United States of America v. Martinez et al, No. 2:2019cv01986 - Document 40 (D. Nev. 2020)
Court Description: ORDER Granting 39 Motion to Extend Time Requesting to Extend Stay. Signed by Judge Gloria M. Navarro on 8/27/2020. (Copies have been distributed pursuant to the NEF - JQC)
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United States of America v. Martinez et al Doc. 40 Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 1 of 6 1 RICHARD E. ZUCKERMAN Principal Deputy Assistant Attorney General 2 3 4 5 6 E. CARMEN RAMIREZ Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 683 Washington, D.C. 20044 202-616-2885 (v) 202-307-0054 (f) E.Carmen.Ramirez@usdoj.gov western.taxcivil@usdoj.gov 7 8 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA 9 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) UNITED STATES OF AMERICA, 10 11 Plaintiff, 12 v. 13 14 15 16 17 18 19 20 21 JEFFREY A. MARTINEZ, individually, and as Trustee of the Martinez Family Trust; DOLORES M. MARTINEZ, individually and as Trustee for the Martinez Family Trust; THE MARTINEZ FAMILY TRUST; MARTINEZ & ASSOCIATES, INC. (NV20041370692); MARTINEZ & ASSOCIATES INC. (NV20181033912); SIERRA MORTGAGE CORPORATION; FIDELITY NATIONAL TITLE; CHASE MORTGAGE COMPANY; JP MORGAN CHASE BANK NATIONAL ASSOCIATION; RHODES RANCH ASSOCIATION; and REPUBLIC SILVER STATE INC., DBA, REPUBLIC SERVICES, 22 Defendants. 23 Case No.: 2:19-cv-1986-GMN-DJA UNITED STATES’ MOTION TO EXTEND STAY IN LIGHT OF REQUIREMENTS FOR SETTLEMENT AND ORDER (Fifth Request) 24 25 1 Dockets.Justia.com Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 2 of 6 1 The United States of America has made four requests for limited stays to facilitate 2 settlement discussions with taxpayers Jeffrey and Dolores Martinez. The last stay will end on 3 August 28, 2020. (See ECF No. 37 at 4). It had previously become clear that settlement is 4 unlikely unless the Martinezes file certain tax returns that are not at issue in the suit, but that are 5 currently delinquent. The Martinezes have now submitted many of the missing returns and 6 represent that they working on others. (At the time of the last stay request, the IRS had extended 7 the deadlines for filing 2019 returns in light of the COVID-19 pandemic.) In the interests of 8 facilitating a resolution, the United States respectfully asks to continue the stay for 30 days. If 9 this motion is granted, the United States will inform the Court of the status of the matter within 10 30 days of the order. 11 MEMORANDUM OF POINTS AND AUTHORITIES 12 Background 13 This is a federal tax case. The United States seeks a judgment against taxpayers Jeffrey 14 and Dolores Martinez, and against two corporations associated with them, for various federal tax 15 liabilities. The United States also seeks to foreclose its tax liens against certain real property to 16 help satisfy the judgment. 17 The United States also named as defendants other parties that might assert a lien or other 18 claim against the property, pursuant to 26 U.S.C. § 7403(b) (“Action to enforce lien or to subject 19 property to payment of tax”). That way, those parties’ claims to the property (if any) could be 20 adjudicated if and when the Court determines that the property should be foreclosed. It is 21 common in such cases for the United States to reach stipulations with other claimants as to lien 22 priority, to the extent they do not disclaim any interest. 23 24 If the matter settles without a foreclosure, the other lienholders would not need to be paid out. In any event, to date only one of the potential lienholders, the Rhodes Ranch Association, 25 2 Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 3 of 6 1 has answered the complaint. (ECF No. 4).1 Another, Fidelity National Title, has disclaimed any 2 interest. (See ECF No. 7). Defendants JP Morgan Chase Bank National Association and Chase 3 Bank National Association (together, the “Chase defendants”), and the United States have 4 reached a stipulation concerning lien priority as between them. (See ECF No. 20 (Order 5 approving stipulation)). (The Chase defendants currently control the mortgage loan that was 6 initially issued by defendant Sierra Mortgage Corporation). Defendant Republic Silver State Inc. 7 has been served but has not yet appeared, and has not contacted the United States. Finally, the 8 United States filed a notice of dismissal concerning defendants Nevada Mortgagee Assistance 9 Company and the Cooper Castle Law firm, and the Clerk has terminated them from the case. The litigation would therefore focus on the Martinezes and their business. Neither of the 10 11 Martinezes, or the corporations, have appeared. The United States served the Martinezes, 12 individually and as representatives of their business, on December 27, 2019. Their time to 13 respond to the complaint thus expired on January 17, 2020, under Fed. R. Civ. P. 12(a)(1)(A)(i). 14 Ordinarily the United States would be moving for an entry of default and a default 15 judgment. However, the Martinezes have reached out to the undersigned counsel, and the parties 16 are discussing a possible settlement. The Martinezes made a formal offer and provided certain 17 financial information that the United States had requested. However, it has become clear that the 18 United States cannot properly evaluate the offer, including the Martinezes’ ability to pay, unless 19 and until the Martinezes submit certain tax returns that are currently outstanding. It is important that the Martinezes come into compliance with their tax reporting 20 21 obligations, including for the most recent tax year. The Martinezes have now submitted many of 22 the missing returns, and have represented that they are preparing others, including for 2019. 23 24 25 1 Counsel for the United States conferred with counsel for Rhodes Ranch Association by e-mail, on August 27, 2020, and the association does not oppose a continued stay. 3 Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 4 of 6 1 Their submission of the missing returns is an important consideration in evaluating their 2 settlement offer. 3 The United States is prepared to proceed with active litigation, including seeking entries 4 of default, if the Court were to deny this request. However, the United States submits that 5 extending the stay would likely facilitate the potential resolution, and may conserve both the 6 parties’ and the Court’s resources. Under the circumstances, and given the Martinezes’ 7 willingness to participate in the discussions and submit missing returns, the United States 8 continues to believe that the parties’ efforts are best focused on the preparation and review of 9 outstanding returns, and in reaching a resolution. 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 25 4 Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 5 of 6 1 2 Request for Relief WHEREFORE, United States respectfully seeks to stay the matter for an additional 30 3 days from the Court’s order on this motion, to facilitate settlement discussions, with the United 4 States to inform the Court regarding the case’s status with 30 days of the order on this motion. 5 The United States reserves the right to seek an entry of default or default judgment after 30 days 6 if the negotiations do not resolve the matter. 7 8 Dated this 27th day of August, 2020. 9 RICHARD E. ZUCKERMAN Principal Deputy Assistant Attorney General 10 /s/ E. Carmen Ramirez E. CARMEN RAMIREZ Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 683 Washington, D.C. 20044 202-616-2885 (v) 202-307-0054 (f) E.Carmen.Ramirez@usdoj.gov western.taxcivil@usdoj.gov 11 12 13 14 15 16 17 IT IS SO ORDERED. 18 27 day of August, 2020. Dated this ____ 19 20 21 22 ________________________________ Gloria M. Navarro, District Judge UNITED STATES DISTRICT COURT 23 24 25 5 Case 2:19-cv-01986-GMN-DJA Document 39 Filed 08/27/20 Page 6 of 6 1 2 CERTIFICATE OF SERVICE IT IS HEREBY CERTIFIED that service of the foregoing is made this August 27, 2020, 3 via the Court’s ECF system to all current parties who have appeared electronically. In an 4 abundance of caution, the United States is sending this motion to the persons listed below, via 5 U.S. Mail. Due to in-office staffing limitations related to the Covid-19 pandemic, the mailing 6 may take two business days to send. 7 8 Jeffrey Martinez 262 Cliff Valley Dr. Las Vegas, NV 89148 9 10 Dolores Martinez 262 Cliff Valley Dr. Las Vegas, NV 89148 11 12 13 14 15 /s/ E. Carmen Ramirez E. CARMEN RAMIREZ Trial Attorney, Tax Division U.S. Department of Justice 16 17 18 19 20 21 22 23 24 25 6
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