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United States of America v. James O. Molen (Also Known As James-Orbin: Molen); Sandra L. Molen

January 28, 2011

UNITED STATES OF AMERICA, PLAINTIFF,
v.
JAMES O. MOLEN (ALSO KNOWN AS JAMES-ORBIN: MOLEN); SANDRA L. MOLEN (ALSO KNOWN AS SANDRA-LYN: MOLEN); BLACK HOLE ADVENTURES, A FAMILY TRUST, BY WILLIAM BAKER AND JOHN VAN AUKEN, TRUSTEES; CALIFORNIA FRANCHISE TAX BOARD; CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT; BUTTE COUNTY ASSESSOR, HOUSEHOLD BANK SB N.A.; ADVANTA BANK CORPORATION; CITIBANK SOUTH DAKOTA, N.A.; MBNA AMERICA BANK; ASSET ACCEPTANCE LLC; WELLS FARGO BANK N.A.; HOUSEHOLD BANK SB N.A.; JAMES ORBIN MOLEN LIMITED PARTNERSHIP, DEFENDANTS.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

ORDER

Presently before the court are: (1) plaintiff United States of America's motion to partially strike the answer of defendants James Molen and Sandra Molen; and (2) four motions to dismiss filed by defendants James Molen, Sandra Molen, William Baker, and John Van Auken. (Dkt. Nos. 5, 8, 12, 14, 15 .) Defendants Molen, Baker, and Van Auken are each proceeding without counsel.*fn1

In plaintiff's motion to strike the Molens' answer in part, plaintiff asserts that because defendants James and Sandra Molen are appearing pro se, or in other words without counsel, they cannot properly assert defenses on behalf of certain entity defendants, namely, the James Orben Molen Limited Partnership (the "Partnership") and the Black Hole Adventures Trust (the "Trust"). (Mot. to Strike, Dkt. No. 5-1 at2-4.)

As to the four motions to dismiss filed by defendants Molen, Baker, and Van Auken, the court construes each of these nearly identical motions as moving to dismiss plaintiff's complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Plaintiff has opposed all four motions to dismiss. (Dkt. No.16.)

The court heard these matters on its law and motion calendar on January 27, 2011. Attorney Patrick Jennings appeared on behalf the plaintiff, and defendants James O. Molen, Sandra Molen, John Hugh Van Auken, and William Baker appeared without counsel.*fn2

The court notes that during the hearing, defendant Van Auken expressed his objection to a statement made within plaintiff's oppositions to the defendants' motions to dismiss. In those oppositions, plaintiff suggested that the defendants ". . . argue in effect that the United States of America has no authority over them." (Oppos. to Mots. to Dismiss, Dkt. Nos. 16 at 1-2, 16-1 at 1.) During the hearing, defendant Van Auken sought to clarify that while he and the other defendants assert a lack of jurisdiction, neither he nor the other defendants have argued that the United States of America lacks authority over them.*fn3

The court further notes that during the hearing on January 27, 2011, defendant James Molen represented that, aside from the defendants' four motions to dismiss for lack of personal jurisdiction, the court was obligated to address additional defense motions that Mr. Molen claimed were also before the court. A review of the court's docket indicates that Mr. Molen was referencing the motion captioned "Motion for Judicial Notice . . . Motion to Dismiss under FRCP 12(b)(6) . . . Motion to Render Judgment on Implied Contract under 28 USC §1367(a)" ("Motion to Render Judgment") that he and Sandra Molen filed the day before the hearing on January 26, 2011. (Mot. to Render Jdgmt., Dkt. No. 19 at 1.) During the hearing, the court expressed that it would deny all of the defendants' motions before it; however, the court herein takes no position on the Molens's Motion to Render Judgment. That motion was not filed in accordance with Eastern District Local Rule 230(b), which requires filing and serving motions at least 28 days before the hearing date. That rule makes it procedurally improper to file a motion the day before the date it is set to be heard, but that is what the Molens apparently sought to do with their Motion to Render Judgment. Therefore, contrary to Mr. Molen's statements during the hearing on January 27, 2011, the substance of the Molens's Motion to Render Judgment was not properly before the court. The procedural deficiencies of that motion will be addressed by separate minute order.

The undersigned has considered the briefs, oral arguments, and the record in this case and, for the reasons stated below, orders that plaintiff's motion to strike the answer in part is granted, and that the four motions to dismiss filed by defendants Molen, Baker, and Van Auken are denied.

I. RELEVANT FACTUAL BACKGROUND

On September 23, 2010, plaintiff filed its complaint against defendants Molen, Baker, Van Auken, the Trust, the Partnership, and others. (Compl., Dkt. No. 1.) The complaint alleges multiple failures to pay federal taxes by the Molens and the Partnership. (Compl. ¶¶ 17-18, 28, 30, 34, 36-41.) The complaint also alleges that the Trust is both a sham and the Molens's alter ego, and plaintiff seeks to set aside the purported transfer of real property from the Molens to the Trust. (Id. ¶¶ 42-54, p. 13 ¶¶ D-E.) Plaintiff seeks foreclosure of tax liens encumbering the Molens's alleged real property in Butte County, California. (Id. at p. 13 ¶ I.)

As to the Molens, the complaint alleges that defendants James and Sandra Molen "reside in Butte County, California, within this judicial district . . . ." (Compl. ¶ 5.) The complaint further alleges that the Molens have occupied 189 Connors Avenue in Butte County, California, "as their residence from at least 1976 to the present." (Compl. ¶¶ 17-18, 44, 49.)

As to Baker and Van Auken, the complaint alleges that the Trust, "by William Baker and John Van Auken, trustees, if it exists, has its principal place of business within this judicial district. . . ." (Compl. ¶ 6.) While plaintiff ultimately seeks to have the Trust disregarded as a sham, plaintiff has alleged that the Molens formed the Trust and that the Butte County property was ostensibly transferred to the Trust, albeit without consideration. (Compl. ¶ 36, 39, 45-46, 49.) The complaint also alleges that the Trust, if it exists, currently holds title to real property located in Butte County. (Id.) Baker and Van Auken have not answered the complaint and have filed the pending motions to dismiss. (Dkt. Nos. 7, 10.)

According to the court's docket, the Molens filed a verified answer to the complaint on November 15, 2010. (Answer, Dkt. No. 4.) In that answer, the Molens asserted defenses on behalf of themselves as individuals, including a lack of personal jurisdiction. (Id. at 1-2 (denying plaintiff's allegations of jurisdiction and purporting to appear "specially, and not generally").) However, the answer also purports to assert defenses on behalf of the Trust and the Partnership in the following capacities: James Orbin Molen as "General Manager" of the Trust and "General Partner" of the Partnership, and Sandra Molen as "General Partner" of the Partnership. (Id. at 2, 5, 7, 8.)

Also according to the court's docket, plaintiff filed its pending motion to strike the answer in part on November 30, 2010. (Dkt. No. 5.) The Molens have not filed any written opposition to plaintiff's motion, and no other party has opposed the motion. See E. Dist. Local Rule 230(c).*fn4

Defendants Molen, Baker, and Van Auken each filed motions to dismiss and supporting affidavits on December 7, 2010, then refiled their motions on December 22, 2010, pursuant to a minute order dated December 10, 2010. (Mots. to Dismiss, Dkt. Nos. 7-10, 12-15; Minute Order, Dkt. No. 11.)*fn5 The undersigned addresses the more recently-filed motions from Baker, Van Auken, and James Molen, and the only motion filed by Sandra Molen. (Mots. to Dismiss, Dkt. Nos. 8, 12, 14, 15.)

Defendants' four motions to dismiss and supporting affidavits are nearly identical, are wide-ranging in both style and scope, and do not clearly set out the legal or factual bases supporting dismissal of the complaint. However, it is clear that these motions and supporting affidavits repeatedly assert a lack of personal jurisdiction. (See, e.g., Van Auken Mot. to Dismiss, Dkt. No. 12 at 4-5.) The first paragraph of the "FACTS BEFORE THE COURT" section of each motion references Federal Rule of Civil Procedure "12(b)(2)" and "lack of jurisdiction over the person." (See, e.g., id. at 4.) The undersigned is aware that these defendants likely prepared these motions ...


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