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HEDLUND v. BRELLENTHIN

July 30, 1981

Frank M. and Marjorie S. HEDLUND, a marital community, Plaintiffs,
v.
Richard L. and Sheila A. BRELLENTHIN, a marital community and Richard L. and Jane Doe Brellenthin, a marital community, Eastside Glass and Paint Company, A Washington Corporation, District Director of Internal Revenue, Western Division, State of California, ex Rel. Rene Brellenthin, State of Arizona ex Rel. Winnie Rozelle, State of Washington, Department of Labor and Industries, Defendants



The opinion of the court was delivered by: HARDY

The plaintiffs, Frank M. Hedlund and Marjorie S. Hedlund, sold two parcels of real property to the defendants Richard L. Brellenthin and Sheila A. Brellenthin pursuant to real estate contracts which provided that upon receiving full payment the Hedlunds would convey title to the Brellenthins by delivering appropriate deeds. On February 18, 1980, after the Brellenthins had failed to make purchase price payments and to pay taxes on both parcels, the Hedlunds caused to be served upon them by certified mail a Notice of Intention to Declare a Forfeiture of and Cancel Real Estate Contracts. On March 24, 1980, after the Brellenthins had failed to cure the defaults, the Hedlunds declared a forfeiture of the contracts by serving upon the Brellenthins by certified mail a Notice of Declaration of Forfeiture and Cancellation of Contracts.

 During the time the contracts were in effect, a number of liens attached to the Brellenthins' interest in the properties:

 
1. A claim of lien by Eastside Glass and Paint Company, together with a lis pendens giving notice of an action by Eastside to foreclose the lien. Eastside did not appear in this action and its default has been entered.
 
2. Two federal tax liens.
 
3. A decree of dissolution of marriage dissolving the marriage of Richard L. and Sheila A. Brellenthin and obligating him to pay her $ 10,000. It does not appear that Sheila has been served with process in this action.
 
4. Judgments in favor of the State of California, ex rel. Winnie Rozelle, and the State of Arizona, ex rel. Rene Brellenthin, for child support arrearages and/or reimbursement for public assistance.

 The Hedlunds have filed a motion for summary judgment against all parties. The United States of America and the States of California and Arizona have filed cross-motions for summary judgment. A Notice of Stay has been filed in this court giving notice that Richard L. Brellenthin and Milo Brellenthin (apparently his present wife) have filed a petition under Chapter XIII of the Bankruptcy Act, as a result of which an automatic stay has come into effect. The Notice also recites,

 
"In addition, most actions and proceedings are stayed as against co-debtors."

 The United States and the two states are not co-debtors of Brellenthin. Accordingly, the Court will proceed to rule on the motions for summary judgment.

 For the reasons stated hereinafter, the motion of Hedlunds will be granted and the motions of the United States and the States of Arizona and California will be denied.

 The Claim of Federal Tax Lien Priority

 The Federal Tax Lien Act of 1966, 26 U.S.C. § 7425(b), provides that when the United States has or claims a tax lien against property "... a sale ... made pursuant to an instrument creating a lien on such property, pursuant to a confession of judgment on the obligation secured by such an instrument, or pursuant to a nonjudicial sale under a statutory lien on such property ..." shall be made subject to the tax lien if notice of the sale is not given in writing by registered ...


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