Opinion
Case No.: 3:20-cv-02134-BEN-KSC
04-23-2021
VISTA VERDE MASTER ASSOCIATION, a California domestic nonprofit corporation, Plaintiff, v. LAKEVIEW LOAN SERVICING LLC, MCT GROUP; INTERNAL REVENUE SERVICE; Defendants.
ORDER:
(1) GRANTING MOTION FOR LEAVE TO FILE AMENDED ANSWER TO INCLUDE COUNTERCLAIM AND CROSSCLAIM and
(2) DENYING MOTION FOR LIEN PRIORITY AND LIMITED PARTICIPATION BY LAKE VIEW LOAN SERVICING LLC
[ECF Nos. 19, 22]
This matter comes before the Court on two motions that are now ripe for disposition. Defendant the United States of America, on behalf of the Internal Revenue Service has filed a Motion for Leave to File an Amended Answer to Include a Counterclaim and Crossclaim, ECF No. 22, and Defendant Lakeview Loan Servicing LLC ("Lakeview") has filed a Motion for Lien Priority and Limited Participation, ECF No. 19.
I. BACKGROUND
This case seeks to quiet title to the real property and fixtures located at 1673 Brezar Street, Chula Vista, California, 91913 (the "Subject Property"). See ECF No. 1. The United States removed the case to this Court, arguing it has a tax lien on the Subject Property. Id. Many of the possible claimants to an interest in the Subject Property have disclaimed any interest or have not appeared. See ECF No. 1-2, 17-19, 21, 23-24; ECF No. 13. The Court also recently granted a Joint Motion and Stipulation, ECF No. 37, which determined that Plaintiff Vista Verde Master Association's ("Vista Verde") interest in the Subject Property is subordinate to the interests of the United States and Lakeview. See Order, ECF No. 38.
Following these disclaimers and stipulations, the following landscape remains: Vista Verde foreclosed on the Subject Property and may be entitled to any excess proceeds from a sale of the Subject Property once Lakeview and the United States have foreclosed on their respective liens. The United States and Lakeview each claim their lien has priority over the other's. See ECF Nos. 19, 22. Thus, the Court's task is now much more straightforward: It must determine which of the liens holds priority.
The United States seeks to amend its answer to include a counterclaim and crossclaim against, inter alia, Lakeview, disputing the priority of Lakeview's lien. See Mot., ECF No. 22. Lakeview, however, through its own motion, asks the Court to make that decision now. See Mot., ECF No. 19. The Court also notes the parties recently submitted a Joint Discovery Plan, which proposes a June 30, 2021 deadline for dispositive motions in this matter. See ECF No. 38.
II. LEGAL STANDARD
After a responsive pleading has been filed, "a party may amend that party's pleading only by leave of the court or by written consent of the adverse party and leave shall be freely given when justice so requires." Fed. R. Civ. P. 15(a)(2). District Courts apply this policy with "extreme liberality." Owens v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001).
III. ANALYSIS
On November 27, 2020, the United States filed its initial answer to Vista Verde's complaint. ECF No. 9. The answer raised certain defenses but made no counterclaims or crossclaims. See id. Since then, the parties have engaged in extensive discussions to resolve the issues before the Court. See ECF Nos. 13, 15. The United States then filed this motion for leave to amend. ECF No. 22.
In support of its motion, the United States argues it must amend its answer to include a counterclaim and crossclaim because it has an enforceable tax lien against the Subject Property, and that its tax lien may have priority over other parties' liens. Mot., ECF No. 22, 3-4. The United States further argues the opposing parties will not suffer prejudice because it seeks amendment early on in this litigation. Id. at 4. Lakeview does not oppose the United States' motion, and Vista Verde has already stipulated that its interest is subordinate to the United States' tax lien. See Notice of Non-Opposition, ECF No. 36; Joint Mot. for Order, ECF No. 37.
Having considered the law and applicable facts, the Court GRANTS the Motion for Leave to File an Amended Answer. The United States may file its amended answer including crossclaims and counterclaims within fourteen days of this Order.
Though Lakeview's motion does not "state with particularity the grounds for seeking the order," Fed. R. Civ. P. 7(b)(1)(B), the Court construes it as a motion for judgment on the pleadings because Lakeview asserts several times that it is entitled to priority "as a matter of law." See Mot., ECF No. 19, 7-8.
Pursuant to Federal Rule of Civil Procedure 12(c), a motion for judgment on the pleadings may only be granted "[a]fter the pleadings are closed." Fed. R. Civ. P. 12(c). Here, the Court has granted the United States leave to file an amended answer, counterclaim, and crossclaim. Thus, the pleadings are not closed and a motion for judgment on the pleadings is premature. See Fed. R. Civ. P. 12(c). Moreover, the Court notes the parties' Joint Discovery Plan indicates this case does not require discovery and recommends dispositive motions be submitted no later than June 30, 2021. See ECF No. 38. The Court finds determination of lien priority would be more suitable at that time, should the United States and Lakeview be unable to resolve their dispute before then. Accordingly, Lakeview's Motion for Lien Priority is DENIED.
IV. CONCLUSION
For the foregoing reasons, the United States' Motion for Leave to File an Amended Answer to Include Counterclaim and Crossclaim (ECF No. 22) is GRANTED. The United States may file its amended answer, including any counterclaims and crossclaims, within fourteen days of this Order. Lakeview's Motion for Lien Priority (ECF No. 19) is DENIED.
IT IS SO ORDERED.
Dated: April 23, 2021
/s/_________
HON. ROGER T. BENITEZ
United States District Judge