Ramsay v. Sanibel & Lancaster Insurance, LLC et al
Filing
99
MEMORANDUM ORDER: adopting the Report and Recommendations as amended re 80 Report and Recommendations. The Court will ADOPT the findings and recommendations set forth in the Report and Recommendation of the United States Magistrate Judge filed on October 27, 2015, AS AMENDED by this Memorandum Order. The Court SUSTAINS Plaintiff's first objection to the Report and Recommendation of the United States Magistrate Judge. The Court AMENDS the Report and Recommendation to note that the IRS 39;s liens against Guajardo attach to Guajardo's one-half interest in the property, and such federal tax liens shall be paid out of one-half of the proceeds of the property sale, after payment of the costs of sale and the superior mortgage lien. The Court OVERRULES Plaintiff's second objection to the Report and Recommendation of theUnited States Magistrate Judge. The Court OVERRULES Garcia-Guajardo's first, second, and fourth through eighth objections to the Report and Recommendat ion of the United States Magistrate Judge. The Court, however, SUSTAINS Garcia-Guajardo's third objection and hereby AMENDS the Report and Recommendation tonote that the current holder of the mortgage lien on the property is Carrington Mortgage Loan Trust, Series 2005-NC3 Asset Backed Pass-Through Certificates. Copy of Memorandum Order mailed to all counsel of record and to the pro se Defendants at their address of record. Defendants are under an obligation to notify the Court of any change of address, and a failure to do so will not relieve Defendants of the consequences of any such failure. Signed by District Judge Mark S. Davis on 6/13/2016. (bgra)
UNITED
STATES
EASTERN
DISTRICT
DISTRICT
Norfolk
FILED
COURT
OF VIRGINIA
Division
JUN 14 2016
CHRISTOPHER RAMSAY,
':
-'•' COURT
I
.
Plaintiff,
Civil Action NO.
v.
SANIBEL & LANCASTER INSURANCE,
ROBERTA L.
LLC,
GARCIA-GUAJARDO,
STEVEN GUAJARDO,
GARY J.
2:llcv207
and
HUNTER,
Defendants.
MEMORANDUM
ORDER
This matter is before the Court on the United States Magistrate
Judge's Report and Recommendation,
objections to such
Report
and
ECF No. 80, and the parties'
Recommendation,
regarding certain
issues related to the sale of "4301 Newport Ave., a/k/a 600 Maryland
Ave.,
Norfolk,
Virginia"
("the property").
As discussed below,
following a de novo review of the Report and Recommendation, and the
objections filed thereto,
the Court will ADOPT the findings and
recommendations set forth in the Report and Recommendation of the
United States Magistrate Judge filed on October 27, 2015, AS AMENDED
by this Memorandum Order.
I.
On
June
30,
Execution Sale,
FACTUAL
2015,
ECF No.
sale of the property.
the
AND
PROCEDURAL
Court
granted
HISTORY
Plaintiff's
Motion
for
37, and determined that it would order the
ECF No. 65.
On August 4, 2015, pursuant to
28 U.S.C.
§ 636(b) (3)
and Local Rule 72,
the Court referred this
matter to the co-assigned United States Magistrate Judge to resolve
certain issues related to the sale of the property.
Report and Recommendation
of
ECF No. 69.
the Magistrate Judge was
The
filed on
October 27, 2015, ECF No. 80, proposing findings and recommendations
regarding (1) the persons who possess an interest in the property
and the extent of their respective interests;
property;
and
(4)
Court.
(2) the liens on the
(3) the order of priority of the liens on the property;
whether all
Id.
at
interested parties are currently before the
1.
By copy of the Report and Recommendation, each party was advised
of
the
right
to
file
written
objections
to
recommendations made by the Magistrate Judge.
the
findings
and
On October 30, 2015,
Plaintiff filed his objections to the Report and Recommendation.
ECF No. 81.
On November 12, 2015, Judgment Debtor and Defendant,
Roberta Garcia-Guajardo
("Garcia-Guajardo"),
the Report and Recommendation.
ECF No. 86.
filed objections to
Plaintiff responded to
Garcia-Guajardo's objections on November 24, 2015, ECF No. 87, and
Garcia-Guajardo filed a "Response to Plaintiff[*s] Objections" on
December 4, 2015, ECF No.
objections,
88.
On January 25,
2016,
based on such
the Court directed the parties to submit supplemental
information regarding the entity that holds the mortgage lien on the
property.
ECF No. 89.
to the Court's Order.
On February 8, 2016, both parties responded
ECF Nos.
91,
92.
About
that
same
time,
Judgment Debtor and Defendant Steven Guajardo ("Guajardo")
filed
three separate Voluntary Petitions for Chapter 13 Bankruptcy in the
United States Bankruptcy Court for the Eastern District of Virginia.
See Case No.
2:15-bk-74306,
Bankr.
2:16-bk-70222, Bankr. E.D. Va.,
Bankr. E.D Va., ECF No. 1.
E.D.
Va.,
ECF No.
1; Case No.
ECF No. 1; Case No. 2:16-bk-70685,
As discussed in the Court's Order, dated
May 19, 2016, Guajardo's bankruptcy petitions have been dismissed
and this matter is no longer subject to a stay related to Guajardo's
petitions for Chapter 13 bankruptcy.
ECF No. 95.
Court stated in its May 19, 2016 Order,
However, as the
issues remained regarding
the identity of the entity that holds the mortgage on the property
and
the
Court
regarding
property.
ordered
the
Plaintiff
entity
Id. at 4.
that
to
submit
currently
additional
holds
the
information
mortgage
on
the
On May 26, 2016, Plaintiff filed his response
to the Court's May 19, 2016 Order.
ECF No. 96.
The Court now has
sufficient information to review the Report and Recommendation and
will
address
Recommendation
the
parties'
Recommendation.
of
to
such
Report
and
in turn.
II.
Plaintiff
objections
makes
PLAINTIFF'S
two
OBJECTIONS
objections
to
the
Report
and
First, while Plaintiff does not object to the order
priority recommended by
the Magistrate
Judge,
Plaintiff does
object to the amount of the property sale proceeds to which the United
States Department of the Treasury, Internal Revenue Service ("IRS")
has a claim.
PL's Objs. to R. & R. at 1-2.
Plaintiff asserts that,
although the IRS has proper and valid liens on the property owned
by Guajardo and Garcia-Guajardo as tenants by the entirety, the IRS
is entitled to only one-half of the proceeds
property,
because
from sale
of the
after payment of costs and the superior mortgage lien,
the
IRS's
liens
are
against
Guajardo
only.
Id.
at
2.
Second, and relatedly, Plaintiff argues that, after payment of costs,
the mortgage lien, and one-half of the remaining proceeds to the IRS,
Garcia-Guajardo
should be
allowed
to
apply
all
remaining
sale
proceeds to Plaintiff s individual or joint and several debts against
her in the order that she chooses.
Although Garcia-Guajardo filed
objections and a "Response to Plaintiff[']s Objections," she does
not address either of Plaintiff's objections.
As discussed below,
the Court SUSTAINS Plaintiff s objection regarding the amount of sale
proceeds to which the IRS has a claim, and OVERRULES Plaintiffs
objection regarding Garcia-Guajardo's ability to discretionarily
pay her debts with the property sale proceeds remaining after payment
of the costs, the mortgage lien, and the IRS tax liens.
A.
IRS Interest in Sale Proceeds
In this matter, Guajardo and Garcia-Guajardo own the property
as tenants by the entirety.
Sale, ECF No. 78-1.
PL's Resp., Ex. 1, Deed of Bargain and
The IRS tax liens are against Guajardo only.
PL's Resp. on Execution Sale, 3. ECF No. 73; io\ Exs. 5, 6, 7, Notice
of Federal Tax Lien, ECF Nos. 73-5, 73-6, 73-7.
As the Magistrate
Judge noted, " [g] enerally, creditors of only one tenant cannot attach
a lien to property held jointly as tenants by the entirety."
R. at 5-6 (listing cases in support).
R. &
However, the United States
Supreme Court has recognized an exception to this general rule with
respect to federal tax liens.
In United States v. Craft, 535 U.S.
274 (2002), the Supreme Court held that property owned as a tenancy
by the entirety may be subject to attachment of federal tax liens,
even though the tax liens are against one tenant only.
Id. at 283-84.
In Craft, interpreting 26 U.S.C. § 6321 which allows a federal tax
lien to be attached "upon all property and rights to property, whether
real or personal, belonging to [a federal tax debtor]," the Supreme
Court
determined
debtor-tenant's
that
a
interest
federal
in
tax
property
lien
held
as
may
a
attach
tenancy
to
by
a
the
entirety when that interest "constitute[s] 'property' or ^rights to
property'" under the applicable state law.
Id. at 283.
Relying on
the ruling in Craft, and determining that the IRS "has a valid federal
tax lien attached to the property" under Virginia law, the Magistrate
Judge found that the IRS has a valid claim to proceeds of the sale
of the property, after payment of the costs of sale and the superior
mortgage lien.
R. & R. at 6-7 (citing Craft, 535 U.S. at 283-88).
The
Judge,
Magistrate
however,
did not
determine the
extent
Guajardo's interest in the tenancy by the entirety property,
proceeds of which may be applied to the
IRS liens.
The
of
the
Court,
therefore, AMENDS the Report and Recommendation to note that, because
Guajardo's rights to the property are equal to a one-half interest
in the property, the IRS's claim on the proceeds of the property sale
is limited to one-half of the sale proceeds, after payment of the
costs of sale and the superior mortgage lien.
While the Supreme Court has held that a valid IRS lien may attach
to a debtor-tenant's interest in property held as a tenancy by the
entirety, it did not address the extent of such interest or the value
of such interest for purposes of paying an IRS lien.
U.S.
at
289
("We express
respondent's
no
husband's
property . . . .").
view as
to
interest
See Craft, 535
the proper valuation of
in
the
entireties
However, several courts have found that, when
a federal tax lien against an individual is attached to property held
as a tenancy by the entirety, the debtor-tenant's "property or right
to property" is equal to a one-half interest in, or fifty percent
of, the tenancy by the entirety property.
found
that
the
IRS's
lien
attaches
only
Thus,
to
such courts have
the
debtor-tenant's
one-half interest in the property, and the IRS's lien is paid out
of the sale proceeds of that one-half interest.
Popky v. United States,
419 F.3d 242
(3d Cir.
Appeals for the Third Circuit found that,
For example,
2005),
in
the Court of
under Pennsylvania law,
the IRS debtor had an interest in property held as a tenancy by the
entirety
and
an
debtor-tenant's
IRS
tax
interest.
lien
was
Id.
properly
at
244.
attached
to
However,
the
the
debtor-tenant's interest was equal to one-half of the property, in
accordance
"with
the
longstanding
Pennsylvania
definition
of
tenancies by the entireties" and Pennsylvania's practice of equal
division of assets between spouses "when an entireties estate is
severed because of a sale with consent of both tenants, divorce or
other reasons."
Id.
at
245
(internal citations omitted).
Thus,
"[w]hen a federal tax lien attaches to a property held in a tenancy
by the entireties, it attaches to the delinquent taxpayer's one-half
interest in the property."
United States v. Tyler, 528 F. App'x 193,
198 (3d Cir. 2013) (unpublished) (citing Popky, 419 F. 3d at 244-45);
see United States v. Hoyt, 524 F. Supp. 2d 638, 642 (D. Md. 2007)
(citing Popky, 419 F.3d at 244-45, for the proposition that the
government was entitled to fifty percent of the proceeds from sale
of Maryland property, held as a tenancy by the entirety, to satisfy
tenant-taxpayer's debt for unpaid tax assessments) . Thus, the Third
Circuit held that, because the debtor-tenant's "property or rights
to property" is equal to a one-half interest in the tenancy by the
entirety property,
the IRS's federal tax lien attaches to the
debtor-tenant's one-half interest in such property, and the IRS's
tax lien is paid out of the sale proceeds of that one-half interest.
Similarly, in the unpublished case of United States v. Barczyk,
434 F. App'x 488 (6th Cir. 2011), the Sixth Circuit held that, under
Michigan law, the debtor-tenant had an interest in property held as
a tenancy by the entirety and the IRS tax lien was properly attached
to the
debtor-tenant's
interest
in such property.
Id.
at
493.
However,
the Sixth Circuit determined,
"because tenants
by the
entirety [, under Michigan law,] 'have equal interests in their home,
division
according
to
their
interests
results
in
an
equal
distribution of the proceeds of the sale of the home'" between the
innocent and debtor tenant.
Id. at 494
Barr, 617 F.3d 370, 373 (6th Cir. 2010) ) .
(citing United States v.
Thus, in Barczyk, the Sixth
Circuit held that the "non-defaulting spouse 'is entitled to fifty
percent of the proceeds of the foreclosure sale of the home,' with
the
other fifty percent
going
defaulting spouse's tax debt."
to the
Government
to satisfy the
Id. (quoting Barr, 617 F.3dat 373);
see also United States v. Winsper, 680 F.3d 482, 492 (6th Cir. 2012)
(determining that, under Kentucky law, an innocent tenant and debtor
tenant have interests in tenancy by the entirety property "of equal
character and value" and, if the property is to be sold to satisfy
the debtor tenant's IRS lien, the innocent tenant has a 50% interest
in tenancy by the entirety property).
Virginia
law,
discussed above,
similar
instructs
to
Pennsylvania
spouses,
that
and
own property as
who
Michigan
law
a
tenancy by the entirety, equally share in such estate "a present right
to the use and possession of, and income from the entire property,
and an
expectancy of
survivorship to
the interest of
the
other
spouse."
In re Philips, 14 B.R. 781 (Bankr. W.D. Va. 1981) (internal
citations
omitted).
divided,
Thus,
if
a
and such division
is
not otherwise addressed by law,
8
tenancy by entirety is
sold or
a
Virginia tenant's "right[] to property," held as a tenancy by the
entirety, is equal to a one-half interest in such property.1
Sundin v. Klein, 221 Va. 232, 241 (1980)
See
(determining that a wife
had an "undivided one-half interest" in property held as a tenancy
by the entirety with her husband and imposing a constructive trust
upon such interest after husband killed the wife (citing Norris v.
Barbour, 188 Va. 723, 743-44 (1949); Jenkins v. Jenkins, 211 Va. 797,
799-800 (1971))); Liqhtburn v. Liqhtburn, 22 Va. Ct. App. 612, 616
(1996) (explaining that, prior to enactment of Va. Code § 20-107.3,
which requires equitable distribution of marital assets in divorce
proceeding, a tenant was entitled to "an undivided one-half interest"
in property held as a tenancy by the entirety (citing Sundin, 221
Va. at 241)); Pratt v. Pratt, No. 2394-10-4, 2012 WL 3573972, at *2
(Va. Ct. App. Aug. 21, 2012) (unpublished) (explaining that "[d]uring
their marriage, husband and Agatha held the house as tenants by the
1 While a husband and wife's rights to property held as a tenancy by the
entirety are generally understood to be equal, actual division or sale of
said property may differ depending upon the circumstances.
For example,
even though a voluntary sale of tenancy by the entirety property severs
the tenancy by the entirety held in the property, the tenancy by the entirety
continues in the proceeds of the sale, absent some other agreement.
Oliver
v. Givens, 204 Va. 123, 126-27 (1963) ("[W]e hold that in the present case
the proceeds of the sale of the Laurel Glen property, which the husband
and wife had owned as tenants by the entireties, were likewise owned and
held by them as tenants by the entireties.") . Similarly, a divorce severs
a tenancy by the entirety, but, pursuant to Va. Code Ann. § 20-107. 3, marital
property is distributed equitably.
However, in a divorce matter prior to
enactment of Va. Code § 20-107.3, when a statutory equitable distribution
proceeding was absent, a tenant was entitled to "an undivided one-half
interest" in property held as a tenancy by the entirety.
Liqhtburn v.
Lightburn, 22 Va. Ct. App. 612, 616 (1996) (citing Sundin v. Klein, 221
Va.
232,
241
(1980) ) .
entirety, each owning an undivided one-half interest in the whole"
(citing Lightburn, 22 Va. Ct. App. at 615)).
Further, courts that
have addressed enforcement of a federal tax lien against a tenant
of Virginia property, held as a tenancy by the entirety, have found
that a tenant of such property is entitled to a one-half interest
in
such
property.
L12-CV-00042,
(unpublished)
spouse's
Gregory
2012 WL 5426533,
("[A]
one-half
v.
U.S.
Pep't
at *1 n.2
of
(W.D.
Treasury,
No.
Va. Nov. 7, 2012)
federal tax lien can apply to an individual
interest
in
property
held
as
tenants
by
the
entirety, so long as the law of the state in which the property is
located would treat the individual spouse's interest as a property
interest.
It is undisputed that Virginia,
the state in which the
property is located, so treats a spouse's ownership as a tenant by
the entirety." (internal citations omitted)); cf. United States v.
Parr,
No.
3:10-CV-00061,
2011 WL 4737066,
at *5
(W.D.
Va.
Oct.
6,
2011) (unpublished) (finding that the sale proceeds of property held
as a tenancy by the entirety, after payment of a priority mortgage
lien,
should be divided between the debtor tenant to satisfy his
federal tax delinquency and the non-liable tenant "to compensate her
for
her
non-liable
possessory
interest
in
the
property").
Additionally, in addressing the Supreme Court's decision in Craft,
the IRS has determined that "[a]s a general rule,
taxpayer's interest
one-half."
the value of the
in entireties property will be deemed to be
Collection Issues Related to Entireties Prop.,
10
2003-2
C.B.
643,
2003-39
I.R.B.
643
(2003).
Thus,
in
Virginia,
a
debtor-tenant who owns property held as a tenancy by the entirety
possesses a one-half interest in such property and a federal tax lien
may attach to that debtor-tenant's one-half interest.
Thus,
as the property is located in Virginia,
and Virginia
recognizes that tenants have a one-half interest in property held
as a tenancy by the entirety,
the Court finds that Guajardo has a
one-half interest in the property.
As such, the IRS's liens attach
to Guajardo's one-half interest and shall be paid out of the sale
proceeds of that one-half interest, after payment of costs and the
superior mortgage lien.
Therefore, the Court SUSTAINS Plaintiff's
objection regarding the amount of sale proceeds to which the IRS has
a claim, and AMENDS the Report and Recommendation to note that:
(1)
Guajardo has a one-half interest in the property, (2) the IRS's liens
attach to Guajardo's one-half interest in the property, and (3) the
IRS's liens shall be paid out of the sale proceeds of that one-half
interest, after payment of the costs of sale and the superior mortgage
lien.
B. Discretionary Payment
Second,
Plaintiff argues
after payment of costs,
tax liens,
that
the
remaining sale proceeds,
the mortgage lien,
and Guajardo's federal
belong to Garcia-Guajardo because the tenancy by the
entirety is terminated once the property is sold at execution sale.
PL's
Objs.
to
R.
&
R.
at
4.
11
As
such,
Plaintiff
argues,
Garcia-Guajardo may pay off her debts to Plaintiff, whether such
debts are against her individually or such debts are against her
jointly and severally, in whatever order she chooses.
Plaintiff's
argument is unavailing and the Court OVERRULES Plaintiff's second
objection.
Plaintiff cites no case law in support of his argument that,
after payment of costs, the mortgage lien, and Guajardo's federal
tax liens, the proceeds of the property sale "are no longer tenancy
by the
entirety property" and,
Instead,
and
contrary
to
thus,
belong to Garcia-Guajardo.
Plaintiff's
argument,
Virginia
law
indicates that, although sale of tenancy by the entirety property
terminates the tenancy by the entirety held in the property,
the
tenancy by the entirety, absent other arrangements, continues in the
proceeds of the sale.
See Oliver v. Givens, 204 Va. 123, 126-27
(1963) ("[W]e hold that in the present case the proceeds of the sale
of the Laurel Glen property, which the husband and wife had owned
as tenants by the entireties, were likewise owned and held by them
as tenants by the entireties."); see also In re Naqel, 298 B.R. 582,
588 (Bankr. E.D. Va. 2003) ("Proceeds from the voluntary sale of real
property held by a husband and wife as tenants by the entirety with
the common-law right of survivorship automatically continue to be
held by them as tenants by the entirety with the common-law right
of survivorship until there is 'an agreement or understanding to the
contrary.'" (citing Oliver, 204 Va. at 126-27; Sprouse v. Griffin,
12
250 Va. 46, 51 (1995); Pitts v. United States, 242 Va. 254,
(1991))).
Thus,
261-62
even after sale of the property, Garcia-Guajardo
and Guajardo continue to possess the proceeds of the property sale
as a tenancy by the entirety and,
absent certain circumstances,
"creditors of only one tenant cannot attach a lien to property held
jointly as tenants by the entirety."
R.
& R. at 5-6.
Therefore,
while Garcia-Guajardo may owe Plaintiff a debt in her individual
capacity, such debt cannot be attached as a lien to the sale proceeds
of property held as a tenancy by the entirety.
Further, even if Guajardo and Garcia-Guajardo's tenancy by the
entirety in the property was terminated by sale of the property, and
Garcia-Guajardo had control of the remaining proceeds, Plaintiff has
not provided support for his argument that Garcia-Guajardo may use
the remaining sale proceeds to pay off her debts to Plaintiff in a
discretionary
order.
Generally,
a
debtor,
making
payment
"involuntarily as in an execution or judicial sale" may not direct
the application of her money to such items or demands as she chooses.
O'Dell v. United States, 326 F.2d 451, 456 (10th Cir. 1964) (internal
citations omitted); see In re R.L. Inge Dev. Corp., 78 B.R. 793, 794
(Bankr.
E.D. Va.
1987)
(finding that "a debtor whose payment is
involuntary may not direct how those payments are to be allocated
to his tax debts"
(citing O'Dell,
326 F.2d at
456)).
Further,
Plaintiff, in his Status Report, submitted on May 20, 2015, proposed
that the proceeds of the sale of the property should be distributed
13
"first to the costs of the sale and then in accordance with the rights
of the parties holding an interest or lien in the property based on
the priority of such interests as determined by the Court."
Report, 2, ECF No. 56 (emphasis added).
Status
As the Magistrate Judge
found, there remain four valid liens against the property, as joint
and several judgments against Guajardo and Garcia-Guajardo,
after
payment of the costs of sale,
the mortgage lien,
and Guajardo's
federal
of
liens are:
tax liens.
In
order
priority,
such
(1)
Plaintiff s judgment of $27, 661.25 plus post-judgment interest which
was recorded with the Norfolk Circuit Court on May 17,
2012;
(2)
Bennetts Creek Landing Homeowners Association's ("BCLHA") judgment
of
$1,602.79 plus
interest
which was
Circuit Court on August 28, 2012;
recorded with the Norfolk
(3) BCLHA judgment of $2,009.67
plus interest which was recorded with the Norfolk Circuit Court on
August 28, 2012; and (4) BCLHA judgment of $2,869.35 plus interest
which was recorded with the Norfolk Circuit Court on April 1, 2014.
Plaintiff provides no support for his argument that Garcia-Guajardo
may disregard this order of priority, much less that his own wrongful
termination judgment against Garcia-Guajardo individually, should
jump the line of priority over the valid liens attached to the
property. 2
Therefore,
the Court OVERRULES Plaintiff's second
objection to the Magistrate Judge's Report and Recommendation.
2 Additionally, it does not appear that Plaintiff has perfected a judgment
lien on Garcia-Guajardo's interest in the property related to Plaintiff's
14
Ill.
GARCIA-GUAJARDO'S OBJECTIONS
Garcia-Guajardo appears to present eight objections to the
Report and Recommendation:
a
Magistrate
Judge's
(1) Garcia-Guajardo did not consent to
determinations
in
this
matter;
(2)
Garcia-Guajardo did not timely receive the Court's August 25, 2015
Order, ECF No. 72; (3) not all parties with an interest in the property
have been notified of the sale;
against
the
property
is
not
(4) the amount of the mortgage lien
correct;
(5)
no
fair
market
value
appraisal has been ordered; (6) Plaintiff has committed perjury; (7)
the
Court's
narrow
Rule
60(b)
constitutional rights; and (8)
ruling
violated
Plaintiff did not comply with the
Court's Order, ECF No. 12, to produce records.
R.
&
R.,
3-4,
ECF
No.
86.
Defendants'
Plaintiff
Garcia-Guajardo's first two objections.
Obj . to Magistrate's
directly
First,
responds
to
Plaintiff argues
that the Court's referral to the Magistrate Judge for a Report and
Recommendation is proper and Garcia-Guajardo waived any objection
to the Court' s referral by failing to object to the Court' s Memorandum
wrongful termination judgment.
To perfect a money judgment as a lien on
real estate, the judgment must be "recorded on the judgment lien docket
of the clerk's office in the county or city where such land is situated."
Va. Code. § 8.01-4 58; see 28 U.S.C. § 1962.
When ordered by the Court to
provide supporting evidence regarding the liens on the property, Plaintiff
did not list his own wrongful termination judgment against Garcia-Guajardo.
See PL's Resp. on Execution Sale, 3, ECF No. 73 (listing individual debts
of Defendants and stating " [u] pon information and belief, there are no other
liens recorded in the Norfolk Circuit Court against either of the Debtors") ;
R. S R. at 5. Further, the Court has been provided no other evidence to
indicate that Plaintiff perfected his wrongful termination judgment
against Garcia-Guajardo.
15
Order, dated June 30, 2015, ECF No. 65.
Second,
Plaintiff argues
that Garcia-Guajardo had the opportunity to object to the Magistrate
Judge's Report and Recommendation and her second objection merely
restates the request for relief included in her Motion for Extension
to Respond, ECF No. 76, which was denied in this Court's October 22,
2015
Order,
ECF
No.
79.
The
Court
will
address
each
of
Garcia-Guajardo's objections in turn.
First,
Garcia-Guajardo waived any objection to this Court's
referral of certain issues to a Magistrate Judge.
the
Court
entered
a
Memorandum
Order
On June 30, 2015,
proposing
judicial
sale
procedures and that the co-assigned Magistrate Judge be referred
certain issues for determination prior to sale.
ECF No. 65.
Mem. Order,
3-9,
The Court further ordered the parties to file position
papers, within fourteen days of the date of the Memorandum Order,
stating
any
objections
to
the
Court's
Plaintiff's Motion for Execution Sale.
proposed
Id. at 9.
filed such position paper on July 14, 2015.
resolution
of
Garcia-Guajardo
ECF. No. 67.
Although
she listed a number of objections, Garcia-Guajardo did not object
to
the
referral
Additionally,
of
certain
matters
to
the
Magistrate
Judge.
Garcia-Guajardo's consent is not necessary and the
Court properly referred certain matters to the Magistrate Judge,
pursuant to Local Civil Rule 72 and 28 U.S.C. § 636(b)(3).
Thus,
Garcia-Guajardo's first objection is OVERRULED.
Second,
the
Court
has
already
16
addressed
Garcia-Guajardo's
objection regarding her late receipt of the Court's August 25, 2015
Order, ECF No. 72.
Garcia-Guajardo first presented this argument
in her Motion for Extension to Respond, filed on October 13, 2015.
ECF No. 76.
The Court denied Garcia-Guajardo' s Motion for Extension
on October 22, 2015.
ECF No. 79.
Further,
Garcia-Guajardo has
filed objections to the Report and Recommendation, and she has had
the
opportunity,
and
has
used
such
opportunity,
to
submit
any
additional evidence or information that she otherwise might have been
denied due to her late receipt of the Court's August 25, 2015 Order.
Thus, Garcia-Guajardo's second objection is OVERRULED.
Third,
Garcia-Guajardo argues that not all parties with an
interest in the property have been notified of the sale.
In support
of her argument, Garcia-Guajardo provided the Court with a mortgage
statement,
dated
Services.
Ex., 9,
October
27,
2015,
from
Mortgage Statement,
Carrington
ECF No. 86.
Mortgage
Due to the
information contained in such mortgage statement, the Court ordered
the parties to submit supplemental information regarding the entity
that currently holds the mortgage lien on the property.
No. 89.
Order, ECF
The parties simultaneously responded to the Court's Order
on February 8, 2016.
ECF Nos.
91,
92.
In her February 8, 2016
submission, Garcia-Guajardo provided the Court with a Virginia Land
Record Cover Sheet, dated February 4, 2016,
entity held the mortgage on the property.
92.
As
indicating that a new
Statement, 5-7, ECF No.
this information conflicted with Plaintiff's February 8,
17
2016 submission, on May 19, 2016, the Court ordered Plaintiff to
identify the entity who currently holds the mortgage on the property.
ECF No. 95.
On May 26, 2016, Plaintiff responded to the Court's
Order, stating that the deed records in the Norfolk Circuit Court
demonstrate that Carrington Mortgage Loan Trust,
Series 2005-NC3
Asset Backed Pass-Through Certificates, is the present holder of the
mortgage on the property.
19, 2016, 1, ECF No. 96.
PL's Resp. to Order of the Court on May
Further, Plaintiff notes that Deutsche Bank
National Trust Company was the trustee for the property, but, as of
May 18,
2016,
Professional
Foreclosure Corporation of Virginia
became the substitute trustee
information differs
for
the
property.
from the 2005 mortgage
relied on in his
Id.
This new
information that
the
Magistrate
Judge
Report and Recommendation.
Therefore,
the Court SUSTAINS Garcia-Guajardo's third objection.
As the information provided by Plaintiff in his May 26, 2016 filing
appears to be the most recent and up-to-date information regarding
the mortgage on the property,
the Court AMENDS the Report and
Recommendation to note that the current holder of the mortgage lien
on the property is Carrington Mortgage Loan Trust, Series 2005-NC3
Asset Backed Pass-Through Certificates.
Fourth, Garcia-Guajardo argues that the reported amount of the
mortgage lien on the property is not correct.
Garcia-Guajardo
previously raised this objection in response to the Court's June 30,
2015 Memorandum Order addressing proposed sale procedures.
18
The
Court, reviewing Garcia-Guajardo's objections to its proposed sale
procedures, determined that the proposed sale procedures adequately
addressed Garcia-Guajardo's concerns on this matter.
Mem. Order,
4, ECF No. 68. Thus, to the extent that Garcia-Guajardo's fourth
objection requires an
immediate resolution,
the Court OVERRULES
Garcia-Guajardo's objection with the understanding that the total
mortgage lien amount will be determined through the Court's property
sale procedures.
Fifth, Garcia-Guajardo objects to the Magistrate Judge's Report
and Recommendation because no fair market value appraisal of the
property has been ordered.
procedures,
the
As explained in the Court' s proposed sale
property
shall
be
sold
at
public
auction.
Garcia-Guajardo cites no case in support of her argument that a fair
market value appraisal of the property is required prior to sale of
the property at public auction, nor is the Court aware of such a
requirement.
The Court notes that, pursuant to 28 U.S.C. § 2001,
an appraisal may be necessary prior to confirmation of a private sale.
However, to the extent that an appraisal becomes necessary in this
matter under 28 U.S.C. § 2001, the Court's proposed sale procedures
adequately address this issue by directing the United States Marshal
for the Eastern District of Virginia to comply with such statutory
requirements.
See ECF No.
65.
Thus,
Garcia-Guajardo's
fifth
objection is OVERRULED.
Finally,
Garcia-Guajardo's
19
sixth,
seventh,
and
eighth
objections
decided.3
attempt
to
raise
issues
that
the
Court
has
already
The Court, therefore, OVERRULES Garcia-Guajardo's sixth,
seventh, and eighth objections because they are further attempts to
argue issues that the Court has foreclosed by previously denying
Defendants' serial motions for relief from judgment.
IV.
CONCLUSION
For the foregoing reasons,
the Court will ADOPT the findings
and recommendations set forth in the Report and Recommendation of
the United States Magistrate Judge filed on October 27,
AMENDED by this Memorandum Order.
SUSTAINS
Plaintiff's
first
As discussed above,
objection
to
the
2015, AS
the Court
Report
Recommendation of the United States Magistrate Judge.
and
The Court
AMENDS the Report and Recommendation to note that the IRS's liens
against
Guajardo attach
to Guajardo's
one-half
interest
in
the
property, and such federal tax liens shall be paid out of one-half
of the proceeds of the property sale, after payment of the costs of
sale
and
the
superior
mortgage
lien.
The
Court
OVERRULES
Plaintiff's second objection to the Report and Recommendation of the
United
States
Garcia-Guajardo's
Magistrate
first,
Judge.
second,
The
and
fourth
Court
OVERRULES
through
eighth
objections to the Report and Recommendation of the United States
Magistrate Judge.
The Court,
however,
SUSTAINS Garcia-Guajardo's
3 The Court informed Defendants, in its August 4, 2015 Memorandum Order,
ECF No. 68, that it might "summarily deny any further
re-litigate matters the Court has decided." Id. at 2 n.2.
20
attempts
to
third objection and hereby AMENDS the Report and Recommendation to
note that the current holder of the mortgage lien on the property
is Carrington Mortgage Loan Trust,
Series 2005-NC3 Asset
Backed
Pass-Through Certificates.
The Clerk shall forward a copy of this Memorandum Order to all
counsel
of record and to the oro se Defendants at their address of
record.
While the Court notes that the mailing to Defendants of (1) the
Court's May 19, 2016 Order, ECF No. 95, and (2) the service copy of
Plaintiff's Response to such Order,
as undeliverable,
Defendant
Public
Roberta
Access
to
see ECF Nos.
97 and 98,
Garcia-Guajardo
Court
ECF No. 96, were both returned
the Court also notes that
previously
Electronic
Records
subscribed
("PACER")
to
the
system.
Nevertheless, Defendants are under an obligation to notify the Court
of any change of address, and a failure to do so will not relieve
Defendants of the consequences of any such failure.
/s/lrugrBMark
S.
Davis
United States District Judge
Norfolk,
Virginia
June IS , 2016
21
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