USA v. Fleming et al

Filing 110

ORDER granting 108 Motion for Default Judgment Against Defendant Gladding and granting 109 United States' Request for Entry of Order of Sale. The Clerk shall enter in favor of the United States (1) DEFAULT JUDGMENT against Defendant Lee Gladding; and (2) FINAL JUDGMENT against all parties in accordance the prior Orders entered in this case and this Order. ORDERED by Judge Raymond P. Moore on 2/20/2019. (cthom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 15-cv-00883-RM-MEH
UNITED STATES OF AMERICA,
Plaintiff,
v.
PATRICIA FLEMING;
VAN EDEN CORPORATION;
LEE GLADDING;
CAPITAL ONE BANK;
COLORADO DEPARTMENT OF REVENUE; and
CLEAR CREEK COUNTY,
Defendants.
______________________________________________________________________________
ORDER:
(1) GRANTING DEFAULT JUDGMENT AGAINST DEFENDANT GLADDING;
AND
(2) DETERMINING PRIORITY OF INTERESTS AMONG THE PARTIES
______________________________________________________________________________
This matter is before the Court on the United States’ “Supplemental Motion for Default
Judgment against Defendant Lee Gladding” (the “Supplemental Motion”) (ECF No. 108) and
United States’ Request for Entry of Order of Sale (the “Request for Order”) (ECF No. 109)
(collectively, “Second Motions”). The Second Motions were filed after the Court denied, without
prejudice, the United States’ initial motions concerning the same subject matter (collectively, the
“First Motions”) (ECF Nos. 104, 105).1 No response or objection has been filed to the First or

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The Court denied the First Motions because there was an inconsistency as to the years in which the proposed
distribution of any proceeds would apply. (ECF Nos. 106, 107.)

Second Motions. Upon consideration of the Second Motions, the court file, and the applicable
rules and case law, and being otherwise fully advised, the Second Motions are GRANTED as
stated herein.
I.

BACKGROUND

The factual and procedural background which gives rise to the Second Motions is set
forth in the Court’s previous Order dated September 13, 2017 (the “First Order”) (ECF No. 103),
so it will not be repeated here. In summary, as relevant here, in the First Order, the Court granted
the United States summary judgment as against Defendants Fleming and Van Eden Corporation
as to certain matters related to 2314 Van Eden Road, Idaho Springs, Colorado 804522 (the
“Subject Property”)3; directed the United States to submit a proposed order of sale accounting for
all priorities and stipulations as to the remaining Defendants with any existing interest in the
Subject Property; and denied without prejudice the United States’ request for default judgment as
against Defendant Gladding for failure to direct the Court as to any appropriate relief it seeks
through the entry of judgment. In response to the First Order, the United States filed the First
Motions and, when those were denied without prejudice, then filed the Second Motions, the
latter of which are at issue and ripe for determination.
II.

ANALYSIS
A. Default Judgment Against Defendant Gladding

As stated, the Court denied the United States’ request for a default judgment against
Defendant Gladding as it failed to advise the Court of the remedy sought. As alleged in the

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More particularly described as “The Soda Creek Placer Mining Claim, U.S. Survey No. 17253, County of Clear
Creek, State of Colorado.”
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There is also an adjacent property (ECF No. 87-1 at ¶2), but that is not at issue here.

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Amended Complaint, and supported by the evidence, Defendant Gladding may claim an interest
in the Subject Property based on a promissory note and deed of trust given by Defendant
Fleming on the Subject Property. (ECF No. 87-2, ¶12; No. 87-3, Exhibit 11.) The record shows
that Defendant Gladding had an opportunity to respond to the complaint and present evidence in
support of his interest, but did not do so. (E.g., ECF No. 87-2, ¶¶42, 43.) As such, in the
Supplemental Motion, the United States requests the Court to enter default judgment against
Defendant Gladding and to enter an order that any interest Defendant Gladding may have in the
Subject Property is discharged. On this record, the Court finds sufficient evidence to support the
relief requested. Accordingly, the Court finds that any interest Defendant Gladding has in the
Subject Property is discharged and default judgment should enter accordingly.
B. Priority of Liens and Order of Sale
Priority of Liens. In order to effectuate the Court’s First Order concerning the United
States’ tax liens on the Subject Property, the United States seeks an Order of Sale for the Subject
Property. Before the Court can do so, it must first address the interests of the other parties in this
case and/or their relative priorities in light of the record at hand.
As to Defendant Van Eden Corporation, the Court has previously found that such
defendant holds legal title to the Subject Property as the nominee of Defendant Patricia Fleming
(First Order, page 22).
As to Defendant Gladding, as stated herein, any interest he has in the Subject Property is
discharged.
As to Defendant Capital One Bank, pursuant to the United States and Capital One Bank’s
stipulation and this Court’s subsequent Order of March 16, 2017, the Court has determined, as to
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the Subject Property, that (1) Capital One Bank’s interest has priority over the United States’
federal tax liens; and (2) Clear Creek County’s tax liens have priority over Capital One Bank’s
interest. (ECF Nos. 90, 93.) The Court left some other issues open. However, in light of these
parties’ stipulation, to which no one has challenged over the course of this case, the Court
accepts the additional stipulations (expressed or implied) as made between the parties, i.e., that
Capital One Bank’s lien is valid and remains in effect, and so finds.
As to Defendant Colorado Department of Revenue, it has filed a Disclaimer of Interest
and the United States has voluntarily dismissed the Department, without prejudice, from this
case. (ECF Nos. 57, 71.)
As to Defendant Clear Creek County, pursuant to the United States and Clear Creek
County’s stipulation and this Court’s subsequent Order of November 25, 2015, the Court has
determined that Clear Creek County’s tax liens have priority over the United States’ federal tax
liens, but left some other issues open (ECF Nos. 36, 50). In light of these parties’ stipulation, to
which no one has challenged over the course of this case, the Court accepts the additional
stipulations (expressed or implied) as made between the parties, i.e., that Clear Creek County’s
tax liens are valid and remain in effect, and so finds.
In light of the foregoing, and the United States’ proposed Order of Sale which sets forth a
priority for distribution of proceeds from the sale of the Subject Property, to which no party
objects and there is nothing in the record to show a contrary priority, the Court accepts and
agrees with the proposed priority of disbursement.

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Proposed Order of Sale. The United States’ proposed Order of Sale for the Subject
Property has been submitted for consideration and, with minor modifications, is approved and
shall be entered in order to effectuate the sale.
III.

CONCLUSION

Based on the foregoing, it is ORDERED
(1) That the United States’ “Supplemental Motion for Default Judgment against
Defendant Lee Gladding” (ECF No. 108) is GRANTED as stated herein;
(2) That Defendant Lee Gladding’s interest, if any, in the Subject Property, i.e., 2314
Van Eden Road, Idaho Springs, Colorado, 80452, is discharged and default judgment
shall enter against Defendant Gladding accordingly;
(3) That the United States’ Request for Entry of Order of Sale (ECF No. 109) is
GRANTED as stated herein; and
(4) That the Clerk shall enter in favor of the United States (1) DEFAULT JUDGMENT
against Defendant Lee Gladding; and (2) FINAL JUDGMENT against all parties in
accordance the prior Orders entered in this case and this Order.
DATED this 20th day of February, 2019.
BY THE COURT:

____________________________________
RAYMOND P. MOORE
United States District Judge

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