George Clinton, an individual v. Will Adams, an individual, p.k.a. will.i.am, DBA Will I Am Music Publishing;

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GEORGE CLINTON, an individual,
Plaintiff - Appellee,
v.
WILL ADAMS, an individual, p.k.a.
will.i.am, DBA Will I Am Music
Publishing; et al.,
Defendants - Appellees.,
ALLAN LAW GROUP P.C.,
Appellee,
v.
HENDRICKS & LEWIS PLLC,
Creditor - Appellant.
No. 12-56663
D.C. No. 2:10-cv-09476-ODW-PL
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Otis D. Wright, II, District Judge, Presiding
Argued and Submitted February 4, 2014
FILED
FEB 24 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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Seattle, Washington
Before: FISHER, GOULD, and CHRISTEN, Circuit Judges.
This appeal concerns the priority of various claimants to settlement funds
resulting from the resolution of a copyright infringement action. The district court,
without explanation, granted an order distributing funds to the Internal Revenue
Service, Jeffrey Thennisch, Hendricks & Lewis, and the Allan Law Group. We
have jurisdiction pursuant to 28 U.S.C. § 1291. We review questions of California
law regarding lien priority de novo. See Paul Revere Ins. Grp. v. United States,
500 F.3d 957, 960 n.5 (9th Cir. 2007).
Hendricks & Lewis argues that Clinton “failed to substantiate his claimed
entitlement to any portion of the settlement funds directly or indirectly through his
alleged federal tax liability.” We agree.
When a taxpayer fails to pay his federal taxes, after the IRS demands
payment, the amount due becomes a ‘lien in favor of the United States
upon all property and rights to property, whether real or personal,
belonging to such person.’ 26 U.S.C. § 6321. The lien attaches
immediately to the taxpayer’s property, 26 U.S.C. § 6322, and
becomes effective against certain third parties after the IRS has filed
notice, 26 U.S.C. § 6323(f).
Gorospe v. Comm’r of Internal Revenue, 451 F.3d 966, 967 (9th Cir. 2006)
(emphasis added). Section 6323(a) specifically provides: “[t]he lien imposed by
section 6321 shall not be valid as against any . . . judgment lien creditor until
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notice . . . which meets the requirements of [§ 6323(f)] has been filed by the
Secretary.”
Hendricks & Lewis is a judgment lien creditor. The record does not include
evidence that notice of Clinton’s federal tax debt was filed as required by §
6323(f); Clinton only filed a faxed letter he received from the Internal Revenue
Service indicating that he owed a debt. As such, the district judge erred by
prioritizing Clinton’s tax debt ahead of Hendricks & Lewis’s judgment lien. We
reverse the portion of the district court’s order allocating settlement funds to the
Internal Revenue Service.
The parties dispute how the remaining settlement funds should be
distributed. Thennisch argues that the debt owed to him takes priority over
Hendricks & Lewis’s lien because his work created the settlement proceeds.
Hendricks & Lewis argues that Thennisch failed to prove the existence of an
attorney lien in the first instance because he failed to file a copy of his fee
agreement, and that in any case its first-in-time judgment lien takes priority over
Thennisch’s claimed attorney lien per California Civil Code § 2897. The Allan
Law Group did not participate in this appeal, but it argued in the district court that
it had both contractual and charging liens on the settlement funds. Hendricks &
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Lewis argues that its judgment lien takes priority over the Allan Law Group’s
claimed liens.
We cannot reconcile the district court’s allocation of settlement funds with
the parties’ priority claims. Because the district court did not explain its allocation,
we remand to the district court for further findings as to each claimant’s
entitlement to a lien on the settlement funds, if any, and the relative priority of
these liens. The panel retains jurisdiction over this appeal.
REVERSED IN PART; REMANDED for further proceedings
consistent with this disposition.
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