Appeal from the United States District Court for the District of Hawaii. D.C. CV-91-00068-HMF. Harold M. Fong, Chief Judge, Presiding
Before: Aldisert,*fn** Goodwin and Fletcher
We are faced with an appeal by the government from two discrete orders of the district court: one dated January 10, 1992, the other, January 15, 1992. We do not have jurisdiction over the January 10 order in which the court granted the defendants' motion to dismiss the government's claim based on Hawaii's Uniform Fraudulent Transfer Act. We have jurisdiction to reach the merits of the appeal from the January 15 order in which the district court granted summary judgment and decree of foreclosure in favor of Akamai Electrical Services, Inc., a mortgagor.
The district court had jurisdiction over all claims under 28 U.S.C. §§ 1340 and 1345. We have jurisdiction over the January 15 order pursuant to an express direction for the entry of judgment, Rule 54(b), Federal Rules of Civil Procedure. Appeal was timely filed under Rule 4, Federal Rules of Appellate Procedure.
A grant of summary judgment is reviewed de novo. Jones v. Union Pacific R.R., 968 F.2d 937, 940 (9th Cir. 1992). The appellate court must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Federal Deposit Ins. Corp. v. O'Melveny & Meyers, 969 F.2d 744, 747 (9th Cir. 1992).
Taxpayers Matio Vellalos and Gloria Vellalos, husband and wife, filed joint federal income tax returns for the tax years 1982 through 1985. During those years, Gloria Vellalos allegedly embezzled funds from her various employers.
After losing their home to foreclosure, the Vellaloses and their family moved into a house in Mililani, Hawaii purchased on February 26, 1986 by their son, Vernon Vellalos (hereinafter the "Mililani property"). The purchase was financed by a mortgage and note in the amount of $140,130, executed and delivered to Stanwell Mortgage by Vernon Vellalos. This mortgage was later purchased by Countrywide Funding Corp. As a result of Vernon Vellalos' failure to make timely payments on the mortgage, Countrywide declared the entire indebtedness secured by the mortgage immediately due and payable on March 1, 1991 in the amount of $145,389.
On June 26, 1986, the IRS made income tax assessments against the taxpayers for the years 1982 through 1985 in the total amount of $778,169 for the unreported income allegedly embezzled by Gloria Vellalos. On January 19, 1990, a notice of federal tax lien was filed against Vernon Vellalos as the agent or nominee of the taxpayers. This notice of tax lien attached only to the Mililani property and set forth the income tax assessments made against taxpayers for tax years 1982 through 1985.
One of Gloria's employers, Akamai Electrical, from whom she allegedly embezzled funds while working as their bookkeeper, demanded restitution upon learning of her activities. In response, on April 17, 1991, Vernon and Gloria Vellalos executed a note in favor of Akamai in the amount of $127,000 secured by a second mortgage on the Mililani property given by Vernon. Vernon and Gloria also defaulted on this note and Akamai Electrical declared the entire indebtedness immediately due and payable.
On February 1, 1991, the United States brought this suit to reduce the tax assessments to judgment and to foreclose its tax liens against the Mililani property. Subsequently, Countrywide and Akamai became parties to the government's action, both claiming a secured interest in the Mililani property. In its complaint, the government requested, among other things, that the court determine that the taxpayers' son, Vernon, was holding the Mililani property as the nominee or agent of taxpayers or, alternatively, that taxpayers' transfer of the property to their son was fraudulent.
On January 10, 1992, the district court granted the Vellaloses' motion to dismiss the government's claim against the Mililani property based on Hawaii's Uniform Fraudulent Transfer Act. The court, however, failed to address, or expressly dismiss, the government's nominee claim.*fn1
On January 15, 1992, the district court granted summary judgment and decree of foreclosure in favor of Countrywide and Akamai. Although the government admitted that Countrywide had a senior and superior interest in the Mililani property, it claimed an interest superior to that of Akamai. In its order, the court failed to specifically address the validity or priority of the government's lien against the Mililani property. The court held merely that the mortgage of Countrywide had priority over the Akamai mortgage and the liens, if any, claimed by the United States. E.R. at 150. Pursuant to the court's order, the Mililani property ...