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U.S. v. GOLDSTEIN

United States District Court, S.D. New York


September 28, 2004.

UNITED STATES OF AMERICA, Plaintiff,
v.
ARTHUR GOLDSTEIN, et al., Defendants.

The opinion of the court was delivered by: LEWIS KAPLAN, District Judge

MEMORANDUM OPINION

Defendants Arthur and Joan Goldstein move, pursuant to Fed.R.Civ. P. 62(b), for a stay of the operation of the default judgment entered herein pending the determination of their motion to vacate the judgment. The matter is before me as the Part I judge. Facts

  This is an action by the United States to foreclose fourteen tax liens assessed by the Internal Revenue Service ("IRS") against Mr. Goldstein, to set aside as fraudulent Mr. Goldstein's 1992 conveyance to Mrs. Goldstein of his interest in a house previously owned by them as tenants by the entirety, and for other relief. The Goldsteins defaulted and judgment was taken against them by default. They have moved pursuant to Rule 60(b) to vacate that judgment.

  The Goldsteins have been defendants also in an action brought by Bruce and Hillary Klein in the Supreme Court of the State of New York, Westchester County, for specific performance of a contract to convey the house. On September 8, 2004, the state court entered judgment for the plaintiffs, granting specific performance, requiring the Goldsteins to close on September 30, 2004, and directing them to pay part of the net proceeds to the IRS in satisfaction of the tax liens. The Goldsteins' application in Supreme Court for a stay of the judgment was denied, as was their motion in the Appellate Division for a stay pending appeal.

  Mrs. Goldstein, who claims sole ownership of the house and disputes her liability for the tax liens, asserts that she would be harmed irreparably if part of the sales proceeds were paid to the IRS because she would be required to commence an action for a refund against the government in order to assert her claim that the liens may not properly be enforced against the proceeds of the sale.

  Discussion

  There is some confusion that must be eliminated at the outset. The present motion is to stay the operation of the default judgment in this action. But the allegedly imminent injury is not the enforcement of the default judgment in this action, but that of the state court judgment requiring the Goldsteins to close the sale of the house and to pay over part of the proceeds to the IRS in satisfaction of the tax liens.*fn1 Thus, even if the Court granted the stay in the terms contained in the Goldsteins' motion, the stay would have no effect on their obligation to close the sale and pay part of the proceeds to the IRS. Confronted with this fact, counsel for the Goldsteins acknowledged that the principal purpose of seeking a stay of enforcement of the default judgment is the hope that the state courts might look more favorably upon a renewed motion there to stay the state court judgment if this Court lends some credence to the motion to vacate the default judgment by granting a stay than they did previously.

  To whatever extent the Goldsteins really seek to have this Court stay the state court judgment, at least to the extent of the requirement that sale proceeds be paid to the government, their application is without merit.

 

"The Rooker-Feldman doctrine embodies the principle that `among federal courts, only the Supreme Court has subject matter jurisdiction to review state court judgments.' Thus, a federal district court lacks jurisdiction over any claim that `directly challenges, or is `inextricably intertwined' with, a prior state court decision.'"*fn2
Accordingly, this Court lacks subject matter jurisdiction to stay the operation of the state court judgment.*fn3 Moreover, even if the Court had the power to stay the state court judgment, it would decline to exercise it, as Mrs. Goldstein has failed to demonstrate the inadequacy of the remedy at law she concededly will have — an action against the government for a tax refund.*fn4

  To the extent that the Goldsteins seek a stay of enforcement of the default judgment itself, the motion also is denied. The likelihood of success in obtaining vacatur of the judgment is modest. Nor have they demonstrated a threat of irreparable injury.

  Conclusion

  For the foregoing reasons, the motion is denied in all respects. Insofar as the motion is properly construed as seeking to stay the operation of so much of the state court judgment as requires Mrs. Goldstein to pay part of the sale proceeds to the government, the denial is for want of subject matter jurisdiction.

  SO ORDERED.


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