USA v. 400 Roper Street, Morganton, North Carolina

Filing 44

ORDER re 43 MOTION for Entry of Default and Final Order of Forfeiture: the Gov shall file a supplemental brief within 14 days of this Order, addressing issue of whether they provided adequate notice to potential claimant, CitiFinancial Services, Inc. 309, LLC. Signed by District Judge Martin Reidinger on 2/7/12. (Attachments: # 1 Exhibit 1)(ejb)

THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:10cv18

UNITED STATES OF AMERICA,

Plaintiff,
vs.
400 Roper Street, Morganton, North
Carolina, being real property as
described in a deed at Book 431,
Page 468, of the Registry of Burke
County, North Carolina, together
with the residences, and all
appurtenances, improvements, and
attachments thereon,
Defendant.

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ORDER

THIS MATTER is before the Court on the Government’s Motion for Entry
of Default Judgment by Default, Entry of Judgment, and Final Order of
Forfeiture [Doc. 43].
On July 15, 2011, the Government moved the Court for entry of default
and entry of default judgment against Associates Financial Services of
America, Inc., and for entry of judgment and final order of forfeiture pursuant
to Federal Rule of Civil Procedure 58(a)(2)(A)(iii) against the defendant

property. [Doc. 35]. In support of its motion, the Government presented to
the Court two Deeds of Trust, indicating two possible lienholders on the
defendant property: Associates Financial Co., Inc. and Associates Financial
Services of America, Inc. The Government asserted that these entities were
in fact one and the same, and that Associates Financial Services of America,
Inc. had been absorbed into “Citi Mortgage (and/or Citi Financial).” [Doc. 35
at 4].
Based on the record presented by the Government, the Court concluded
that it could not determine whether the Government had identified the proper
corporate entities entitled to notice under the applicable Rules. In addition,
the Government had not established that the lienholders were notified
properly. Accordingly, the Government’s Motion for Entry of Judgment by
Default, Entry of Judgment, and Final Order of Forfeiture was denied without
prejudice. [Doc. 40].
The Government now renews its motion for entry of judgment by default
and for a final order of forfeiture. [Doc. 43]. With respect to the lienholders,
the Government offers additional evidence in support of its assertion that
“Associates Financial Co., Inc.” and “Associates Financial Services of
America, Inc.” are in fact the same entity. Specifically, the Government notes

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that the transfer and assignment of the first deed of trust to Associates
Financial Co., Inc. was filed with the Burke County Register of Deeds on the
same date, November 15, 1995, that the second deed of trust to Associates
Financial Services of America, Inc. was filed.

Further, the Government

asserts that a search of the North Carolina Department of the Secretary of
State website shows that no company with the name Associates Financial
Co., Inc. has ever been registered to do business in North Carolina, but that
Associates Financial Services of America, Inc. was registered with the North
Carolina Department of the Secretary of State to do business in this State at
the time the transfers and assignments of the deeds of trust were effected.
The Government submits that this circumstantial evidence demonstrates that
it is more likely than not that Associates Financial Co., Inc. and Associates
Financial Services of America, Inc. are the same entity and that this single
entity (i.e., Associates Financial Services of America, Inc.) held both deeds of
trust with respect to the defendant property.
The Government also has presented evidence that Associates Financial
Services of America, Inc. merged with another entity in 2001. Citing an
Articles of Merger filed with the North Carolina Department of the Secretary
of State, the Government identifies the entity surviving this merger as

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“CitiFinancial Services, Inc. 309 LLC” located at 300 St. Paul Place, Baltimore,
Maryland 21202. [Doc. 43 at 4 (citing Ex. I, Doc. 43-9)]. The Government
asserts that it provided proper notice of the forfeiture action to CitiFinancial
Services, Inc. 309 LLC on October 11, 2011. [Id. at 4-5]. The Government’s
exhibits reveal, however, that notice was actually sent on that date to an entity
identified as “CitiFinancial Services, Inc. LLC,” not “CitiFinancial Services,
Inc. 309 LLC.” [See Ex. L, Doc. 43-12]. The difference between the names
of these corporate entities is not insubstantial, as a cursory search of the
Delaware Department of State website reveals at least eleven different limited
liability companies which include “CitiFinancial Services” and a three-digit
number as part of their name.1
It reasonably appears from the exhibits presented by the Government
that CitiFinancial Services, Inc. 309, LLC is a potential claimant and thus the
Government was required to provide this entity with notice pursuant to Rule
G(4)(b)(I) of the Supplemental Rules for Admiralty or Maritime and Asset
Forfeiture Claims. It is unclear, however, whether the Government’s actions
in mailing notice to “CitiFinancial Services, Inc. LLC” constitutes notice that
is “reasonably calculated” to reach the actual potential claimant in this case,
1

See https://delecorp.delaware.gov/tin/controller (last visited February 7, 2012).
A screenshot of this website is attached hereto as Exhibit 1.
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CitiFinancial Services, Inc. 309, LLC.

See

Rule

G(4)(b)(iii)(A),

Supplemental Rules for Admiralty or Maritime and Asset Forfeiture Claims.
Accordingly, IT IS, THEREFORE, ORDERED that within fourteen (14)
days of this Order, the Government shall file a supplemental brief addressing
the issue of whether the Government provided adequate notice to the
potential claimant, CitiFinancial Services, Inc. 309, LLC. Such supplemental
brief shall not exceed ten (10) pages in length and shall be in 14-point type,
double spaced.
IT IS SO ORDERED.
Signed: February 7, 2012

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