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United States v. Ballantyne

United States District Court, Ninth Circuit

September 3, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
DON L. BALLANTYNE, et al., Defendants.

ORDER DENYING MOTION TO INTERVENE

BARRY TED MOSKOWITZ, Chief District Judge.

The Agape Way, LLC ("Agape") has filed a motion to intervene in this action. For the reasons discussed below, the Court DENIES without prejudice the motion to intervene.

I. FACTUAL BACKGROUND

This action is a suit brought by the United States to foreclose federal tax liens against two parcels of property - the "McCall" and "Fourth" properties[1] - that this Court previously determined to be property of Don and Susanne Ballantyne ("the Ballantynes"), to which the United States' tax liens attach. See Leeds, LP v. United States, Case No. 08cv100 BTM(BLM); Fourth Inv. LP v. United States, Case No. 08cv110 BTM(BLM); Fourth Inv. LP v. United States, 720 F.3d 1058 (9th Cir. 2013) (affirming this Court's judgment in favor of the United States).

The United States seeks a decree of sale to enforce its tax liens, an order adjudging that purported deeds of trust encumbering the McCall and Fourth properties are fraudulent and that the transfers are null and void, and a determination by the Court regarding the validity and priority of all liens on and other interests in the McCall and Fourth properties.

Agape's interest in this action relates to the deeds of trust on the properties. At some point in time, Susanne C. Ballantyne executed two deeds of trust, purporting to encumber the McCall and Fourth properties in favor of Eastman Investment ("Eastman"). (FAC, ¶ 60.) Susanne Ballantyne owned a majority interest in Eastman. (FAC ¶ 62) The deeds of trust, which were dated November 1, 1991, but were not notarized until May 1995, were allegedly given in connection with a loan in November 1991 from Eastman to Susanne C. Ballantyne Trust. (Id.) The United States contends that no loan was actually given from Eastman to Susan C. Ballantyne Trust. (FAC ¶ 61.) Instead, purported loan dispersals were made to a third party, Lark Investments, and for at least one year, Lark Investments repaid the loan to Eastman. (Id.)

New Horizon, L.C. ("New Horizon") claims that it purchased the notes and deeds of trust from Eastman. (Doc. No. 47 at 1:6-11.) Eastman retained a collateral interest in the notes and deeds of trust to secure New Horizon's obligation to pay Eastman the balance of the purchase price for the instruments. (Id.) The United States contends that the assignment to New Horizon, an entity managed by Susanne Ballantyne and her daughter, was a sham and that New Horizon did not actually provide proper consideration for the notes and deeds of trust. (Proposed Second Amended Complaint, ¶¶ 75-83.)

According to Agape, Eastman is a general partnership whose partners are Cramer Investment Company ("CIC"), a California general partnership, and Investment Associates, L.P. ("IALP"). (Decl. of "Ted" Edward R. Cramer, ¶ 5.) CIC holds an 80% interest in Eastman, and IALP holds a 20% interest in Eastman. (Id. at ¶ 7.) CIC's partners are Agape and IALP, each of which holds a 50% interest in CIC. (Id. at ¶ 5.)

Agape received its partnership interest in CIC from Edward T. Cramer, Susanne Ballantyne's brother. (Id. at ¶ 9; FAC ¶ 62.) Agape's managers are Dianne W. Cramer (Edward Cramer's wife) and Ted Cramer (Edward Cramer's son), and its sole member is Remarc Capital, LLC, which is also managed by Dianne Cramer and Ted Cramer and has as members Dianne Cramer, the children of Edward Cramer and Dianne Cramer, and trusts for their benefit. (Id. at ¶¶ 10-11.)

IALP received its partnership interests in Eastman and CIC from Susanne Ballantyne and the Susanne C. Ballantyne Trust. (Id. at ¶ 9.) According to Agape, IALP is held and controlled by Clark Ballantyne and Laura Ballantyne, the children of Susanne and Don Ballanytne, through trusts for their benefit. (Id. at ¶ 6.) IALP's general partner is Freemont corporation, a Nevada corporation controlled by the Ballantyne children. (Id. at ¶ 6.)

II. DISCUSSION

Agape moves to intervene as a defendant in this action. Agape seeks to intervene as a matter of right pursuant to Fed.R.Civ.P. 24(a), or in the alternative, by permission of the Court pursuant to Fed.R.Civ.P. 24(b). As discussed below, the Court finds that Agape is not entitled to intervene as a matter of right and that permissive intervention is not warranted.

A. Intervention as of Right

The Court must permit anyone to intervene who "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless ...


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