United States District Court, D. Arizona
Nancy K. Duckett, as Personal Representative for the estate of Miyoko Enomoto, Plaintiff,
Dennis M. Enomoto; United States Internal Revenue Service; Kurt A. Tittelbach, Trustee; Defendants.
V.Wake United States District Judge
the Court is the IRS’s Motion to Alter or Amend
Judgment and to Distribute Interpleaded Funds (Doc. 97) and
the accompanying briefs. For the reasons that follow, the
Motion will be denied.
Dennis Enomoto is the beneficiary of a testamentary trust
created by his mother. In relevant part, the trust instructs
the trustee to pay Dr. Enomoto whatever amount the trustee
deems necessary for Dr. Enomoto’s support and
The Trustee shall pay to [Dr. Enomoto] so much or all of the
net income and principal of the trust as in the sole
discretion of the Trustee may be required for support in the
beneficiary’s accustomed manner of living, for medical,
dental, hospital, and nursing expenses, or for reasonable
expenses of education, including study at college and
graduate levels. . . . In the Trustee’s sole discretion
and to the extent the Trustee deems advisable, the Trustee
may consider or disregard the funds available to the
beneficiary from other sources or the duty of anyone to
support the beneficiary.
(Doc. 49-1 at 9.)
seeks distribution of the trust funds to the United States to
satisfy Dr. Enomoto’s tax deficiencies. Dr. Enomoto
opposes this distribution. The parties previously presented
the Court with cross-motions for summary judgment (Docs. 48,
58, 89, 91) on the issue of "whether the United States
has federal tax liens on the [trust] funds"
(see Doc. 49 at 2).
lengthy order (Doc. 95), the Court divided the issue into
three parts: (1) What are Dr. Enomoto’s rights in the
trust funds? (2) Does the federal tax lien attach to those
rights? (3) If so, is the tax lien presently enforceable?
Court answered as follows: (1) Dr. Enomoto has a conditional
right in the trust funds. He can compel payment only when the
trustee’s withholding of funds would be an abuse of
discretion in applying the standard of payment set forth in
the trust for Dr. Enomoto’s support. (2) The federal
tax lien attaches to this right. (3) The tax lien is not
presently enforceable because Dr. Enomoto’s right in
the trust funds "has no permanently fixed dollar
value" and "is variable according to [his]
needs." (Doc. 95 at 15 (quoting United States v.
Taylor, 254 F.Supp. 752, 756 (N.D. Cal. 1966).) This
variability poses "practical problems of enforcing the
lien" that cannot be resolved without evidence of Dr.
Enomoto’s "current needs and living demands."
(Id. at 15-16 (quoting Taylor, 254 F.Supp.
reaching these conclusions, the Court noted the absence of
binding federal appellate case law and explained that
district courts had reached "mixed results" that
were "difficult to harmonize . . . in a principled
way." (Id. at 10-11.) Both Dr. Enomoto and the
IRS relied on factually distinguishable district court cases
from other circuits. (Id. at 11-14.) The Court,
however, followed a more analogous and more persuasive case
from within this circuit: United States v. Taylor,
254 F.Supp. 752 (N.D. Cal. 1966).
the Court entered judgment (1) declaring that the tax lien
extends to Dr. Enomoto’s right in the trust funds, (2)
declaring that the lien is enforceable only as to the amount
to which Dr. Enomoto’s right extends, (3) prohibiting
the trustee from distributing any of the funds, (4)
permitting the IRS to request post-judgment discovery and
noting that the Court "may order distributions upon the
parties’ stipulation or a party’s separate
motion, " and (5) retaining jurisdiction to enforce the
judgment. (Doc. 96.)
now moves, pursuant to Federal Rule of Civil Procedure 59(e),
to "alter or amend the Judgment so that the federal tax
liens against [Dr. Enomoto] extend over all of the [trust]
funds" and to order the trustee "to distribute all
of the Funds to the United States." (Doc. 97 at 1-2.)
or amending a judgment under Rule 59(e) is "an
extraordinary remedy which should be used sparingly."
Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111
(9th Cir. 2011) (citation omitted). It is generally limited
to four purposes: (1) to correct "manifest errors of law
or fact upon which the judgment rests, " (2) to present
"newly discovered or previously unavailable evidence,
" (3) to prevent "manifest injustice, " or (4)
to respond to "an intervening change in controlling
law." Id. It "may not be used to
relitigate old matters, or to raise arguments or present
evidence that could have been raised prior to the entry of
judgment." Exxon Shipping Co. v. Baker, 554