United States v. 15607 E. Girard Place
| Decision Date | 17 September 2021 |
| Docket Number | Civil Action 1:20-cv-00304-RM-KLM |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. 1. 15607 EAST GIRARD PLACE, AURORA, COLORADO; 2. $12, 999.00 IN UNITED STATES CURRENCY; 3. 1792 SOUTH NOME WAY, AURORA, COLORADO; 4. $1, 418.00 IN UNITED STATES CURRENCY; 5. $1, 857.00 IN UNITED STATES CURRENCY; 6. $33.000.00 IN UNITED STATES CURRENCY; 7. $19, 156.00 IN UNITED STATES CURRENCY; 8. 10641 SEDGWICK WAY, PARKER, COLORADO; 9. $8, 609.00 IN UNITED STATES CURRENCY; 10. $20, 101.00 IN UNITED STATES CURRENCY; 11. $6, 567.00 IN UNITED STATES CURRENCY; 12. $14, 250.00 IN UNITED STATES CURRENCY; 13. $14, 130.00 IN UNITED STATES CURRENCY; 14. 4 WESTERN UNION MONEY S; 15. $5, 086.00 IN UNITED STATES CURRENCY; 16. $18, 590.00 IN UNITED STATES CURRENCY; 17. $33, 106.00 IN UNITED STATES CURRENCY; 18. $62, 434.00 IN UNITED STATES CURRENCY; 19. $7, 440.00 IN UNITED STATES CURRENCY; Defendants. HANGBIN ZHENG, YU LING LIN, GUO DONG CHI, and MEILI CHEN, Claimants. |
| Court | U.S. District Court — District of Colorado |
This matter is before the Court on Plaintiffs' Partially Opposed Motion to Amend Complaint [#91][1] (the “Motion”). Claimant Meili Chen (“Claimant Chen”) filed a Response [#95] in opposition to the Motion [#91], and Plaintiff filed a Reply [#96]. The Motion [#91] has been referred to the undersigned pursuant to 28 U.S.C. § 636(b) and D.C.COLO.LCivR 72. See [#92]. The Court has reviewed the Motion, the Response, the Reply, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#91] is GRANTED.
On February 5, 2020, following an extensive narcotics investigation coordinated by the United States Drug Enforcement Administration (the “DEA”), Plaintiff filed the Verified Complaint for Forfeiture in Rem [#1] (the “Complaint”). The Complaint asserts that the nineteen named Defendant assets are forfeitable to the United States pursuant to 21 U.S.C. §§ 801, 881(a)(7).[2] Compl. [#1] at 22-27. Of those named Defendant assets, only two, 1792 South Nome Way Aurora, Colorado, and 10641 Sedgwick Way, Parker, Colorado, remain at issue. Motion [#91] at 2. Plaintiff seeks only to amend its Complaint [#1] with regards to Defendant 10641 Sedgwick Way (the “Property”). Id. at 5.
As a result of the DEA's investigation, investigators discovered that the Property utilized electrical services from Intermountain Rural Electric Association. Compl. [#1] at 12. The subscriber to that electrical account was Meiyun Chen, Claimant Chen's sister, but the email address associated with the account was Meilichen2258@gmail.com. Id. Between June 2017 and February 2019, the average monthly electrical usage at the Property was 7, 455 kWh; homes of comparable size use between 500 and 1, 500 kWh of electricity per month. Id.
Investigators executed a search warrant at the Property on May 22, 2019. Id. Claimant Chen's sister, as well as her sister's partner, were present during the search. Id. Investigators found evidence of a marijuana grow operation inside the residence, including approximately 427 marijuana plants, approximately 0.55 pounds of processed marijuana, 32 light/ballast combination units, and 2 light hoods. Id. at 13. Thereafter, Plaintiff sought forfeiture of various assets pursuant to 21 U.S.C. § 801 and § 881(a)(7). Id. at 25.
The original deadline for joinder of parties and amendment of pleadings was March 15, 2021, which was later extended to April 5, 2021. Sched. Order [#80] at 7; Minute Order [#86] at 2. Plaintiff filed the present Motion [#91] on March 31, 2021. Similarly, the Court has extended deadlines for discovery requests and responses on multiple occasions. See, e.g., Motion [#91] at 3 ( that deadlines for first set of discovery requests were extended from February 24, 2021, to March 22, 2021); Minute Order [#79] (setting final discovery deadline for June 21, 2021). At present, the discovery deadline is November 12, 2021. Minute Order [#104].
Claimant Chen filed a response to Plaintiff's first discovery requests on March 22, 2021. Claimant Meili Chen's Response to Pl.'s First Set of Interrogatories, Requests for Production of Documents, and Requests for Admissions [#91-2]. In that response, Claimant Chen admitted that she purchased the Property on May 22, 2017, after obtaining a $350, 000.00 mortgage from First Bank. Id. at 8-9. Per Plaintiff's request, Claimant Chen attached to her discovery responses the Uniform Residential Loan Application (“Loan Application”) used to secure the mortgage. See Uniform Residential Loan Application [#91-3]. On that application, Claimant Chen indicated that the Property would be a primary residence; nevertheless, Claimant Chen admitted that she never utilized the Property as her primary residence, and that her sister and sister's partner had lived there since the time of purchase. Loan Application [#91-3] at 1; Claimant Chen's Response to Pl.'s First Set of Interrogatories [#91-2] at 6-7. Further, while Claimant Chen admitted that the Meilichen2258@gmail.com email address was hers, id. [#91-2] at 9, Claimant Chen maintained that she had no knowledge of her sister's grow operation and that she never received any email statement from Intermountain Rural Electric Association regarding invoices for electrical power usage. Id. at 5. As a result of Claimant Chen's discovery responses, Plaintiff sought to amend its Complaint [#1] and add a claim for bank fraud and forfeiture pursuant to 18 U.S.C. § 1344 and 18 U.S.C. § 881(a)(7) respectively. See Proposed Am. Verified Compl. for Forfeiture In Rem (the “Amended Complaint”) [#91-1] at 24-25.
As an initial matter, the parties' deadline to amend pleadings was April 5, 2021. Minute Order [#86]. Plaintiff's Motion [#91] was filed on March 31, 2021, and is therefore timely. Thus, because the Court finds that Plaintiff's Motion [#91] is timely, it turns directly to Rule 15(a)(2). Gorsuch, Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014) ().
The Court has discretion to grant a party leave to amend its pleadings. Foman v. Davis, 371 U.S. 178, 182 (1962); see also Fed.R.Civ.P. 15(a)(2) (). “In the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.-the leave sought should, as the rules require, be ‘freely given.'” Foman, 371 U.S. at 182 (quoting Fed.R.Civ.P. 15(a)(2)). Potential prejudice to a defendant is the most important factor in considering whether a plaintiff should be permitted to amend its complaint. Minter v. Prime Equip. Co., 451 F.3d 1196, 1207 (10th Cir. 2006). Courts typically find prejudice only when the proposed amendments unfairly affect the defendant in terms of preparing their defense to the amendment. Patton v. Guyer, 443 F.2d 79, 86 (10th Cir. 1971). “Most often, this occurs when the amended claims arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues.” Minter, 451 F.3d at 1208 (citations omitted). “Courts also consider discovery deadlines to determine if the amendment will unduly prejudice the nonmoving party.” Cano-Rodriguez v. Adams Cnty. Sch. Dist. No. 14, No. 19-cv-01379-CMA-KLM, 2020 WL 6049595, at *5 (D. Colo. July 23, 2020). In addition, “[t]he non-moving party bears the burden of showing that the proposed amendment is sought in bad faith, that it is futile, or that it would cause substantial prejudice, undue delay or injustice.” zvelo, Inc. v. Sonicwall, Inc., No. 06-cv-00445-PAB-KLM, 2012 WL 2872115, at *2 (D. Colo. July 12, 2012) (quoting Corp. Stock Transfer, Inc. v. AE Biofuels, Inc., 663 F.Supp.2d 1056, 1061 (D. Colo. 2009)).
Plaintiff argues that the Motion [#91] should be granted because the bank fraud claim was added after Plaintiff learned new information about Claimant Chen's acquisition of a mortgage to purchase the Property. Motion [#91] at 5. Further, Plaintiff argues that the Motion should be granted because it was made without undue delay, bad faith, or undue prejudice, and because it is the first proposed amendment rather than a repeated attempt to cure previous deficiencies. Id. at 3.
In her Response [#95], Claimant Chen concedes that the Motion was made without undue delay and bad faith, and that the Motion was the first amendment sought by Plaintiff. Response [#95] at 3. Claimant Chen contends, however, that the Motion should be denied because it proposes substantially different issues from the initial Complaint [#1], and because it will cause Claimant Chen undue prejudice. More specifically, Claimant Chen contends that the initial claims of marijuana cultivation and distribution are “sufficiently remote” from the additional claim of bank fraud, and that new allegations of wrongful conduct will result in prejudice and jury confusion when determining whether Claimant Chen intended to reside in Colorado after her purchase of the Property. Response [#95] at 5. Lastly, Claimant Chen contends that the Motion should be denied because the Amended Complaint [#91-1] does not meet the pleading requirements under Fed.R.Civ.P. 8, and will not survive a motion to dismiss. Id. at 5-6.
In its Reply [#96], Plaintiff maintains that prejudice is absent because the parties are in the earlier stages of discovery. Reply [#96] at 3. Because no depositions have been scheduled and documents are...
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