The opinion of the court was delivered by: Michael A. Telesca United States District Judge
The United States brings this action pursuant to 26 U.S.C. § 7401 and § 7403 against Richard and Maureen Anderson and all other parties having an interest in certain real property which the government seeks to foreclose pursuant to a judgment lien issued in accordance with 28 U.S.C. § 3201 and a consent judgment issued against Richard Anderson in favor of the government in the amount of $111, 076.40, plus interest, for unpaid taxes and other debts. See United States v. Anderson, et al., 06-CV-6076T. Richard Anderson also consented to the initiation of this foreclosure proceeding against his interest in the real property at issue, located at 1112 Five Mile Line Road, Webster, New York in Monroe County ("the Property"). The Property is jointly owned by Richard Anderson and his wife, Maureen, as a tenants by the entirety and both parties currently reside at the Property.
The United States moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rule 56"). Defendant
Maureen Anderson opposes the government's motion and cross-moves for summary judgment seeking an order directing the government to specifically perform its obligations under the Stipulation entered into between the government and Richard Anderson and for permission to file an amended answer to the Complaint. For the reasons set forth below, both the government's and Maureen Anderson's motions are denied in all respects.
On February 25, 2008, Richard Anderson consented to a judgment against him in favor of the United States for unpaid taxes for the years 1994 and 1996-2001 and for unpaid school loans that he guaranteed for his children. The Stipulation and Order for Judgment ("the Stipulation") states that, "On or before October 1, 2008, plaintiff United States of America will bring a separate action to foreclose its federal tax liens on defendant Richard F. Anderson's interest in real property located at 1112 Five Mile Line Road, Webster, New York 14580..." See United States v. Anderson, et al., 06-CV-6076T (Docket # 21). The issue in this case is whether a forced sale of the entire property should be ordered, with the government remitting 50% of the proceeds (after costs) to Maureen Anderson, as compensation for her interest in the Property.
Defendants Richard and Maureen Anderson acquired title to the Property on September 23, 1968 as tenants by the entirety. (Docket # 1). The Anderson's have resided at the Property for 42 years and have filed separate income tax returns for the last twenty years. (Docket #34). Maureen Anderson has a Masters Degree in Social Work and worked full time as a social worker from 1984 through 2009, when she began to work part-time. Id. Maureen Anderson does not have any outstanding tax liability. Id. While Richard Anderson has paid some expenses on the property in the past, Maureen Anderson states that she has principally maintained their home and paid expenses on the Property, including property taxes, utilities and insurance, for the past several years. (Docket #32, 34). Maureen Anderson is currently 70 years old and is in relatively good health. (Docket # 34).
Defendant, Richard Anderson, claims that he entered into the Stipulation with the understanding that his wife's interest in the Property would be undisturbed, and that she would be able to purchase his share of their home from the government following foreclosure on his interest in the Property. (Docket #35). He contends that he would not have consented to the judgment if he knew that the government would seek to sell the entire property. Id. The government contends that they did not make any representations to Richard Anderson, or his attorney, Alfred J. Heilman, regarding its ability to seek a forced sale of the whole property to satisfy the judgment against Mr. Anderson, and that his ignorance of the law is of no consequence. (Docket #28). Maureen
Anderson was not a party to the first action in which the Stipulation was entered.
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). An issue is genuine if the relevant evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). A party seeking summary judgment bears the burden of informing the court of the basis for the motion and of identifying those portions of the record that the moving party believes demonstrate the absence of a genuine issue of material fact as to a dispositive issue. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must draw all factual inferences in favor of the party against whom summary judgment is sought and view the factual assertions in materials such as affidavits, exhibits, and depositions in the light most favorable to the non-moving party. See Id. at 322; Anderson, 477 U.S. at 255.
I. The Government's Motion
The Supreme Court has held that, pursuant to 26 U.S.C. § 7403 (§7403), a district court may order the forced sale of residential property owned as a tenancy by the entirety if the non-delinquent spouse is compensated for his or her interest in the property. United States v. Rodgers, 461 U.S. 677, 680 (1983). The power to order a forced sale is, however, subject to the district court's limited equitable discretion. Id. While the policy behind §7403 favors the "prompt and certain collection of delinquent taxes," the Court recognized that third parties may be unduly harmed by the application of §7403 and that "financial compensation ...