United States District Court, D. Colorado
ORDER: (1) GRANTING DEFAULT JUDGMENT AGAINST
DEFENDANT GLADDING; AND (2) DETERMINING PRIORITY OF INTERESTS
AMONG THE PARTIES
RAYMOND P. MOORE United States District Judge
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 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
80452[2] (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
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 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 ...