No. 00-1831 

In the Supreme Court of the United States 

UNITED STATES OF AMERICA, PETITIONER 

v. 

SANDRA L. CRAFT 

ON WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS 
FOR THE SIXTH CIRCUIT 

JOINT APPENDIX 

JEFFREY A. MOYER 

Stenger & Stenger, P.C. 
4095 Embassy Drive, SE 
Grand Rapids, Michigan 49546 
(616) 940-1190 

Counsel of Record 
for Respondent 

THEODORE B. OLSON 

Solicitor General 
Department of Justice 
Washington, D.C. 20530-0001 
(202) 514-2217 

Counsel of Record 
for Petitioner 

PETITION FOR WRIT OF CERTIORARI FILED: JUNE 8, 2001 
CERTIORARI GRANTED: SEPT. 25, 2001 

TABLE OF CONTENTS 

Page 

Relevant docket entries in the United States District 

Court for the Western District of Michigan ........... 
1 

Relevant docket entries in the United States 

Court of Appeals for the Sixth Circuit, 
No. 96-1038 .................................................................... 

18 
Relevant docket entries in the United States 

Court of Appeals for the Sixth Circuit, 
No. 99-1734 .................................................................... 

22 
Letter to Ms. Chiles from Jeff Moyer (dated Jan. 
21, 1993) ......................................................................... 
28 

Plaintiff ’s Response Brief in, Opposition to United 

States’ Motion for Summary Judgment ................... 

31 

Joint Final Pretrial Order (dated Dec. 1, 1998) ............. 
54 

Complaint to Quiet Title .................................................... 
64 

Letter to Ms. Chiles from Jeff Moyer (dated Dec. 
28, 1992) [Exhibit A] .................................................... 
69 

Letter to Ms. Chiles from Jeff Moyer (dated Jan. 21, 
1993) [Exhibit B] .......................................................... 
72 

Letter to Mr. Jeff Moyer from TransAmerica Title 

Insurance Company (dated Feb. 12, 1993) 
[Exhibit C] ..................................................................... 

75 
Copy of Deed [Exhibit D] .................................................. 
77 

Copy of Quit Claim Deed [Exhibit E] .............................. 
78 

Notice of Federal Tax Lien [Exhibit F] .......................... 
79 

Relief Order (dated Jan. 30, 1992) [Exhibit G] .............. 
80 

Discharge of Debtor [Exhibit H] ...................................... 
82 

Notice to Creditors and other parties in 
interest [Exhibit I] ...................................................... 
84 

Motion to re-open bankruptcy estate (dated Aug. 14, 
1992) ................................................................................ 85 

Order re-opening case (dated Oct. 7, 1992) 
[Exhibit J] ..................................................................... 87 

(I) 

II 

Table of Contents—Continued: 

Page 

Summons and notice of pretrial conference in an 
adversary proceeding [Exhibit K] ............................ 
89 

Complaint to determine dischargeability, validity 
of Federal Tax Liens, and enforcement of post- 
discharge injunction .................................................... 
91 

Notice of Federal Tax Lien Under IRS Law (dated 

Mar. 30, 1989) [Exhibit A] .......................................... 

96 

Tax creditor hold in deed [Exhibit B] .............................. 
97 

Letter to Paul Patsun from Peter Titta (dated May 
26, 1992) [Exhibit C] .................................................... 
98 

Second Request to Paul Patsum from Peter Titta 
(dated June 11, 1992) [Exhibit D] ............................. 
100 

Letter from IRS to Mr. Paul Patsun (dated July 
15, 1992) [Exhibit E] .................................................... 
102 

Letter to Mr. Titta from Elizabeth Patino (dated 

June 15, 1992) [Exhibit F] .......................................... 

104 

Adversary proceeding cover sheet .................................. 
106 

Consent judgment and withdrawl of adversary 
proceeding [Exhibit L] ............................................... 107 

UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Docket No. 93-CV-30638 

SANDRA L. CRAFT, PLAINTIFFS 

v. 
UNITED STATES OF AMERICA, 

DEFENDANTS 

RELEVANT DOCKET ENTRIES 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

4/23/93 1 COMPLAINT TO QUIET 

TITLE (38 pgs) filed 
w/exhibits A-L [Entry date 
4/26/93] 

4/23/93 – 

FILING FEE PAID on 4/23/93 

in the amount of $120.00 
(Receipt #024272) [Entry date 
04/26/93] 

4/23/93 – 

SUMMONS issued as to deft 

IRS and returned to pltf ’s rep. 
[Entry date 4/26/93] 

(1) 

2 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

* * * * * 

4/28/93 4 
SUMMONS AND RETURN OF 

SERVICE executed person- 
ally upon defendant IRS via 
deft’s counsel, Terry Zabel, on 
4/27/93 

* * * * * 

7/15/93 7 ANSWER to complaint by 
defendant IRS [Entry date 
7/16/93] 

* * * * * 

9/10/93 12 

MOTION by plaintiff Sandra 

L. Craft for summary judg- 
ment; O/A requested w/brief 
in support and proof of service 
[Entry date 09/14/93] 

9/13/93 13 

MOTION by defendant IRS for 

summary judgment w/brief in 
support, attached exhibits and 
proof of service [Entry date 
09/14/93] 

3 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

10/5/93 14 RESPONSE IN OPPOSITION 

by defendant IRS to pltf ’s 
motion for summary judg- 
ment [12-1] w/proof of service 
[Entry date 10/06/93] 

10/12/93 15 

NOTICE of hearing re Cross- 
motions for summary judg- 
ment [12-1] & [13-1]; O/A 
scheduled for hearing on 
10/22/93 at 9:30 is adjourned 
w/out date; briefing ddls have 
been extended by two weeks 
(cc: all counsel) [Entry date 
10/13/93] 

10/22/93 16 

RESPONSE BRIEF IN OPPO- 
SITION by plaintiff Sandra L. 
Craft to the United States’ 
motion for partial summary 
judgment [13-1] w/exhibit 1 
[Entry date 10/25/93] 

10/29/93 17 

REPLY BRIEF by plaintiff 

Sandra L. Craft in support of 
pltf’s motion for summary 
judgment [12-1] [Entry date 
11/01/93] 

4 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

11/3/93 18 SUPPLEMENT by defendant 

IRS in support of the United 
States’ Motion for summary 
judgment [13-1] w/cert of svc 
and exhibit #8 [Entry date 
11/04/93] 

* * * * * 

7/18/94 23 SUPPLEMENTAL BRIEF IN 

OPPOSITION by pltf Craft re 
United States’ motion for par- 
tial summary judgment [13-1] 
[Entry date 07/19/94] 

* * * * * 

7/21/94 - PROCEEDING before Judge 

Gordon J. Quist on 7/21/94 
from 3:00 – 4:35 p.m. re Cross- 
motions for summary judg- 
ment [13-1], [12-1]; Motions 
taken under advisement; 
Court Reporter – Diane Cals- 
beek [Entry date 07/26/94] 

8/5/94 25 SUPPLEMENTAL BRIEF by 
dft in support of United 
States’ motion for summary 
judgment [13-1] w/cert of svc 
[Entry date 08/08/94] 

5 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

9/12/94 26 

OPINION (7 pgs) by Judge 

Gordon J. Quist (cc: all 
counsel) [Entry date 09/13/94] 

9/12/94 27 

ORDER (1 pg) in accordance 

w/the Opinion by Judge 
Gordon J. Quist granting dft’s 
motion for summary judg- 
ment [13-1]; denying pltf ’s 
motion for summary judg- 
ment [12-1]; terminating case 
(cc: counsel) [Entry date 
09/13/94] 

9/22/94 28 

MOTION by pltf for new trial 

under FRCP 59(a), or in the 
alternative to amend 
judgment under FRCP 59(e) 
as to fraudulent conveyance 
issue w/brief in support 
[Entry date 09/23/94] 

9/22/94 29 

MOTION by pltf to amend 

judgment under FRCP 52(b) 
& 59(e) as to attachment of 
federal tax lien issue w/brief 
in support and exhibit 1 
[Entry date 09/23/94] 

6 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

9/22/94 30 MOTION by pltf to stay 
execution pursuant to FRCP 

62(b) w/brief in support 
[Entry date 09/23/94] 

9/22/94 31 

MOTION by pltf to refer case 

to Bankruptcy Court for 
determination of Don Craft’s 
property interests pursuant 
to 28 USC Sec. 157(a) and 

W.D.L.R. 57 w/brief in support 
[Entry date 09/23/94] 

* * * * * 

10/7/94 33 RESPONSE IN OPPOSITION 

by dft IRS to pltf ’s motion to 
amend judgment under FRCP 

52(b) & 59(e) as to attachment 
of federal tax lien issue [29-1] 
w/cert of svc [Entry date 
10/13/94] 

10/7/94 34 RESPONSE IN OPPOSITION 

by dft IRS to pltf ’s motion for 
new trial under FRCP 59(a) 
[28-1], or in the alternative, to 
amend judgment under FRCP 
as to fraudulent conveyance 
issue [28-2] w/cert of svc 
[Entry date 10/13/94] 

7 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

10/7/94 35 RESPONSE IN OPPOSITION 

by dft IRS to pltf’s motion to 
refer case to Bankruptcy 
Court for determination of 
Don Craft’s property inter- 
ests pursuant to 28 USC Sec. 
157(a) and W.D.L.R. 57 [31-1] 
w/cert of svc [Entry date 
10/13/94] 

11/17/94 36 

OPINION (4 pgs) by Judge 

Gordon J. Quist (cc: all 
counsel) 

11/17/94 37 

ORDER (2 pgs) in accordance 

w/the Opinion by Judge 
Gordon J. Quist: Pltf ’s motion 
to refer case to Bankruptcy 
Court for determination of 
Don Craft’s property inter- 
ests pursuant to 28 USC Sec. 
157(a) W.D.L.R. 57 [31-1] is 
denied; Pltf ’s motion to stay 
execution pursuant to FRCP 

62(b) [30-1] is granted; Pltf’s 
motion to amend judgment 
under FRCP 52(b) & 59(e) as 
to attachment of federal tax 
lien issue [20-1] is grnated – 
pltf ’s complaint is reinstated 
for further proceedings to 
determine the value of pltf’s 

8 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

interest in the property as of 
8/28/89; and Pltf ’s motion for 
new trial under FRCP 59(a) 
[28-1] and/or to amend judg- 
ment under FRCP 59(e) as to 
fraudulent conveyance issue 
[28-2] is denied; Case re- 
opened (cc: all counsel) 

* * * * * 

2/27/95 40 RENEWED MOTION by dft 
for summary judgment w/ 
mem of law in support, dec- 
laration in support, exhibits & 
prf of svc [Entry date 
02/28/95] 

5/17/95 41 
MOTION by pltf for leave to 

file delayed response to mtn 
for summary judgment 
w/proposed pldg. [Entry date 
05/18/95] 

5/18/95 42 ORDER (1 pg) by Judge 

Gordon J. Quist granting 
pltf ’s motion for leave to file 
delayed response to mtn for 
summary judgment [41-1] (cc: 
all counsel) 

9 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

5/18/95 43 RESPONSE AND MEMORAN- 
DUM OF LAW IN OPPOSI- 
TION by pltf to the USA’s 
renewed motion for summary 
judgment [40-1] w/exhibits A- 
G & attachments [Edit date 
05/18/95] 

5/24/95 44 

OPPOSITION by USA to pltf’s 

mtn for leave to file response 
to USA’s renewed mtn for 
summary judgment w/cert of 
svc [Entry date 05/26/95] 

5/30/95 45 

REPLY BRIEF by dft in 

support of the United States’ 
Motion for summary judg- 
ment [40-1] w/cert of svc 
[Entry date 06/01/95] 

7/12/95 46 OPINION AND ORDER (3 
pgs) by Judge Gordon J. Quist 
denying the United States’ 
Renewed Motion for summary 
judgment [40-1] (cc: all 
counsel) [Entry date 07/14/95] 

10 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

* * * * * 

9/6/95 49 STIPULATION OF FACTS 

submitted by pltf & dft re fair 
mkt value of the Berwyck 
property over a period of 
years [Entry date 09/07/95] 

9/11/95 - PROCEEDING before Judge 

Gordon J. Quist; Pretrial conf 
held; Trial cancelled; Final 
briefs due in 14 days (9/25/95); 
Ct Rptr – D. Calsbeek [Entry 
date 09/12/95] 

9/11/95 50 ORDER (1 pg) by Judge 

Gordon J. Quist: In accor- 
dance w/the final pretrial conf 
held on 9/11/95, the trial set 
for 9/13/95 is cancelled; The 
ptys have 14 days to submit 
final briefs (9/25/95) (cc: all 
counsel on 9/12/95) [Entry 
date 09/12/95] 

9/21/95 51 SUPPLEMENTAL BRIEF by 
dft IRS re Order [50-1] 
w/exhibit 1 and cert of svc 
[Entry date 09/22/95] 

11 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

9/25/95 52 SUPPLEMENTAL BRIEF by 
pltf re scheduling order [50-1] 
[Entry date 09/26/95] 

10/26/95 53 

OPINION (3 pgs) by Judge 

Gordon J. Quist (cc: all 
counsel on 10/27) [Entry date 
10/27/95] 

10/26/95 54 

FINAL JUDGMENT (1 pg) by 

Judge Gordon Quist in 
accordance w/the Opinion 
awarding the United States 
$50,293.94 of the escrowed 
sales proceeds from the 
Berwyck property; The 
remainder of the escrowed 
fund will be released to the 
pltf; terminating case (cc: all 
counsel on 10/27/95) [Entry 
date 10/27/95] 

12/22/95 56 NOTICE OF APPEAL to 

Circuit Court by plaintiff 
Sandra L. Craft, [54-2] re: 
decision entered on 10/26/95 
and Order entered on 9/12/94 
[Entry date 01/03/96] 

12/22/95 57 

RECEIPT # 033540 in the 

amount of $105.00 submitted 
by Sandra L. Craft for appeal 
fee [Entry date 01/03/96] 

12 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

12/26/95 55 NOTICE OF APPEAL to 

Circuit Court by dft IRS re 
the Final Judgment entered 
on 10/26/95 [54-1] w/cert of svc 
[Entry date 12/27/95] 

* * * * * 

1/8/97 - 

MAILED record on appeal to 

CCA re: CCA # 96-1038/1039, 
appeal [55-1], appeal [56-1]; 
consisting of 3 vol. of plead- 
ings, 1 vol. of transcripts, 0 
vol. of depositions pursuant to 
a request from CCA (cc: all 
counsel) 

1/16/96 60 TRANSCRIPT of Motion 

Hearing held July 21, 1994 
before Judge Gordon J. Quist, 
transcribed by Dianne C. 
Calsbeek, Court Reporter 
(ghl) 

1/24/97 65 TRANSMISSION FORM show- 
ing record of appeal [55-1], 
appeal [56-1] filed by CCA on 
1/15/97 and assigned CCA 96- 
1038 [Entry date 01/29/97] 

13 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

4/3/98 66 INFORMATION copy of slip 
opinion from CCA reversing/ 
remanding judgment/order, 
[54-2] re: CCA # 96-1038/1039 
appeal [55-1], appeal [56-1] for 
further proceedings in accor- 
dance with this opinion [Edit 
date 04/10/98] 

5/29/98 67 

MANDATE from Sixth Circuit 

Court of Appeals re: CCA #: 
96-1038: 96-1039; reversing 
and remanding the Decision of 
the District Court [Appeal 
[55-1] reversing and remand- 
ing the Decision of the Dis- 
trict Court [Appeal [56-1] re: 
order/judgment # 54 as to deft 

IRS. The certified record will 
be sent under-separate cover. 

6/3/98 68 ORDER Scheduling Rule 16 

Status Conference by Judge 
Gordon J. Quist; a status conf 
is set for 8/5/98 at 4:00 p.m. 
before Judge Quist; a joint 
status report must be filed 
three (3) business days prior 
to the scheduled conf (7/13/98) 
(cc: all counsel 6 3/98) [Entry- 
date 06/08/98] 

14 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

6/22/98 - 

RECORD on Appeal returned 

from CCA re: CCA # 96-1039, 
appeal [55-1], appeal [56-1]; 
consisting of three (3) vol. of 
pleadings, one (1) vol. of tran- 
scripts, no (0) vol. of deposi- 
tions [Entry date 06/23/98] 

8/3/98 69 

JOINT STATUS REPORT filed 

8/5/98 - PROCEEDING before Judge 

Gordon J. Quist; Rule 16 
Status Conf held in chambers 
[Entry date 08/11/98] 

* * * * * 

10/8/98 73 

MOTION by pltf for summary 

judgment [Entry date 
10/09/98] 

10/13/98 74 

ORDER (1 pg) by Judge 

Gordon J. Quist denying pltf ’s 
motion for summary judg- 
ment [73-1] (cc: all counsel 
10/ 14/ 98) [Entry date 
10/14/98] 

* * * * * 

11/16/98 76 

TRIAL BRIEF submitted by 

pltf [Entry date 11/17/98] 

* * * * * 

15 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

11/24/98 79 

TRIAL BRIEF submitted by 

deft w/cert of svc [Entry date 
11/25/98] 

11/30/98 - PROCEEDING before Judge 

Gordon J. Quist; final Pretrial 
conf held [Entry date 
12/01/98] 

12/1/98 - PROCEEDING before Judge 

Gordon J. Quist; Bench Trial 
Day 1; concluded; parties shall 
have fourteen days to file post 
trial briefs and until 1/1/99 to 
file response briefs; Court 
Reporter: Diane Calsbeek 
[Entry date 12/02/98] 

12/1/98 80 FINAL PRE-TRIAL ORDER 

approved (7 pgs) by Judge 
Gordon J. Quist (cc: all 
counsel 12/2/98) [Entry date 
12/02/98] 

* * * * * 

12/18/98 82 

POST TRIAL BRIEF by pltf 

[Entry date 12/21/98] 

* * * * * 

12/29/98 85 

POST TRIAL BRIEF by deft 

[Entry date 01/06/99] 

16 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

1/7/99 86 POST TRIAL RESPONSE 

BRIEF by pltf [Entry date 
01/11/99] 

3/30/99 87 FINDINGS OF FACT and 

CONCLUSIONS OF LAW (25 
pgs) by Judge Gordon J. 
Quist: a judgment consistent 
w/these Findings of Fact and 
Conclusions of law will be 
entered (cc: all counsel 
3/30/99) [Entry date 04/01/99] 

3/30/99 88 

JUDGMENT: (1 pg) by Judge 

Gordon J. Quist: the US is 
awarded $6,693 of the ex- 
crowed [sic] sales proceeds 
from the Berwyck Property, 
plus interest on that amt from 
10/26/95; the remainder of the 
escrowed sales proceeds plus 
interes [sic] shall be delivered 
to the pltf; terminating case 
(cc: all counsel 3/30/99) [Entry 
date 04/01/99] 

4/2/99 89 MOTION by pltf to amend 
judgment under FRCP 52 & 
59 w/brief in support [Entry 
date 04/05/99] 

17 

_________________________________________________ 

DOCKET 
DATE NUMBER PROCEEDINGS 

4/26/99 90 MEMORANDUM ORDER (4 
pgs) by Judge Gordon J. Quist 
granting in part and denying 
in part pltfs motion to amend 
judgment under FRCP 52 & 
59 [89-1]; the judgment 
entered 3/30/99 is AMENDED 

to provide that $6,693 is 
awarded to the US w/out in- 
terest and that the remainder 
of the escrowed sales pro- 
ceeds shall be delivered to pltf 
w/out interest (cc: all counsel) 

6/11/99 91 

TRANSCRIPT of Bench Trial 

held 12/1/98 before Judge 
Gordon J. Quist; transcribed 
by Diane C. Calasbeek [Entry 
date 06/14/99] 

6/22/99 92 NOTICE OF CROSS-APPEAL 

to Circuit Court of Appeals by 
pltf Sandra L. Craft re deci- 
sion [90-1] entered on 4/26/99 
[Entry date 06/23/99] 

6/24/99 93 NOTICE OF APPEAL to 

Circuit Court of Appeals by 
deft IRS re decision [90-1] 
entered on 4/26/99 w/cert of 
svc [Entry date 06/25/99] 

* * * * * 

18 

UNITED STATES COURT OF APPEALS 
FOR THE SIXTH CIRCUIT 

Docket No. 96-1038 

SANDRA L. CRAFT, PLAINTIFF-APPELLANT/ 
CROSS-APPELLEE 

v. 
THE UNITED STATES OF AMERICA, ACTING THROUGH 

THE COMMISSIONER OF INTERNAL REVENUE, 
DEFENDANT-APPELLEE/CROSS-APPELLANT 

[Decided: Apr. 1, 1998] 

RELEVANT DOCKET ENTRIES 

_________________________________________________ 

DATE PROCEEDINGS 

1/10/96 Civil Case Docketed. Notice filed by coun- 
sel for Appellant Cross-Appellee Sandra L. 
Craft. Transcript needed: 

* * * * * 

8/21/96 BRIEF filed by Jeffrey Alan Moyer for 

Appellant Cross-Appellee Sandra L. Craft. 
Copies: 5. Certificate of Service date 
8/20/96. Number of Pages: 38. 

8/21/96 Request to require oral argument filed by 

Jeffrey Alan Moyer for Appellant Cross- 
Appellee Sandra L. Craft. 

19 

_________________________________________________ 

DATE PROCEEDINGS 

* * * * * 

10/7/96 BRIEF filed by Sara S. Holderness for 

Appellee Cross-Appellant CIR in 96-1038, 
and 96-1039 Copies: 05. Certificate of 
Service date 10/4/96. Number of Pages: 57. 

10/7/96 Request to require oral argument filed by 

Sara S. Holderness for Appellee Cross- 
Appellant CIR in 96-1038, and 96-1039 

* * * * * 

11/25/96 BRIEF filed by Jeffrey Alan Moyer for 

Appellant Cross-Appellee Sandra L. Craft 
in 96-1038, Jeffrey Alan Moyer for 
Appellant Cross-Appellee Sandra L. Craft 
in 96-1039. Copies: 6. Certificate of service 
date 11/19/96 Number of Pages: 20 + 6. 

11/25/96 SEE RULING ON 11/25/96. BRIEF filed by 

Jeffrey Alan Moyer for Appellant Cross- 
Appellee Sandra L. Craft in 96-1038, 
Jeffrey Alan Moyer for Appellant Cross- 
Appellee Sandra L. Craft in 96-1039. 
Copies: 7. Certificate of service date 
11/22/96. Number of Pages: 21 + 6. 

* * * * * 

12/23/96 BRIEF filed by Marion E.M. Erickson for 

Appellee Cross-Appellant CIR in 96-1038, 
in 96-1039. Copies: 5. Certificate of 
service date 12/18/96. Number of Pages: 
10+ 2. 

20 

_________________________________________________ 

DATE PROCEEDINGS 

12/27/96 BRIEFING LETTER SENT resetting cross 
appeal briefing schedule: appendix 1/9/97 

1/10/97 APPENDIX filed by Jeffrey Alan Moyer for 

Appellant Cross-Appellee Sandra L. Craft 
in 96-1038, in 96-1039. Copies: 5. Certi- 
ficate of service date 1/9/97 

1/13/97 APPENDIX TENDERED. Received from 

Jeffrey Alan Moyer for Appellant Cross- 
Appellee Sandra L. Craft in 96-1038, in 96- 
1039. Copies: 5. Certificate of service date 
1/9/97 Corrections to be made: index of 
appendix incorrect new index; due 1/14/97 
for Jeffrey Alan Moyer in 96-1038, in 
96-1039 

1/14/97 Appellant LETTER filed correcting 
appendix defect. Corrections made: new 
index received and placed in each copy of 
joint appendix. Letter from Jeffrey Alan 
Moyer for Appellant Cross-Appellee 
Sandra L. Craft in 96-1038, in 96-1039. 
Certificate of service date 1/14/97 

1/15/97 CERTIFIED RECORD filed. Volumes 
include 1 Tr; 3 Pl. 

3/20/97 ADDITIONAL CITATION filed by Sara S. 

Holderness for Appellee Cross-Appellant 
CIR. Certificate of service 3/18/97. 

21 

_________________________________________________ 

DATE PROCEEDINGS 

7/30/97 Oral argument date set for 9/16/97 in court 
room 636. Notice of argument sent to 
counsel. 

9/16/97 CAUSE ARGUED on 9/16/97 by Jeffrey 

Alan Moyer for Appellant Cross-Appellee 
Sandra L. Craft in 96-1038, David Carmack 
for Appellee Cross-Appellant CIR in 96- 
1038 before Judges Ryan, Suhrheinrich, 
Cole. 

1/30/98 ADDITIONAL CITATION filed by Jeffrey 

Alan Moyer for Appellant Cross-Appellee 
Sandra L. Craft. Certificate of service 
1/30/98. 

2/9/98 NOTIFICATION filed by Jeffrey Alan 

Moyer – change of address. Dated: 2/6/98 
Automation notified. 

4/1/98 OPINION filed: the judgment of the district 
court granting summary judgment to the 
defendant USA is REVERSED and the case 
in REMANDED for further proceedings. 
Decision for publication pursuant to local 
rule 24. James L. Ryan, concurring, 
Richard F. Suhrheinrich, Circuit Judge, R. 
G. Cole, Authoring Judge. 

4/1/98 JUDGMENT: REVERSED and remanded. 

5/27/98 MANDATE ISSUED with no cost taxed. 

* * * * * 

22 

UNITED STATES COURT OF APPEALS 
FOR THE SIXTH CIRCUIT 

Docket No. 99-1734 

SANDRA L. CRAFT, PLAINTIFF-APPELLEE/ 
CROSS-APPELLANT 

v. 

UNITED STATES OF AMERICA, ACTING THROUGH THE 
COMMISSIONER OF INTERNAL REVENUE, DEFENDANT- 
APPELLANT/CROSS-APPELLEE 

RELEVANT DOCKET ENTRIES 

_________________________________________________ 

DATE PROCEEDINGS 

6/29/99 Civil Case Docketed. Notice filed by 

Appellant Sandra L. Craft. Transcript 
needed: 

* * * * * 

10/13/99 PETITION for en banc hearing filed by 

David English Carmack for Appellant 
Cross-Appellee CIR. Certificate of service 
date 10/12/99. 

* * * * * 

23 

_________________________________________________ 

DATE PROCEEDINGS 

11/12/99 RESPONSE to a petition for en banc 
hearing, filed by David English Carmack. 
Response filed by Jeffrey Alan Moyer for 
Appellee Cross-Appellant Sandra L. Craft. 
Certificate of service date 11/12/99. 

* * * * * 

12/2/99 ORDER filed denying petition for en banc 
hearing [2030443-1] filed by David English 
Carmack Entered by order of the court. 

* * * * * 

12/30/99 Appellant MOTION filed to file supple- 
mental brief. Motion filed by Joan I. 
Oppenheimer for Appellant Cross-Appellee 

CIR in 99-1734, 99-1737. Certificate of 
service date 12/29/99. 

12/30/99 ADDITIONAL CITATION filed by Joan I. 

Oppenheimer for Appellant Cross-Appellee 

CIR in 99-1734, 99-1737. Certificate of ser- 
vice date 12/29/99. 

12/30/99 TENDERED: Supplemental “Opening 

Brief ” from Joan I. Oppenheimer for 
Appellant Cross-Appellee USA, CIR in 99- 
1737. 

1/7/00 RULING granting motion to file supple- 
mental brief [2074560-1] filed by Joan I. 
Oppenheimer appellee may file a response, 
nte 6 pages. Response due by 1/18/00 for 
Jeffrey Alan Moyer in 99-1734. 

24 

_________________________________________________ 

DATE PROCEEDINGS 

1/7/00 Supplemental brief filed by Joan I. 

Oppenheimer for Appellant Cross-Appellee 
CIR in 99-1734/99-1737. Copies: 4. Certi- 
ficate of service date 12/29/99. Number of 
pages: 6. 

1/11/00 APPENDIX filed by Joan I. Oppenhemier 
for Appellant Cross-Appellee USA, Appel- 
lant Cross-Appellee CIR in 99-1734, 99- 
1737. Copies: 05 – 2 volumes. Certificate 
of service date 1/7/00 

1/18/00 Supplemental brief filed by Jeffrey Alan 

Moyer for Appellee Cross-Appellant 
Sandra L. Craft in 99-1734, in 99-1737. 
Copies: 4. Certificate of service date 
1/17/00. Number of pages: 6. 

1/21/00 FINAL BRIEF filed by Jeffrey Alan Moyer 
for Appellee Cross-Appellant Sandra L. 
Craft in 99-1734. Copies: 07 Certificate of 
service date 1/20/00. Number of pages: 36 
(8,621). 

1/21/00 Request to require oral argument filed by 

Jeffrey Alan Moyer for Appellee Cross- 
Appellant Sandra L. Craft in 99-1734, 99- 
1737 

1/21/00 FINAL BRIEF filed by Jeffrey Alan Moyer 
for Appellee Cross-Appellant Sandra L. 
Craft in 99-1734, 99-1737. Copies: 07. 
Certificate of service date 1/20/00. Number 
of Pages: 23 (3,285). 

25 

_________________________________________________ 

DATE PROCEEDINGS 

1/24/00 FINAL BRIEF filed by Joan I. 

Oppenheimer for Appellant Cross-Appellee 
USA, Appellant Cross-Appellee CIR in 99- 
1734, 99-1737. Copies: 07. Certificate of 
service date 1/19/00. Number of Pages: 47 
(10,133). 

2/7/00 FINAL BRIEF filed by Joan I. 

Oppenheimer for Appellant Cross-Appellee 
USA, Appellant Cross-Appellee CIR in 99- 
1734, 99-1737. Copies: 07. Certificate of 
Service date 1/21/00. Number of Pages: 60 
(14,092). 

2/7/00 Request to require oral argument filed by 

Joan I. Oppenheimer for Appellant Cross- 
Appellee USA, Appellant Cross-Appellee 
CIR in 99-1734, 99-1737 

* * * * * 

8/10/00 CAUSE ARGUED on 8/10/00 by Joan I. 

Oppenhemier for Appellant Cross-Appellee 
USA in 99-1734/99-1737, Jeffrey Alan 
Moyer for Appellee Cross-Apellant Sandra 
L. Craft in 99-1734/99-1737, before Judges 
Keith, Cole, Gilman. 

26 

_________________________________________________ 

DATE PROCEEDINGS 

11/22/00 OPINION filed: the district court’s 
judgment is AFFIRMED, we deny Craft’s 
motion for litigation costs and the motion to 
dismiss the government’s appeal. Decision 
for publication pursuant to local rule 206. 
Damon J. Keith, R. G. Cole (AUTHORING), 
Ronald L. Gilman, concurring; Circuit 
Judges. 

11/22/00 JUDGMENT: AFFIRMED. 

1/8/01 PETITION for en banc rehearing filed by 

David English Carmack for Appellant 
Cross-Appellee CIR. Certificate of service 
date 1/5/01. 

2/1/01 LETTER SENT by blh to Jeffrey Alan 

Moyer for Appellee Cross-Appellant 
Sandra L. Craft notifying that party is 
directed to respond to a petition for en banc 
rehearing [2284336-1] filed by David 
English Carmack. Response due by 
2/15/01. 

2/15/01 RESPONSE to a petition for en banc 
rehearing [2284336-1] filed by David 
English Carmack. Response filed by 
Jeffrey Alan Moyer for Appellee Cross- 
Appellant Sandra L. Craft. Certificate of 
service date 2/14/01. 

3/16/01 ORDER filed denying petition for en banc 
rehearing [2284336-1] filed by David 
English Carmack Damon J. Keith, R. G. 
Cole, Ronald L. Gilman, Circuit Judges. 

27 

_________________________________________________ 

DATE PROCEEDINGS 

3/26/01 MANDATE ISSUED with no cost taxed. 

* * * * * 

28 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 
ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

January 21, 1993 

Ms. Diane Chiles 
TRANSAMERICA TITLE 
921 North Division 
Grand Rapids, Michigan 49503 

Re: Sandra Craft and Don Craft Escrowed Funds 

Dear Ms. Chiles: 

This letter should serve as sufficient documentation 
and authority for TransAmerica Title to release the full 
amount of $119,888.20 currently being escrowed in the 
name of Sandra Craft to the law firm of Rhoades, 
McKee, Boer, Goodrich & Titta. The release of these 
funds is with the knowledge and consent of the Internal 
Revenue Service with the understanding that upon 

29 

receipt of those funds, the law firm of Rhoades, McKee, 
Boer, Goodrich & Titta will disburse one-half of those 
funds to Mrs. Sandra Craft as the Internal Revenue 
Service has no claim against her share of those funds. 
The remaining one-half, or $59,944.10 will be placed in 
an interest bearing account at the law firm of Rhoades, 
McKee, Boer, Goodrich & Titta until such time as a 
resolution of the tax lien dispute is reached and an 
agreement is signed by both the Internal Revenue 
Service and representatives of Don Craft or until 
ordered to release those funds by an appropriate court 
order. 

The signatures listed below should serve as 
sufficient authority for TransAmerica Title to release 
those funds to Rhoades, McKee, Boer, Goodrich & 
Titta. The Crafts thank you for your time, cooperation 
and understanding in holding those funds in escrow for 
them until now. 

Very truly yours, 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

/s/ JEFF MOYER 

JEFF A. MOYER 
Attorney For Sandra And 

Don Craft 

JAM/klm 

30 

I acknowledge and consent to the release of the 
escrowed funds by TransAmerica Title to Rhoades, 
McKee, Boer, Goodrich & Titta under the terms 
outlined above. 

Dated: February 9, 1993 

By: TERRY L. ZABEL 

Terry Zabel, Internal Revenue 
Service, District Counsel 

31 

UNITED STATES COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. 1:93-CV-306 
HON. GORDON J. QUIST 

SANDRA L. CRAFT, PLAINTIFF 

vs. 

THE UNITED STATES OF AMERICA, ACTING THROUGH 
THE INTERNAL REVENUE SERVICE, DEFENDANT 

PLAINTIFF’S RESPONSE BRIEF IN OPPOSITION 
TO UNITED STATES’ MOTION FOR PARTIAL 
SUMMARY JUDGMENT 

Jeff A. Moyer (P44671) 
RHOADES, MCKEE, BOER 

GOODRICH & TITTA 
Attorneys for Plaintiff 
600 Waters Building 
Grand Rapids, MI 49503 
(616) 235-3500 

John A. Lindquist 
U.S. Dept. of Justice 
Attorneys for Defendant 
P.O. Box 55 
Ben Franklin Station 
Washington, D.C. 20044 
(202) 307-6561 

32 

[2] 

TABLE OF CONTENTS 

Table of Authorities 

[33] 

Issues Presented [35] 

Summary of Case 
[36] 

Statement of Facts 

[37] 

Legal Argument [38] 

A. Standards for Summary Judgment 
[38] 

B. Attachment of Federal Tax Lien to 

Tenancy by the Entireties Property 
[39] 

C. Attachment of Federal Tax Lien to 

Tenancy by the Entireties Property 
Upon Conveyance [49] 

D. Interest Conveyed by Don Craft 
[51] 

Conclusion [52] 

Exhibit 1 attached 

33 

[3] 

TABLE OF AUTHORITIES 

Cases: 

Aquilino v. United States, 363 U.S. 509 
(1960) [42] 
Cole v. Cardoza, 441 F.2d 1337 (6th Cir. 
1971) [46, 47, 50, 52] 
Dow v. State of Michigan, 396 Mich. 
192 (1976) 
[40, 43] 

FMB-First Michigan Bank v. Van Rhee, 
681 F. Supp. 1264 (W.D. Mich. 1987) 
[39] 

In the Matter of Grosslight (Liberty 

State Bank v. Grosslight), 757 F.2d 
773 (6th Cir. 1985) 

[47] 
In the Matter of Ignasiak, 22 B.R. 828 
(Bankr. E.D. Mich. 1982) 
[51] 

In the Matter of Jackson (Jackson v. Leitch), 
92 B.R. 211 (Bankr. W.D. Mich. 1988) 
[46] 

In the Matter of Jones, 31 B.R. 372 (Bankr. 

E.D. Mich. 1983) 
[46] 

In the Matter of Wickstrom (Lasich v. 
Estate of Wickstrom), 113 B.R. 339 
(Bankr. W.D. Mich. 1990) 
[48] 

Muskegon Lumber & Fuel Co. v. Johnson, 
338 Mich. 655 (1954) 
[46] 

Sanford v. Bertrau, 204 Mich, 244 (1918) 
[46, 47] 

Shaw v. United States, 94 F. Supp. 245 
(W.D. Mich. 1939) 
[46] 

United States v. Bess, 357 U.S. 51 (1958) 
[40] 

United States v. Certain Real Property 

Located at 2525 Leroy Lane, 910 F.2d 
343 (6th Cir. 1990) [48] 

34 

[3] 

United States v. Certain Real Property 
Located at 2525 Leroy Lane, 972 F.2d 
136 (6th Cir. 1992) 

[49-50, 51] 
United States v. Nathanson, 60 F. Supp. 
193 (E.D. Mich. 1945) 
[46] 

United States v. National Bank of 
Commerce, 472 U.S. 713 (1985) 
[40, 45] 

United States v. Rodgers, 461 U.S. 677 
(1982) [40, 43, 44, 46] 

[4] 

Statutes: 

M.C.L.A. § 552.102 
[51] 

M.C.L.A. § 557.71 

[42, 52] 

M.C.L.A. § 557.101 

[36, 50, 51] 

Rules: 

F.R.C.P. 56 [38] 

35 

[5] 

ISSUES PRESENTED 

I. WHETHER THE UNITED STATES’ FED- 
ERAL TAX LIEN ATTACHED TO THE TAX- 
PAYER’S INTEREST IN REAL PROPERTY 
HELD IN A TENANCY BY THE ENTIRETIES 
PRIOR TO ITS CONVEYANCE TO THE 
PLAINTIFF? 

ANSWER: No. 

II. WHETHER THE UNITED STATES’ FED- 
ERAL TAX LIEN ATTACHED TO THE TAX- 
PAYER’S INTEREST IN REAL PROPERTY 
HELD IN A TENANCY BY THE ENTIRETIES 
UPON ITS CONVEYANCE TO THE 
PLAINTIFF? 

ANSWER: No. 

36 

[6] 

PLAINTIFF’S RESPONSE BRIEF IN OPPOSITION 

TO UNITED STATES’ MOTION FOR PARTIAL 
SUMMARY JUDGMENT 

Summary of Case 

Plaintiffs concur with the United States’ Motion in 
stating that the action before the Court is a civil action 
brought by Plaintiff Sandra L. Craft to quiet title to the 
proceeds from the sale of certain real property located 
at 2656 Berwyck Rd., S.E., Grand Rapids, Michigan, 
(hereinafter referred to as “Berwyck Property”), 
formerly owned by the Plaintiff and her husband Don 
Craft, as tenants by the entireties. Plaintiff would 
clarify the United States’ analysis of the conveyance in 
question in that the copy of the Quit-claim deed 
involved more accurately reflects a conveyance by the 
owner, the husband and wife entity which held that 
property as tenants by the entireties, who then 
conveyed the real property to the Plaintiff. (See Govt. 
Exh. 3) Such a conveyance thereby terminated the 
former tenancy by the entireties in accordance with the 
statutory provisions of MCLA § 557.101. 

Plaintiff does not dispute that the United States has 
a perfected Federal tax lien filed against the Plaintiff ’s 
husband for unpaid Federal income tax liabilities nor 
that the lien is perfected to the extent of any equity in 
property owned by Don Craft in Kent County as of the 
date of filing his individual Chapter 7 Bankruptcy 
petition, January 30, 1992. Plaintiff further agrees that 
pursuant to an escrow agreement reached between the 
Crafts and the Internal Revenue Service (IRS), the sale 
of the [7] subject property was allowed to be closed free 

37 

and clear of any tax liens with any existing Federal tax 
liens being transferred with the same right, title and 
interest to the proceeds from that sale as the lien may 
have had with respect to the property itself. 

The terms of that agreement further provided that 
fifty percent (50%) of the net sales proceeds would be 
retained in an escrow account pending a resolution of 
this issue between the parties. However, that agree- 
ment contained no terms, expressly or impliedly, that 
indicated in any manner whatsoever that the other fifty 
percent of the net sales proceeds which were released 
to the Plaintiff were in any way in satisfaction of her 
interest. (Govt. Brf, fn 2, p2) The agreement further 
did not state, expressly or impliedly, that the Plaintiff ’s 
interest was claimed to only be fifty percent of the 
equity in a property which she had owned and which 
was titled exclusively in her name as fee simple owner 
for a period of over four years prior to the sale. 

Statement of Facts 

Plaintiff Sandra L. Craft concurs in the Statement 
of Facts #1 through #14 set forth in the United States’ 
Motion for Partial Summary Judgment for purposes of 
the two motions currently before the Court. (Govt. Brf, 

p. 2-4) Plaintiff further stipulates to the validity of 
those documents attached as Exhibits to the United 
States’ Motion and cited in its Statement of Facts for 
purposes of the Court’s consideration of these two 
summary judgment motions only. 

38 

[8] 

Legal Argument 

A. Standard for Summary Judgment. 

Summary judgment under Rule 56 is appropriate 
where no issue of material fact necessary to decide the 
matter on its merits remains contested and one party is 
entitled to judgment as a matter of law. 

“Summary judgment is appropriate only where no 
genuine issue of material fact remains to be decided 
and the moving party is entitled to judgment as a 
matter of law. Atlas Concrete Pipe, Inc v. Roger J. 
Au & Son, Inc., 668 F.2d 905, 908 (6th Cir. 1982), see 
Willetts v. Ford Motor Co., 583 F.2d 852, 854 (6th 
Cir. 1978); Felix v. Young, 536 F.2d 1126, 1130 (6th 
Cir. 1976). The function of a motion for summary 
judgment is not to allow the court to decide issues of 
fact but rather to determine whether there is an 
issue of fact to be tried. United States v. Articles of 
Device, Etc., 527 F.2d 1008, 1011 (6th Cir. 1976); 
Aetna Ins. Co. v. Cooper, Wells & Co., 234 F.2d 342, 
345 (6th Cir. 1956). The moving party bears the 
burden of clearly establishing the non-existence of 
any genuine issue of fact material to a judgment in 
his favor. Adickes v. S.H. Kress and Co., 398 U.S. 
144, 157, 90 S. Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); 
Articles, 527 F.2d at 1011. In determining whether 
there are genuine issues of fact warranting a trial, 
the evidence will be viewed in the light most 
favorable to the party opposing the motion. United 
States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 
993, 994, 8 L.Ed.2d 176 (1962); Bohn Aluminum & 
Brass Corp. v. Storm King Corp., 303 F.2d 425, 427 
(6th Cir. 1962). If a disputed question of material 

39 

fact remains, the motion for summary judgment 
must be denied. Atlas, 668 F.2d at 908; Felix, 536 
F.2d at 1030; Bohn, 303 F.2d at 427.” 

FMB-First Michigan Bank v. Van Rhee, 681 F. 
Supp. 1264, 1266 (W.D. Mich. 1987). 

[9] 

Plaintiff Sandra L. Craft asserts this matter is ripe 
for summary judgment since all the relevant dates, 
documents and facts necessary to decide the legal 
question at issue have now been submitted as exhibits 
to the United States’ Motion for Summary Judgment or 
as exhibits to this brief. 

B. Attachment of Federal Tax Lien to Tenancy by the 
Entireties Property. 

The United States based its Motion for Summary 
Judgment on the proposition that the Federal tax lien 
of the Internal Revenue Service against Mr. Don Craft, 
attached to real property held as tenants by the 
entireties by the Plaintiff and Mr. Craft as husband and 
wife. The foundation of the United States’ motion is 
based upon its interpretation of a 1975 change in 
Michigan statute and one case subsequent to that law’s 
enactment. The position of the United States that its 
Federal tax lien attached to that property is in direct 
conflict with the specific holdings contained in current, 
controlling case law in the State of Michigan, the 
United States District for the Western District of 
Michigan, and the United States Sixth Circuit Court of 
Appeals. 

40 

The United States cites the Court to numerous 
cases for the proposition that while State law governs 
the question of what interest a taxpayer has in 
property, Federal law then controls the attachment of a 
Federal tax lien to that property. United States v. 
Nat’l Bank of Commerce, 472 U.S. 713, 722 (1985); 
United States v. Rodgers, 461 U.S. 677 (1982); Aquilino 

v. United States, 363 U.S. 509, 513-514 (1960); United 
States v. Bess, 357 U.S. 51, 55 (1958). 

[10] 

The Plaintiff does not contest that legal principle or 
dispute the holdings so cited by the United States in 
those cases. The legal proposition cited only serves to 
clarify and focus the issue before the Court on this 
motion. The actual issue to be decided by the Court is 
whether or not the property interest held by one 
spouse in a tenancy by the entireties in Michigan has 
changed by statute or by case law to the point where 
that interest is now separate, divisible and distinct from 
any other property interest including that of his or her 
spouse. The Plaintiff asserts that voluminous case law 
suggests that is not the case. 

The United States goes to great lengths to assert 
that the definition of the property interest held by an 
individual spouse in real property held in a tenancy by 
the entireties changed upon the enactment of the 1975 
Public Act 288. The United States then cites this Court 
to the case of Dow v. State of Michigan, 396 Mich. 192 
(1976) as proof of that statutory change. The inter- 
pretation of and reliance by the United States on that 
statutory enactment and the Dow case interpreting it 
are both erroneous and misplaced. 

41 

The statutory change to which the United States 
refers was the enactment of 1975 Public Act 288 which 
became law on December 10, 1975. 

“Sec. 1. 

A husband and wife shall be equally 

entitled to the rents, products, income, or profits, and to 
the control and management of real or personal 
property held by them as tenants by the entirety.” 

1975 Public Act 288. 

This statutory provision which is now codified at 
MCLA § 557.71 or MSA § 26.201(1), originated as 1975 
House Bill no. 4971. [11] Attached to this brief as 
Exhibit 1 are documents obtained from the Legislative 
Service Bureau at the Michigan Capital which track the 
original enactment of that statute. 

Those documents attached include the act as 
originally proposed, the bill as enrolled, a page from the 
1975 history of House bills, a page from the 1975 House 
Journal showing what language was deleted from the 
original proposed act, a page from the numerical indices 
listing the bills before the House by number and 
general topic, an interim status report on the bill 
providing some legislative history, and an analysis of 
the proposed act provided to the legislators by the 
Analysis Section of the House of Representatives 
Judiciary Committee. (Exhibit 1) 

Numerous places within that package of legislative 
history indicate that that provision of Michigan statute 
was enacted simply to rectify historical sex discrimina- 
tion and to equalize women’s rights to property held by 
a tenancy by the entireties. For the United States to 
assert that this statute somehow creates separate, 

42 

divisible property interests in the husband and wife in 
property held as a tenancy by the entireties is contrary 
to the plain meaning of that statute as well as 
contradicted by the legislative history and intent at 
that time. 

The United States also cites this Court to the Dow 
case for the assertion that Michigan law subsequent to 
that congressional enactment recognizes a severable 
and separate property interest in an entireties estate. 
(Govt. Brf, p. 12-13) That argument by the United 
States misreads the holding of Dow v. State of 
Michigan. 

[12] 

The Court in Dow decided what constituted suffi- 
cient notice to satisfy due process concerns in a 
situation where there was a State taking of property 
that was held in a tenancy by the entireties. Dow, 396 
Mich. at 201-212. In a footnote to that decision, the Dow 
court cites MCLA § 557.71 for the proposition that 
whatever the law had been previously, each spouse in a 
tenancy by the entireties was now entitled to separate 
notice of an action by the State which would result in a 
taking of that property. Dow, 396 Mich. at 198, fn 10. 
No where in the Dow decision does that court redefine 
entireties property interests or use language that 
“recognizes severable and separate property interest.” 
(Govt. Brf, p. 12) 

The United States in the their brief asserts that the 
Dow court held that each spouse had significant 
property interest within protection of the due process 
clause and each spouse had a separate constitutionally 
protected property interest in entireties property. 

43 

(Govt. Brf, p.12) Footnote 19 of the Dow case stated 
that Due Process protects property interests and that 
those property interests are defined by state law. 
Nowhere in that footnote or in the case itself did the 
Dow court hold that each spouse had a separate 
property interest in entireties property. The free 
interchange by the United States of the terms 
“significant” and “separate” is both inaccurate and 
misleading. 

The Dow decision deals with adequate notice in a 
due process context, it does not contain any holding 
that can be construed as redefining or recognizing 
separate, devisable property interests in Michigan 
tenancy by the entireties property. Equally significant 
[13] is that fact that in the 17 years subsequent to the 
Dow decision, not one Michigan case, or any case 
anywhere interpreting Michigan law, has cited Dow or 
even inferred that such a monumental change in 
Michigan real property law has now occurred. 

The United States’ Motion further cites the Court to 
two recent United States Supreme Court opinions in 
support of their argument that since Michigan now 
recognizes a separate, devisable property interest in 
tenancy by the entireties property that interest can 
therefore be attached by a Federal tax lien. 

The United States cites this Court to United States 

v. Rodgers, 461 U.S. 677 (1982), in support of their 
argument by stating that a “homestead” right under 
Texas law is very similar to a tenancy by the entireties 
under Michigan law. (Govt. Brf, p. 9) The United 
States goes on to base that statement on the concept 
that both legal principles preclude one spouse from 
selling or abandoning the property without the consent 

44 

of the other, and both are protected from forced sale 
and the reach of most creditors. (Govt. Brf, p.9) 

That assertion by the United States is refuted by 
the very case and footnote to which the United States 
cites this Court. Footnote 31 of the U.S. v. Rodgers 
decision contained the following language: 

“31 

. . . . 

. . . . 

Second, the dissent relies on a piece of 1954 
legislative history concerning the application of the 
federal tax lien to interests in tenancies by the 
entirety. Post, at 719-720. 

[14] 

. . . . 

More important, tenancies by the entirety pose a 
problem quite distinct from that at issue in the case 
of homestead rights. See Herndon v. United States, 
501 F.2d at 1220-1221; W. Plumb Federal Tax Liens 
37-38 (3d ed. 1972). The basis holding of the line of 
cases mentioned by the dissent was, not merely that 
interests in a tenancy by the entirety could not be 
sold to satisfy a tax debt of one spouse, but that, as a 
result of the peculiar legal fiction governing 
tenancies by the entirety in some States, no tax lien 
could attach in the first place because neither spouse 
possessed an independent interest in the property. 

. . . . 

45 

In the homestead context, by contrast, there is no 
doubt, even under state law, that not only do both 
spouses (rather than neither) have an independent 
interest in the homestead property, but that a 
federal tax lien can at least attach to each of those 
interests. See Paddock v. Siemoneit, 147 Tex. 571, 
584-585 (1949). Thus, if the tenancy by the entirety 
cases are correct, they do no more than illustrate 
the proposition that, in the tax enforcement context, 
federal law governs the consequences that attach to 
property interests, but state law governs whether 
any property interests exist in the first place.” (bold 
emphasis in original). 

United States v. Rodgers, 461 U.S. 677, 703 fn 31 
(1982). 

While not ruling on the validity of tenancy by the 
entireties characteristics, the Supreme Court clearly 
acknowledges that under Texas homestead law, a 
Federal tax lien can attach to the separate interest of 
each spouse whereas under tenancy by the entireties 
neither spouse has an independent interest in the 
property which would subject it to a Federal tax lien. 
Rodgers, 461 U.S. at 703, fn 31 (1982). The Plaintiff 
asserts that such a clearly enunciated distinction as 
stated by the U.S. Supreme Court should allow this 
Court regard the Rodgers case as support of her 
assertion that the Federal tax lien did not attach to 
property held by her and her husband as tenants by the 
entirety. 

[15] 

The motion of the United States places further 
reliance on the case of the United States vs. National 
Bank of Commerce for the proposition that the United 

46 

States Supreme Court has held that the IRS was 
entitled to levy against and seize a joint bank account of 
a husband and wife held as a tenancy by the entireties 
for tax debts of only one spouse. Plaintiff is unclear 
how the United States feels this case might be 
applicable since the controlling Michigan precedent 
both before and after Cole v. Cardoza, 441 F.2d 1337 
(6th Cir. 1971) which the United States now seeks to 
overturn is that Michigan does not recognize tenancies 
by the entirety in personal property except in very 
limited situations. In the Matter of Jackson (Jackson v. 
Leitch), 92 B.R. 211, 213-214 (Bankr. W.D. Mich. 1988); 
In the Matter of Jones, 31 B.R. 372, 376 (Bankr. E.D. 
Mich. 1983); Muskegon Lumber & Fuel Co. v. Johnson, 
338 Mich. 655 (1954). 

The position of the United States that the Federal 
tax lien for the tax liabilities of Don Craft attached to 
the property held as tenancy by the entireties by 
Plaintiff and her husband, directly contradicts a long 
line of Michigan, U.S. District for the Western District 
of Michigan, and Sixth Circuit case law. The case of 
Cole v. Cardoza decided in 1971 by the U.S. Sixth 
Circuit was not the first, nor was it the most recent, 
Court to specifically hold that a Federal tax lien against 
a single spouse cannot attach to real property held as 
tenancy by the entireties in Michigan. That principal 
was long ago enunciated by two early Federal court 
cases in the State of Michigan, those being Shaw v. 
United States, 94 [16] F. Supp. 245, 246 (W.D. Mich. 
1939) and United States v. Nathanson, 60 F. Supp. 193, 
194 (E.D. Mich. 1945) as well as the Michigan case of 
Sanford v. Bertrau, 204 Mich. 244 (1918). 

The motion by the United States suggests that 
somehow Michigan law has changed subsequent to the 

47 

enactment of 1975 Public Act 288 in December of 1975 
and that Cole v. Cardoza is no longer valid law. This 
assertion by the United States ignores a vast progeny 
of Federal Court cases subsequent to 1975 which 
continue to hold unaltered the principle that a Federal 
tax lien for one spouse cannot attach to real property in 
the State of Michigan held as tenants by the entireties. 
In 1985, the U.S. Sixth Circuit held that in Michigan, 
“Tenants by the entirety, who must be husband and 
wife, hold under a single title with right of survivorship. 
Neither husband or wife acting alone can alienate any 
interest in the property, nor can the creditors of one 
levy upon the property; but their joint creditors can 
reach entireties property. See Sanford v. Bertrau, 204 
Mich. 244 (1918).” In the Matter of Grosslight (Liberty 
State Bank and Trust v. Grosslight), 757 F.2d 773, 775 
(6th Cir. 1985). 

Grosslight was cited approvingly by the U.S. 
Bankruptcy Court of the Western District of Michigan 
more recently which went on to state: 

“Under Michigan law, property held by tenancy by 
the entireties is exempt from the claims and execution 
of creditors of solely one spouse; however creditors 
which hold joint claims against both spouses may 
reach the entireties property notwithstanding is 
otherwise exempt status. Sandford v. Bertrau, 204 
Mich 244, (1918). Entireties real property may be 
transferred or [17] encumbered only by a joint deed 
or joint mortgage executed by both spouses; jointly 
the spouses hold complete ownership of entireties 
property. Conversely, because neither spouse holds a 
severable interest, one spouse cannot unilaterally 
sever or convey entireties property absent consent by 
the other spouse. (cites omitted)” (emphasis added) 

48 

In the Matter of Wickstrom (Lasich v. Estate of 
Wickstrom), 113 B.R. 339, 346 (Bankr. W.D. Mich. 
1990). 

Another recent Sixth Circuit case cited by the 
United States clearly and unequivocally reaffirms the 
validity of the legal principal which the United States 
now seeks to overturn. In 1990, the U.S. Sixth Circuit 
stated: 

“Under Michigan law, entireties property may be 
levied upon by the State for nonpayment of real 
estate taxes on the real property itself. See Robbins 

v. Barron, 32 Mich. 36 (1875). However, entireties 
property may not be attached to satisfy the personal 
tax liability of a single spouse. Cole v. Cardoza, 441 
F.2d at 1343; United States v. Nathanson, 60 F. Supp. 
193 (E.D. Mich. 1945).” 

United States v. Certain Real Property located at 
2525 Leroy Lane, 910 F.2d 343, 350 (6th Cir. 1990). 

That case dealt with the ability of the United States 
to seize real property held in Michigan in a tenancy by 
the entireties using the Federal Drug Forfeiture laws 
which provide even greater powers to the United 
States than those accorded to it under the Internal 
Revenue Code. 

After the case was remanded by the Sixth Circuit 
and subsequently appealed a second time, the Sixth 
Circuit in 1992 again reaffirmed that principle when it 
stated: 

“As we stated in our prior opinion, the federal 
forfeiture statutes do not operate to destroy the 
fundamental characteristics given to real property 
[18] by the states. See Certain Real Property, 910 
F.2d at 349. To allow the United States to step into 

49 

Mitchell Marks’ place as a tenant by the entirety 
would destroy the tenancy by the entirety because 
the unities of time, title and person would be violated. 
The government did not and could not possess 
Mitchell Marks’ present interest in the tenancy by the 
entirety. The government’s interest come into being 
only when the tenancy by the entireties is destroyed 
either by death, divorce, or operation of Michigan law. 
When the tenancy by the entireties is destroyed, the 
government gets whatever Mitchell Marks possesses 
after the entireties estate is destroyed.” 

United States v. Certain Real Property located at 
2525 Leroy Lane, 972 F.2d 136, 138 (6th Cir. 1992). 

C. Attachment of Federal Tax Lien to Tenancy 
by the Entiretires Property upon Conveyance. 

The United States argues in the alternative that 
even if the IRS tax lien did not attach to any interest of 
Don Craft in tenancy by the entireties property when it 
was filed, it attached at some “transitory moment” 
while being conveyed. (Govt. Brf, p. 19-12) The brief of 
the United States cites the Court to no statutory 
authority nor a single case in any jurisdiction to support 
this imaginative, but meritless concept. Unfortunately, 
such an inventive hypothesis is contradictory to the 
language of at least two controlling Sixth Circuit cases 
as well as Michigan statute governing the voluntary 
termination of tenancy by the entireties. 

As previously quoted, the Sixth Circuit has held that 
the government is only entitled to whatever interest is 
possessed by the spouse against whom they have a 
claim after the entireties estate is destroyed. U.S. v. 
Certain Real Property at 2525 Leroy Lane, 972 F.2d 

50 

136, 138 (6th Cir. 1992). The tenancy by the [19] 
entireties in the case before the Court was destroyed 
by operation of law when the tenancy was terminated 
in accordance with the provisions of MCLA § 557.101 as 
shown on Government Exhibit 3. 

Such a concept does further violence to the holding of 
Cole v. Cardoza which held that such a lien for taxes of 
one spouse filed against Michigan real property held as 
tenants by the entirety is a nullity, is without legal 
effect and is null and void as to the property. Cole v. 
Cardoza, 441 F.2d 1337, 1343-1344 (6th Cir. 1971). The 
Court in Cole omitted only language which could even 
be inferred to indicate an ability for a federal tax lien to 
remain dormant or inchoate until such time as a 
transfer at which time it would spring to life. 

The United States concludes by attempting to 
analogize the Craft situation to either after–acquired 
property or a circumstance attempts to renounce some 
asset prior to a federal tax lien attaching. It would 
seem to be without argument that a theory approximat- 
ing attachment to after-acquired property is not 
applicable here because Don Craft could not possibly 
have owned or possessed more of an interest after he 
and his wife conveyed away the property, than Don 
Craft may have had before they conveyed the property. 
After the conveyance, Don Craft had no claim what- 
soever to the Berwyck property. Before the convey- 
ance, Michigan law states that Don Craft had no 
separate, divisible property interest in the entireties 
property. 

The proposition that the Craft circumstances are 
analogous to a taxpayer who renounces some expecta- 
tion of receiving an asset due [20] to a federal tax lien is 
similarly inapplicable. Don and Sandra Craft purchased 

51 

the property in question as tenants by the entirety in 
May of 1972, seventeen years prior to the United States 
filing a tax lien against Don Craft, and eight years 
before the first year for which Don Craft was assessed 
tax liability for by the IRS on substituted returns. His 
conveyance can hardly be viewed as a renouncement 
taken to avoid the future attachment of a tax lien to an 
asset which he did not own at the time. 

D. Interest Conveyed by Don Craft. 

The amount of valuation of any property interest to 
which Don Craft might have been entitled is not 
properly before this Court as part of either of the 
pending Motions for Summary Judgment. The United 
States cites the Court to Michigan statute and a Michi- 
gan Bankruptcy case to establish that if any attachable 
interest was conveyed by Don Craft, it amounted to 
50% of the net proceeds from the sale of the house. 
(Govt. Brf, p. 21) Both MCLA § 552.102 and the case of 
In the Matter of Ignasiak, 22 B.R. 828 (Bankr. E.D. 
Mich. 1982) not only create only a presumption of 
an equal division of the property, they do so in the 
context of a divorce. Plaintiff took exclusive title to the 
Berwyck property after she and her husband termi- 
nated the tenancy in accordance with the provisions of 
MCLA § 557.101 which has nothing to do with a Court- 
ordered division of property incident to a divorce. 
Plaintiff further reserves the right to contest that 
presumption, if the Court finds it applicable, to present 
such factual evidence as is appropriate [21] in making 
that determination such as who paid the mortgage, who 
maintained the property in liveable fashion, who paid 
the property taxes, etc. United States v. Certain Real 
Property Located at 2525 Leroy Lane, 972 F.2d 136, 139 
(6th Cir. 1992). 

52 

Conclusion 

There has been no change in Michigan law which has 
the effect of now recognizing by statute separate, 
divisible property interests in each spouse in a tenancy 
by the entireties. There also has been no Michigan 
case, nor any federal case interpreting Michigan law, 
which interprets MCLA § 557.71 as creating separate, 
divisible property interests in tenants by the entireties. 
State law defining what property interest is possessed 
by a tenant in an entireties estate has not materially 
changed since the Holding in Cole v. Cardoza. Since 
state law determines what property interest exists that 
would be available for attachment by a federal tax lien, 
the tax lien for Don Craft’s tax liabilities did not attach 
to the Berwyck property while held in a tenancy by the 
entireties. 

There is no Michigan statute, no Michigan case law, 
or case law anywhere interpreting Michigan law, which 
stands for the proposition that when tenancy by the 
entireties property is transferred it becomes a tenancy 
in common “for a transitory moment.” The federal tax 
lien for Don Craft’s tax liabilities did not attach to the 
Berwyck property during any “transitory moment” 
when the tenancy was terminated in accordance with 
Michigan law and the property became titled in the 
Plaintiff ’s name. 

[22] 

There is no issue of material fact remaining which 
would prevent this Court from entering Summary 
Judgment on the issues of whether the federal tax lien 
solely for the liabilities of Don Craft attached to the 
property held by the Plaintiff and her husband as 
tenants by the entirety upon its filing, or subsequently 

53 

upon the property’s conveyance to the Plaintiff. The 
Plaintiff is therefore entitled to judgment as a matter of 
law and respectfully requests this Court enter Sum- 
mary Judgment against the United States on both 
issues. 

RHOADES, MCKEE, BOER, 
GOODRICH, TITTA 
Attorneys for Plaintiff 

Date: October 22, 1993 By: JEFF MOYER 

Jeff A. Moyer 
600 Waters Bldg. 
161 Ottawa 
Grand Rapids, MI 49503 
(616) 235-3500 

[Exhibit omitted] 

54 

UNITED STATES DISTRICT COURT FOR THE 
WESTERN DISTRICT OF MICHIGAN 
SOUTHERN DIVISION 

Case No. 1:93 CV 306 
HON. GORDON J. QUIST 

SANDRA L. CRAFT, PLAINTIFF 

v. 

THE UNITED STATES OF AMERICA, ACTING THROUGH 
THE INTERNAL REVENUE SERVICE, DEFENDANT 

Filed: [Dec. 1, 1998] 

JOINT FINAL PRETRIAL ORDER 

A final pre-trial conference was held on the 30th day 
of November, 1998, at 11:00 a.m. Appearing were: 

FOR PLAINTIFF SANDRA L. CRAFT 

Jeff A. Moyer, Esquire 
Donovan, Love & Twinney 

P.L.C. 
509 Waters Building 
161 Ottawa Ave., N.W. 
Grand Rapids, Michigan 49503 
Telephone: 616/454-1900 

FOR DEFENDANT UNITED 
STATES OF AMERICA 

JOHN A. LINDQUIST 
MICHAEL W. DAVIS 

Trial Attorney 
U.S. Department of 

Justice 
P.O. Box 55 
Ben Franklin Station 
Washington, D.C. 20044 
Telephone: (202) 307-6561 

1. Exhibits: The following exhibits will be offered by 
the plaintiff and the defendants: 

55 

Exhibits of Plaintiff Sandra L. Craft 

Exhibits of Defendant United States of America 

a. Warranty Deed dated 5/26/72; 

b. Mortgage dated on or about 5/26/72; 

c. Referral Report for Potential Fraud Cases dated 
10/16/87, with attachments; 

d. Notice of Federal Tax Lien dated 3/30/89; 

e. Quit Claim Deed dated 8/28/89; 

f. Bankruptcy Petition by Don Craft dated 1/30/92, 
with supporting schedules; 

g. Letter dated 1/21/93 regarding escrow of funds; 

h. Letter dated 8/6/92 from Donald Craft to IRS; 

I. Affidavit of Donald Craft; 

j. Affidavit of Sandra L. Craft; 

k. NBD Statement of Mortgage Account dated 
12/31/86; 

l. NBD Mortgage Statements dated 12/31/89; 
12/31/90; 12/30/91 and 6/23/82, for loan number 
658781-0; 

m. Letter dated November 19, 1998, from Charlene S. 
Veenstra, Deputy Treasurer for City of East 
Grand Rapids; 

n. Letter dated 5/17/95 from Matthew Woolford, City 
Assessor for City of East Grand Rapids; 

o. U.S. Requests for Admission. 

p. 1977 Certificate of Assessments and Payments for 
Don and Sandra Craft; 

q. 1978 Certificate of Assessments and Payments for 
Don and Sandra Craft; 

r. 1979 Certificate of Assessments and Payments for 
Don Craft; 

56 

s. 1980 Certificate of Assessments and Payments for 
Don Craft; 

t. 1981 Certificate of Assessments and Payments for 
Don Craft; 

u. 1982 Certificate of Assessments and Payments for 
Don Craft; 

v. 1983 Certificate of Assessments and Payments for 
Don Craft; 

w. 1984 Certificate of Assessments and Payments for 
Don Craft; 

x. 1985 Certificate of Assessments and Payments for 
Don Craft; 

y. 1986 Certificate of Assessments and Payments for 
Don Craft; 

z. 1987 Certificate of Assessments and Payments for 
Don Craft; 
aa. 1988 Certificate of Assessments and Payments for 
Don Craft; 
bb. 1989 Certificate of Assessments and Payments for 
Don Craft; 
cc. 1990 Certificate of Assessments and Payments for 
Don Craft; 
dd. 1991 Certificate of Assessments and Payments for 
Don Craft; 
ee. 1993 Certificate of Assessments and Payments for 
Don Craft; 
ff. 1979 Certificate of Assessments and Payment for 
Sandra Craft; 
gg. 1980 Certificate of Assessments and Payments for 
Sandra Craft; 
hh. 1981 Certificate of Assessments and Payments for 
Sandra Craft; 

57 

ii. 1982 Certificate of Assessments and Payments for 
Sandra Craft; 
jj. 1983 Certificate of Assessments and Payments for 
Sandra Craft; 
kk. 1984 Certificate of Assessments and Payments for 
Sandra Craft; 
ll. 1985 Certificate of Assessments and Payments for 
Sandra Craft; 
mm. 1986 Certificate of Assessments and Payments for 
Sandra Craft; 
nn. 1987 Certificate of Assessments and Payments for 
Sandra Craft; 
oo. 1988 Certificate of Assessments and Payments for 
Sandra Craft; 
pp. 1989 Certificate of Assessments and Payments for 
Sandra Craft; 
qq. 1990 Certificate of Assessments and Payments for 
Sandra Craft; 
rr. 1991 Certificate of Assessments and Payments for 
Sandra Craft; 
ss. 1992 Certificate of Assessments and Payments for 
Sandra Craft; 
tt. 1980, Form 1040 for Sandra Craft; 
uu. 1981, Form 1040 for Sandra Craft; 

vv. 1982, Form 1040 for Sandra Craft; 
ww. 1983, Form 1040 for Sandra Craft; 

xx. 1984, Form 1040 for Sandra Craft; 
yy. 1985, Form 1040 for Sandra Craft; 

2. Uncontroverted Facts: The parties have agreed 
that the following may be accepted as established facts: 

58 

1. Don R. Craft and his wife Sandra Craft pur- 
chased the Berwyck property as tenants by 
the entireties on May 26, 1972; 

2. Don R. Craft had been a practicing attorney in 
Grand Rapids for a substantial period of time; 

3. In 1992 , upon the sale of the Berwyck prop- 
erty Don and Sandra Craft moved to 
Alabama; 

4. Don R. Craft failed to timely file federal in- 
come tax returns for his taxable years 1979 
through 1987; 

5. The Internal Revenue Service prepared sub- 
stitute § 6020(b) federal income tax returns 
for Don R. Craft for the tax years 1979 
through 1986; 

6. Don R. Craft incurred tax liabilities for the 
taxable years 1979 through 1987 in the amount 
of $482,446.73; 

7. These tax liabilities were assessed, with notice 
and demand duly given, in 1988; 

8. A Notice of Federal Tax Lien with respect to 
these liabilities was recorded with the Kent 
County Register of Deeds on April 7, 1989; 

9. On August 28, 1989, Don R. Craft and Sandra 
Craft quit claimed their interest in the 
Berwyck property to Sandra Craft for $1.00; 

10. Don R. Craft filed a petition for relief under 
Chapter 7 of the Bankruptcy Code on January 
30, 1992; 

59 

11. On June 1, 1992, the Bankruptcy Court 
entered an order of discharge; 

12. On June 11, 1992, the Bankruptcy case was 
closed; 

13. Don and Sandra Craft entered into an agree- 
ment with the IRS under which the Berwyck 
property was sold free and clear of the federal 
tax liens against Don Craft, and 50% of the net 
proceed were retained in escrow subject to 
the same right title and interest that the 
federal tax lien had in the property; 

13. The balance of the net sales proceeds from the 
sale of the Berwyck property have been 
distributed to the plaintiff; 

14. No event of any legal significance affecting the 
title or claim to the property occurred at any 
time between August 28, 1989, and the sale of 
the property in June of 1992, which would 
otherwise disturb the United States’ claim or 
title to the interest of Don Craft in the 
property [U.S. First Request for Admissions, 
Req. No. 1, Govt. Ex. 1; Plaintiff ’s Motion to 
Refer Case to Bankruptcy Court. ¶7]; 

15. Sandra Craft does not have any claim against 
any interest Don Craft had in the Berwyck 
Property from August 28, 1989, through June 
of 1992 [U.S. First Request for Admissions, 
Req. No. 2, Govt. Ex. 1]; 

16. Sandra L. Craft does not have any claim 
against any interest Don Craft had in the 
Berwyck Property from August 28, 1989 
through June of 1992, which has priority over 

60 

the United States’ prior perfected federal tax 
lien [U.S. First Request for Admissions, Req. 
No. 3, Govt. Ex. 1]; 

17. Sandra L. Craft did not claim the property tax 
or the mortgage interest payments for the 
Berwyck property as deductions for the years 
1979, 1980, 1981, 1982, 1983, 1984 and 1985; 

18. Sandra L. Craft claimed the property tax or 
the mortgage interest payments for the 
Berwyck property as deductions for the years 
1986, 1987, 1988, 1989, 1990, 1991 and 1992; 

3. Controverted and Unresolved Issues: The 
factual issues remaining to be determined and issues of 
law for the Court’s determination are: 

1. Whether the quit claim conveyance out of 
entireties on August 28, 1989, was a 
fraudulent in fact; 

2. Whether the conveyance out of entireties was 
part of scheme to avoid the United States’ lien 
upon the sale of the Berwyck property; 

3. Whether the quit claim conveyance out of 
entireties on August 28, 1989, was fraudulent 
in law; 

4. Whether Don Craft was insolvent prior to his 
conveyance of the property out of tenancy by 
the entireties to his wife on August 28, 1989; 

5. Whether fair consideration was given to Don 
Craft for his conveyance on August 28, 1989, 
to the plaintiff; 

61 

6. Whether from 1979 through 1985 Don Craft 
made fraudulent conveyances into the tenancy 
by the entireties; 

7. Whether Don Craft contributed about 
$38,000.00 into the tenancy by entirety from 
1979 through 1985 in the form of property tax 
and mortgage payments; 

8. Whether Don Craft insolvent from 1979 
through 1985, while he was making contribu- 
tions to or for the benefit of the tenancy by 
the entirety. 

4. Witnesses: Non-expert witnesses to be called by 
the plaintiff and defendant, except those who may be 
called for impeachment purposes only, are: 

Non-Expert Witnesses of the Plaintiff Sandra 
L. Craft 

1. 

Non-Expert Witnesses of the Defendant 
United States of America 

1. Sandra L. Craft 

2. Rosie Wilson, Revenue Agent 

3. Charlene S. Veenstra, Deputy Treasurer City 
of East Grand Rapids, Michigan 

4. Sue Ann Symons, IRS Special Advisor 

5. Representative for National Bank of Detroit; 

6. All custodians of records introduced as exhib- 
its; 

7. All witnesses listed by plaintiff. 

It is understood that, except upon a showing of good 
cause, no witness whose name does not appear herein 

62 

shall be permitted to testify over objection for any 
purpose except impeachment. 

5. Depositions and Other Discovery Documents: 

All depositions, answers to written interrogatories, and 
requests for admissions, or portions thereof, which are 
expected to be offered in evidence by the parties are: 

Defendant United States: 

The United States expects to offer in evidence the 
following admissions by Sandra L. Craft: 

1. That no event of any legal significance 
affecting the title or claim to the property 
occurred at any time between August 28, 1989, 
and the sale of the property in June of 1992, 
which would otherwise disturb claim or title to 
the interest of Don Craft in the property [U.S. 
First Request for Admissions, Req. No. 1 Govt. 
Ex. 1; Plaintiff ’s Motion to Refer Case to 
Bankruptcy Court, ¶7]; 

2. That Sandra Craft does not have any claim 
against any interest Don Craft had in the 
Berwyck Property from August 28, 1989 
through June of 1992 [U.S. First Request for 
Admissions, Req. No. 2, Govt. Ex. 1]; 

3. That Sandra L. Craft does not have any claim 
against any interest Don Craft had in the 
Berwyck Property from August 28, 1989 
through June of 1992, which has priority over 
the United States’ prior perfected federal tax 
lien [U.S. First Request for Admissions, Req. 
No. 3, Govt. Ex. 1]; 

6. Length of Trial: Counsel estimate the trial will 
consume 2 days. 

63 

7. Prospects of Settlement: Counsel for the 
parties have discussed settlement, but settlement is 
unlikely insofar as the parties are divided by a number 
of procedural issues and the United States seeks to 
reach a final determination of its remedy within the 
context of an alleged fraudulent conveyance of 
entireties property. 

8. Damages: The United States seeks an award of 
50% of the net sales proceeds. 

FOR DEFENDANT UNITED 
STATES OF AMERICA 

/s/ JOHN A. LINDQUIST 
JOHN A. LINDQUIST 
Trial Attorney 
U.S. Department of 

Justice 
P.O. Box 55 
Ben Franklin Station 
Washington, D.C. 20044 
Telephone: (202) 307-6561 
FOR PLAINTIFF SANDRA L. CRAFT 

/s/ JEFF A. MOYER 

Jeff A. Moyer, Esquire 
Donovan, Love & Twinney 

P.L.C. 
509 Waters Building 
161 Ottawa Ave., N.W. 
Grand Rapids, Michigan 49503 
Telephone: 616/454-1900 

IT IS SO ORDERED THIS 
1st day of December, 1998. 
/s/ GORDON J. QUIST 

HON. GORDON J. QUIST 
U.S. District Court 

64 

UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. 1:93-CV-306 

SANDRA L. CRAFT, PLAINTIFF 

v. 

THE UNITED STATES OF AMERICA, ACTING THROUGH 
THE INTERNAL REVENUE SERVICE, DEFENDANT 

Filed: Apr. 23, 1993] 

COMPLAINT TO QUIET TITLE 

NOW COMES the Plaintiff, Sandra L. Craft, by and 
through her attorneys Rhoades, McKee, Boer, Goodrich 
& Titta, and files this action against the United States 
to quiet title to certain real property or the proceeds 
thereof and in support of this action states the 
following: 

1. The Plaintiff, Sandra L. Craft, is a resident of 
Birmingham, Alabama. 

2. The Defendant, The United States of America, 
acting through the Internal Revenue Service, conducts 
business in Kent County, Michigan. 

3. Plaintiff Sandra L. Craft and her husband Don 
R. Craft were Michigan residents formerly residing at 
2656 Berwyck Rd., S.E., Grand Rapids, Michigan. 

65 

4. Plaintiff has standing and statutory authority to 
commence this action against the United States of 
America pursuant to 28 U.S.C. § 2410(a)(1), Actions 
Affecting Property in Which the United States has a 
Lien. 

5. The Court has jurisdiction to hear and decide 
this action under provisions of 28 U.S.C. § 1346. 

6. The subject of this litigation are the proceeds of 
the sale of certain real property formerly owned by the 
Plaintiff located at 2656 Berwyck Rd., S.E., and located 
in Kent County, Michigan. 

7. The proceeds from the June 1992 sale of that 
real property are currently being held in escrow by 
agents of TransAmerica Title Insurance Company 
located at 921 South Division, Grand Rapids, Michigan. 
(Exhibits A, B, C) 

8. Plaintiff Sandra L. Craft and her husband Don 
R. Craft purchased the subject real property on May 
26, 1972 and owned the subject property in a tenancy 
by the entireties through and including March 30, 1989. 
(Exhibits D, E) 

9. The Defendant United States of America acting 
through the Internal Revenue Service filed a Notice of 
Federal Tax Lien Form 668(Y) with the Kent County 
Register of Deeds on March 30, 1989 based on unpaid 
taxes assessed solely against Don R. Craft. (Exhibit F) 

10. The subject real property was owned by Sandra 
L. Craft and Don R. Craft as tenancy by the entireties 
property at the time the Federal tax lien was filed, and 
remained so until any interest of Don R. Craft was 
subsequently transferred by Mr. and Mrs. Craft to 
Sandra L. Craft on August 28, 1989. (Exhibits D, E) 
Don R. Craft no longer maintained, asserted or claimed 

66 

any interest in the subject real property after August 
28, 1989. 

11. Don R. Craft filed an individual Chapter 7 
Bankruptcy Petition in the United States Bankruptcy 
Court for the Western District of Michigan on January 
30, 1992, titled Case No. 92-80551. (Exhibit G) 

12. Don R. Craft was granted a discharge by the 
U.S. Bankruptcy Court of all his dischargeable debts on 
June 1, 1992. (Exhibit H) 

13. Don R. Craft’s Chapter 7 Bankruptcy was 
subsequently closed by the Bankruptcy Court on June 
11, 1992. 

14. Don R. Craft subsequently moved the U.S. 
Bankruptcy Court on August 14, 1992 to reopen his 
Chapter 7 Bankruptcy to accord relief to the Debtor 
which was granted by order of the U.S. Bankruptcy 
Court on October 7, 1992. (Exhibits I, J) 

15. Don R. Craft also filed Adversary Proceeding 
No. 92-8542 against the United States of America 
acting through the Internal Revenue Service seeking to 
avoid the tax lien against the subject real property on 
August 14, 1992. (Exhibit K) 

16. That Adversary Proceeding was subsequently 
resolved and withdrawn based on lack of jurisdiction by 
the Bankruptcy Court over the subject real property 
with the simultaneous entry by the Court on January 
27, 1993 of a consent judgment. That consent judgment 
stipulated that Don R. Craft had been discharged of all 
personal liability for personal income taxes with the 
exception of those taxes listed as priority debts on his 
Bankruptcy Petition ($10,300) and an additional amount 
of $2,109 representing the value of Don R. Craft’s 

67 

personal property to which the IRS was acknowledged 
to be a secured party. (Exhibit L) 

17. The sale of the subject real property was 
conducted in escrow and one-half of the net proceeds 
have been released to Mrs. Sandra L. Craft represent- 
ing what both parties acknowledge to be an amount to 
which it is undisputed that the IRS had no claim. The 
remaining one-half of the net proceeds of this sale are 
currently being held in escrow by agents of Trans- 
America Title Insurance Company. (Exhibit C) 

18. The United States acting through the Internal 
Revenue Service continues to assert that its lien 
attaches or attached to one-half of the proceeds of the 
sale of that real property despite clear and unequivocal 
language to the contrary in case law representing the 
controlling precedent in this Circuit. 

WHEREFORE, Plaintiff Sandra L. Craft prays 
that this Court order the following relief: 

(1) That the Notice of Federal Tax Lien filed 
against the subject real property on March 30, 1989 did 
not attach and be declared null and void; 

(2) That the Defendant be ordered to issue a 
Certificate of Release with a disclaimer stating that the 
Notice of Federal Tax Lien does not attach to property 
of Plaintiff Sandra L. Craft; 

(3) That it is hereby adjudged and ordered that the 
Defendant, the United States of America acting 
through the Internal Revenue Service has no right, 
title or interest in or to the proceeds of the Plaintiff ’s 
property; 

68 

(4) That the Plaintiff be awarded costs and ex- 
penses incurred as a result of the Plaintiff being forced 
to institute this action; and 

(5) That TransAmerica Title Insurance Company 
or its agents be hereby ordered to release to the 
Plaintiff those proceeds currently being held in escrow 
and any such other or further equitable relief as this 
Court deems just and proper. 

I declare that the statements above are true to the 
best of my knowledge and belief. 

Dated: March 10, 1993 

/s/ SANDRA L. CRAFT 

SANDRA L. CRAFT 

RHOADES, MCKEE, BOER, 

GOODRICH & TITTA 
Attorneys for Plaintiff 

Dated: April 22, 1993 

By: JEFF MOYER 

JEFF A. MOYER (P44671) 
Business address: 
600 Waters Building 
Grand Rapids, MI 49503 
(616) 235-3500 

69 

[EXHIBIT A] 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 

ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

December 28, 1992 

Ms. Diane Chiles 
TRANSAMERICA TITLE 
921 North Division 
Grand Rapids, Michigan 49503 

Re: Sandra Craft Escrow Account 

Dear Ms. Chiles: 

This letter is to confirm our conversation on 
December 23, 1992 with respect to the funds being held 
in escrow for Mrs. Sandra Craft by TransAmerica Title 
Insurance Company. At this time, this office is pro- 
ceedings with litigation in Federal Bankruptcy Court to 
force the Internal Revenue Service to release their lien 

70 

against the house and accordingly against the funds of 
Sandra Craft. Since certain facts in this case are 
somewhat unique, the Internal Revenue Service seems 
to be taking a posture that it will try this case at 
however many levels are necessary to not only win but 
set a precedent for future situations of this type. 

It is therefore necessary that this escrow account be 
continued until this litigation is concluded one way or 
the other. As a concession to the probable duration of 
the litigation, we think we have a tentative agreement 
with the Internal Revenue Service to split the es- 
crowed funds into two portions, one which would repre- 
sent Sandra Craft’s share if Don still owned part of the 
house, and the other portion would represent Don’s 
share if he still owned part of the house. The Internal 
Revenue Service has made overtures that it might be 
willing to release that half belonging to Sandra Craft to 
her and simply retain the half asserted to belong to Don 
Craft in an interest-drawing escrow account until the 
litigation is completed. As soon as that arrangement 
can be ironed out and put in writing, we will certainly 
be in touch with your office not only to release one-half 
of the amount you are presently holding to Sandra 
Craft, but also to set up a separate escrow account in 
Don Craft’s name at your office or elsewhere if neces- 
sary. Mr. and Mrs. Craft and this office sincerely ap- 
preciate your cooperation and understanding in assist- 
ing them in getting this matter completed as quickly 
and efficiently as possible. 

Finally, if either yourself, your supervisors or any 
outside personnel such as auditors have any questions 

71 

on what the status of the resolution of this matter is, 
please have them contact this office at your con- 
venience. 

Very truly yours, 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

/s/ JEFF MOYER 

JEFF A. MOYER 

JAM/klm 

cc: Don Craft 

72 

[EXHIBIT B] 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 
ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

January 21, 1993 

Ms. Diane Chiles 
TRANSAMERICA TITLE 
921 North Division 
Grand Rapids, Michigan 49503 

Re: Sandra Craft and Don Craft Escrowed Funds 

Dear Ms. Chiles: 

This letter should serve as sufficient documentation 
and authority for TransAmerica Title to release the full 
amount of $119,888.20 currently being escrowed in 
the name of Sandra Craft to the law firm of Rhoades, 
McKee, Boer, Goodrich & Titta. The release of these 
funds is with the knowledge and consent of the Internal 

73 

Revenue Service with the understanding that upon 
receipt of those funds, the law firm of Rhoades, McKee, 
Boer, Goodrich & Titta will disburse one-half of those 
funds to Mrs. Sandra Craft as the Internal Revenue 
Service has no claim against her share of those funds. 
The remaining one-half, or $59,944.10 will be placed in 
an interest bearing account at the law firm of Rhoades, 
McKee, Boer, Goodrich & Titta until such time as a 
resolution of the tax lien dispute is reached and an 
agreement is signed by both the Internal Revenue 
Service and representatives of Don Craft or until 
ordered to release those funds by an appropriate court 
order. 

The signatures listed below should serve as suffi- 
cient authority for TransAmerica Title to release those 
funds to Rhoades, McKee, Boer, Goodrich & Titta. The 
Crafts thank you for your time, cooperation and under- 
standing in holding those funds in escrow for them until 
now. 

Very truly yours, 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

/s/ JEFF MOYER 

JEFF A. MOYER 
Attorneys for Sandra and 

Don Craft 

JAM/klm 

74 

I acknowledge and consent to the release of the 
escrowed funds by TransAmerica Title to Rhoades, 
McKee, Boer, Goodrich & Titta under the terms 
outlined above. 

Dated: February 9, 1993 By: TERRY ZABEL 

TERRY ZABEL, Internal 
Revenue Service, District 

Counsel 

75 

[EXHIBIT C] 

921 North Division Avenue 
Grand Rapids, MI 49503 
Telephone 616-459-2400 
Fax 616-459-0637 

TRANSAMERICA 

TITLE INSURANCE COMPANY 

February 12, 1993 

Mr. Jeff Moyer 
Rhoades, McKee, Boer et al 
161 Ottawa NW, Suite 600 
Grand Rapids, MI 49503 

Re: Sandra and Donald Craft 

Dear Mr. Moyer: 

I have studied your proposal regarding the transfer of 
funds from Transamerica to your firm. 

Inasmuch as the Internal Revenue Service has 
agreed with the assertion that Mrs. Crafts’ assumed 
50% share of the proceeds is not subject to the tax lien, 
we are enclosing our check for those funds. You will 
note that the check is jointly payable to your firm and 
Sandra Craft. 

Unfortunately, I fail to understand how the transfer of 
the remaining funds to your firm eliminates Trans- 
america’s liability for the tax lien insofar as Mr. & Mrs. 
Witt and First Federal of Michigan are concerned. 
Only a “point blank” release or statement by the IRS or 
favorable court proceedings can eliminate the effect of 
the tax lien upon the property we agreed to insure 
without exception to that tax lien. Until such an 

76 

elimination can be obtained, sound business judgement 
dictates that Transamerica must retain the asset to 
offset the liability. 

For the benefit of your client, we would be willing to 
invest those funds in an interest-bearing account. Keep 
in mind that any interest earned would remain in the 
account until resolution of the matter. Diane Chiles 
would be most happy to work out the details of the 
account with you or your client. 

Very truly yours, 

/s/ MONTE RELNERT 

MONTE RELNERT 
Manager 

Encl. 

MLR/js 

[Seal Omitted] 

77 

78 

79 

80 

81 

82 

[EXHIBIT H] 

P.O. Box 3310 
Grand Rapids, MI 49501 

Western District of Michigan 

Case Number: 92-80551 DEN 

Jeff A. Moyer 
161 Ottawa, NW 
Suite 600 
Grand Rapids, MI 
49503 

IN RE: 

Don R. Craft, 521-42-0169 

DISCHARGE OF DEBTOR 

It appearing that a petition commencing a case 
under title 11, United States code, was filed by or 
against the person named above on 01/30/92, and that 
an order for relief was entered under chapter 7, and 
that no complaint objecting to the discharge of the 
debtor was filed within the time fixed by the court [or 
that a complaint objecting to discharge of the debtor 
was filed and, after due notice and hearing, was not 
sustained]; 

IT IS ORDERED that 

1. The above-named debtor is released from all 
dischargeable debts. 

2. Any judgment heretofore or hereafter obtained 
in any court other than this court is null and void as a 
determination of the personal liability of the debtor 
with respect to any of the following: 

83 

(a) debts dischargeable under 11 U.S.C. Sec. 
523; 

(b) unless heretofore or hereafter determined 
by order of this court to be nondischargeable, debts 
alleged to be excepted from discharge under clauses 
(2), (4) and (6) of 11 U.S.C. Sec. 523(a); 

(c) debts determined by this court to be 
discharged. 

3. All creditors whose debts are discharged by this 
order and all creditors whose judgments are declared 
null and void by paragraph 2 above are enjoined from 
instituting or continuing any action or employing any 
process or engaging in any act to collect such debts as 
personal liabilities of the above-named debtor. 

Dated: 06/01/92 
BY THE COURT 

Hon. David E. Nims, Jr. 
United States Bankruptcy Judge 

84 

[EXHIBIT I] 

UNITED STATES BANKRUPTCY COURT FOR THE 
WESTERN DISTRICT OF MICHIGAN 

Case No. NG92-80551 

IN RE DON R. CRAFT, DEBTOR(S) 

NOTICE TO CREDITORS AND OTHER PARTIES 
IN INTEREST 

Notice is given that a hearing will be held before the 
Hon. David E. Nims, Jr. at the U.S. Bankruptcy Court, 
Room 740 Federal Building, 110 Michigan, N.W., Grand 
Rapids, MI, at 10:00 A.M. ON FRIDAY, SEPTEMBER 18, 
1992 to consider and act upon the following matter: 

DEBTOR’S MOTION TO REOPEN 
CHAPTER 7 BANKRUPTCY ESTATE 

-------------------------------------------------------------------------- 

Notice & Motion returned to Jeff A. Moyer, Esq. on 
August 18, 1992 for service of notice & motion upon all 
creditors on the court’s mailing matrix. (kah) 

[Seal Omitted] 

August 18, 1992-kah 
MARK VAN ALLSBURG 

Date CLERK OF BANKRUPTCY COURT 

COPY 

By: Sandra L. Boylan, Deputy Clerk 

85 

UNITED STATES BANKRUPTCY COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. NG 92-80551 
Chapter 7 
Hon. David E. Nims, Jr. 

IN RE DON R. CRAFT, DEBTOR 

[Received: Aug. 14, 1992] 

MOTION TO RE-OPEN BANKRUPTCY ESTATE 

NOW COMES Don R. Craft, by and through his 
attorneys, Rhoades, McKee, Boer, Goodrich & Titta, 
and moves this Court to re-open the above-captioned 
Chapter 7 Bankruptcy under provisions of 11 U.S.C. 
§ 350(b) to accord relief to the Debtor with respect to 
avoiding a Federal tax lien, determining that the 
Federal tax debt involved has been discharged and for 
injunctive relief against the continuing collection 
actions by the Internal Revenue Service. In support of 
his motion to re-open the Bankruptcy case, the Debtor 
states as follows: 

1. The Debtor filed a Chapter 7 Bankruptcy 
Petition with this Court on January 30, 1992. 

2. The Internal Revenue Service was listed as both 
a priority and general unsecured creditor for unpaid 
1040 and 941 tax liabilities for the period of 1979 
through and including 1991. 

3. The Debtor was discharged by Order of this 
Court dated June 1, 1992. 

86 

4. The above-captioned Bankruptcy case was 
closed on June 11, 1992. 

5. The Internal Revenue Service has continued to 
attempt collection of debts previously discharged by 
the Debtor’s Chapter 7 Bankruptcy Petition. 

6. The Debtor requests the above-captioned Bank- 
ruptcy case be re-opened under provisions of § 350(b) to 
accord relief to the Debtor having to do with the extent 
of his discharge and for other cause. 

7. The Debtor further requests the fee to re-open 
this Bankruptcy be waived by the Bankruptcy Court 
since this Motion and the accompanying Adversary 
Complaint are both being filed seeking to enforce the 
terms of the Debtor’s discharge. 

NOW WHEREFORE, Don R. Craft, Debtor, prays 
this Court to re-open this Bankruptcy case to allow the 
appropriate actions to be filed to determine conclu- 
sively whether the listed tax debt was discharged, 
whether the Federal tax lien filed by the Internal 
Revenue Service was valid and to seek this Court’s 
enforcement of the injunctive powers contained within 
provisions of § 524(a)(2) and (3). 

Respectfully submitted, 

Dated: August 14, 1992 
RHOADES, MCKEE, BOER, 

GOODRICH & TITTA 

By: JEFF A. MOYER 

JEFF A. MOYER (P44671) 
Attorneys for Don R. Craft 
Business address: 
600 Waters Building 
Grand Rapids, MI 49503 
(616) 235-3500 

87 

[EXHIBIT J] 

UNITED STATES BANKRUPTCY COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. NG 92-80551 
Chapter 7 
Hon. David E. Nims, JR. 

IN RE DON R. CRAFT, DEBTOR 

[Oct. 7, 1992] 

ORDER RE-OPENING CASE 

At a session of said Court of Bankruptcy held in 
the Federal Building, in Grand Rapids, Michigan, 
on September 18, 1992. 

PRESENT: HONORABLE DAVID E. NIMS, JR. 

United States Bankruptcy Judge 

The Debtor having moved this Court to re-open his 
Chapter 7 Bankruptcy to accord certain relief; the 
Court having reviewed the pleadings and the Court’s 
file; and the Court being otherwise duly apprised; the 
Court having ordered this Case re-opened from the 
bench at a session of open court on September 18, 1992; 

IT IS SO ORDERED. 

[Illegible] 
Hon. David E. Nims, Jr. 
United States Bankruptcy Judge 

88 

Examined, Countersigned & 
Attest: A True Copy 

Entered 

_____________ ___________________ 
Deputy County Clerk 

Deputy County Clerk 
Return for service to: 
Jeff A. Moyer 
RHOADES, MCKEE, BOER, 
GOODRICH & TITTA 
600 Waters Building 
Grand Rapids, MI 49503 
(616) 235-3500 

89 

[EXHIBIT K] 

United States Bankruptcy Court 
WESTERN District of MICHIGAN 

[ADVERSARY PROCEEDING 
NO. 92 8542] 

In re 

Bankruptcy Case No. NG 92-80551 

DON R. CRAFT, 

Debtor 

DON R. CRAFT and SANDRA L. 

Plaintiff 

CRAFT, 

INTERNAL REVENUE SERVICE, 

Defendant 

SUMMONS AND NOTICE OF PRETRIAL 
CONFERENCE IN AN ADVERSARY PROCEEDING 

YOU ARE SUMMONED and required to submit a motion 
or answer to the complaint which is attached to this 
summons to the clerk of the bankruptcy court within 30 days 
after the date of issuance of this summons, except that the 
United States and its offices and agencies shall submit a 
motion or answer to the complaint within 35 days. 

Address of Clerk 

Mark Van Allsburg, Clerk of Court 
U.S. Bankruptcy Court 
Post Office Box 3310 
Grand Rapids MI 49501 

At the same time, you must also serve a copy of the motion 
or answer upon the plaintiff ’s attorney. 

Name and Address of Plaintiff ’s Attorney 

Jeff A. Moyer (P44671) 
600 Waters Building 
Grand Rapids, MI 49503 

90 

If you make a motion, your time to answer is governed by 
Bankruptcy Rule 7012. 

YOU ARE NOTIFIED that a pretrial conference of the 
proceeding commenced by the filing of the complaint will be 
held at the following time and place. 

Address 

United States Bankruptcy Court 
7th Floor, Federal Building 
110 Michigan, N.W. 
GRAND RAPIDS MICHIGAN 

Room 
11:00 A.M. 
Date and Time 
Tuesday/ 
Dec. 22, 1992 

IF YOU FAIL TO RESPOND TO THIS SUMMONS, YOUR 
FAILURE WILL BE DEEMED TO BE YOUR CONSENT 
TO ENTRY OF A JUDGMENT BY THE BANKRUPTCY 
COURT AND JUDGMENT BY DEFAULT MAY BE 
TAKEN AGAINST YOU FOR THE RELIEF DEMANDED 
IN THE COMPLAINT. 

MARK VAN ALLSBURG, 

Clerk of the Bankruptcy Court 

10-14-92 dgs 
By: DAVID G. SCALICI 

Date Deputy Clerk 

David G. Scalici 

91 

UNITED STATES BANKRUPTCY COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. GG 92-80551 
Chapter 7 
HON. JAMES D. GREGG 

IN RE DON R. CRAFT, DEBTOR 

DON R. CRAFT AND SANDRA L. CRAFT, PLAINTIFFS 

vs. 

INTERNAL REVENUE SERVICE, DEFENDANT 

[ADVERSARY PROCEEDING NO. 

92 8542 

ALL DOCUMETS REGARDING THIS 
MATTER MUST BE IDENTIFIED BY 
BOTH ADVERSARY AND DEBTOR 
CASE NUMBERS] 

[Received: AUG. 14, 1992 PM 4:27] 

COMPLAINT TO DETERMINE DISCHARGEABILITY, 
VALIDITY OF FEDERAL TAX LIENS, AND 
ENFORCEMENT OF POST-DISCHARGE INJUNCTION 

NOW COMES Don R. Craft (“Debtor”) and Sandra 
L. Craft, by and through their attorneys Rhoades, 
McKee, Boer, Goodrich & Titta, and for their Complaint 
state as follows: 

92 

1. This Complaint is to determine if certain 
indebtedness asserted by the Internal Revenue Service 
(“IRS”) against the Debtor has been discharged, to 
determine the validity of the Federal tax liens filed by 
the IRS, and to enforce the injunctive provisions of 11 
U.S.C. § 524(a)(2) and (3) against the IRS. This Com- 
plaint is filed pursuant to Federal Rule of Bankruptcy 
Procedure 7001(2), (6), (7) and (9). 

2. This Court has jurisdiction in this adversary 
proceeding pursuant to 28 U.S.C. §§ 157 and 1334 since 
this proceeding arises in the above-captioned Chapter 7 
case which was heard before this Court. This adver- 
sary proceeding is a core proceeding under 28 U.S.C. 
§ 157(b)(2)(C), (I), (K) and (O). 

3. Don Craft was a Michigan resident formerly 
residing at 2656 Berwyck Road, S.E., Grand Rapids, 
Michigan 49506 at the time this Chapter 7 petition was 
filed and for a period in excess of 180 days prior to 
filing. Sandra L. Craft is the non-debtor spouse who 
resides with the Debtor. 

4. The Defendant is an instrumentality of the 
United States government charged with the 
responsibility of collection and enforcement under 
various Federal taxation statutes. The Defendant’s 
local representative in the office of District Director is 
Mr. Paul J. Papsun who performs duties for the IRS as 
an agent at the Department of Treasury, 477 Michigan 
Avenue, Detroit, Michigan 48226. 

5. Don R. Craft filed a Chapter 7 petition with this 
Court on January 30, 1992. 

6. The IRS was listed on Schedule E of the 
Debtor’s Chapter 7 petition as a priority creditor in the 
amount of $10,300 for unpaid 1040 liability for years 

93 

1988 through 1991 and also an undetermined amount of 
unpaid “trust fund” liability arising out of unpaid 941 
taxes for the years 1979 through 1991. 

7. The IRS was further listed on Schedule F as an 
unsecured creditor in the amount of $509,271.71 for 
unpaid 1040 tax liability for tax years 1979 through and 
including 1987 after determining that the provisions of 
§ 507(a)(7), § 503(b)(1)(B) and § 523(a)(1) were not 
applicable. 

8. The petition, schedules and matrix on file with 
the Court reflect appropriate notice to the IRS and the 
Debtor’s schedules further provide record notice to the 
IRS of the treatment of their claim by the Debtor’s 
bankruptcy petition. 

9. Don R. Craft, Debtor, was discharged by Order 
of this Court signed on June 1, 1992. 

10. The IRS did not at any time file any motion, 
request for hearing or adversary proceeding before this 
Court concerning the above-captioned bankruptcy case 
to assert that the treatment of its claims were incorrect 
or that the debts should not be discharged. 

11. The IRS filed a Notice of Federal Tax Lien 
(Form 668(Y)) with the Kent County Register of Deeds 
against the Debtor for a residence listed at 2656 
Berwyck, S.E., Grand Rapids, Michigan 49506 on March 
30, 1989. See Exhibit A. 

12. At the time the Federal tax lien was recorded 
against the interest of the Debtor in the house located 
on 2656 Berwyck, this home was owned by the Debtor 
and his non-debtor spouse as tenancy by the entireties 
property. See Exhibit B. 

94 

13. Under the current and controlling case law 
within the Sixth Circuit as it determined the appli- 
cation of Michigan law, a Federal tax lien against the 
husband only does not attach to any home owned by the 
husband and wife by tenancy by the entireties. United 
States v. Certain Real Property Located at 2525 LeRoy 
Lane, West Bloomfield, Michigan, 910 F.2d 343, 350 
(6th Cir. 1990); Cole v. Cardoza, 441 F.2d 1337, 1343 
(6th Cir. 1971). The Cardoza Court went on to state 
that a Federal tax lien against a husband only consti- 
tuted a cloud upon the title to a Michigan home owned 
by the husband and wife as tenancy by the entireties 
property and that the husband and wife were entitled 
to have the Federal tax lien declared a nullity as to 
their home. That Court went on to order the county 
register of deeds to declare the Federal tax lien filed to 
be null and void as to that property. Cardoza, 441 F.2d 
at 1344. 

14. The IRS has been informed on several occasions 
that this factual situation exists and that their Federal 
tax lien could not have legally attached. Counsel for the 
Debtor has further requested that the IRS provide a 
“Cardoza” letter to serve as a release to any title com- 
pany for the Federal tax lien filed against the subject 
property. See Exhibits C, D, and E. 

15. The IRS has continued and persisted in refusing 
to acknowledge the invalidity of their lien, release their 
lien as filed against this home and has continued to seek 
enforcement of this discharged debt in violation of the 
provisions of § 524(a)(2) and (3). See Exhibit F. 

WHEREFORE, Don R. Craft and Sandra L. Craft 
request this Court to determine that (a) the entire debt 
which is the subject of the Federal tax lien filed on 
March 30, 1989 has been discharged; (b) said Federal 

95 

tax lien was a nullity and did not attach to the marital 
home owned by the Debtor and his non-debtor spouse 
as tenancy by the entireties’ property at the time the 
lien was filed; (c) that said tax lien should be ordered by 
this Court to be removed from the title by the register 
of deeds for Kent County as being null and void; and 
(d) that the IRS be hereafter permanently enjoined 
from any and all continuations or commencements of 
actions or processes to collect, recover or enforce this 
discharged debt against the Debtor. 

Dated: August 13, 1992 
RHOADES, MCKEE, BOER, 

GOODRICH & TITTA 
Attorneys for Don R. Craft 
and Sandra L. Craft 

By: JEFF MOYER 

JEFF A. MOYER (P44671) 

Edward B. Goodrich 

(P14176) 

Peter A. Titta (P21476) 

Business address: 
600 Waters Building 
Grand Rapids, MI 49503 
(616) 235-3500 

96 

97 

98 

[EXHIBIT C] 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 
ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

May 26, 1992 

Mr. Paul Patsun 
Special Procedures 
IRS Advisory Unit 1 
Stop 47 
477 Michigan Ave. 
Detroit, MI 48226 

In Re: Federal Tax Lien: Donald Craft, 2656 

Berwyck, East Grand Rapids, Michigan 

Dear Mr. Patsun: 

We are the attorneys for the Seller of the real estate 
located at 2656 Berwyck. 

99 

A title search related to the sale has disclosed a 
Notice of Federal Tax Lien dated March 30, 1989 and 
recorded April 7, 1989, in Liber 2613 at Page 232, was 
filed against Donald Craft. A copy of the lien is 
attached. At the time the lien was recorded, the real 
estate was owned by the taxpayer, Mr. Donald Craft 
and his spouse, Sandra Lee Craft, as tenants by the 
entirety. A copy of the deed is attached. 

Mr. Craft 
deeded his interest in the property to Sandra Lee Craft 
on August 28, 1989, by deed recorded in Liber 2660 at 
Page 7 on August 29, 1989. A copy of the deed is 
attached. 

We have been requested by the title insurance 
company to obtain a “Cardoza” letter from your office 
indicating that the lien against Mr. Craft, individually, 
has no validity as to the property owned as tenants by 
the entirety. Cole v. Cardoza, 441 F.2d 1337 (6th Cir. 
1971). 

Would you please provide such verification as to Mr. 
Craft. 

Very truly yours, 

/s/ PETER A. TITTA 

PETER A. TITTA 
PAT: ab 

cc: Mr. Donald Craft 

Transamerica Title 
Ms. Sue Allen, Fletcher Realty 

100 

[EXHIBIT D] 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 
ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

Second Request – June 11, 
1992 

May 26, 1992 

Mr. Paul Patsun 
Special Procedures 
IRS Advisory Unit 1 
Stop 47 
477 Michigan Ave. 
Detroit, MI 48226 

In Re: Federal Tax Lien: Donald Craft, 2656 

Berwyck, East Grand Rapids, Michigan 

101 

Dear Mr. Patsun: 

We are the attorneys for the Seller of the real estate 
located at 2656 Berwyck. 

A title search related to the sale has disclosed a 
Notice of Federal Tax Lien dated March 30, 1989 and 
recorded April 7, 1989, in Liber 2613 at Page 232, was 
filed against Donald Craft. A copy of the lien is 
attached. At the time the lien was recorded, the real 
estate was owned by the taxpayer, Mr. Donald Craft 
and his spouse, Sandra Lee Craft, as tenants by the 
entirety. A copy of the deed is attached. 

Mr. Craft 
deeded his interest in the property to Sandra Lee Craft 
on August 28, 1989, by deed recorded in Liber 2660 at 
Page 7 on August 29, 1989. A copy of the deed is 
attached. 

We have been requested by the title insurance 
company to obtain a “Cardoza” letter from your office 
indicating that the lien against Mr. Craft, individually, 
has no validity as to the property owned as tenants by 
the entirety. Cole v. Cardoza, 441 F.2d 1337 (6th Cir. 
1971). 

Would you please provide such verification as to Mr. 
Craft. 

Very truly yours, 

/s/ PETER A. TITTA 

PETER A. TITTA 
PAT: ab 

cc: Mr. Donald Craft 

Transamerica Title 
Ms. Sue Allen, Fletcher Realty 

102 

[EXHIBIT E] 

RHOADES, MCKEE, BOER, GOODRICH & TITTA 

ATTORNEYS AT LAW 
161 OTTAWA AVENUE N.W., SUITE 600 
GRAND RAPIDS, MICHIGAN 49503-2793 

TELEPHONE (616) 235-3500 

FAX (616) 459-5102 
________ 

OF COUNSEL 

JEAN MCKEE 
CHARLES T. ZIMMERMAN 
ROBERT F. WILLIAMS 
ROBERT J. DE BOER 
________ 
AFFILIATED OFFICES 
DE FRANCESCO & DE FRANCESCO 
ST. JOSEPH, MI & NEW BUFFALO, MI 

[NAMES OMITTED] 

July 15, 1992 

Internal Revenue Service 
Attn: Paul J. Papsun 
477 Michigan Avenue 
Detroit, MI 48226 

RE: Request for a Certificate of Discharge – 

Donald Craft 
Refer Reply to: PJP 
Our File No.: 37084-1 

Dear Mr. Papsun: 

103 

Enclosed are the following documents which I am 
submitting to your office with regard to the request for 
a Certificate of Discharge – Donald Craft: 

1. Copy of purchase deed; 

2. Copy of Quit Claim Deed from Mr. and Mrs. 
Craft to Mrs. Craft dated August 28, 1989, and 
recorded August 29, 1989, at Liber 2660, Page 7; 

3. Printouts from NBD showing mortgage pay- 
ments made and monthly payment; 

4. Copy of St. Mary’s Hospital Credit Union state- 
ments showing payment of the $273.50 monthly 
mortgage amount; 

5. Copy of signature card establishing that Donald 
Craft did not have control over St. Mary’s 
Account dated 2/23/92; 

6. Copy of Sandra Craft 1040 Schedule A showing 
she paid all mortgage payments and taxes on 
the property; and, 

7. Copy of bankruptcy court decree discharging all 
debts, which included federal taxes, of Mr. 
Donald Craft. 

These are furnished in response to the issue of 
whether Mrs. Craft was actually paying the mortgage 
or acted as a nominee on behalf of Mr. Craft. 

Very truly yours, 

/s/ PETER A. TITTA 

PETER A. TITTA 
PAT: ka 
cc: Sandra Craft 
Enclosures 

104 

[EXHIBIT F] 

Internal Revenue Service 

Department of Treasury 

District Director 

477 Michigan Avenue 

Detroit, Michigan 48226 

Person to Contact: 
Paul J. Papsun 
Peter Titta 

Telephone Number: 
Attorney At Law 

(313) 226-7157 

161 Ottawa Avenue N.W. #600 
Refer Reply to: 

Grand Rapids, Michigan 
PJP 

49503-2793 Date: June 15, 1992 

Re: Request for a Certificate of Discharge- 
Donald Craft 

Dear Mr. Titta: 

I have received and reviewed the above request for a 
Cole v. Cardoza letter for property located at 2656 
Berwyck. Per our conversation on June 15, 1992, the 
IRS would issue a COLE Letter on this property if the 
IRS receives all payments made to the mortgage from 
September 1, 1989 to the present. In addition, Mr. 
Craft would have to quit claim the property back to 
both him and his wife (as it correctly should be). If you 
wish to follow this course of action, please resubmit 
your application with the with a COPY of this LETTER 

and the following: 

1. Copy of purchase deed. 

2. Copy of original quit claim deed. 

3. Copy of quit claim deed to correct. 

4. Letter from bank as to the amount of each monthly 
payments for this specific piece of property. 

105 

5. Copy of the federal tax lien. 

6. Certified check in the amount of those payments. 

7. Please sign your application under penalties of 
perjury. 

If you wish not to follow this course of action, your 
alternative would be to file a quiet title action joining 
the Internal Revenue Service. 

At this time your case has been closed. Thank you for 
your inquiry and we hope that your questions have 
been answered. 

Sincerely, 

/s/ ELIZABETH J. PATINO 

ELIZABETH J. PATINO 
Chief, S.P.B. Advisory Unit 

106 

107 

[EXHIBIT L] 

UNITED STATES BANKRUPTCY COURT 
FOR THE WESTERN DISTRICT OF MICHIGAN 

Case No. NG 92-80551 
Adversary Proceeding No. 92-8542 
Chapter 7 
HON. JAMES D. GREGG 

IN RE: DON R. CRAFT, DEBTOR 

DON R. CRAFT AND SANDRA L. CRAFT, PLAINTIFFS 

vs. 

INTERNAL REVENUE SERVICE, DEFENDANT 

[Filed Jan. 25, 1993] 

CONSENT JUDGMENT AND WITHDRAWAL OF 
ADVERSARY PROCEEDING 

The undersigned parties appearing through counsel 
in the above-captioned Adversary Proceeding before 
this Court have consented to the entry of a Judgment 
by this Court and the withdrawal of this adversary 
proceeding upon the entry of that Judgment under the 
following terms: 

1. The Debtor, Mr. Don R. Craft, is deemed to be 
discharged of all further personal liability to the 
Internal Revenue Service for liabilities arising out of 
1040 tax returns for the period 1979 through and 

108 

including 1991 with the following exceptions: Priority 
taxes in the amount of $10,300 representing liabilities 
for the years 1988 through 1991, and the secured 
amount of $2,109 representing the value of the personal 
property to which the IRS [2] tax lien attached are not 
discharged. All remaining personal liability of Don R. 
Craft to the Internal Revenue Service based on the 
1040 tax liability for those years is discharged under 
provisions of 11 U.S.C. § 727(b). 

2. Upon entry of this Judgment, the Debtor agrees 
to withdraw this adversary proceeding against the 
Internal Revenue Service forthwith. 

Dated: January 21, 1993 By: TERRY ZABEL 

TERRY ZABEL, District 

Counsel 
Internal Revenue Service 

Dated: January 21, 1993 By: JEFF MOYER 

JEFF A. MOYER (P44671) 
Attorneys for Don and 

Sandra Craft 

ORDER 

At a session of said Court of Bankruptcy held in the 
Federal Building, in Grand Rapids, Michigan, on 
JAN 27, 1993. 

PRESENT: HONORABLE JAMES D. GREGG 

United States Bankruptcy Judge 

The above-captioned Bankruptcy having been filed 
on January 30, 1992; the Debtor having received his 
discharge by Order of this Court dated June 1, 1992; the 
Debtor having filed a Motion to Reopen this Bank- 

109 

ruptcy seeking relief against the Internal Revenue 
Service on August 14, 1992; the Debtor having filed an 
Adversary Complaint to determine the discharge- 
ability, the validity of Federal Tax Liens and to enforce 
post-discharge injunction on August 14, 1992; the Court 
having reviewed and accepted the [3] Stipulation of 
Facts as between these two parties; the Court having 
reviewed the above Consent Judgment and being 
otherwise duly advised on the premises: 

IT IS SO ORDERED. 

Dated: January ___, 1993 

/s/ JAMES D. GREGG 

U.S. Bankruptcy 

Judge