Park State Bank v. Duluth Steel Fabricators, Inc.
- Donovan Frank
- 0:19-cv-02438
- U.S. District Court · District of Minnesota
- 4
In Park State Bank v. Duluth Steel Fabricators, Judge Frank granted settlement-based motions, dismissing the United States’ lien claims without prejudice and removing it as defendant.
Park State Bank and the United States had their claims against each other dismissed. The United States’ counterclaim and crossclaim were dismissed without prejudice, and the United States was dismissed as a party defendant. The order stated that the remaining defendants were not prejudiced.
What happened
Park State Bank sued to enforce mortgages and personal-property liens against property owned by Duluth Steel Fabricators, Inc. The United States was involved because federal tax liens encumbered that property and it asserted its own lien-enforcement claims.
The Bank and the United States settled their disputes. The settlement provided that the Internal Revenue Service would discharge the property from the federal tax liens, making the United States’ claims in this case moot. Both sides asked the court to dismiss their claims involving each other, and no party opposed the motions.
Judge Frank granted both motions. The United States’ lien-enforcement counterclaim and crossclaim were dismissed without prejudice, and the United States was dismissed as a party defendant to the Bank’s complaint.
The detailed version
- Park State Bank v. Duluth Steel Fabricators, Inc. · No. 0:19-cv-02438
- Donovan Frank
- Mar. 17, 2022
Background
Park State Bank brought the action to enforce mortgages and personal-property liens against real and personal property owned by Duluth Steel Fabricators, Inc. The Bank named the United States as a defendant because the United States held federal tax liens against the property. Those liens were based on Duluth Steel Fabricators’ unpaid federal employment and unemployment tax liabilities.
The United States answered the complaint and asserted an in rem counterclaim against the Bank and a crossclaim against the other defendants. Those claims sought enforcement of the federal tax liens against the same property involved in the Bank’s lawsuit.
On December 21, 2021, the Bank and the United States reached a settlement concerning enforcement of the federal tax liens. Under the settlement, the Internal Revenue Service would discharge the real and personal property from the liens involved in the complaint. The United States argued that this made its lien-enforcement claims moot, meaning that no live dispute remained for those claims.
Motions and ruling
The United States moved for voluntary dismissal without prejudice of its lien-enforcement counterclaim and crossclaim. The Bank separately moved under Rule 41(a)(2) of the Federal Rules of Civil Procedure for voluntary dismissal of the United States as a party defendant. Both motions were unopposed.
The court granted the United States’ motion and dismissed its lien-enforcement counterclaim against Park State Bank without prejudice. It also dismissed without prejudice the United States’ lien-enforcement crossclaim against all other defendants named in the complaint.
The court also granted the Bank’s motion. The United States was dismissed as a party defendant to the Bank’s complaint. The court stated that the parties had settled all claims between them and that the dismissals would not prejudice the remaining defendants.
Disposition
The order granted both motions. It did not decide the underlying priority or enforceability of the liens; it dismissed the United States’ claims because the settlement rendered them moot and removed the United States as a party defendant.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.