Crissen v. Vinod C. Gupta, Satyabala V. Gupta, Wiper Corp., 2:12–cv–00355–JMS–WGH.
| Decision Date | 28 January 2014 |
| Docket Number | No. 2:12–cv–00355–JMS–WGH.,2:12–cv–00355–JMS–WGH. |
| Citation | 994 F.Supp.2d 937 |
| Parties | Joshua B. CRISSEN, Plaintiff, v. Vinod C. GUPTA, Satyabala V. Gupta, Wiper Corporation, Vivek V. Gupta, and Banco Popular North America, Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
OPINION TEXT STARTS HERE
Bhavik R. Patel, Jesse B. Rochman, John S. Sandberg, Sandberg Phoenix & Von Gontard PC, St Louis, MO, for Plaintiff.
David J. Theising, Marc Allen William Stearns, Stephen E. Arthur, Harrison & Moberly, A. Richard Blaiklock, Edward D. Thomas, Lewis Wagner LLP, Indianapolis, IN, Gregory A. Blue, Dilworth Paxson LLP, New York, NY, Joshua D. Wolson, Dilworth Paxson, LLP, Philadelphia, PA, for Defendants.
Presently pending before the Court is Defendant Banco Popular North America's ( “Banco Popular” ) Motion to Dismiss Plaintiff's First Amended Class Action Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) and 9(b). [Dkt. 135.]
Plaintiff Joshua Crissen is an individual residing in Bloomfield, Indiana. [Dkt. 85 at 3, ¶ 7.] Defendants Vinod Gupta and Satyabala Gupta are husband and wife, and reside in Boca Raton, Florida. [ Id. at 3, ¶¶ 8–9.] Mr. and Ms. Gupta are the only directors and officers of Wiper Corporation ( “Wiper” ), a Florida corporation. [ Id. at 3, ¶ 10.] Mr. Crissen alleges that “[Wiper] or its nominees have participated in tax sales in Indiana from at least 2002 through the present.” [ Id.] Defendant Vivek Gupta is Vinod and Satyabala Gupta's son, and resides in Boca Raton, Florida as well. [ Id. at 4, ¶ 11.] Mr. Crissen alleges that Vivek Gupta “participated in the operation or management of and performed activities necessary or helpful to Vinod's and Wiper's tax sale business in Indiana from at least 2002 through the present.” [ Id.] Banco Popular is a New York state-chartered member bank with its principal place of business in New York. [ Id. at 4, ¶ 12.] Mr. Crissen alleges that Banco Popular “participated in the operation or management of and performed activities necessary or helpful to Vinod's and Wiper's tax sale business in Indiana from at least 2002 through the present.” [ Id.]
Mr. Crissen describes the tax sale process in Indiana in the following way: In Indiana, when a real property owner fails to pay property taxes, the property can be sold at a tax sale to satisfy the delinquent taxes pursuant to Ind.Code § 6–1.1–24 et seq. [Dkt. 85 at 4, ¶ 13.] The process begins when each county auditor publishes a list of delinquent real estate parcels in area newspapers, which gives notice that the county auditor and treasurer will apply for court judgments against delinquent real estate and for orders to sell those judgments at public auction. [ Id. at 4–5, ¶ 15.] After the court issues the requested judgments and orders, the county auditor will send a notice of the sale by certified mail, return receipt requested, to the last address of the property owner on the date the tax sale list is certified ( “Notice of Sale” ). [ Id. at 5, ¶¶ 15–16.]
At the tax sale, the county treasurer sells the real property, subject to a right of redemption, to the highest bidder at public auction. [ Id. at 5, ¶ 17.] An Indiana statute provides the minimum price for which the real property can be sold ( “Minimum Price” ), factoring in the taxes due and owing, all penalties owed, costs incurred by the county due to the sale, unpaid costs due from any prior tax sales, and other reasonable expenses of collection. [ Id. at 5–6, ¶ 18.] When a bid equals at least the Minimum Price, the purchaser receives a certificate of sale and acquires a lien against the property in the amount paid. [ Id. at 6, ¶ 19.] When no bid equals at least the Minimum Price, the county executive receives a certificate of sale and acquires a lien in the amount of the Minimum Price. [ Id. at 6, ¶ 20.] The county executive can then decide to sell its certificate of sale at a public auction to the highest bidder for an amount less than the Minimum Price. [ Id. at 6, ¶ 21.] The purchaser of a certificate of sale must give notice ( “Notice of Redemption” ) by sending a copy of the Notice of Redemption by certified mail to the owner of record at the time of the sale and any person with a substantial property interest of public record in the real property. [ Id. at 6, ¶ 23.] The Notice of Redemption must be sent no later than nine months after the date of the tax sale or ninety days after the date of the Commissioner's Sale. [ Id. at 7, ¶ 24.]
Any person may redeem real property sold at a tax sale or Commissioner's Sale by paying the amount required for redemption before the expiration of the redemption period, which is one year after the date of sale. [ Id. at 7, ¶ 25.] The amount of money required for redemption of the real property ( “Redemption Amount” ) is set by Indiana statute. [ Id. at 7, ¶ 26.] If the property is certified before redemption, the attorneys' fees and costs of giving notice ( “Notify Costs” ) and the costs of a title search or of examining and updating the abstract of title for the real property that were incurred and paid by the purchaser ( “Title Costs” ) are part of the Redemption Amount. [ Id.] The purchaser of a certificate of sale certifies that he or she incurred and paid the Notify Costs and the Title Costs by completing, signing, and providing the county auditor with a Certification. [ Id. at 7, ¶ 27.] The Notice of Redemption must set forth the components of the Redemption Amount, including the amounts owed for Notify Costs and Title Costs. [ Id. at 8, ¶ 29.]
Mr. Crissen owns property in Greene County, Indiana (the “Property” ). [ Id. at 9, ¶ 35.] After property taxes on the Property became delinquent, the Greene County auditor and treasurer applied for a judgment against the Property and an order to sell the judgment at public auction. [ Id. at 9, ¶ 36.] On October 9, 2009, after the requested judgment and order were entered, the Greene County treasurer offered the Property for sale, subject to a right of redemption, for a Minimum Price of $2,118.60. [ Id. at 9, ¶ 37.] Vinod Gupta was the highest bidder with a bid of $8,000, and he remitted payment to the Greene County Treasurer for $208,281.27 to pay for the Property and several others that were offered for sale at the 2009 Greene County tax sale, and for which Vinod Gupta, Wiper, or one of their nominees was the highest bidder. [ Id. at 9, ¶¶ 38–39.] Banco Popular “funded the entire $208,281.27 purchase price.” [ Id. at 9, ¶ 40.] The Greene County auditor issued a certificate of sale ( “Tax Sale Certificate” ) for the Property to “Vinod C. Gupta c/o Banco Popular NA/Lien Holder” that same day. [ Id. at 9, ¶ 41.] Banco Popular directed Vinod Gupta to deliver the Tax Sale Certificate to it, which Vinod Gupta did shortly after October 9, 2009. [ Id. at 9, ¶ 42.]
On November 13, 2009, Vinod Gupta provided a signed Certification to the Greene County auditor certifying that he had incurred and paid $350 in Notify Costs and $150 in Title Costs relating to the Property. [ Id. at 10, ¶ 43.] On February 8, 2010, the Property was redeemed by Mr. Crissen for a Redemption Amount of $3,027.04. [ Id. at 10, ¶ 46.] Shortly thereafter, the county auditor notified Vinod Gupta and/or Banco Popular of the redemption and requested that the original Tax Sale Certificate be returned to the county auditor before the Redemption Amount and Surplus would be remitted to Banco Popular. [ Id. at 10, ¶ 47.] Shortly before February 17, 2010, Banco Popular returned the original Tax Sale Certificate to the county auditor. [ Id. at 10, ¶ 48.] On February 17, 2010, the county auditor remitted the Redemption Amount of $3,027.04 and the Surplus of $5,881.40 to Banco Popular. [ Id. at 10, ¶ 49.]
Mr. Crissen alleges that Defendants “conspired to and devised a scheme to inflate the money required for the redemption of real property sold at Indiana tax sales or Commissioner's Sales for delinquent taxes and special assessments.” [ Id. at 10, ¶ 50.] As to Banco Popular, Mr. Crissen alleges that the Guptas (Vinod, Vivek, and Satyabala) and Wiper approached Banco Popular's predecessor, Kislak National Bank ( “Kislak” ), sometime before May 2002 to obtain funding to participate in the Indiana tax sales, Commissioner's Sales, or both. [ Id. at 10, ¶ 51.] From May 2002 to the present, Kislak agreed to loan Vinod and Satyabala Gupta various amounts ($4,000,000 in May 2002, $6,000,000 to $7,000,000 from 2003 through January 2005, $7,000,000 from January 2005 through July 31, 2006, and $7,000,000 to $10,000,000 from July 31, 2006 to the present), for the purchase of certificates of sale at Indiana tax sales, Commissioner's Sales, or both. [ Id. at 11–12, ¶¶ 52, 54, 56, 58.] From May 2002 to January 2005, Kislak directed that all Tax Sale Certificates were to be purchased in the name of and jointly owned by one or all of the Guptas or Wiper on the one hand and Kislak on the other, with Kislak's Miami Lakes Branch as the address of record. [ Id. at 11, ¶¶ 53, 55.] Banco Popular succeeded Kislak in January 2005, and from January 2005 to July 2006 Banco Popular directed that all Tax Sale Certificates were to be purchased in the name of and jointly owned by one or all of the Guptas or Wiper on the one hand and Banco Popular on the other, with the Miami Lakes Branch as the address of record. [ Id. at 4, ¶ 12; 11, ¶ 57.] However, on or before July 2006, Banco Popular's legal department, credit officers, or both, determined that the Tax Sale Certificates should no longer be purchased in the name of and jointly owned by the Guptas and Wiper with Banco Popular. [ Id. at 12, ¶ 59.] Instead, Banco Popular directed that the Tax Sale Certificates be purchased in the name of the Guptas or Wiper and in care of Banco Popular, with the Miami Lakes Branch as the...
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