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Bloom v. United States Department of Treasury

United States District Court, Ninth Circuit

September 19, 2013

Joshua Bloom, Petitioner,
v.
United States Department of Treasury, Respondent. United States of America, Plaintiff,
v.
Rolls Royce Phantom Sedan 2004, VIN # SCA1S68444UX07410, Defendant.

ORDER

FREDERICK J. MARTONE, Senior District Judge.

The court has before it two identical Motions to Set Aside Default, Re-Open Cases and Unseal Documents in the above two captioned cases. In Bloom v. U.S. Treasury, 12-CV-1999, we have the motion (doc. 14), response (doc. 18), and reply (doc. 21). In U.S. v. Rolls Royce Phantom Sedan, 12-CV-2337, we have the motion (doc. 16), response (doc. 20), and reply (doc. 23). In both motions, petitioner Joshua Bloom seeks to set aside the default judgments entered against him, and to reopen the cases for an adjudication on the merits.

I. Background

In March 2010, Bloom purchased the subject 2004 Rolls Royce for $134, 843.66 from a dealer in Texas. He paid for the vehicle in part with 16 money orders issued by Money Gram, the United States Postal Service, and Western Union. The 16 money orders were purchased on the same day, at nine separate locations in close proximity, in amounts below the currency transaction reporting threshold of $10, 000.[1] The government alleged that Bloom knowingly structured the financial transactions in order to avoid the reporting requirements of 31 U.S.C. § 5313(a), in violation of 31 U.S.C. § 5324(a).

Bloom also financed a portion of the vehicle purchase with a $65, 000 loan from Best Banc. The government asserted that Bloom made a number of suspect and unusual payments on the car loan, including an October 25, 2010 payment consisting of 16 money orders that were purchased at two locations in close proximity to each other. Again, government analysis of the money orders revealed that they were purchased in a manner consistent with an attempt to evade the currency transaction reporting requirements.

On May 8, 2012, a Federal Task Force Officer interviewed Bloom regarding the financial transactions. Bloom stated that he purchased the money orders using money that he kept in a safe buried in the backyard of his mother's residence in Delaware. But when the officer told Bloom that his mother would also be contacted, Bloom changed his story and admitted that his mother lived in Washington State. The Officer ultimately served Bloom with a federal seizure warrant and seized the Rolls Royce.

On September 19, 2012, Bloom, through his lawyer Nathan Carr, filed a hardship petition in this court. See Bloom v. U.S. Treasury, 12-CV-1999 ("IRS Hardship Action"). The United States responded to the petition asserting that Bloom had purchased the Rolls Royce through financial transactions that were knowingly structured to avoid the reporting requirements of 31 U.S.C. § 5313(a). The government argued that the hardship petition should be denied because Bloom could not prove any of the four elements set forth in 18 U.S.C. § 983(f)(1). Bloom did not file a reply brief in support of his petition. On January 28, 2013, we entered an order finding that Bloom had not satisfied § 983(f)(1), and denied the petition (doc. 12). The Clerk entered final judgment (doc. 13).

On October 31, 2012, while the Hardship Action was pending, the United States filed a civil complaint for forfeiture of the Rolls Royce. U.S. v. Rolls Royce Phantom Sedan, 12-CV-2337 (the "Forfeiture Action"). Because Bloom's lawyer, Nathan Carr, was representing Bloom in the IRS Hardship Action, the United States served the complaint and notice of forfeiture upon Mr. Carr by certified mail, at his address of record. Carr's office signed the certified mail receipt on November 4, 2012. Bloom did not file a claim or answer in the Forfeiture Action. Therefore, upon motion of the government, the Clerk entered default judgment on February 13, 2013.

II. IRS Hardship Action

Bloom has now moved to set aside the "default" judgments in both the IRS Hardship Action and the Forfeiture Action, contending that his lawyer, Nathan Carr, had moved his office in November 2012, and therefore did not receive the notices of the docket filings in either case.

First, we reject Bloom's characterization of the judgment in the IRS Hardship Action as a "default judgment." Bloom filed his petition. The government answered. Notwithstanding that Bloom did not file a reply brief in support of his hardship petition, we ruled on the merits of the petition and final judgment was entered. This was not a default judgment.

Moreover, contrary to Bloom's current assertion, Attorney Carr does not "avow[] that he did not receive any pleadings or information in the [IRS Hardship] case." Motion at 3:18-22. In fact Carr acknowledges that he "receiv[ed] notice that the petition... was denied." Carr Affidavit at 1:18-19. More importantly, however, the docket in the IRS Hardship Action demonstrates that each of the docket entries was electronically sent to Carr. The fact that electronic notices were sent renders the relocation of Carr's physical office irrelevant.

The record demonstrates that Bloom, through his counsel of record, received notices of every filing in the IRS Hardship Action. Bloom has made no showing to support a motion for relief from judgment under Rule 60(b), Fed.R.Civ.P. Therefore, petitioner's motion to set aside ...


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