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Innovative Real Estate Planning Group, Inc. v. Le

United States District Court, S.D. California

July 22, 2019

INNOVATIVE REAL ESTATE PLANNING GROUP, INC., Plaintiff,
v.
NGON T. LE, et al., Defendants. NGON T. LE, Cross Claimant,
v.
INNOVATIVE REAL ESTATE PLANNING GROUP, INC., et al., Cross Defendants.

          ORDER: (1) GRANTING THE UNITED STATES OF AMERICA'S MOTION FOR SUMMARY JUDGMENT; [DOC. NO. 25] (2) DENYING NGON T. LE'S CROSS MOTION FOR SUMMARY JUDGMENT; AND [DOC. NO. 31] (3) REMANDING REMAINING STATE LAW CLAIMS TO STATE COURT

          HON. MICHAEL M. ANELLO UNITED STATES DISTRICT JUDGE.

         On November 29, 2017, Plaintiff Innovative Real Estate Planning Group, Inc. (“Innovative”) filed this quiet title action against Ngon T. Le (“Le”) and “all other persons unknown, claiming any right, title, estate, lien or interest in the real property described in the complaint, adverse to [Innovative's] ownership or any cloud on plaintiff's title thereto.” Doc. No. 1-2 (“Compl.”). On February 26, 2018, Le filed a cross complaint against Innovative, Vladymir Frazilus, Chien Thi Nguyen, Dung A Nguyen, Canh M. Phan, Canh Tran, and Thi Truong Nguyen, Trustees of the Truong Family Trust, Elizabeth Persons, the United States of America (“USA”), the State of California, the City of San Diego, Fire Prevention Services, Inc., and “all persons unknown, claiming any right, title, estate, lien or interest in the real property described in the complaint, adverse to plaintiff's ownership or any cloud on plaintiff's title thereto.”[1]Doc. No. 3 (“Cross Compl.”). On May 1, 2018, USA removed the action to this Court. Doc. No. 1.

         The USA filed a motion for summary judgment against Le. Doc. No. 25. Le filed a response in opposition (Doc. No. 32) and a cross motion for summary judgment against the USA (Doc. No. 31). USA replied to Le's opposition (Doc. No. 33) and filed a response in opposition to Le's cross motion (Doc. No. 39). Le replied to the USA's opposition. Doc. No. 40. The Court found these matters suitable for determination on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1.d.1. Doc. Nos. 34, 41. For the following reasons, the Court GRANTS the USA's motion for summary judgment and DENIES Le's cross motion for summary judgment. Also, the Court REMANDS the remaining state-law claims raised in the Complaint and Cross Complaint to the state court in which they were originally filed.

         Material Facts[2]

         From May 5, 2017 to May 10, 2017, San Diego County held an online auction for several pieces of tax-defaulted real property (“auction”), including two pieces of undeveloped land identified as Parcel Nos. 541-130-11-00 and 541-2 0-12-00 (collectively, “Le Properties”). Doc. No. 25-5 (“Heaton Depo.”) at 5:23-6:5, 19:22-20:5, 36:14-36:17; see also Cross Compl. ¶ 13; Doc. No. 31-4, Exhibit 3 at 3. To advertise the auction, San Diego County published a notice of the auction in the San Diego Examiner and published information on its website.[3] Doc. No. 25-3, Exhibit A (“Notice of Tax Auction”); Heaton Depo. at 13:1-13:17; Doc. No. 25-4 (“Le Depo.”) at 18:24-19:2; S.D. Examiner Publication.

         Prior to the auction, the Le Properties were owned by Phuc N. Doan and Longngoc N. Doan (the “Doans”).[4] Notice of Tax Auction; Heaton Depo. at 19:8-19:12; S.D. Examiner Publication at 5; Doc. No. 29-2, Exhibits A-C. On April 6, 2017, the Internal Revenue Service (“IRS”) recorded a Notice of Federal Tax Lien against the Doans for failing to pay approximately $1.6 million in federal income taxes for the 2010 and 2012 tax years.[5] Doc. No. 25-3, Exhibit B (“Form 2866”), Exhibit C (“Notice of Federal Tax Lien”); Doc. No. 31-4, Exhibit 3 at 3.

         Le bid and ultimately won the Le Properties.[6] Le Depo. at 24:8-24:11; Doc. No. 30-4 (“Le Decl.”) ¶ 1. Following the auction, San Diego County prepared a Tax Sale Deed, listing the date the auction sale was conducted as May 9, 2017. Doc. No. 25-3, Exhibit E (“Tax Deed”); Doc. No. 29-2, Exhibits A-C. The IRS did not receive notice of the auction at least 25 days prior to the auction. Heaton Depo. at 30:5-30:7, 33:10-33:13.

         Evidentiary Objections

         Le raises a variety of evidentiary objections to the USA's evidence. Doc. No. 32-2. These objections are raised on the grounds that the evidence is irrelevant, vague, assumes facts not in evidence, or misstates the evidence or law. Id. “A trial court can only consider admissible evidence in ruling on a motion for summary judgment.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002). At the summary judgment stage, district courts consider evidence with content that would be admissible at trial, even if the form of the evidence would not be admissible at trial. See Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2003); Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001). “[O]bjections to evidence on the ground that it is irrelevant . . . [is] duplicative of the summary judgment standard itself” and unnecessary to consider here. Burch v. Regents of Univ. of Cal., 433 F.Supp.2d 1110, 1119 (E.D. Cal. 2006); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Factual disputes that are irrelevant or unnecessary will not be counted.”). Accordingly, the Court does not consider any relevance objections. Le's remaining objections that the statements misstate the evidence or law, assume facts not in evidence, or are vague, are objections to USA's characterization of the evidence rather than to the evidence itself. Thus, the Court will not consider these objections. See Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc., 556 F.Supp.2d 1122, 1126 n.1 (E.D. Cal. 2008) (noting that the parties' “‘evidentiary objections to [their adversary's] separate statements of undisputed facts are not considered because such objections should be directed at the evidence supporting those statements”).

         Legal Standard

         “A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought. The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party seeking summary judgment bears the initial burden of establishing the basis of its motion and of identifying the portions of the declarations, pleadings, and discovery that demonstrate absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party has “the burden of showing the absence of a genuine issue as to any material fact, and for these purposes the material it lodged must be viewed in the light most favorable to the opposing party.” Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). A fact is material if it could affect the outcome of the suit under applicable law. See Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. The party opposing summary judgment cannot “‘rest upon the mere allegations or denials of [its] pleading' but must instead produce evidence that ‘set[s] forth specific facts showing that there is a genuine issue for trial.'” Estate of Tucker v. Interscope Records, Inc., 515 F.3d 1019, 1030 (9th Cir. 2008) (quoting Fed.R.Civ.P. 56(e)).

         Discussion

         Le asserts one cause of action against the USA, seeking a decree that Le owns the property free and clear of the federal tax lien. Cross Compl. ¶¶ 15-20. The sole dispute between the parties is whether the date of sale is May 5, 2017 or May 9, 2017. The USA contends the date of sale is May 9, 2017-the date the auction concluded-and Le avers the date of sale is May 5, 2017-the date the auction commenced.

         Title 26, section 7425(b) of the United States Code governs nonjudicial sales of property to which the government claims a federal tax lien. 26 U.S.C. § 7425(b). Pursuant to § 7425(b), “[a] nonjudicial sale of property is made ‘subject to and without disturbing' federal tax liens if (1) the federal tax liens were filed more than 30 days before the sale, and (2) notice of the sale is not given to the IRS in accordance with § 7426(c)(1).” Orme v. United States, 269 F.3d 991, 994 (9th Cir. 2001) (quoting 26 U.S.C. § 7425(b)); see Quality Loan Serv. Corp. v. 24702 Pallas Way, 635 F.3d 1128, 1134 (9th Cir. 2011). ...


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