United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION FOR ORDER CORRECTING CLERICAL
MISTAKES RE: DKT. NO. 1000
EDWARD
IDAVILA United States District Judge.
I.
INTRODUCTION
Interested
party Pajaro/Sunny Mesa Community Services District
(“PSMCSD”) is presently before the court seeking
an order correcting a “clerical mistake” pursuant
to Federal Rule of Civil Procedure 60(a).[1] PSMCSD asks the
court to revise a March 4, 2008 order by Judge Fogel
approving the Bill of Sale effecting the transfer of certain
water systems to PSMCSD. More specifically, PSMCSD asks the
court to revise the order so that it identifies two parcels
included in the Bill of Sale with sufficient detail to be
acceptable to the Monterey County Office of the Assessor
(“Assessor's Office”) for secured tax roll
purposes. Dkt. No. 1000 (PSMCSD's Motion For Order
Correcting Clerical Mistakes Or Mistakes Arising From
Oversight Or Omission In Order Approving Original Bill of
Sale [Fed. R. Civ. P. 609a)] (hereinafter
“Motion”)). Defendant Alisal Water Corporation
(“Alco”) and AWC Holdings Trusts oppose the
motion.[2] The County of Monterey filed a statement
of non-opposition. For the reasons discussed below,
PSMCSD's motion will be granted.
II.
BACKGROUND
At the
request of the Environmental Protection Agency, the United
States Attorney General initiated this suit over a decade ago
in 1997 against Alco, its president and sole shareholder,
Robert T. Adcock (“Adcock”), and others
(collectively “Defendants”) for violating the
Safe Drinking Water Act and regulations promulgated
thereunder. Judge Fogel found that Defendants failed to meet
the Maximum Contaminant Level (“MCL”) for
microbiological contaminants; failed to report or give public
notice of the MCL failures; failed to do required repeat and
increased routine monitoring; failed to report the lack of
monitoring; failed to retain documents as required; and
failed to test for lead and copper in their water in a timely
manner. Dkt. Nos. 143 (Order Granting Plaintiff's Motions
For Partial Summary Judgment), 248 (Order Granting In Part
And Denying In Part Plaintiff's Motion For Partial
Summary Judgment; And Denying Defendants' Motion For
Partial Summary Judgment). Many of the violations found by
the court involved intentional false reporting or
non-reporting. Dkt. No. 301 (Findings Of Fact And Conclusions
Of Law). The court conducted a bench trial for the purpose of
determining an appropriate remedy for the violations, and
ordered, among other things, that a receivership be created
to take control of the eight water systems operated by
Defendants and that the Receiver assess the feasibility of
selling seven of the eight water systems. Included among the
water systems placed into receivership were those owned by
Moss Landing Water System, Inc. (“Moss Landing”)
and North Monterey County Water Systems, Inc.
(“NORMCO”). Dkt. No. 301 (Findings Of Fact And
Conclusions Of Law). After Moss Landing and NORMCO were
placed in receivership, PSMCSD began management of the water
systems and has continued to do so ever since. Dkt. No.
1000-1 (Decl. of Don Rosa in Support of Motion).
On
April 13, 2004, the court directed the court-appointed
Receiver to sell the Moss Landing and NORMCO water systems
(and others) to PSMCSD. Dkt. No. 481-1 (Order Regarding Sale
Of Receivership Assets). In January of 2008, PSMCSD submitted
to the court an application for approval of a Bill of Sale
for five water systems, including Moss Landing and NORMCO.
Dkt. No. 802-2 (Bill Of Sale). Voluminous Condition of Title
reports from the Chicago Title Insurance Company were
attached to and incorporated by reference into the Bill of
Sale. Dkt. No. 802-2 at 1. Among the Condition of Title
reports was one for NORMCO parcel APN 125-151-006-one of the
two parcels at issue. Dkt. No 802-12 at 25-31. The Condition
of Title report for the other parcel at issue, Moss Landing
parcel APN 131-061-008, was inadvertently omitted. The NORMCO
and Moss Landing parcels are connected via pipes to the
NORMCO and Moss Landing water systems, respectively. Dkt.
100-1 at 3 (Decl. of Don Rosa in Support of Motion). The only
purpose and only use of the two parcels are to serve
customers of the two water systems. Id.
On
March 4, 2008, Judge Fogel issued an Order Resolving Pending
Issues Re Receivership (“March 4, 2008 Order”)
which included the following provisions relevant to the
instant motion:
1) Pajaro/Sunny Mesa Community Services District
(“PSMCSD”) seeks final Court approval of the Bill
of Sale for five small water systems in North Monterey
County, termination of the existing Management Agreements,
and release of all claims. Pursuant to this Court's Order
dated April 13, 2004, PSMCSD was designated as the purchaser
of the assets of the Moss Landing Water System, Inc., North
Monterey County Water System, Inc. (“NORMCO”),
Blackie Road Mutual Water System #18, Vierra Canyon Water
System, and Langley/Valle Pacifico Water. System. On or about
January 12, 2005, PSMCSD entered into “Operational and
Management Agreements” with the Receiver for the five
systems. In June, 2007, at the Court's direction, PSMCSD
engaged the Chicago Title Company to complete title research
and production of title documents, easement descriptions, and
maps and the Bill of Sale to complete the transfer of the
five systems. The Court hereby authorizes and confirms the
sale of the five systems to PSMCSD and directs the Receiver
to execute and deliver the Bill of Sale that has been
presented to the Court.
11) The Receivership shall remain in effect with respect to
the San Jerardo water system only. . . .
Dkt. No. 824. PSMCSD submitted the Bill of Sale to the
Monterey County Recorder's Office (“Recorder's
Office”) on April 11, 2008. Dkt. No. 825. The
Recorder's Office, however, did not record the transfer
of Moss Landing parcel APN 131-061-008 from Alco to PSMCSD
presumably because the Condition of Title report for that
particular parcel had been inadvertently omitted from the
Bill of Sale. Dkt. No. 100 at 4 (PSMCSD's Motion). The
Recorder's Office also did not record the transfer of
NORMCO parcel APN 125-151-006 even though the Condition of
Title report for this parcel was attached to the Bill of
Sale. Id. (citing Dkt. No. 802-12). The transfer of
the NORMCO parcel was not recorded because the Bill of Sale
did not include a “metes-and-bounds” description
for that parcel. Dkt. No. 1005 at 4 (Opp'n of Alisal
Water Corporation And The AWC Holdings Trusts To Motion);
see also Dkt. No. 1008 at 6 (PSMCSD's Reply).
Even
though Judge Fogel, the Receiver, Alco, and PSMCSD all
understood that the Moss Landing and NORMCO water systems
were to be sold and transferred to PSMCSD and the Bill of
Sale had been recorded, the Assessor's Office continued
sending tax notices and demands for payment to Alco for the
two parcels at issue. Dkt. No. 1006 at 3. The tax bills were
dated November 19, 2008, October 15, 2009, June 22, 2010,
November 23, 2010, August 10, 2011, February 15, 2011 and
February 16, 2011. Id. Alco forwarded these tax
notices to PSMCSD and asked PSMCSD to pay the bills and to
take the necessary action to change ownership of the two
parcels to PSMCSD. Id. at 6-64. Alco copied the
Monterey County Treasurer-Tax Collector on all but one of the
letters to PSMCSD. Id.
On
February 23, 2009, the Assessor's Office sent PSMCSD a
letter explaining that the two parcels at issue “do not
appear to be described” in the recorded Bill of Sale,
and therefore the Assessor's Office “cannot change
the ownership until a document describing the subject
properties is recorded.” Id. at 65. On October
23, 2008, the Assessor's Office wrote to PSMCSD again
reiterating that the Bill of Sale did not describe the
properties at issue, and therefore the Office of the
Assessor's records would continue to reflect that one of
Alco's trusts, AWC II Holdings LLC, was the owner of
record. Id. at 66. The Assessor's Office also
sent Alco a letter stating that the parcels at issue were
“referenced” in the April 11, 2008 Bill of Sale
but not “described.” Id. at 68.
Therefore, the Assessor's Office did not change ownership
of the parcels in its records. Id. The
Assessor's Office asked Adcock to contact PSMCSD or a
title company to prepare and record the necessary conveyance
documents to enable the Assessor's Office “to
finally remove [Alco] from title and reflect [PSMCSD] as the
new owner of record as intended with the recording of the
Bill of Sale.” Id.
Apparently,
no action was taken to address the Assessor's Office
issue for approximately four years. During that time, Alco
continued to receive, but did not pay, the tax bills for the
two parcels at issue. Eventually the Receiver's attorney
had the Receiver execute an Addendum to Bill of Sale on
August 15, 2012, which included as attachments the
inadvertently omitted legal description of the Moss Landing
parcel and the same legal description of the NORMCO parcel
that had been attached to the Bill of Sale. Dkt. No. 1000 at
5 (PSMCSD's Motion). The Receiver's attorneys filed a
Notice of Receiver's Execution of Addendum to Bill of
Sale on August 23, 2012, and served the Notice on Alco's
counsel, the Deputy County Counsel, and others. Dkt. No. 980.
The Recorder's Office recorded the Addendum to Bill of
Sale on September 19, 2012. Dkt. No. 1001-1 at 25. On August
12, 2013, Judge Fogel issued an Order Discharging Receiver
And Terminating Proceedings. Dkt. No. 995.
A
couple of years later, in approximately June 2015, the
Monterey County Treasurer-Tax Collector caused its agent,
Bid-4-Assets, to conduct an internet auction to sell the two
parcels at issue in order to satisfy the delinquent taxes
assessed against Alco. Dkt. No. 1005 at 6-7 (Alco's
Opp'n). A third-party bidder purportedly purchased both
parcels. Id. at 7. The purported sale of the parcels
resulted in excess tax sales proceeds of approximately $32,
000 and has led to two state court actions. First, two of
Alco's trusts have filed an action against the County of
Monterey seeking recovery of the excess tax sales proceeds.
Dkt. No. 1007 at 4-16 (AWC Holding Trust v. County of
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