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United States v. Loreno

United States District Court, W.D. Pennsylvania

March 26, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
LARRY A. LORENO, et al., Defendants.

MEMORANDUM OPINION

TERRENCE F. McVERRY, District Judge.

Pending before the Court is the MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No. 56) filed by Plaintiff, the United States of America (also referred to herein as the "Government"). The United States has filed a brief (ECF No. 57) as well as a Concise Statement of Material Facts (ECF No. 58) in support of its motion. Defendant Larry A. Loreno ("Loreno") has filed a brief in opposition to the Government's motion (ECF No. 61), and the Government has filed its reply (ECF No. 64). Accordingly, the motion is ripe for disposition.

I. Factual and Procedural Background[1]

Loreno resides within and owns numerous real properties located within this judicial district. (Compl. ¶¶ 6, 22-52, ECF No. 1; Loreno Answer ¶¶ 1, 9-20, ECF No. 25.) In particular, Loreno has an ownership interest in several properties located in Mercer County, Pennsylvania. These parcels, collectively referred to as the "Mercer County properties, " are situated at 320 Main Street in the Borough of Greenville (the "320 Main Street Property"), Route 58 in Greene Township (the "Route 58 Property"), and Route 18 in Hempfield Township (the "Route 18 Property"). Loreno also has, or had during times relevant to this litigation, an ownership interest in several properties located in Crawford County, Pennsylvania. These parcels, collectively referred to as the "Crawford County properties, " consist of certain real property located on Brown Avenue in Sadbury Township (the "Brown Avenue Property"), real property situated at Fitch Road in South Shenango Township (the "Fitch Road Property"), and a 10.353-acre parcel of real estate located in South Shenango Township (the "10-acre South Shenango Property"). (Compl. ¶¶ 22-24, 28-30, 34-36, 40-42, 46-48, 52-54; Loreno Answer ¶¶ 9-20.)

In 2002 and 2003, the United States made assessments against Loreno for unpaid federal income taxes relative to tax years 2000, 2001, and 2002. (Compl. ¶¶ 14-18; Loreno Answer ¶ 4; Decl. of Dennis L. Bohn ¶¶ 1, 4-5, ECF No. 56-3 and 38-3; Pl.'s Ex. 101-103, ECF No. 38-4; Pl.'s Ex. 104-106, ECF No. 38-5.) Those taxes remained unpaid and, on July 28, 2010, the United States commenced this civil action with the filing of its eight-count "Complaint for Federal Taxes" against Loreno and various other Defendants who had an ostensible ownership interest in, or lien(s) upon, Loreno's property (ECF No. 1). The matter was originally assigned to United States District Judge Sean J. McLaughlin.[2]

In its complaint, the Government alleged that it has valid and subsisting tax liens arising from the assessments that were made against Loreno. To satisfy these liens, the United States sought a court order permitting foreclosure against, and a judicial sale of, Loreno's property, including the aforementioned parcels of real estate.

In accordance with 26 U.S.C. §7403(b), [3] the Government originally named as Defendants Loreno, his former wife, Darlene A. Loreno, the Mercer County Tax Claim Bureau, Greenville Borough, Bank of America, the Commonwealth of Pennsylvania, and the Crawford County Tax Claim Bureau. On June 10, 2013 Judge McLaughlin entered a default judgment against all of the named Defendants except for Loreno and Bank of America (ECF No. 45).

On June 12, 2013, Judge McLaughlin granted partial summary judgment in favor of the United States and against Loreno relative to Count I of the complaint (ECF No. 47). In doing so, Judge McLaughlin reduced the Government's assessments of Loreno's federal income tax liabilities to judgment in the amount of $141, 768.70, plus interest accruing thereon (ECF No. 48).

After the case was transferred to the undersigned district judge, [4] the United States entered into a stipulation with Bank of America concerning the parties' competing claims relative to the subject properties (ECF No. 53). According to the Government, this stipulation resolved all of its claims against Bank of America. ( See Sept. 10, 2013 Status Report ¶1, ECF No. 51.) The stipulation was approved by this Court on September 17, 2013 (ECF No. 54). Accordingly, the only outstanding claims at this juncture are the Government's foreclosure claims against Defendant Loreno at Counts II through VIII of the complaint.

On November 14, 2013, the Government filed a report concerning the status of this litigation (ECF No. 55). In its status report, the United States disclosed that it would seek an entry of summary judgment with regard to the foreclosure claims at Counts II, III, IV, and VII of the complaint. The United States further advised, with regard to Counts V, VI, and VIII, that the real and personal property identified in those counts had been sold at some point after the commencement of this litigation. It is the Government's position that the federal tax liens continue to attach to the properties which are the subject of Counts V, VI, and VIII, inasmuch as the sales allegedly occurred without proper notice and in violation of this Court's jurisdiction. In light of these circumstances, the Government sought leave to amend its complaint with respect to Counts V, VI, and VIII in order to substitute the new title holders as parties to this action and pursue a judgment against them.

By text order entered on November 15, 2013, this Court granted the United States leave to file, on or before November 29, 2013, its motion for partial summary judgment as well as any amendments to the complaint. The United States proceeded to file the pending motion for partial summary judgment on November 27, 2013 (ECF No. 56), together with its supporting brief (ECF No. 57) and a concise statement of material facts (ECF No. 58). Consistent with the Government's prior status report, its motion seeks summary judgment relative to the foreclosure claims at Counts II, III, IV, and VII of the complaint.

On November 29, 2013, the United States filed its amended complaint (ECF No. 59) which adds new Defendants and allegations relative to Counts V, VI and VIII but otherwise leaves intact the original allegations set forth in Counts II, III, IV, and VII. Because the amended complaint is now the operative pleading, and because it makes no changes affecting the Government's original claims at Counts II, III, IV, and VII, the Court will construe the Government's Rule 56 motion as a request for summary judgment relative to Counts II, III, IV, and VII of the amended complaint .

II. Standard of Review

Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be granted "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." The moving party has the initial burden of proving the absence of a genuinely disputed material fact relative to the clams in question. Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Country Floors, Inc. v. Partnership Composed of Gepner and Ford, 930 F.2d 1056, 1061 (3d Cir.1990). A material fact is one whose resolution will affect the outcome of the case under applicable law. Anderson v. Liberty Lobby, Inc . 477 U.S. 242, 248 (1986).

Once the moving party meets its initial burden, it then becomes the non-movant's burden to demonstrate the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp ., 475 U.S. 574 (1986); Williams v. Borough of West Chester, Pa ., 891 F.2d 458, 460-461 (3d Cir.1989). Under Rule 56(c)(1), a non-moving party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations..., admissions, interrogatory answers, or ...


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