United States of America v. Hernandez et al

Filing 58

ORDER granting 54 Motion for Leave to File Amended Answer and Motion for Jury Trial. Signed by Senior Judge David C Bury on 8/6/13.(SMBE)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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United States of America,
Plaintiff,

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ORDER

v.

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No. CV-11-00250-TUC-DCB

Hilda A. Hernandez and Elvia Callahan,

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Defendants.

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On April 25, 2011, the United States filed an action against the Defendants, Hilda

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Hernandez and Elvia Callahan, under the Arizona Fraudulent Transfer Act (AFTA),

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A.R.S. § 44-1001-1010. The Government sued Defendants for the value they received as

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a result of an alleged fraudulent transfer of real property at the location where Alfonso’s

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Carnitas, Inc. operated Alfonso’s Carnitas restaurant. The judgment amount represents

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$47,059 for unpaid employment taxes, interest, late fees, and penalties that Alfonso’s

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Carnitas, Inc. owes the IRS from 2003 through 2007.

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To succeed on its claim, the Government must establish its creditor status, a

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property transfer, and actual or constructive fraud on the part of the transferor. In a prior

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Report and Recommendation, the Magistrate Judge found the Government prevailed as to

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Defendant Hernandez and recommended the Court grant summary judgment for the

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Government as to her. However, the Magistrate Judge found material questions of fact

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remained in dispute as to Defendant Callahan, which would prevent summary judgment

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being entered against her.

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On February 20, 2013, the Court accepted and adopted the Magistrate Judge’s

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R&R as its findings of fact and conclusions of law. The Court granted Judgment for the

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Government against Defendant Hernandez. The Court did not grant summary judgment

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against Defendant Callahan because it appeared she may be a good-faith transferee. The

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Court ordered the Plaintiff and Defendant Callahan to file a Joint Pretrial Order and

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subsequently appointed counsel to serve pro bono on behalf of Defendant Callahan.

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On April 9, 2013, the Joint Proposed Pretrial Order was filed. It identified two

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remaining factual issues to be tried and decided: (1) Ms. Callahan’s subjective

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unawareness of the government’s tax lien against the property, and (2) the amount of Ms.

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Callahan’s payments on the loan. According to the Defendant, neither of these issues

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were raised in the original Answer.

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On April 1, 2013, the Defendant filed a Motion for Leave to File an Amended

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Answer. The proposed Amended Answer includes a demand for trial by jury on all the

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factual issues not previously raised in the original Answer. The Government does not

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object to the Defendant’s Amended Answer, but objects to the Defendant’s request for a

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jury trial. The Court allows Defendant Callahan to amend her Answer, which is her first

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pleading to be properly filed with the Court.

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Answer, pro se. It was not signed by Defendant Callahan. While a non-attorney may

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appear pro se on his own behalf, “[sh]e has no authority to appear as an attorney for

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others than [herself].” Johns v. County of San Diego, 114 F.3d 874, 876 (9th Cir. 1997)

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(citing C.E. Pope Equity Trust v. Unites States, 818 F.2d 696, 697 (9th Cir. 1987)).

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Defendant Hernandez could not answer for Defendant Callahan.

Defendant Hernandez filed the first

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The Court allows the Amended Answer including Defendant’s timely jury demand

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as to new matters. Fed. R. Civ. P. 38(b)(1). The Government claims the Defendant’s

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Amended Answer does not raise any new issues for trial that were not already stated in

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the initial Answer filed by Defendant Hernandez. The Court finds the initial Answer filed

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by Defendant Hernandez and the proposed Amended Answer filed by Defendant

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Callahan to be quite different. The first did not touch on Defendant Callahan’s subjective

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good faith. Nor did it state the amount of the Defendant’s payments on the loan or her

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entitlement to an offset. The proposed Amended Answer directly raises these two issues

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left to be tried – raising them for the first time in a pleading properly filed by Defendant

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Callahan.

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Conclusion

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Since the Court is granting Defendant Callahan’s request for leave to file an

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Amended Answer, her jury demand is timely as to all new issues raised by the Amended

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Answer, which are the issues remaining for trial.

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Accordingly,
IT IS ORDERED that the Motion for Leave to File Amended Answer and Motion
for Jury Trial (Doc. 54) are GRANTED.
Dated this 6th day of August, 2013.

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