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

April 20, 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

Defendants James O. Molen (a.k.a. James-Orbin: Molen) and Sandra L. Molen (a.k.a. Sandra-Lyn: Molen) are proceeding without counsel. Presently before the court are the Molens' "Motion for Judicial Notice Under 44 U.S.C. § 1507 - Federal Register Act and Administrative Procedure Act at 5 U.S.C. § 553(b)(c) & (d)" and "Motion to Render Judgment On Implied Contract Under 28 U.S.C. § 1367(a)" (collectively, the "Motions"). (Motions, Dkt. No. 35.) Plaintiff the United States of America opposed the Motions. (Oppo., Dkt. No. 38.) The Molens filed a reply supporting their Motions. (Reply, Dkt. No. 44.)*fn1

On March 8, 2011, finding that oral argument would not aid the resolution of the issues the motions raise, the undersigned took the matters under submission. (Dkt. No. 42.) Based on the record and the briefing on file with the court, for the reasons stated below, the Molen's Motions are denied in their entirety.

I. BACKGROUND

On September 23, 2010, plaintiff filed its complaint against the Molens, the Black Hole Adventures Trust, the James Orbin Molen Limited 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' alleged real property in Butte County, California. (Id. at p. 13 ¶ I.) The complaint alleges that the Molens "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.)

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").) The Molens also filed motions to dismiss asserting a lack of personal jurisdiction. (Dkt. Nos. 8-9, 15.) After hearing oral arguments on the matter, the undersigned denied the Molens' motions to dismiss in their entirety. (Dkt. No. 26.)

After the undersigned denied their original motions to dismiss, the Molens filed the pending Motions, which appear to seek dismissal of this action pursuant to Federal Rule of Civil Procedure 12(b)(6). (E.g., Reply at 3 (repeatedly calling the motion a "12(b)(6) motion"; 6 ("The Defendants' FRCP 12(b)(6) motion should be granted . . . .").)

II. LEGAL STANDARD

The undersigned construes the pending Motions as requesting dismissal of the complaint for failure to state a claim under Federal Rule 12(b)(6). (Reply at 6 ("The Defendants' FRCP 12(b)(6) motion should be granted . . . .").) However, because the Molens have already filed a responsive pleading in this action (Dkt. No. 4), the Motions will be construed as motions for judgment on the pleadings. Elvig v. Calvin Presbyterian Church, 375 F.3d 951, 954 (9th Cir. 2004) ("A Rule 12(b)(6) motion must be made before the responsive pleading.") (emphasis in original); see also Dent v. Cox Commc'ns Las Vegas, Inc., 502 F.3d 1141, 1143 n.3 (9th Cir. 2007).

Motion for Judgment on the Pleadings "A judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law." Ventress v. Japan Airlines, 603 F.3d 676, 681 (9th Cir. 2010) (citation and quotation marks omitted). Where, as here, a motion for judgment on the pleadings is used to raise the defense of failure to state a claim, the motion "faces the same test as a motion under Rule 12(b)(6)." McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988). Under the "notice pleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint must provide, in part, a "short and plain statement" of plaintiff's claims showing entitlement to relief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009). "A complaint may survive a motion to dismiss if, taking all well-pleaded factual allegations as true, it contains 'enough facts to state a claim to relief that is plausible on its face.'" Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). "'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949). "When considering a motion for judgment on the pleadings, [a] court may consider facts that are contained in materials of which the court may take judicial notice." Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971, 980 n.18 (9th Cir. 1999) (citation and quotation marks omitted). The court is "not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Paulsen, 559 F.3d at 1071 (citations and quotation marks omitted).

III. DISCUSSION

"Motion for Judicial Notice" Construed as Motion for Judgment on the Pleadings The Molens ask that the undersigned take "judicial notice" of "44 U.S.C. § 1507 - Federal Register Act and 5 U.S.C. § 553(b)(c) & (d) - Administrative Procedure Act." As a preliminary matter, the request is unnecessary. The "Motion for Judicial Notice" appears to seek only to direct the court to analyze 44 U.S.C. § 1507 and 5 U.S.C. § 553 and to dismiss the complaint based upon these legal authorities. The court may consider the applicability of these rules by citations to them and without the need to judicially notice them.*fn2

The undersigned construes the "Motion for Judicial Notice" (Dkt. No. 35) as a request that the complaint be dismissed pursuant to Federal Rule 12(b)(6) for failure to state a claim upon which relief can be granted, based on a theory that 44 U.S.C. § 1507 and 5 U.S.C. § 553 somehow preclude plaintiff's action against the Molens. However, as stated above, because the Molens have already answered the operative complaint (Dkt. No. 4), such a motion would be denied outright on grounds that it is untimely. See Elvig, 375 F.3d at 954; see also Dent, 502 F.3d at1143 n.3. Accordingly, the "Motion for Judicial Notice" is construed as a motion for judgment on the pleadings and analyzed accordingly below.

While their argument is unclear, the Molens appear to argue that plaintiff's action is precluded by 44 U.S.C. § 1507 (hereinafter "Section 1507") and 5 U.S.C. § 553 (hereinafter "Section 553"). (Dkt. No. 35 at 1-3.) The Molens appear to suggest that the United States does not have the authority to file suit against them for alleged refusal or neglect to pay taxes. (Id.) However, the United States's power to sell a taxpayer's property to collect unpaid taxes and its power to direct a civil action to be filed in connection with such tax or liability has been clearly stated within federal statutes. E.g., 26 U.S.C. § 7403; U.S. v. Holoubek, No. CV-06-761-PHX-SMM, 2006 WL 1701872, at *5 (D. Ariz. May 15, 2006) (not reported) (where the court analyzed the IRS's authority to issue summonses, it held that the IRS did not need to prove its "regulatory" authority and held that where the IRS's authority to act is "plainly, unambiguously, and expansively" conferred by the "clear provisions" of a statute itself, the statute requires "no regulatory 'assistance' in order to implement its provisions.") In light of this express statutory authority, the Molens face an uphill battle with respect to their argument that the plaintiff's suit against them should be dismissed as a matter of law. Nonetheless, the undersigned has reviewed the statutes and cases upon which the Molens appear to rely, and those authorities are described below.

Section 1507 provides, in full:

A document required by section 1505(a) of this title to be published in the Federal Register is not valid as against a person who has not had actual knowledge of it until the duplicate originals or certified copies of the document have been filed with the Office of the Federal Register and a copy made available for public inspection as provided by section 1503 of this title. Unless otherwise specifically provided by statute, filing of a document, required or authorized to be published by section 1505 of this title, except in cases where notice by publication is insufficient in law, is sufficient to give notice of the contents of the document to a person subject to or affected by it. The publication in the Federal Register of a document creates a rebuttable presumption --

(1) that it was duly issued, prescribed, or promulgated;

(2) that it was filed with the Office of the Federal Register and made available for public inspection at the day and hour ...


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