Acacia Corporate Management, LLC et al v. United State of America et al

Filing 129

ORDER Lifting Stay, signed by Chief Judge Anthony W. Ishii on 1/10/2012. (It is ORDERED that the stay be lifted. The parties are directed to contact the chambers of Magistrate Judge Gary Austin within fourteen (14) days to schedule a Mandatory Scheduling Conference.)(Gaumnitz, R)

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT FOR THE

6

EASTERN DISTRICT OF CALIFORNIA

7
8
9
10
11
12
13

)
)
)
)
Plaintiffs,
)
)
v.
)
)
UNITED STATES, et al.,
)
)
Defendants.
)
____________________________________)
ACACIA CORPORATE
MANAGEMENT, LLC, MICHAEL
IOANE,

CIV F-07-1129 AWI GSA
ORDER LIFTING STAY

14
15

Steven and Louise Booth (the “Booths”) owe Defendant United States over $2 million

16

dollars in tax deficiencies and penalties dating from activity in 1995-97. The Booths owned (or

17

controlled through other entities) three parcels of property (the “Properties”) in Bakersfield, CA.

18

On December 5, 2005, the Booths transferred ownership of the Properties to Plaintiffs Acacia

19

Corporate Management and Michael Scott Ioane. Bakersfield Properties and Trust Company,

20

Alpha Omega Trust, and Aligned Enterprises Trust (“Lienholders”) have lien and/or mortgage

21

interests in the Properties. On December 22, 2005, the United States put a tax lien on the

22

Properties on the basis that Plaintiffs and Lienholders are nominees/alter egos of the Booths.

23

On August 3, 2007, Plaintiffs filed suit against the United States, the Booths, and the

24

Lienholders to quiet title to the Properties and seeking monetary, declaratory, and injunctive

25

relief against the United States. By order of January 22, 2008, the court limited Plaintiffs’ suit to

26

one seeking to quiet title on the Properties pursuant to 28 U.S.C. §2410. Plaintiffs voluntarily

27

dismissed claims against the Booths and Lienholders under Fed. Rule Civ. Proc. 41(a). The only

28

remaining defendant in this case is the United States.

1

Defendant United States moved to stay the case pending resolution of criminal cases

2

against the Booths and Michael Scott Ioane, who had been indicted for tax evasion. Eastern

3

District of California Criminal Case No. 09-0142 LJO. Plaintiffs opposed the motion, which was

4

ultimately granted. Recently, the Booths agreed to a plea bargain; Steven Booth plead guilty and

5

all charges are expected to be dropped against Louise Booth. In a jury trial, Plaintiff Ioane was

6

convicted of several counts. Plaintiff has moved for acquittal or, in the alternative, for a new

7

trial. The motion has been denied. Defendant United States now moves to have the stay lifted.

8

Plaintiffs oppose the motion on the grounds that Plaintiff Ioane will seek to appeal his

9

conviction. The matter was taken under submission without oral argument.

10
11
12
13
14
15

A court must decide whether to stay civil proceedings in the face of parallel criminal
proceedings in light of the particular circumstances and competing interests involved in
the case. Obviously a court should consider the extent to which the defendant’s fifth
amendment rights are implicated. Other factors a court should consider will vary
according to the case itself, but generally will include: (1) the interest of the plaintiffs in
proceeding expeditiously with this litigation or any particular aspect of it, and the
potential prejudice to plaintiffs of a delay; (2) the burden which any particular aspect of
the proceedings may impose on defendants; (3) the convenience of the court in the
management of its cases, and the efficient use of judicial resources; (4) the interests of
persons not parties to the civil litigation; and (5) the interest of the public in the pending
civil and criminal litigation.

16
Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902-3 (9th Cir. 1989). As explained
17
in the prior order, the main reasons a stay was necessary was to protect Plaintiff Ioane’s Fifth
18
Amendment right to avoid making statements that may incriminate himself and to prevent
19
Plaintiff Ioane from using civil discovery to gain access to the statements of prosecution
20
witnesses before trial. Doc. 81, May 7, 2008 Order, at 4:22-5:6 and 6:26-7:25. With the
21
conclusion of trial, there is no longer any fear that civil discovery may be used to obtain
22
privileged information on the criminal prosecution. Plaintiff’s Fifth Amendment rights must still
23
be considered. But in this circumstance, Plaintiff Ioane “has not explained what the issues are in
24
his criminal appeal nor how precisely his rights will be jeopardized.” Edward v. New United
25
Motors Mfg., 2008 U.S. Dist. LEXIS 88900, *2 (N.D. Cal. Oct. 22, 2008). He has not explained
26
on what grounds he is appealing or even if a successful appeal would result in a new trial.
27
28

2

1

Without pointing out special circumstances that imperil his Fifth Amendment rights, this factor

2

alone is insufficient to support a continuation of stay in this case. As a general rule, “where trial

3

in the parallel criminal proceeding has concluded, and a conviction is being challenged on

4

appeal, the analysis shifts against staying the civil proceedings.” Taylor v. Ron’s Liquors Inc.,

5

2011 U.S. Dist. LEXIS 15916, *5-6 (N.D. Cal. Feb. 8, 2011).

6

It is ORDERED that the stay be lifted. The parties are directed to contact the chambers of

7

Magistrate Judge Gary Austin within fourteen (14) days to schedule a Mandatory Scheduling

8

Conference.

9

IT IS SO ORDERED.

10
11

Dated:
0m8i78

January 10, 2012
CHIEF UNITED STATES DISTRICT JUDGE

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

3