United States of America v. Grantham et al

Filing 60

ORDER granting in part and denying in part 54 Joint Motion to Stay. The action is hereby stayed until 8/31/2018. Telephonic Status Hearing set for 8/16/2018 02:00 PM before Magistrate Judge Jill L. Burkhardt Signed by Magistrate Judge Jill L. Burkhardt on 6/1/2018. (All non-registered users served via U.S. Mail Service)(anh)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

Case No.: 17-cv-01104-JLB

Plaintiff,

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v.

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ORDER GRANTING IN PART AND
DENYING IN PART JOINT
MOTION TO STAY

GREGORY E. GRANTHAM, et al.,

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Defendants.

[ECF No. 54]

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Before the Court is the parties’ Joint Motion to Stay in Light of Settlement

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Agreement. (ECF No. 54.) For the reasons stated below, the Court GRANTS in part and

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DENIES in part the parties’ Joint Motion.

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In this federal income tax dispute, the United States brought suit against Defendants

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Gregory Grantham, Silvia Alvarado, and the Pacific Forster Irrevocable Trust for

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outstanding tax liabilities. (ECF No. 1.) On April 13, 2018, the parties filed a Joint Motion

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to Approve Stipulation between the United States and Defendants. (ECF No. 53.) This

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motion indicated that the parties had reached a settlement agreement and requested the

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Court enter the parties’ attached stipulation (“Stipulation”). (Id.) The Stipulation provided

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that Defendants would satisfy their agreed upon liabilities for the tax years of 1998-2002

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and 2004. (ECF No. 53-1.) In the event that Defendants failed to satisfy these liabilities,

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the United States would be entitled to seek foreclosure of Defendants’ property to satisfy
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the outstanding liabilities. (Id.) The United States agreed, however, that it would not move

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for entry of judgment or for an order of sale before March 26, 2019 to provide Defendants

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with a year to satisfy their liabilities. (Id.) The parties also filed a notice of consent to

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jurisdiction by magistrate judge. (ECF No. 55.) On April 16, 2018, the Honorable Larry

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Alan Burns granted the parties’ motions for entry of the Stipulation and consent to

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magistrate judge jurisdiction, and referred the instant Motion to the undersigned. (ECF

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No. 56.)

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In the instant Motion, the parties request a one-year stay of this action in order to

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allow Defendants until March 26, 2019 to satisfy their liabilities in full. (ECF No. 54-1 at

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2.) Thus, the parties represent, if Defendants pay the liabilities as contemplated by the

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Stipulation before that date, the United States would not foreclose on Defendants’ property.

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(Id. at 4.) The parties further represent that there is little risk of extended litigation after

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the stay terminates because in the event that Defendants fail to satisfy their liabilities under

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the Stipulation by March 26, 2019, the United States may take prompt action to foreclose

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on the property. (Id. at 6.)

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Courts have the discretionary power to stay proceedings. Ali v Trump, 241 F. Supp.

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3d 1147, 1152 (W.D. Wash. 2017) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)).

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In determining whether to grant a motion to stay, “the competing interests [that] will be

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affected by the granting or refusal to grant a stay must be weighed.” Lockyer v. Mirant

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Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268

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(9th Cir. 1962)). Those interests include: (1) “the possible damage which may result from

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the granting of a stay,” (2) “the hardship or inequity which a party may suffer in being

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required to go forward,” and (3) “the orderly course of justice measured in terms of the

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simplifying or complicating of issues, proof, and questions of law which could be expected

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to result from a stay.” Id.

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Here, a one-year stay is not warranted. There is little to no damage that may result

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from granting the requested stay because the parties have reached a settlement agreement

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and jointly seek a stay. The parties fail to establish, however, that they will suffer hardship
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or inequity in being required to go forward without a one year stay. The parties represent

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that a stay would save the parties resources because, if the case were to go forward on the

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merits, it would require extensive discovery. (ECF No. 54-1 at 5.) This argument carries

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little weight as the parties’ settlement agreement, entered by Judge Burns, resolves the

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merits of this case. (See ECF Nos. 53, 55.) Further, the parties reassure the Court that

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“there is little risk of extended litigation after the stay terminates, because the taxpayers

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have agreed to the liabilities and have further agreed that if they do not pay in full, the

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United States may take prompt action to foreclose on the property in Trust.” (ECF No. 54-

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1 at 6.) The parties contemplate that the remaining litigation on the horizon, then, is limited

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to enforcement of the Stipulation and the potential foreclosure of Defendants’ property.

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Lastly, the Court has an interest in managing judicial resources by preventing inactive cases

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from remaining indefinitely on its docket. The Court finds, however, that a shorter stay of

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three months is warranted in the interest of potentially simplifying, or eliminating, the

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outstanding issues in this case. Accordingly, the parties’ Motion is GRANTED in part

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and DENIED in part as follows: This action is hereby stayed until August 31, 2018. The

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Court hereby SETS a telephonic Status Conference for August 16, 2018 at 2:00 PM. For

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purposes of the Conference, the parties and counsel shall place a joint call to Judge

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Burkhardt’s chambers with all participants already on the line.

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IT IS SO ORDERED.
Dated: June 1, 2018

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