 (3d Cir.
1969). Notably, the court's analysis of the propriety of
the sale of real property did not include any discussion of
discretion to proceed without the procedures delineated in
other hand, it does not appear that a receiver was appointed
in Kerner pursuant to § 7403(d), as is the case
here. Numerous other courts have directed tax foreclosure
sales pursuant to public auction without appointing a
receiver and without indicating whether the appointment of a
receiver would obviate the need to comply with § 2001.
See, e.g., United States v. Kriegsmann,
2017 WL 3966580, at *1 (S.D. Cal. Sept. 1, 2017) (ordering
judicial sale at public auction pursuant to 28 U.S.C. 2001
and 26 U.S.C. § 7402-7403, but not appointing a receiver
under 7403(d)); United States v. Albertson, 2017 WL
3822020, at *1 (D. Minn. Aug. 31, 2017) (ordering judicial
sale at public auction pursuant to 26 U.S.C. § 7403(c)
and 28 U.S.C. 2001(a), but not appointing receiver).
there is precedent suggesting that a receiver appointed
pursuant to 7403(d) may independently determine fair market
value and make arrangements to sell the property, perhaps
without complying with 28 U.S.C. §§ 2001-2002.
See Sumpter v. United States, 314 F.Supp.2d 684, 687
(E.D. Mich. 2004). There is also precedent, albeit mostly
unpublished, suggesting that appointment of a receiver is an
alternative procedure to public auction under § 2001(a)
or private sale under § 2001(b). See, e.g.,
United States v. Poteet, 792 F.Supp.2d 1201, 1208
(D.N.M. 2011) (“The Court orders sale of the Property
either through a real estate agent acting as a
receiver or under 28 U.S.C. § 2001) (emphasis
added); United States v. Smith, 2008 WL 4960430, at
*12 (S.D. Ohio Nov. 19, 2008) (“To the extent that sale
of the property on the open market may more closely
approximate fair market value of the property than a
judicial sale by auction . . . the government may wish
to consider appointment of a receiver pursuant to
§ 7403(d)) (emphasis added); United
States v. Nipper, 2015 WL 4664921, at *1 (D.N.M. July 2,
2015) (“According to the agreed judgment, the United
States is entitled to foreclose its federal tax lien,
pursuant to 28 U.S.C. §§ 2001 et seq, or
through a receiver.) (emphasis added).
applicability of the notice publication provisions of 28
U.S.C. § 2002 to a sale by a receiver under 7403(d) is
equally unclear. The above cases do not directly address
whether the notice provisions of § 2002 apply to a
public sale conducted by an appointed receiver rather than at
auction. That is, assuming the appointment of a receiver to
sell property by public listing under 7403(d) obviates the
need to conduct a public auction under § 2001(a), the
question becomes must notice of the sale nonetheless be
published for four weeks leading up to such sale as set forth
in § 2002?
briefing will be ordered to provide the Court additional
legal authority for the proposed sale in this matter. The
supplemental brief shall address the applicability of the
public and private sale procedures delineated in 28 U.S.C.
§ 2001(a)-(b), as well as the notice publication
provisions of § 2002, to tax foreclosure sales conducted
by a receiver under § 7403(d), citing to controlling
precedent in this circuit where applicable. The supplemental
brief shall also address what procedures or considerations
circumscribe 1) the receiver's statutory authority to
determine fair market value and make arrangements to dispose
of the property by sale, and 2) the Court's obligation to
evaluate the receiver's proposed sale. Finally, the
supplemental brief shall address the legal effect on the
judicial sale procedure, if any, of the fact that the
property is not being sold in full satisfaction of
Defendant's tax liability, but that Plaintiff shall
remain free to collect any deficiency from Defendant.
it is ORDERED that Plaintiff shall submit a
supplemental brief by October ...