Vista Verde Master Association v. Broker Solutions, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 VISTA VERDE MASTER Case No.: 3:20-cv-02134-BEN-KSC ASSOCIATION, a California domestic 12 nonprofit corporation, ORDER: 13 Plaintiff, (1) GRANTING MOTION FOR 14 v. LEAVE TO FILE AMENDED 15 ANSWER TO INCLUDE LAKEVIEW LOAN SERVICING LLC, COUNTERCLAIM AND 16 MCT GROUP; INTERNAL REVENUE CROSSCLAIM and 17 SERVICE; (2) DENYING MOTION FOR LIEN 18 Defendants. PRIORITY AND LIMITED 19 PARTICIPATION BY LAKEVIEW LOAN SERVICING 20 LLC 21 [ECF Nos. 19, 22] 22 23 24 This matter comes before the Court on two motions that are now ripe for 25 disposition. Defendant the United States of America, on behalf of the Internal Revenue 26 Service has filed a Motion for Leave to File an Amended Answer to Include a 27 Counterclaim and Crossclaim, ECF No. 22, and Defendant Lakeview Loan Servicing 28 LLC (“Lakeview”) has filed a Motion for Lien Priority and Limited Participation, ECF 1 No. 19. 2 I. BACKGROUND 3 This case seeks to quiet title to the real property and fixtures located at 1673 Brezar 4 Street, Chula Vista, California, 91913 (the “Subject Property”). See ECF No. 1. The 5 United States removed the case to this Court, arguing it has a tax lien on the Subject 6 Property. Id. Many of the possible claimants to an interest in the Subject Property have 7 disclaimed any interest or have not appeared. See ECF No. 1-2, 17-19, 21, 23-24; ECF 8 No. 13. The Court also recently granted a Joint Motion and Stipulation, ECF No. 37, 9 which determined that Plaintiff Vista Verde Master Association’s (“Vista Verde”) 10 interest in the Subject Property is subordinate to the interests of the United States and 11 Lakeview. See Order, ECF No. 38. 12 Following these disclaimers and stipulations, the following landscape remains: 13 Vista Verde foreclosed on the Subject Property and may be entitled to any excess 14 proceeds from a sale of the Subject Property once Lakeview and the United States have 15 foreclosed on their respective liens. The United States and Lakeview each claim their 16 lien has priority over the other’s. See ECF Nos. 19, 22. Thus, the Court’s task is now 17 much more straightforward: It must determine which of the liens holds priority. 18 The United States seeks to amend its answer to include a counterclaim and 19 crossclaim against, inter alia, Lakeview, disputing the priority of Lakeview’s lien. See 20 Mot., ECF No. 22. Lakeview, however, through its own motion, asks the Court to make 21 that decision now. See Mot., ECF No. 19. The Court also notes the parties recently 22 submitted a Joint Discovery Plan, which proposes a June 30, 2021 deadline for 23 dispositive motions in this matter. See ECF No. 38. 24 II. LEGAL STANDARD 25 After a responsive pleading has been filed, “a party may amend that party’s 26 pleading only by leave of the court or by written consent of the adverse party and leave 27 shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a)(2). District Courts 28 apply this policy with “extreme liberality.” Owens v. Kaiser Foundation Health Plan, 1 Inc., 244 F.3d 708, 712 (9th Cir. 2001). 2 III. ANALYSIS 3 On November 27, 2020, the United States filed its initial answer to Vista Verde’s 4 complaint. ECF No. 9. The answer raised certain defenses but made no counterclaims or 5 crossclaims. See id. Since then, the parties have engaged in extensive discussions to 6 resolve the issues before the Court. See ECF Nos. 13, 15. The United States then filed 7 this motion for leave to amend. ECF No. 22. 8 In support of its motion, the United States argues it must amend its answer to 9 include a counterclaim and crossclaim because it has an enforceable tax lien against the 10 Subject Property, and that its tax lien may have priority over other parties’ liens. Mot., 11 ECF No. 22, 3-4. The United States further argues the opposing parties will not suffer 12 prejudice because it seeks amendment early on in this litigation. Id. at 4. Lakeview does 13 not oppose the United States’ motion, and Vista Verde has already stipulated that its 14 interest is subordinate to the United States’ tax lien. See Notice of Non-Opposition, ECF 15 No. 36; Joint Mot. for Order, ECF No. 37. 16 Having considered the law and applicable facts, the Court GRANTS the Motion 17 for Leave to File an Amended Answer. The United States may file its amended answer 18 including crossclaims and counterclaims within fourteen days of this Order. 19 Though Lakeview’s motion does not “state with particularity the grounds for 20 seeking the order,” Fed. R. Civ. P. 7(b)(1)(B), the Court construes it as a motion for 21 judgment on the pleadings because Lakeview asserts several times that it is entitled to 22 priority “as a matter of law.” See Mot., ECF No. 19, 7-8. 23 Pursuant to Federal Rule of Civil Procedure 12(c), a motion for judgment on the 24 pleadings may only be granted “[a]fter the pleadings are closed.” Fed. R. Civ. P. 12(c). 25 Here, the Court has granted the United States leave to file an amended answer, 26 counterclaim, and crossclaim. Thus, the pleadings are not closed and a motion for 27 judgment on the pleadings is premature. See Fed. R. Civ. P. 12(c). Moreover, the Court 28 notes the parties’ Joint Discovery Plan indicates this case does not require discovery and 1 ||recommends dispositive motions be submitted no later than June 30, 2021. See ECF No. 2 ||38. The Court finds determination of lien priority would be more suitable at that time, 3 should the United States and Lakeview be unable to resolve their dispute before then. 4 || Accordingly, Lakeview’s Motion for Lien Priority is DENIED. 5 ||IV. CONCLUSION 6 For the foregoing reasons, the United States’ Motion for Leave to File an Amended 7 || Answer to Include Counterclaim and Crossclaim (ECF No. 22) is GRANTED. The 8 || United States may file its amended answer, including any counterclaims and crossclaims, 9 || within fourteen days of this Order. Lakeview’s Motion for Lien Priority (ECF No. 19) is 10 || DENIED. 11 IT ISSO ORDERED. " 12 Dated: April 23, 2021 fr 13 HON. ROGER T. BENITE United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28