Unpublished Disposition, 928 F.2d 408 (9th Cir. 1991)

MEMORANDUM^** 

This action involves real property located at 7327 Spruce Road in Anchorage, Alaska (the Spruce property).¹  On August 27, 1980, Jerome and Priscilla Przybyla transferred the Spruce property to the Good Samaritan Church by quitclaim deed. The deed was recorded in the Anchorage Recording District on September 21, 1980.

Seven years later, on August 18, 1987, the IRS issued a levy on the Spruce property, claiming that the Good Samaritan Church was a nominee²  of the Przybylas and owed the government $5,492.49 in taxes and penalties.

On May 31, 1989, the IRS sold the Spruce property to satisfy the tax liability.

The day before sale, on May 30, 1989, the trustee for the Good Samaritan Church filed a pro se complaint in the United States District Court for the District of Alaska. The complaint alleged a quiet title action under 28 U.S.C. § 2410 (1988)³  as well as a wrongful levy under 26 U.S.C. § 7426 (1988).⁴  After the Church procured legal counsel, an amended complaint was filed alleging that the Church was the owner of the Spruce property. All allegations of a wrongful levy under 26 U.S.C. § 7426 were removed. The thrust of the amended complaint was that the United States had failed to give proper notice of seizure and sale to the owner of the property as required by 26 U.S.C. § 6335(a) and (b) (1988); that the levy was therefore invalid; and that the government illegally had seized the Spruce property.

The government moved to dismiss the amended complaint for lack of jurisdiction under Federal Rule of Civil Procedure 12(b) (1) on the grounds that the applicable statute of limitations had expired. The government maintained that the Church's exclusive remedy as a third party alleging a wrongful levy was under 26 U.S.C. § 7426 and that therefore, the quiet title provisions of section 2410 were irrelevant. The government claimed the action was time-barred, because the applicable nine-month statute of limitations for wrongful levies had expired. See 26 U.S.C. § 6532(c).⁵  In the alternative, the government asserted that even if 28 U.S.C. § 2410 could be construed to provide a waiver of sovereign immunity, the nine-month statute of limitations nonetheless applied.

The district court granted the motion to dismiss based on the government's alternative theory. Although the court recognized that the United States has waived sovereign immunity for suits to quiet title under 28 U.S.C. § 2410, which have a six-year statute of limitations under 28 U.S.C. § 2401, the court concluded that the nine-month statute of limitations under 26 U.S.C. § 6532(c) applied. It did so on the grounds that "Congress has the power to provide for more specific limitations periods in specific situations. In this instance, Congress has done so." (citing United States v. A.S. Kreider Co., 313 U.S. 443 (1941)).

Consequently, the district court found the Church's quiet title action under section 2410 time-barred because it was not filed until May 30, 1989, more than nine months after the levy on August 20, 1987.⁶ 

STANDARD OF REVIEW

A ruling on the appropriate statute of limitations is a question of law reviewed de novo. In re Hawaii Federal Asbestos Cases, 871 F.2d 891, 893 (9th Cir. 1989). Under Federal Rule of Civil Procedure 12(b) (1), " [i]t is axiomatic that a complaint should not be dismissed unless 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' " McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232, 246 (1979) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). We may affirm the dismissal "on any basis supported by the record even if the district court did not rely on that basis." Shaw v. California Dep't of Alcoholic Beverage Control, 788 F.2d 600, 603 (9th Cir. 1986).

DISCUSSION

Recently, this court decided that section 7426 of the Internal Revenue Code provides the exclusive remedy if the IRS allegedly wrongfully levied upon real property to satisfy the tax liability of another. Winebrenner v. United States, No. 89-16193, slip op. at 642 (9th Cir. Jan. 23, 1991). Because we are bound by that decision, State of Montana v. Johnson, 738 F.2d 1074, 1077 (9th Cir. 1984), the Good Samaritan Church has no remedy under section 2410 and we need not consider its arguments to the contrary. The Church's remedy, if any, arises exclusively from section 7426. Therefore, we must determine if this action was properly dismissed as time-barred.

Winebrenner specifically left open the question "whether service upon the owner of real property is required to commence running of the statute against the owner or whether service upon the possessor is sufficient." Winebrenner, slip op. at 644.

26 U.S.C. § 6335(a), which mandates service upon the owner of property, has the following requirements:

Notice of seizure.--As soon as practicable after seizure of property, notice in writing shall be given ... to the owner of the property ... or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain ... in the case of real property, a description with reasonable certainty of the property seized.

(Emphasis added).

According to the Good Samaritan Church's opening brief on appeal, the IRS handed Jerome Przybyla a notice of seizure for the Spruce property at the IRS office in Anchorage on August 21, 1987, even though he was no longer the owner.⁷  This service would be ineffective under the statute because Jerome Przybyla is not the owner of the Spruce property. However, the government contends the Good Samaritan Church had admitted that a notice of seizure was personally delivered to the address of the Church at 7327 Spruce Road on August 20, 1987.⁸ 

We find the Church has admitted that a notice of seizure was left at the Church, despite its bald assertions in its reply brief to the contrary. See Reply Brief at 4.⁹  In the record before the district court, the Church stated: "As an offer of proof, Plaintiff herein states ... the notice of seizure was hand delivered at 7327 Spruce Rd., Anchorage, Alaska, the address of the church." Docket Entry No. 19, Plaintiff's Opposition to United States' Motion to Dismiss, No. A 89-209 Civil, at 11. The Church goes on to admit that " [t]he notice of sale, dated May 11, 1989, [occurred] approximately twenty-one (21) months after the notice of seizure [.]" Id. Thus, by the Church's own admission, the notice of seizure to the Church is dated sometime in August of 1987.

Because the complaint was filed on May 30, 1989, this action was filed outside the nine months statute of limitations and is time-barred. Therefore, we need not decide whether service upon the owner of real property is necessary to commence the running of the statute. Cf. Winebrenner, slip op. at 644 (declining to decide whether the statute commenced to run upon proper service to the owner where it was apparent that the action was filed outside the nine month limitation period).

Because the Church can prove no set of facts in support of its claim which would entitle it to relief, the district court's dismissal of the complaint is AFFIRMED.