TRIAL NEEDED TO DETERMINE ENFORCEABILITY OF CONTRACT FOR SALE OF TAX- LIENED PROPERTY.

[3] In 1996, plaintiff Denise Cook entered into an agreement to purchase the subject real property from Defendant Layman for $115,000.00. See Doc.20 at p.1; Doc.36 at Exh. A. The sale was not completed because of federal tax liens filed against Zeke Layman's predecessor in interest. See Doc.20 at p.1. On or about May of 1998, Denise Cook filed this action for specific performance in state court. See Doc.19 at p.3. The United States intervened in the specific performance action, and removed it to federal court. See Doc.20 at p.2. The Government's complaint in intervention seeks foreclosure on its liens. See id.

[4] On January 11, 1999, Defendant brought a quiet title action against the Government. See Doc.20 at p.3; CIV-F-99- 5239, Doc.1. On December 21, 1999, in CIV-F-99-5239, Magistrate Judge Snyder ruled that the tax lien attached to the land at issue and granted summary judgment in favor of the Government. See id. at p.4; Doc.33 at p.2:1-2; CIV-F-99-5239, Docs.32-33. On January 23, 2001, Defendant's motion for reconsideration was denied. See Doc.20 at p.4.

[5] On February 26, 2001, Defendant filed a notice of appeal in the quiet title action. See Doc.20 at p.2. On March 21, 2001, the Ninth Circuit found the notice of appeal untimely. See id., Exh. A. The Ninth Circuit limited review of the quiet title appeal to the order denying the motion for reconsideration. See id., Ex. A. On May 15, 2001, this action was stayed for three months. See Doc.24. On December 28, 2001, the Ninth Circuit affirmed the ruling that the I.R.S. lien attached to the land at issue. See Doc.32 at p.2:2-3.

[6] On January 31, 2002 Plaintiff filed a "Motion For order Permitting the Sale of Real Property. " See Docs. 27,29. The I.R.S. opposed Plaintiff's motion. See Doc. 32. Plaintiff's motion was denied on March 11, 2002. See Doc 38. Plaintiff Cook and the I.R.S. have reached agreement and jointly file a new "Motion For Order Permitting the Sale of Real Property."

[7] Plaintiffs move for an order 1) lifting the stay and 2) permitting Plaintiff Cook to purchase the Property for $115,000.00.

[8] A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) addresses the court's subject matter jurisdiction, derived from the case or controversy clause of Article III of the U.S. Constitution. See Fed.R. Civ.P. 12(b)(1); U.S. Const. Art. III § 1 (vesting the judicial power in "such inferior Courts as the Congress may from time to time ordain and establish"). Federal courts are limited in jurisdiction; it is presumed that a case lies outside the jurisdiction of the federal courts unless Plaintiff proves otherwise. Kokkonen v. Guardian Life ins. Co. of America, 511 U.S. 375, 376, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221 (9th Cir. 1993); Thornhill Publishing Co. v. General Telephone & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979). "A motion to dismiss for lack of subject matter jurisdiction may either attack the allegations of the complaint or may be made as a 'speaking motion' attacking the existence of subject matter jurisdiction in fact." Id. at 733.

[9] In a facial attack on the complaint, "the court must consider the allegations of the complaint as true." Mortensen v. First Federal S&L Ass'n, 549 F.2d 884, 891 (3rd Cir. 1977); see also, NL Indus. Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The motion will be denied unless the allegations appear to be frivolous. See Black v. Payne, 591 F.2d 83, 86 n.1 (9th Cir.), cert. denied, 444 U.S. 867, 100 S.Ct. 139, 62 L.Ed.2d 90 (1979).

[10] A 12(b)(1) motion may "attack the existence of subject matter jurisdiction in fact, quite apart from any pleading," as a "speaking motion." Mortensen, 549 F.2d at 891; Thornhill Publishing, 594 F.2d at 733, FDIC v. Nicholas, 885 F.2d 633, 635-36 (9th Cir. 1983). Defendant may "rely on affidavits or any other evidence properly before the court." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.) (citations omitted), cert. denied, 493 U.S. 993, 110 S.Ct. 541, 107 L.Ed.2d 539 (1989). It then becomes necessary for the party opposing the motion to present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction." Id.

[11] Although deference is given to a plaintiff's factual allegations in a 12(b)(6) motion, plaintiff's allegations need not be taken as true when considering a Rule 12(b)(1) motion. See Thornhill Publishing, 594 F.2d at 733 ("[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims."); see also Trentacosta v. Frontier Pacific Aircraft Industries, 813 F.2d 1553, 1557-58 (9th Cir. 1987).

[12] Lack of subject matter jurisdiction can be raised at any time by any party. Am. Fire & Gas. Co. v. Finn, 341 U.S. 6, 17-8 (1951).

B. Standard For Summary Judgment

[13] Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Fed. R. Civ. P. 56(c); see also Maffei v. Northern Ins. Co. of New York, 12 F.3d 892, 899 (9th Cir. 1993). A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor viewing the record as a whole in light of the evidentiary burden the law places on that party. See Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986). The non-moving party cannot simply rest on its allegation without any significant probative evidence tending to support the complaint. See U.A. Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir. 1995). [T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "'no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial. Celotex Corp. v. Catrett, 477 U.S. 317, 322- 23 (1986).

[14] The more implausible the claim or defense asserted by the opposing party, the more persuasive its evidence must be to avoid summary judgment. See United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810, 815 (9th Cir. 1996). Nevertheless, [t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in its favor." Liberty Lobby, 477 U.S. at 255. A court's role on summary judgment, however, is not to weigh the evidence, i.e., issue resolution, but rather to find genuine factual issues. See Abdul-Jabbar v. General Motors Corp., 85 F.3d 407, 410 (9th Cir. 1996).

[15] Evidence submitted in support of or in opposition to a motion for summary judgment must be admissible under the standard articulated in 56(e). See Keenan v. Hall, 83 F.3d 1083, 1090 n.1 (9th Cir. 1996); Anheuser-Busch, Inc. v. Nat'l Beverage Distribs., 69 F.3d 337, 345 n.4 (9th Cir. 1995). Properly authenticated documents, including discovery documents, although such documents are not admissible in that form at trial, can be used in a motion for summary judgment if appropriately authenticated by affidavit or declaration. See United States v. One Parcel of Real Property, 904 F.2d 487, 491-492 (9th Cir. 1990). Supporting and opposing affidavits must be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. See Fed. R. Civ. P.56(c); Connor v. Sakai, 15 F.3d 1463, 1470 (9th Cir. 1993), rev'd on other grounds sub nom. Sandin v. Connor, 515 U.S. 472 (1995).

C. Discharge of Lien

[16] United States Code section 6325(b)(3) provides:

[17] Defendant requests judicial notice of the "Real Estate Purchase Contract and Receipt For Deposit" and the "Sales Contract," respectively Exhibits "A" and "B."

[18] Federal Rules of Evidence Rule 201(d) states that "[a] court shall take judicial notice if requested by a party and supplied with the necessary information." To qualify for judicial notice an adjudicative fact must be either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." See Rule 201(b).

[19] In this matter, the authenticity and accuracy of the two documents is not disputed and apparently have been verified by the parties. See materials attached as Exhibits on documents 44, 45, 47, & 50. Therefore, without any objection, judicial notice is taken of the existence and authenticity of the "Real Estate Purchase Contract and Receipt For Deposit" and the "Sales Contract."

B. DEFENDANT'S MOTION TO DISMISS

[20] Defendant moves to dismiss Plaintiff Denise Cook's complaint for specific performance of the land sale contract on the grounds that (1) Plaintiff Cook breached the sales contract by failing to perform; (2) the court lacks jurisdiction to hear Plaintiffs' claim; and (3) Plaintiff Cook breached the Supplemental Agreement.

[21] Defendant argues that Plaintiff Cook's alleged breach of contract disables Plaintiff's purchase of the property. Without identifying how Rules 12(b)(1) and 12(b)(6) are the proper mechanisms by which to challenge the rightful ownership of the property, Defendant argues that since Plaintiff Cook failed to obtain and deposit sums totaling $114,000.00 and to close escrow within forty- five days, Plaintiff's default bars enforcement of the contract. These matters are outside the purview of Plaintiffs' Rule 12 motion which is limited to the face of the complaint and can only be addressed through a motion for summary judgment or cross-complaint.

[22] Based on a 12(b)(1) facial attack on the complaint, "the court must consider the allegations of the complaint as true." Mortensen v. First Federal S&L Ass'n, 549 F.2d 884, 891 (3rd Cir. 1977); see also, NL Indus. Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The motion will be denied unless the allegations appear to be frivolous. See Black v. Payne, 591 F.2d 83, 86 n.1 (9th Cir.), cert. denied, 444 U.S. 867, 100 S.Ct. 139, 62 L.Ed.2d 90 (1979).

[23] Allegations in Plaintiffs' complaint are considered true for purposes of analysis. Defendant argues Plaintiff Cooks' alleged default bars any purchase right. Assuming the truth of Plaintiff Cook's allegations, the I.R.S. liens encumber Plaintiffs' real property and prevent Defendant from conveying clear title. See Doc. 45, p.2. Plaintiffs' motion to settle the property is not frivolous.

[24] Defendant offers Weisberg v. Ashcroft, a contract performance case, "[i]f times are fixed for deposit of the purchase price . . ., each act must be performed on or before the times agreed upon." (223 Cal. App. 2d 793, 795 (1963)). Defendant argues that Plaintiff Cook was obligated to pay sums totaling $114,000.00 and not having done so lost any interest in the property. A review of the Contract reveals the terms and conditions of Sections 1(c)& (e) do not specify the time for deposit of these monies. Ashcroft notes that if matters are agreed upon by the parties for ". . . deposit by the seller of sufficient instruments to convey title . . .," it requires counter-performance by Defendant as seller that has not been fulfilled. See Id. Plaintiffs argue that Defendant's motion raises factual disputes whether Plaintiff Cook was able to perform the contract. Whether Plaintiff Cook breached the contract and lost any interest in the property is a matter of controversy that survives the motion to dismiss. Defendant's motion to dismiss the complaint on the ground that Plaintiff Cook breached the sales contract by failing to perform is DENIED.

[25] Defendant's second argument is the court is without jurisdiction to hear Plaintiffs' claim. A 12(b)(1) motion attacks the existence of subject matter jurisdiction in fact, and here Defendant argues the Court is precluded from hearing this matter because terms of the contract mandate the use of mediation.

[26] The Sales Contract reads in relevant part that: "Buyers and Sellers agree to mediate any disputes or claim arising between them out of this contract or any resulting transaction before resorting to arbitration or court action." See Exhibit "A," paragraph 33.

[27] Though the contract specifies the use of mediation as a first resort, based on the plain meaning of the language the use of courts is not precluded. The Contract specifies the only penalty for using the courts is that ". . . in the discretion of the . . . judge, [the moving party] . . . shall not be entitled to recover attorney's fees even if they would otherwise be available . . ." This means that arbitration is not exclusive and the parties can resort to the courts, but may loose [sic] the right to recover attorney's fees for doing so at the judge's discretion. The Contract does not preclude the courts from asserting judicial jurisdiction over matters between parties to the Contract.

[28] The court has jurisdiction over this case as the I.R.S. claims and interest in the disputed real property by virtue of its tax liens. Motions for 12(b)(1) require the party opposing the motion to present evidence to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction. See St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.) (citations omitted), cert. denied, 493 U.S. 993, 110 S.Ct. 541, 107 L.Ed.2d 539 (1989). In this case, jurisdiction of the court is based upon the removal of the underlying civil action to federal court by the United States because of tax liens filed by the federal government against the real property that is the subject of the specific performance suit. A complaint to enforce a claim of the United States to an interest in the real property is within the exclusive jurisdiction of the United States court under 28 U.S.C. § 1331.

[29] Defendant also argues that because both Plaintiffs and Defendant have submitted affidavits to this court as evidence, Defendant's motion becomes a speaking motion and should be treated as a motion for summary judgment. See Jackson v. American Bar Ass'n, 538 F.2d 829 (1976). Assuming arguendo, that Defendant's motion to dismiss should be treated as a motion for summary judgment, Defendant's argument is without merit.

[30] In addition to not giving notice that the motion was to be considered as one for summary judgment, summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Fed. R. Civ. P. 56(c); see also Maffei v. Northern Ins. Co. of New York, 12 F.3d 892, 899 (9th Cir. 1993). A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor viewing the record as a whole in light of the evidentiary burden the law places on that party. See Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986).

[31] Here, disputed issued [sic] of material fact exist whether the contract was breached or whether Plaintiff Cook is entitled to complete the purchase of the property. Disputed facts show Plaintiff Cook has resided on the property since 1997, made substantial improvements to the property itself, and has continuously sought to complete the purchase of the property, such factual disputes cannot be decided on summary judgment. See Declaration, Doc. 45.

[32] Defendant's motion to dismiss on the ground the court is without jurisdiction to hear Plaintiff's claim is DENIED.

[33] Defendant's third argument is that Plaintiffs breached the Supplemental Agreement by failing to pay taxes on the property. On September 2, 1997 Plaintiff Cook signed the Supplemental Agreement whereby "Denise Cook agree[d] to take responsibility and liability for the property as if she [were] the landlord." See Paragraph 2 of Exhibit B. Defendant explains that property taxes totaling over $11,000.00 are outstanding and argues that it was Plaintiff Cook's responsibility to pay the property taxes per the Supplemental Agreement. See Doc. 41, p. 9-10. Not having done so, Defendant argues, Plaintiff Cook breached the sales contract and forfeited her interest in the property. See Id. Defendant argues that without such an interest, Plaintiff Cook is without the authority to affect [sic] the sale of the property. See Id.

[34] In a facial attack on the complaint, "the court must consider the allegations of the complaint as true." Mortensen v. First Federal S&L Ass'n, 549 F.2d 884, 891 (3rd Cir. 1977); see also, NL Indus. Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The motion will be denied unless the allegations appear to be frivolous. See Black v. Payne, 591 F.2d 83, 86 n.1 (9th Cir.), cert. denied, 444 U.S. 867, 100 S.Ct. 139, 62 L.Ed.2d 90 (1979).

[35] Defendant argues that without fulfilling its contractual obligations, Plaintiff Cook has no authority to enforce the sale of the property. See Doc. 47, p. 3. Assuming the truth of the allegations that Plaintiff Cook is the responsible party for affecting the sale of the property, whether Plaintiff Cook breached the contract by failing to pay property taxes is a contention unrelated to the underlying contract dispute. Furthermore, it is foreseeable that Plaintiff Cook will challenge the allegation that she has an obligation to pay the taxes on property Defendant was unable to sell and Plaintiff unable to purchase. Plaintiff Cook even declared that "Because I do not know if I will be obtaining/purchasing the real property . . ., I am unwilling to pay the property tax." See Doc. 45, p. 5. Defendant's motion to dismiss on the ground that Plaintiff Cook breached the supplemental agreement by failing to pay property taxes is DENIED.

[37] Plaintiff Cook's previous "Motion For Order Permitting the Sale Of Real Property" was denied by this Court on March 4th, 2002. The order explained the Government had not granted its approval necessary under section 6325(b)(3). See Doc. 38, p. 5:23-25. The Government opposed Plaintiff Cook's request on the grounds that the sale price proposed in the 1996 agreement no longer represented the fair market value of the property. See Doc. 38, p. 4:18- 21. Now, however, Plaintiff Cook contends the Government stipulates to Plaintiff's request and now joins her motion for an order permitting sale of the property.

[38] In its "Notice of Non-opposition to Plaintiff Cook's Motion For Order Permitting the Sale of Real Property," the Government consents to the sale of the property (the "Notice"). See Doc. 49, filed August 9, 2002. The Government has entered into an agreement with Plaintiff Cook to complete the sale, to have the liens released from the property, and to have the liens reattach to the proceeds from the sale. See Doc 43, p. 5 sect. (F). The property is to be sold to Plaintiff Cook at the agreed purchase price of $115,000.00 and the actual cost of sale will be determined when escrow is closed. See Doc 43, p. 5 number 6. Immediately following this Order the Government has agreed to issue a certificate of discharge confirming the sale.

[39] Defendant opposes Plaintiffs' motion on the ground that Plaintiff Cook has not complied with the terms and conditions of either the Sales Contract or the Further Agreement. As discussed above, the enforceability of the land sale contract cannot be determined without a trial even if, pursuant to 26 U.S.C. § 6325(b)(3), the Government has agreed to the sale of the property and to place the proceeds in an interest-bearing account from which the liens can be satisfied.

[41] Defendant's motion to dismiss Plaintiff Denise Cook's complaint for specific performance on a contract for a sale of land is DENIED. Defendant's request for reimbursement of costs and attorney's fees is DENIED.

[42] Plaintiffs' Motion For Relief from Stay and for Order Permitting the Sale of Real Property is DENIED.

[43] The Government will issue a certificate of discharge immediately following this Order.

[44] Within five (5) days following service of this decision, the Government shall lodge with the court a proposed order in conformity with this decision.

[45] SO ORDERED.

DATED: September 16, 2002.