United States v. Harry S. Stonehill Robert P. Brooks

Appellants Harry S. Stonehill and Robert P. Brooks seek to prevent the United States from selling real property in which they have an interest, pursuant to a federal tax lien. The property is held in a tax receivership, and the receiver entered into a contract to sell the property to the Town of Tiburón, California, for $6.8 million. The terms of the contract include a provision requiring ..dismissal of two state lawsuits filed against Tiburón by the receiver alleging that Tiburón depressed the value of the property through a series of illegal zoning procedures. The receiver agreed to dismiss the lawsuits on behalf of the receivership, but appellants refused to dismiss their personal claims. The district court ordered appellants to dismiss their claims, and they appealed this order. We now affirm.

I

This case began with a tax dispute filed against the appellants by the United States in 1965. Final judgment was entered against appellants in 1980, and the government subsequently secured liens on appellants’ property. In 1984, at appellants’ request, the court appointed a tax receiver to manage the foreclosure of the property. The real property at issue here is the last remaining…