Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-02648/USCOURTS-casd-3_06-cv-02648-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7401 IRS: Tax Liability

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

CASE NO. 06cv2648 JM(LSP)

ORDER DENYING MOTION 

vs. TO DISMISS COMPLAINT

KENDELL LANG; PATRICIA LANG;

CASCADE PROFESSIONAL TRUST,

KENDELL LANG, TRUSTEE;

WASHINGTON MUTUAL BANK;

NATIONAL PROPERTY TRUST;

TAYLOR & ASSOCIATES; WHITE

MEMORIAL MEDICAL CENTER; STATE

OF CALIFORNIA, FRANCHISE TAX

BOARD,

Defendants.

Defendants Kendell Lang, individually and as trustee for Cascade Professional Trust, and

Patricia Lang, (collectively “Moving Defendants”) move to dismiss the complaint for lack of subject

matter jurisdiction, lack of personal jurisdiction, and failure to state a claim. Plaintiff opposes the

motion. Defendants Washington Mutual Bank, National Property Trust, Taylor & Associates, White

Memorial Medical Center, and State of California, Franchise Tax Board have not responded to the

motion. Pursuant to Local rule 7.1(d)(1), this matter is appropriate for decision without oral argument.

For the reasons set forth below, the motion is denied.

BACKGROUND

On December 4, 2006 Plaintiff filed a Complaint to Reduce Federal Tax Assessments to

Judgment and to Foreclose Federal Tax Liens. Among other things, the Government seeks to

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foreclose on real property located at 2605 Long Jack Road, Encinitas, California. (Compl. ¶4).

Defendants Kendell and Patricia Lang reside at the property. (Compl. ¶¶5, 6). Kendall Lang is also

named in his capacity as trustee of Cascade Professional Trust (“Trust”) as Trust may have an interest

in the real property. (Compl. ¶7). Defendants Washington Mutual Bank, National Property Trust,

Taylor & Associates, While Memorial Medical Center, and State of California, Franchise Tax Board

are named as defendants because they “may claim an interest in the real property that is the subject

of this action.” (Compl. ¶¶ 8-12). 

The first two claims for relief seek to reduce the tax assessments to judgment against that

Kendell and Patricia Lang in the amount of $305,388.56 for tax years 1993-1994 and 1999-2002.

(Compl. ¶¶16-20). The third claim seeks to foreclose the federal tax liens against the property held

by Cascade Professional Trust/National Property Trust as nominee of Kendell and Patricia Lang.

(Compl. ¶¶222-28).

Moving Defendants, acting in propria persona, answered the complaint on January 4, 2007.

On February 12, 2007 Washington Mutual answered the Complaint by filing a Notice of Disclaimer

of Interest. 

DISCUSSION

Subject Matter Jurisdiction

Federal Rule of Civil Procedure 12(b)(1) provides that an action may be dismissed for lack of

subject matter jurisdiction. On such a motion, the plaintiff bears the burden of establishing that

subject matter jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. Of Am., 511 U.S. 373, 377

(1994). 

The Complaint alleges that the court has jurisdiction over this action pursuant to 28 U.S.C.

§§1340 and 1345 and 26 U.S.C. §7402. The court concludes that the court has subject matter

jurisdiction over this action because the action arises under the internal revenue laws, 28 U.S.C.

§1340; the United States commenced this action, 28 U.S.C. §1345; and the United States is seeking

to enforce internal revenue laws. 26 U.S.C. §7402(a). 

The court notes that the thrust of Moving Defendants’ motion is to bring evidentiary challenges

to the claims alleged in the Complaint. In short, Moving Defendants argue that they owe no tax

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liability and therefore the court lacks subject matter jurisdiction. The court notes that the Federal

Rules provide for “notice pleading.” That is, the pleadings need only give fair notice of the pleader’s

claim or defense so that opposing parties can respond, undertake discovery and prepare for trial. See

Conley v. Gibson, 355 U.S. 41, 47-48 (1957). To the extent Moving Defendants seek to raise

evidentiary matters, “federal courts and litigants must rely on summary judgment and control of

discovery to weed out unmeritorious claims.” Letherman v. Tarrant County Narcotics Intelligence

& Coordination Unit, 507 U.S. 163, 168-69 (1993). Accordingly, Moving Defendants’ merits-based

arguments are better left to another day.

In sum, the motion to dismiss for lack of subject matter jurisdiction is denied.

Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) provides that an action may be dismissed for lack of

personal jurisdiction. Personal Jurisdiction refers to the court’s power to render an enforceable

judgment against the defendant. See Pennoyer v. Neff, 95 U.S. 714, 720-22 (1877). The burden is

on plaintiff to show that personal jurisdiction is appropriate. See Dole Food v. Watts, 303 F.3d 1104,

1108 (9th Cir. 2002). 

Here, Plaintiff meets its burden as the Court Docket reflects an affidavit of service of the

complaint and summons on Moving Defendants at their home on Long Jack Road, Encinitas,

California. (Court Docket No. 3). Moreover, the defense of lack of personal jurisdiction is waived

if not raised in the responsive pleading. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584

(1999). As Moving Defendants’ answer, filed on January 4, 2007, did not raise the defense of lack

of personal jurisdiction, that defense is waived.

In sum, the motion to dismiss for lack of personal jurisdiction is denied.

Failure to State a Claim

Federal Rule of Civil Procedure 12(b)(6) provides that a motion for dismissal may be brought

for failure to state a claim. All material allegations in the complaint are accepted as true and viewed

in the light most favorable to the non-moving party. See Big Bear Lodging Ass’n v. Snow Summit

Inc., 182 F.3d 1096, 1101 (9th Cir. 1999).

/ / / 

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In broad brush, Moving Defendants claim that there is no evidence to support Plaintiff’s claim

for tax liability. Moving Defendants misconstrue the purpose of a Rule 12(b)(6). At the pleading

stage Plaintiff need not support its claims with any evidence. As set forth above, the purpose of

pleadings is to give fair notice of the pleader’s claim or defense so that opposing parties can respond,

undertake discovery and prepare for trial. See Conley, 355 U.S. at 47-48. Moving Defendants’

arguments are better left to a Rule 56 motion or for the time of trial.

In sum, the court denies the Rule 12(b)(6) motion.

Other Claims

Among other things, Moving Defendants argue that their evidence has not been rebutted, there

is no valid tax lien on the property, the alter-ego allegations are insufficient with respect to Cascade

Professional Trust or National Property Trust. The court denies these motions as a basis for Rule

12(b) relief. To the extent Moving Defendants raise evidentiary issues going to he merits of Plaintiff’s

claims, such claims must be raised on a motion for summary judgment or await the time of trial.

In sum, the motion to dismiss is denied.

IT IS SO ORDERED.

DATED: February 23, 2007

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All Parties 

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