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United States v. Lang

February 23, 2007

UNITED STATES OF AMERICA, PLAINTIFF,
v.
KENDELL LANG; PATRICIA LANG; CASCADE PROFESSIONAL TRUST, KENDELL LANG, TRUSTEE; WASHINGTON MUTUAL BANK; NATIONAL PROPERTY TRUST; TAYLOR & ASSOCIATES; WHITE MEMORIAL MEDICAL CENTER; STATE OF CALIFORNIA, FRANCHISE TAX BOARD, DEFENDANTS.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER DENYING MOTION TO DISMISS COMPLAINT

Defendants Kendell Lang, individually and as trustee for Cascade Professional Trust, and Patricia Lang, (collectively "Moving Defendants") move to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim. Plaintiff opposes the motion. Defendants Washington Mutual Bank, National Property Trust, Taylor & Associates, White Memorial Medical Center, and State of California, Franchise Tax Board have not responded to the motion. Pursuant to Local rule 7.1(d)(1), this matter is appropriate for decision without oral argument. For the reasons set forth below, the motion is denied.

BACKGROUND

On December 4, 2006 Plaintiff filed a Complaint to Reduce Federal Tax Assessments to Judgment and to Foreclose Federal Tax Liens. Among other things, the Government seeks to foreclose on real property located at 2605 Long Jack Road, Encinitas, California. (Compl. ¶4). Defendants Kendell and Patricia Lang reside at the property. (Compl. ¶¶5, 6). Kendall Lang is also named in his capacity as trustee of Cascade Professional Trust ("Trust") as Trust may have an interest in the real property. (Compl. ¶7). Defendants Washington Mutual Bank, National Property Trust, Taylor & Associates, While Memorial Medical Center, and State of California, Franchise Tax Board are named as defendants because they "may claim an interest in the real property that is the subject of this action." (Compl. ¶¶ 8-12).

The first two claims for relief seek to reduce the tax assessments to judgment against that Kendell and Patricia Lang in the amount of $305,388.56 for tax years 1993-1994 and 1999-2002. (Compl. ¶¶16-20). The third claim seeks to foreclose the federal tax liens against the property held by Cascade Professional Trust/National Property Trust as nominee of Kendell and Patricia Lang. (Compl. ¶¶222-28).

Moving Defendants, acting in propria persona, answered the complaint on January 4, 2007. On February 12, 2007 Washington Mutual answered the Complaint by filing a Notice of Disclaimer of Interest.

DISCUSSION

Subject Matter Jurisdiction

Federal Rule of Civil Procedure 12(b)(1) provides that an action may be dismissed for lack of subject matter jurisdiction. On such a motion, the plaintiff bears the burden of establishing that subject matter jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. Of Am., 511 U.S. 373, 377 (1994).

The Complaint alleges that the court has jurisdiction over this action pursuant to 28 U.S.C. §§1340 and 1345 and 26 U.S.C. §7402. The court concludes that the court has subject matter jurisdiction over this action because the action arises under the internal revenue laws, 28 U.S.C. §1340; the United States commenced this action, 28 U.S.C. §1345; and the United States is seeking to enforce internal revenue laws. 26 U.S.C. §7402(a).

The court notes that the thrust of Moving Defendants' motion is to bring evidentiary challenges to the claims alleged in the Complaint. In short, Moving Defendants argue that they owe no tax liability and therefore the court lacks subject matter jurisdiction. The court notes that the Federal Rules provide for "notice pleading." That is, the pleadings need only give fair notice of the pleader's claim or defense so that opposing parties can respond, undertake discovery and prepare for trial. See Conley v. Gibson, 355 U.S. 41, 47-48 (1957). To the extent Moving Defendants seek to raise evidentiary matters, "federal courts and litigants must rely on summary judgment and control of discovery to weed out unmeritorious claims." Letherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168-69 (1993). Accordingly, Moving Defendants' merits-based arguments are better left to another day.

In sum, the motion to dismiss for lack of subject matter jurisdiction is denied.

Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) provides that an action may be dismissed for lack of personal jurisdiction. Personal Jurisdiction refers to the court's power to render an enforceable judgment against the defendant. See Pennoyer v. Neff, 95 U.S. 714, 720-22 (1877). The burden is on plaintiff to show that personal ...


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