Charlene Anne Washington; Eric A. Munson, Plaintiffs-appellants, v. Terry Koening, Individually and Other Currently Unknownpersons; United States of America; Ira A.c.peets, Individually, Defendants-appellees, 967 F.2d 596 (9th Cir. 1992)

MEMORANDUM^* 

OVERVIEW

Plaintiffs-appellants Charlene Washington and Eric Munson appeal the district court's orders granting partial summary judgment for the government and dismissing their action. We affirm.

FACTS AND PROCEEDINGS

In April of 1990, Internal Revenue Service ("IRS") Officers Ira Peets and Theresa Koenig ("officers") seized a Cadillac registered in Washington's name from the driveway of her residence. The Cadillac was seized to satisfy a tax lien. Washington submitted documents showing that Munson, her son, had a prior lien on the vehicle as collateral for a $6,000 loan. On May 14, 1990, Washington and Munson filed a complaint against the government and the officers in their individual capacities, alleging violations of their constitutional and statutory rights.

On September 21, 1990, before filing an answer, the government filed a motion for summary judgment. The district court granted the motion, rejecting the plaintiffs' claims that the seizure of the Cadillac violated either the fourth amendment or 26 U.S.C. §§ 6331(f) and 7433.¹  The court refused to consider the claims against the individual officers because it found they had not been properly served with process. The court also denied the plaintiffs' request for default judgments against the government and the officers. Thereafter, the government returned the Cadillac to Washington and the district court dismissed the action as moot. This timely appeal followed.

DISCUSSION

We review a grant of summary judgment de novo. Maisano v. Welcher, 940 F.2d 499, 500 (9th Cir. 1991), cert. denied sub nom Maisano v. I.R.S., 112 S. Ct. 1957 (1992). "Summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id. (citations omitted); Fed. R. Civ. P. 56(c).

Washington argues the seizure of the Cadillac from her driveway without a warrant violated her fourth amendment rights. We reject this argument. Without evidence of special features of the driveway (i.e. barriers, lack of visibility from the street) or activities performed upon it to support a reasonable expectation of privacy, a warrantless seizure of an automobile from a taxpayer's driveway pursuant to a tax levy does not violate the fourth amendment. Maisano, 940 F.2d at 502-03.

The plaintiffs contend Munson's prior lien on the Cadillac exceeded its value and made the levy "uneconomical" under 26 U.S.C. § 6331(f).²  They assert the word "property" in section 6331(f) means the taxpayer's net equity in the property. We disagree. Section 6331 authorizes the government to levy upon "all property and rights to property" belonging to a delinquent taxpayer. 26 U.S.C. § 6331(a). Holding that "property" extends only to the taxpayer's net equity would require the government to determine the rights of third-party claimants before making a levy. There is no such requirement. See United States v. National Bank of Commerce, 472 U.S. 713, 721, 729 (1985); United States v. Badger, 930 F.2d 754, 757 (9th Cir. 1991); United States v. Bell Credit Union, 860 F.2d 365, 368 (10th Cir. 1988). " [Section] 6331 is a provisional remedy, which does not determine the rights of third parties until after the levy is made, in postseizure administrative or judicial hearings." National Bank of Commerce, 472 U.S. at 731 (emphasis in original).

The plaintiffs also contend the alleged violation of section 6331(f) constituted a further violation of 26 U.S.C. § 7433.³  We reject this argument. There was no violation of section 6331(f).

Where damages are sought from a federal official in his individual capacity, personal service, and not service at the official's place of employment is required to obtain personal jurisdiction. Daley-Murphy v. Winston, 837 F.2d 348, 355 (9th Cir. 1987).

Here, it is undisputed that the process for service on the officers was delivered to Peter Chin, District Chief of Special Procedures with the IRS Collection Division. The plaintiffs contend they established a prima facie showing of jurisdiction over the officers by service upon Chief Chin, because the declarations of the plaintiffs' counsel show a policy of the IRS to accept service on behalf of its employees. We reject this argument. Chief Chin was neither appointed by the officers nor authorized by law to accept personal service for them in their individual capacities. See Fed. R. Civ. P. 4(d) (1).

The plaintiffs further argue the officers waived any defect in personal jurisdiction by their participation in the case, which the plaintiffs contend constituted a general appearance. We disagree. The officers only provided written testimony for the government in their official capacities. Participation in a case as a witness for another party does not constitute an appearance in the action. Schuckman v. Rubenstein, 164 F.2d 952, 956 (6th Cir. 1947), cert. denied, 333 U.S. 875 (1948).

The plaintiffs contend the court erred by refusing to enter default judgments against the officers and the government. Because the court lacked personal jurisdiction over the officers, the request for a default judgment against them was properly denied. See Pacific Atl. Trading Co. v. M/V Main Express, 758 F.2d 1325 (9th Cir. 1985).

As to the government, the plaintiffs failed to establish their claims against the government and thus they were not entitled to a judgment by default. Fed. R. Civ. P. 55(e) ("No judgment by default shall be entered against the United States or an officer or agency thereof unless the claimant establishes a claim or right to relief by evidence satisfactory to the court."); cf. Giampaoli v. Califano, 628 F.2d 1190 (9th Cir. 1980) (if a claimant presents a prima facie case, Rule 55(e) does not apply).

D. Dismissal of Claims for Injunctive Relief

The court dismissed the plaintiffs' claims for injunctive relief as moot because the Cadillac was returned to Washington. "We review de novo a determination of mootness." EEOC v. Hacienda Hotal, 881 F.2d 1504, 1519 (9th Cir. 1989). The central issue in all mootness questions is whether changes in the circumstances that prevailed at the beginning of the litigation have forestalled any occasion for meaningful relief. Goodwin v. United States, 935 F.2d 1061, 1064 (9th Cir. 1991).

The plaintiffs contend the return of the Cadillac did not moot their claims for injunctive relief.⁴  We disagree. The return of the vehicle rendered meaningless all requests relating to the Cadillac's return or sale. Munson's claim under 26 U.S.C. § 7426⁵  was rendered moot because relief is limited by statute to either an injunction or recovery of the property. See 26 U.S.C. § 7426(b).

The plaintiffs contend the return of the Cadillac did not moot their quiet title actions under 28 U.S.C. § 2410.⁶  While not technically moot, the district court correctly dismissed these claims. A taxpayer may use section 2410 to challenge the procedural validity of a tax lien, but not to collaterally attack the merits of a tax assessment. Hughes v. United States, 953 F.2d 531, 538 (9th Cir. 1992). Because Washington's procedural challenge was based upon fourth amendment and statutory claims that are without merit, her quiet title action must fail. See Elias v. Connett, 908 F.2d 521, 527-28 (9th Cir. 1990) (meritless allegation of section 6303(a) violation failed to support section 2410 claim). Munson's quiet title action is barred because his exclusive remedy is a claim for a wrongful levy under section 7426. Winebrenner v. United States, 924 F.2d 851, 855 (9th Cir. 1991).⁷ 

The district court denied the plaintiffs' request for an award of attorney fees and costs. The plaintiffs contend they were entitled to such an award because they were prevailing parties.⁸ 

To qualify as a prevailing party under section 7430, a party must substantially prevail with respect to either the amount in controversy or the most significant issue or set of issues presented. 26 U.S.C. § 7430(c) (4) (A) (ii).⁹  The most significant issues presented in this action pertained to the plaintiffs' fourth amendment and uneconomical levy claims. Because the plaintiffs failed to prevail on these claims, the district court did not err in finding they were not prevailing parties.¹⁰ 

The plaintiffs further contend the district court erred by not imposing sanctions against the government under Fed. R. Civ. P. 11. Because the plaintiffs failed to raise this issue at the district court, we decline to address it on appeal. Brown v. Civil Service Comm'n, 818 F.2d 706, 710 (9th Cir. 1987).¹¹ 

AFFIRMED.