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United States v. Vacante

September 8, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
FRANK A. VACANTE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT (Document 70)

On June 8, 2009, Plaintiff United States of America ("Plaintiff") filed the instant motion for leave to file a second amended complaint. The matter was heard on September 4, 2009, before the Honorable Dennis L. Beck, United States Magistrate Judge. Adair F. Boroughs appeared on behalf of Plaintiff. Defendant Frank A. Vacante appeared telephonically.

BACKGROUND

Plaintiff filed the instant complaint to reduce federal tax assessments to judgment and foreclose federal tax liens on real property on June 10, 2008.*fn1 The tax assessments at issue are against husband and wife Frank and Ute Vacante and their alleged alter egos, Central Valley Insurance Services, Inc. ("CVIS"), and Instant Services, Inc. The remaining Defendants were named because they may claim an interest in the real property that is the subject of the action.

Most Defendants, including the Vacantes, filed answers to the original complaint.

On October 24, 2008, Plaintiff filed a first amended complaint. According to the first amended complaint, the Vacantes have operated an insurance business since at least 1987. By November 1992, the Vacantes' unincorporated business had unpaid federal employment tax liabilities and the IRS assigned the case to a Revenue Officer for collection. To avoid the tax liabilities, Plaintiff alleges that Frank Vacante filed an Employer's Quarterly Federal Tax Return falsely indicating that the unincorporated business no longer had employees. Plaintiff further alleges that the Vacantes incorporated CVIS in August 1993 and transferred the assets of the unincorporated business to CVIS. The State of California suspended the corporate charter of CVIS in April 1997, but the Vacantes continued to operate it until at least 2001. In March 2001, the California Department of Insurance closed CVIS. Instant Services, Inc., was incorporated in Nevada on March 23, 2001. Plaintiff alleges that the unincorporated business, CVIS and Instant Services were all operated out of the same business location, employed the same staff, sold the same product and utilized the same phone numbers. They were all operated under Frank Vacante's broker's license.

On March 7, 2003, this Court entered judgment by default against Frank Vacante for unpaid employment taxes and federal unemployment taxes in the amount of $21,087.91, plus interest, penalties and other statutory additions from November 1, 2002 until paid.*fn2 $13,666.86 is still owing on that judgment, as well as over $1 million dollars in other tax liabilities.

The subject properties consist of five parcels in Turlock, Riverbank, Ceres and Hilmar, California owned by the Vacantes. Numerous Notices of Federal Tex Liens have been filed against the properties.

Plaintiff previously filed a motion to amend the complaint on September 15, 2008. The Court granted the motion on October 22, 2009, and Plaintiff filed its amended complaint.

Plaintiff filed the instant motion to amend the complaint on June 8, 2009. Plaintiff seeks to add a party who may claim an interest in two of the parcels of real property at issue.

No oppositions have been filed.

DISCUSSION

Federal Rule of Civil Procedure Rule 15(a) provides that the Court "should freely give leave [to amend] when justice so requires." The United States Supreme Court has stated:

[i]n the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of ...


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