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United States v. Olsen

United States District Court, D. Colorado

January 27, 2016



William J. Martínez United States District Judge

Plaintiff United States of America (“Plaintiff”) brings this action against Defendants Carl F. Olsen and El Paso County, Colorado to reduce to judgment outstanding federal income tax assessments and to foreclose federal tax liens. (ECF No. 1.) Before the Court is Plaintiff’s Motion for Default Judgment Against Defendant Carl F. Olsen (the “Motion”). (ECF No. 22.) For the following reasons, the Motion is granted.


Plaintiff initiated this action by filing a Complaint on December 5, 2014. (ECF No. 1.) On December 31, 2014, Defendant Olsen filed a pro se Motion to Dismiss for lack of jurisdiction. (ECF No. 6.) Magistrate Judge Kristen L. Mix recommended that the Motion to Dismiss be denied. (ECF No. 29). Defendant Olsen did not object to the Recommendation and the Court adopted the Recommendation on June 10, 2015. (ECF No. 30.)

On July 28, 2015, Plaintiff filed a Motion for Entry of Default against Defendant Olsen. (ECF No. 33.) The Court, in considering that motion, noted that Defendant Olsen had failed to comply with his discovery obligations and failed to file a responsive pleading after the denial of his Motion to Dismiss. (ECF No. 36 at 3.) Furthermore, the Court found that Defendant Olsen had failed to participate in the case in any way since he filed his Motion to Dismiss in 2014. (Id.) As a result, the Court granted Plaintiff’s Motion for Entry of Default on August 21, 2015. (Id. at 4.) Plaintiff filed its Motion for Entry of Default Judgment Against Defendant Olsen on October 20, 2015. (ECF No. 38.) Defendant Olsen filed no response.

The Court has reviewed the motion, the exhibits and affidavits, and the applicable law, and is sufficiently advised on the issues involved.


Default must enter against a party who fails to appear or otherwise defend a lawsuit. Fed.R.Civ.P. 55(a). Pursuant to Rule 55(b)(1), default judgment must be entered by the clerk of court if the claim is for “a sum certain”; in all other cases, “the party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2). “[D]efault judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection.” In re Rains, 946 F.2d 731, 732–33 (10th Cir. 1991) (internal quotation marks and citation omitted).

Further, “a party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the ‘sound judicial discretion’ of the court.” Greenwich Ins. Co. v. Daniel Law Firm, 2008 WL 793606, at *2 (D. Colo. Mar. 22, 2008) (internal citation omitted). Before granting a motion for default judgment, the Court must take several steps. First, the Court must ensure that it has personal jurisdiction over the defaulting defendant and subject matter over the action. See Williams v. Life Sav. & Loan, 802 F .2d 1200, 1202-03 (10th Cir. 1986). Next, the Court should consider whether the well-pleaded allegations of fact-which are admitted by the defendant upon default-support a judgment on the claims against the defaulting defendant. See Fed. Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, *3 (D. Colo. March 20, 2009) (“Even after entry of default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate basis for the entry of a judgment.”) (citations omitted). “In determining whether a claim for relief has been established, the well-pleaded facts of the complaint are deemed true.” Id. (citing Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983)).

Once the Court is satisfied that default judgment should be entered, it has the discretion to hold a hearing to determine the amount of damages. See Fed. R. Civ. P. 55(b)(2). Generally, a damages hearing is not needed when the damages requested are for a sum certain. See United States v. Craighead, 176 F. App’x 922, 925 (10th Cir. 2006).


A. Jurisdiction

First, the Court has subject matter jurisdiction over this case. District courts have subject matter jurisdiction over “any civil action arising under any Act of Congress providing for internal revenue.” 28 U.S.C. § 1340. Additionally, district courts have the authority to order the sale of property encumbered by a tax lien, and to render such judgments and decrees as may be necessary or appropriate to complete that sale. 26 U.S.C. §§ 7402(a), 7403(c). Thus, the Court is satisfied that it has subject matter jurisdiction in this lawsuit.

Second, the Court has personal jurisdiction over residents of the state of Colorado because the District of Colorado encompasses the entire state. See Dallas Buyers Club, LLC v. Cordova, 81 F.Supp.3d 1025, 1032 (D. Colo. 2015) (“As Defendant resides in the District of Colorado, the Court has personal jurisdiction over him.”). In the Complaint, Plaintiff alleges that Defendant Olsen is a resident of Colorado. (ECF No. 1 at 2). Plaintiff’s ...

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