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Sixth Circuit Will Not Order Jury Trial in Lien Enforcement Suit

SEP. 24, 2021

In re: Laura Dombrowski

DATED SEP. 24, 2021
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In re: Laura Dombrowski

In re: LAURA DOMBROWSKI,
Petitioner.

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

ORDER

Before: BATCHELDER, GIBBONS, and DONALD, Circuit Judges.

Plaintiff Laura Dombrowski petitions for a writ of mandamus asking that we direct the district court to reinstate her demand for a jury trial in this action to quiet title to property in which the Government countersues to reduce its tax lien to judgment.

We may consider a mandamus petition following the district court's denial of a jury trial. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 511 (1959); First Nat'l Bank of Waukesha v. Warren, 796 F.2d 999, 1006 (7th Cir. 1986) (noting that “sometimes . . . the use of mandamus [is permitted] when the rebuff of a demand for a jury would not be appealable”). “Mandamus is a drastic remedy that should be invoked only in extraordinary cases where there is a clear and indisputable right to the relief sought.” United States v. Young, 424 F.3d 499, 504 (6th Cir. 2005). In determining whether mandamus relief is appropriate, we balance five factors: (1) whether the petitioner “has no other adequate means, such as direct appeal, to attain the relief desired”; (2) whether “the petitioner will be damaged or prejudiced in a way not correctable on appeal”; (3) whether the district court's action “is clearly erroneous as a matter of law”; (4) whether the district court's action “is an oft-repeated error, or manifests a persistent disregard of the federal rules”; and (5) whether the district court's action “raises new and important problems, or issues of law of first impression.” John B. v. Goetz, 531 F.3d 448, 457 (6th Cir. 2008). While not all factors need to be met, they are balanced to determine whether the circumstances warrant mandamus relief. Id. “Where the constitutional right to a jury trial is involved, however, some courts, relying on Beacon Theatres, have held that neither of [the first] two preconditions needs to be met.” Golden v. Kelsey-Hayes Co., 73 F.3d 648, 658 (6th Cir. 1996).

“The seventh amendment guarantees the right to a trial by jury only as it existed at common law.” Martin v. Comm'r of Internal Revenue, 756 F.2d 38, 40 (6th Cir. 1985). But “[t]he right to a jury trial includes more than the common-law forms of action recognized in 1791; the phrase 'Suits at common law' refers to 'suits in which legal rights [are] to be ascertained and determined, in contradistinction to those where equitable rights alone [are] recognized, and equitable remedies [are] administered.'” Chauffeurs, Teamsters & Helpers, Loc. No. 391 v. Terry, 494 U.S. 558, 564 (1990) (second, third, and fourth alterations in the original) (quoting Parsons v. Bedford, 28 U.S. 433, 434 (1830)).

Dombrowski sues to quiet title under 28 U.S.C. § 2410(a)(1). Both federal and Michigan courts have long recognized that actions to quiet title were traditionally brought in the court of equity and seek equitable relief. See Beacon Theatres, 359 U.S. at 516 (Stewart, J., dissenting); Grether v. Wright, 75 F. 742, 749 (6th Cir. 1896)); United States v. Porath, 764 F. Supp. 2d 883, 890 (E.D. Mich. 2011) (collecting cases), aff'd, 490 F. App'x 789 (6th Cir. 2012); McFerren v. B & B Inv. Grp., 655 N.W.2d 779, 783 (Mich. Ct. App. 2002) (per curiam). Moreover, a plaintiff is not entitled to a jury trial in a suit against the government unless that right is “unequivocally expressed” by the legislature. Lehman v. Nakshian, 453 U.S. 156, 160 (1981). There is no such expression in 28 U.S.C. § 2410. Dombrowski argues that, because the Government consented to be sued “in any district court, or in any State court having jurisdiction,” it implicitly consented to being sued in states where there is a right to a jury in any civil suit. That implication falls short of an unequivocal expression of consent to trial by jury.

The Government seeks to undo an allegedly fraudulent transfer by enforcing its lien against Dombrowski's home under 26 U.S.C. § 7403. “It is beyond dispute that [actions to foreclose a lien] have their historical origins in courts of equity.” United States v. Porath, 764 F. Supp. 2d 883, 890 (E.D. Mich. 2011), aff'd, 490 F. App'x 789 (6th Cir. 2012) (collecting cases); see also Exact Software N. Am., Inc. v. DeMoisey, 718 F.3d 535, 546 (6th Cir. 2013) (citing Damsky v. Zavatt, 289 F.2d 46, 53 (2d Cir. 1961)) (recognizing that actions to foreclose tax liens are equitable in nature). And the Supreme Court has held that “[a] §7403 proceeding is by its nature a proceeding in equity.” United States v. Rodgers, 461 U.S. 677, 708 (1983).

But “actions to recover preferential or fraudulent transfers were often brought at law in late 18th-century England,” Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 43 (1989), and Dombrowski argues that this foreclosure action is merely the vehicle by which the Government seeks to reverse the allegedly fraudulent transfer so it can recover a $220,000 payment — a legal action for a sum certain, as was the case in Granfinanceria.

Granfinanceria involved a direct transfer of money. The money at issue in this case was used to purchase real property. Thus, the Government seeks to foreclose on its tax lien, which we recognize as an equitable action. DeMoisey, 718 F.3d at 546.

The Government also advances a constructive-trust claim. “The creation of a constructive trust and the enforcement of the rights of those for whom it is created lies exclusively in the field of equity.” Black v. Boyd, 248 F.2d 156, 162 (6th Cir. 1957). Dombrowski urges the court to follow the Second Circuit's conclusion in Lee Pharms. v. Mishler, 526 F.2d 1115, 1117 (2d Cir. 1975) (per curiam), that a claimant is entitled to a jury trial on an equitable claim when it “arise[s] out of the same factual circumstances and mirror[s] those asserted in” a separate legal claim. She argues that “[t]he legal issue at the center of the government's fraudulent conveyance theory overlaps entirely with its constructive trust theory, i.e., whether Matheson fraudulently conveyed $220,000 to Dombrowski to purchase the [home].” As noted above, however, the Government's fraudulent-conveyance theory sounds in equity, so Mishler does not help.

Dombrowski cannot show that the district court's decision was clearly erroneous and none of the remaining factors supports mandamus. She offers no basis on which we could conclude that the district court's action “is an oft-repeated error, or manifests a persistent disregard of the federal rules” or “raises new and important problems, or issues of law of first impression.” See Goetz, 531 F.3d at 457.

The petition for writ of mandamus is DENIED.

ENTERED BY ORDER OF THE COURT

Deborah S. Hunt, Clerk

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