Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_01-cv-02301/USCOURTS-caed-2_01-cv-02301-11/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7403 Suit to Enforce Federal Tax Lien

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

UNITED STATES OF AMERICA, 

Plaintiff, 

v. 

J. LEONARD PADILLA, NELLY 

PATINO, ROSE MORENO-PADILLA, 

STATE OF CALIFONRIA FRANCHISE 

TAX BOARD, CARLOS M. ALCALA, 

JULIE A. PADILLA, CLIFFORD J. 

and CLIFFORD W. ELDRIDGE, 

INDEPENDENT APPRAISAL, INC., 

NATOMAS CENTRAL MUTUAL WATER 

COMPANY, 

 Defendants. /

No. Civ. S-01-02301 DFL GGH 

Memorandum of Opinion

and Order

Before the court are the government’s motion for final 

judgment and foreclosure, Julie Padilla’s motion to sell, and 

the government’s motion to dismiss Leonard Padilla’s 

counterclaim. For the reasons discussed below, the court GRANTS 

the government’s motion for judgment and foreclosure, and DENIES 

Julie Padilla’s motion to sell. Because the court finds that 

the counterclaim was filed in violation of the scheduling order, 

it shall be DISMISSED. 

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I. Facts

The government filed this lawsuit on December 17, 2001, 

seeking to foreclose on a sixty-acre property in Natomas (the 

“property” or the “Natomas property”) to satisfy tax liabilities 

owed by Leonard Padilla, and to reduce to judgment the tax 

liability of Rose Moreno-Padilla. When they divorced in 1993, 

Leonard Padilla and Rose Padilla-Moreno each took a one-half 

interest in the Natomas property. On June 6, 2005, this court 

held that a tax lien of $2,158,760.41, plus interest and 

penalties, attaches to Leonard Padilla’s one-half interest in 

the property. This court also held that Rose Padilla-Moreno 

owes taxes in the amounts of $429,755.03 for tax year 1996 and 

$734.23 for tax year 1997, plus interest and penalties. 

Before this lawsuit began, Rose Padilla-Moreno transferred 

her one-half interest in the property to her daughter, Julie 

Padilla. The government considers this transfer to have been a 

sham, and has sought to attach Julie Padilla’s one-half interest 

in the property to satisfy Rose Moreno-Padilla’s tax 

obligations. 

To stave off a foreclosure sale, on April 21, 2006, Julie 

Padilla, through her attorney, and the government stipulated to 

an order under which she and Leonard Padilla would have 210 days 

to effect the private sale of the property. If the property 

were not sold within that period, Julie Padilla agreed that the 

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government would have a claim against her for $2,350,000, and 

that it would have the right to sell her interest in the 

property and apply the proceeds toward satisfying its claim. On 

November 14, 2006, the court extended the deadline for sale to 

February 23, 2007, but admonished the parties that “[n]o further 

extensions shall be granted.” 

On March 26, 2007, the government filed a motion for final 

judgment and order of foreclosure. In response, Julie Padilla 

filed a motion to forfeit her father’s interest in the property 

to the government and order the government to sell that interest 

to a local developer under terms she has negotiated. Julie 

Padilla opposes the government’s motion to foreclose and auction 

the property, asserting that she would have sold the property by 

the deadline were it not for her father’s unreasonable refusal 

to sell his share. Leonard Padilla has filed an opposition to 

the government’s motion, arguing that foreclosure should be 

stayed pending the resolution of his counterclaim against the 

government. According to Leonard Padilla, the property is worth 

much more than Julie Padilla’s proposed sale would bring. 

II. Analysis

Julie Padilla may well be correct that her father’s refusal 

to participate in the deal she has negotiated is unreasonable. 

But the possibility that Leonard Padilla might refuse to sell 

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was a known risk she assumed on April 21, 2006 in exchange for 

more time to organize a private sale. 

The court is no longer persuaded, as it was in April 2006, 

that all of the parties will be better off if the property is 

sold privately. Given the drawn-out nature of the case and the 

parties’ conflicting agendas, the government is now entitled to 

foreclose without further uncertainty and delay. 

Finally, Leonard Padilla’s counterclaim is no impediment to 

foreclosure, as the court finds that it was filed in violation 

of a scheduling order and should be dismissed. On July 10, 

2002, Judge Damrell, before whom this case was then pending, 

issued a pretrial scheduling order under Fed. R. Civ. P. 16(b) 

stating that no further amendments or pleadings were to be filed 

without leave of court, good cause having been shown. Leonard 

Padilla filed his counterclaim nearly four years later, on 

February 17, 2006, without leave of court and without making any 

attempt to demonstrate good cause. Moreover, the counterclaim 

is a wholly inadequate pleading, as Padilla concedes, and is 

clearly designed to delay and obstruct these proceedings. If 

Padilla wishes to pursue the claims contained in his 

counterclaim, he must file a separate lawsuit. 

CONCLUSION 

The government’s motion for final judgment and order of 

foreclosure is GRANTED. The court will sign the government’s 

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proposed order. Julie’s motion for sale is DENIED, and 

Leonard’s counterclaim is DISMISSED. 

IT IS SO ORDERED. 

Dated: June 1, 2007 

 /s/ David F. Levi___________

 DAVID F. LEVI 

United States District Judge 

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