Anthony Mcilvain Ostheimer, Mary Bacon Ostheimer,plaintiffs-appellants, v. First Bank System, First Bank Western Montana, et al.,defendants-appellees, 942 F.2d 792 (9th Cir. 1991)

MEMORANDUM^** 

Anthony Mcilvain Ostheimer and Mary Bacon Ostheimer appeal pro se the district court's order dismissing their action against First Bank System, First Bank Western Montana, et al. (the "Bank"), for lack of diversity jurisdiction. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

The district court properly found that diversity of citizenship is lacking in this action. The Ostheimers and all of the individual named defendants are Montana residents. Therefore, the requirement of complete diversity of parties has not been satisfied. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978).

The Ostheimers, however, also alleged federal question jurisdiction in their complaint. The district court's order did not determine whether the Ostheimers could properly assert federal question jurisdiction. Rather than decide whether the district court had jurisdiction on one of the grounds asserted by the Ostheimers, we forego the jurisdictional issue and decide this case on the merits. See Norton v. Mathews, 427 U.S. 524, 532 (1976); Wolder v. United States, 807 F.2d 1506, 1507 (9th Cir. 1987) (although we ordinarily decide the jurisdictional issue first, we may forego the resolution of such issues if the appeal is wholly without merit and the jurisdictional issue is complex).

In response to a notice of levy, the Bank surrendered the entire balance of Anthony Ostheimer's Individual Retirement Account to the Internal Revenue Service ("IRS"). The Ostheimers brought this action against the Bank for honoring the IRS's levy.

The Bank and its agents were required to honor the IRS's levy in order to avoid liability imposed directly on them, including the principal amount due, costs, interest and penalties. See 26 U.S.C. § 6332(c); accord Commonwealth of Ky., United Pac. Ins. Co. v. Laurel County, 805 F.2d 628, 635 (6th Cir. 1986). Section 6332(d) provides that a person honoring a federal tax levy by surrendering the property subject to the levy is discharged from any obligation or liability to the delinquent taxpayer. See 26 U.S.C. § 6332(d); see also, Commonwealth of Ky., 805 F.2d at 635. Therefore, the Ostheimer's contention that the Bank is liable to them for honoring the levy is without merit. See 26 U.S.C. § 6332(d).¹ 

AFFIRMED.