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United States v. Santana

United States District Court, M.D. Pennsylvania

October 27, 2017

UNITED STATES OF AMERICA Plaintiff
v.
CHRISTIAN F. SANTANA, et al. Defendants

          MEMORANDUM OPINION

          ROBERT D. MARIANI UNITED STATES DISTRICT JUDGE.

         I. Introduction and Procedural History

         Presently before the Court is the United States' Motion for Default Judgment as to Count III (Doc. 25) of the Complaint (Doc. 1). For the reasons discussed below, the Court will grant the United States' motion.

         On July 19, 2016, Plaintiff, the United States of America, filed a Complaint naming as Defendants Christian F. Santana, Oriza Dotel, Christian L. Santana, the Pennsylvania Department of Revenue, the Municipal Authority of Hazle Township, and Dentalcrafts Masters, LLC. (Doc. 1). The civil action was filed "to collect the federal income tax assessments made against Christian F. Santana and Oriza Dotel and the civil penalty assessments made against Christian F. Santana; to obtain a judicial determination that Christian L. Santana is the nominee, alter ego, or transferee of Christian F. Santana; and to enforce the tax liens of the United States against real property located at 1024 Peace Street, Hazle Township, Pennsylvania 18202 (the 'Real Property')." (Doc. 1, at2).[1] The Complaint contains three counts: Reduce Federal Income Tax Assessments to Judgment (Count I); Reduce Civil Penalty Assessments to Judgment (Count II); and Foreclosure of the Federal Tax Liens Against the Real Property (Count III). (See generally, Doc. 1).

         The record reflects that summons were returned executed as to each defendant, with the exception of the Pennsylvania Department of Revenue (Docs. 5-9), but no attorney has entered an appearance on behalf of any defendant nor has any defendant filed a pleading or performed any other action to otherwise defend the case. Thus, on November 1, 2016, Plaintiff filed a Request to Enter Default Pursuant to Fed.R.Civ.P. 55(a) against Christian F. Santana, Oriza Dotel, Christian L. Santana, and Dentalcrafts Masters, LLC (Doc. 10). The Clerk of Court entered default against these defendants on November 14, 2016. (Doc. 11).

         The Clerk of Court having entered default, the United States filed a Motion for Default Judgment as to Counts I and II (Doc. 13) on February 15, 2017 pursuant to Fed.R.Civ.P. 55(b)(2). The following month, the United States filed a Motion for Default Judgment Against Defendant Dentalcrafts Masters, LLC, (Doc. 15). The Court granted both motions on April 26, 2017 (see Docs. 20-24).

         The United States subsequently filed the Motion for Default Judgment as to Count III (Doc. 25) on August 1, 2017, which is presently before this Court.

         II. Standard of Review

         Pursuant to the Federal Rules of Civil Procedure, "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default". Fed.R.Civ.P. 55(a). Upon the party's request, the clerk of court may then enter default judgment, but only if the claim is for a sum certain or one that can be made certain by computation, the defendant has made no appearance, and the defendant is not a minor or incompetent. Id. at 55(b)(1). In all other cases, the party seeking a default judgment must make an application to the court. Id. at 55(b)(2).

         Although the entry of default judgment is "left primarily to the discretion of the district court", the discretion is not limitless given that cases should "be disposed of on the merits whenever practicable." Hritz v. Woma Corp., 732 F.2d 1178, 1180-1181 (3d Cir. 1984). "Where a court enters a default judgment, 'the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 n. 6 (quoting Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)).

         III. Analysis

         A. Statement of Facts as Set Forth by Plaintiff

         Count III of the United States' Complaint, entitled Foreclosure of the Federal Tax Liens Against the Real Property, alleges that by deed dated September 6, 2012, Christian F. Santana and Oriza Dotel ("the Taxpayers"), husband and wife, acquired the real property known as 1024 Peace Street, Hazle Township, PA. (Doc. 1, at ¶ 29). The Taxpayers thereafter conveyed the Real Property to Christian L. Santana, the Taxpayers' son, for no consideration by deed dated September 12, 2012. (Id. at ¶ 30). The United States asserts that "Christian L. Santana acquired his interest and continues to hold his interest in the Real Property as a nominee, transferee, or alter ego of the Taxpayers, Christian F. Santana and Oriza Dotel, for the purpose of assisting his parents in evading the collection of their Federal tax liabilities" and that "[d]espite the purported transfer of the Real Property to Christian L. Santana, the Taxpayers retained possession of the Real Property and continue to reside at the Real Property." (Id. at ¶¶ 31, 32). Therefore, "[b]ecause Defendant Christian L. Santana acquired bare legal title to the Real Property solely as the nominee, transferee, or alter ego of the Taxpayers, the Taxpayers are the true and beneficial owners of the Real Property." (Id. at ¶ 33).

         By reason of the tax assessments described in Counts I and II of the Complaint, tax liens in favor of the United States arose as of the dates of those assessments pursuant to Internal Revenue Code §§ 6321 and 6322 in the amounts of the assessments, plus all statutory additions to tax accruing thereon under law. The Complaint alleges that the federal tax liens attached to all property and rights to property then owned or thereafter acquired by the Taxpayers, including the Real Property belonging to the Taxpayers that is currently titled in the name of Christian L. Santana. (Doc. 1, at ¶ 34).

         Notices of the federal tax liens for assessments for unpaid federal income taxes against Christian F. Santana and Oriza Dotel, set forth in Count I of the Complaint, and for assessments of penalties under 26 U.S.C. § 6672 against Christian F. Santana in Count II, were filed June 19, 2012, December 16, 2014, April 14, 2015, and October 14, 2015 with the Prothonotary of Luzerne County in Wilkes Barre, Pennsylvania and the notices of these federal tax liens for assessments were recorded against Defendant Christian L. Santana as ...


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