Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Staton

United States District Court, D. Hawaii

December 20, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
RONALD B. STATON, BRENDA L. STATON NAVY FEDERAL CREDIT UNION, CAPSTEAD MORTGAGE CORPORATION, and STATE OF HAWAI`I, Defendants.

          ORDER

          Alan C. Kay, Sr. United States District Judge.

         For the reasons set forth below, the Court (1) determines the amount of principal, interest and penalties on Defendant Ronald B. Staton's tax liabilities owed to Plaintiff United States; (2) determines the amount of principal, interest and costs owing to the Lender Defendants under the Statons' mortgage; (3) approves the Commissioner's Request for additional commissioner fees and costs, as modified herein; (4) determines the amount of proceeds from the sale of the subject property to which each party is entitled; and (5) orders disbursement of the remaining sales proceeds.

         BACKGROUND

         For purposes of this Order, the Court will not recount this case's lengthy procedural history beginning in 2012. The Court only discusses those facts of specific relevance to the issues that this Order addresses.

         On April 10, 2018, the Court filed an Order Confirming Sale, Approving Commissioner's Report, and Determining Priority of Future Disbursements (the “April Order”). ECF No. 330. In the April Order, the Court (1) confirmed the sale of the subject property; (2) approved the Commissioner's Report requesting commissioner fees and costs related to the sale of the subject property; and (3) approved the proposed order of priority for future disbursements. April Order at 1. As to the distribution of sales proceeds, the Court reserved consideration of that issue pending a final determination of: (1) the reasonable amount of attorneys' fees and costs to which Defendants Navy Federal Credit Union and Capstead Mortgage Corporation (the “Lender Defendants”) are entitled; and (2) the amount of interest and penalties to which Plaintiff United States is entitled. Id. at 1-2. The Court stated that it would rule on the ultimate amount of sales proceeds to be distributed to each party and order distribution of the proceeds following a separate hearing. Id.

         On September 27, 2018, the Magistrate Judge filed its Findings and Recommendation (the “F&R”) regarding the amount of attorneys' fees and costs to which the Lender Defendants are entitled. ECF No. 400. The Magistrate Judge found that the Lender Defendants were entitled to total award of $62, 063.00 consisting of (1) $35, 000.00 in attorneys' fees and costs as agreed to by Plaintiff United States and the Lender Defendants in a Stipulation dated February 24, 2015; and (2) $27, 063.00 in attorneys' fees incurred in related bankruptcy proceedings. F&R at 12. The Magistrate Judge denied the Lender Defendants' request for costs incurred in the bankruptcy proceedings because the Lender Defendants did not adequately substantiate the costs that they incurred. Id. at 13. This Court reviewed the hours billed and rates charged and found that the attorneys' fees and costs the Magistrate Judge recommended were reasonable; on October 18, 2018, this Court filed an Order Adopting the Magistrate Judge's Findings and Recommendation. ECF No. 404.

         On May 16, 2018, Plaintiff United States filed a Memorandum correcting and clarifying the amount of interest and penalties that it seeks to recover in this matter. ECF No. 369. On the same day, the Lender Defendants filed a Statement of No Position with respect to Plaintiff United States's Memorandum. ECF No. 373.

         In its April Order, the Court approved the Commissioner's Report of Sale dated February 14, 2018, ECF No. 270, in which the Commissioner requested a total of $39, 048.15 consisting of: (1) $30, 065.00 in commissioner fees for past services; (2) $2, 000.00 in commissioner fees for anticipated future services; (3) a $1, 416.67 General Excise Tax; and (4) a $5, 566.48 reimbursement for costs associated with publicizing the foreclosure sale. April Order at 22. On May 11, 2018, the Commissioner received a check for $39, 048.15 in satisfaction of his Court-approved Report. ECF No. 395-1.

         On June 27, 2018, the Commissioner filed a Declaration requesting additional commissioner fees and costs relating to his efforts to remove Defendants Ronald B. Staton and Brenda L. Staton (the “Statons”) and their personal property from the subject property post-closing. ECF No. 395. In his Declaration, the Commissioner requested a total of $18, 658.36 consisting of: (1) $14, 207.50 in additional commissioner fees for past services; (2) $2, 000.00 in additional commissioner fees for anticipated future services; (3) a $669.46 General Excise Tax; and (4) a $1, 781.40 reimbursement for costs associated with the eviction. Decl. ¶ 20. On June 28, 2018, Plaintiff United States filed a Statement of No Opposition to the Commissioner's Request. ECF No. 396.

         On October 18, 2018, this Court entered a Minute Order, ECF No. 405, that: (1) directed the Lender Defendants to file any objections to the Commissioner's Declaration by Monday, October 29, 2018; and (2) directed the Statons to file any objections to Plaintiff United States's Memorandum and the Commissioner's Declaration by the same deadline. On October 19, 2018, the Lender Defendants filed a Statement of No Position regarding the Commissioner's Declaration. ECF No. 406. On October 29, the Statons filed a request, ECF No. 408, asking for additional time to object to Plaintiff United States's Memorandum and the Commissioner's Declaration. On October 30, 2018, the Court granted the Statons an extension until November 5, 2018. ECF No. 407. On November 5, 2018, the Statons filed a Response (the “Response”) that raises objections to both Plaintiff United States's Memorandum and the Commissioner's Declaration. ECF No. 409.

         In this Order, the Court addresses each of the following issues in turn: (1) the amount of principal, interest and penalties to which Plaintiff United States is entitled; (2) the amount of principal, interest and costs owing to the Lender Defendants under the Statons' mortgage; (3) the amount of additional commissioner fees and costs to which the Commissioner is entitled; and (4) the amount of proceeds from the sale of the subject property to which each party is entitled. Finally, the Court addresses disbursement of the proceeds of the sale in accordance with the order of priority set forth in its April Order. The Court, in the exercise of its discretion pursuant to Local Rule 7.2(d), finds that these matters are appropriate for disposition without a hearing.

         DISCUSSION

         1. Amount of Principal, Interest and Penalties to which Plaintiff United States Is Entitled

         On February 15, 2018, Plaintiff United States filed a Notice (the “Notice”), ECF No. 271, providing that the aggregate balance of Mr. Staton's tax liabilities for the years 2001 through 2007, as of March 30, 2018, was $412, 166.31. Notice at 2. In its April Order, the Court approved Mr. Staton's tax liabilities owed to Plaintiff United States in the amount of $355, 526.74.[1] April Order at 26. Given the discrepancy between the amount set forth in Plaintiff United States's Notice and the amount approved in the Court's April Order, the Court directed Plaintiff United States to file a Memorandum clarifying the amount of penalties and interest it is seeking to recover from Mr. Staton. Id. Plaintiff United States filed its Memorandum on May 16, 2018.

         Plaintiff United States explains that after the Court filed its April Order, the Internal Revenue Service (the “IRS”) determined that it made a calculation error when it added failure to pay penalties for the 2001, 2002, and 2003 Tax Years in the total amount of $8, 523.00. United States's Memorandum at 4. Because the IRS added the penalties in error, Plaintiff United States corrected the aggregate amount owed as of March 30, 2018, which it states is $403, 643.31. Id.

         Plaintiff United States explains that the discrepancy between the Court's judgment of $355, 526.74 and the requested amount of $403, 643.31 is due to (1) two payments made by Mr. Staton in the amounts of $992.00 and $186.00 for the 2001 Tax Year; (2) a collection fee of $128.00 for the 2001 Tax Year; and (3) interest in the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.