ORDER ON THE UNITED STATES' MOTION TO VACATE AND DISMISS AND ORDER TO SHOW CAUSE

PAUL G. BYRON, District Judge.

This cause comes before the Court on the United States' Motion to Vacate and Dismiss and Supporting Memorandum of Law (Doc. 9), filed May 4, 2016. No party has responded and the time for doing so has passed. Upon consideration, the United States' motion will be granted in part and denied in part. The Court will additionally order Plaintiff and its counsel to show cause why sanctions should not be imposed.

I. BACKGROUND1

Plaintiff, U.S. Bank, N.A. ("U.S. Bank"), initiated this lawsuit on March 28, 2011 in state court to foreclose its interest in a mortgage securing real property located in Orange County, Florida. On January 18, 2013, the state court entered a final judgment of foreclosure in favor of U.S. Bank and scheduled the subject property for judicial sale. U.S. Bank ultimately prevailed as the highest bidder at the judicial sale and purchased the subject property for $173,000. Title to the subject property issued to U.S. Bank on March 11, 2013.

Approximately three years later on March 16, 2016, U.S. Bank filed a motion with the state court titled "Plaintiff's Ex-Parte Motion for Supplemental Proceedings and for an Order Granting Redemption Rights." In its ex parte motion, U.S. Bank represented that the United States Department of Housing and Urban Development ("HUD") holds an interest in the subject property, but that HUD was omitted from the original foreclosure proceedings. U.S. Bank requested that the state court institute supplemental proceedings for the purpose of giving HUD thirty days to exercise any redemption rights HUD may have with respect to the subject property. On March 18, 2016, the state court granted U.S. Bank's ex parte motion without a hearing and without notice to HUD. The state court's order directed that U.S. Bank serve HUD within thirty days and that HUD exercise any redemption rights within thirty days of service. The state court's order further provided that HUD's failure to exercise its redemption rights within the time provided would result in the foreclosure of any interest HUD holds in the subject property.

Upon receiving service of the original foreclosure complaint and learning of the state court's March 18, 2016 order, the United States immediately removed the action to this Court. This Court has subject matter jurisdiction and removal is proper.2 The United States now moves to vacate the March 18, 2016 order and to dismiss this action for lack of subject matter jurisdiction.3

II. DISCUSSION

A. Motion to Vacate

The United States first moves to vacate the March 18, 2016 order requiring HUD to exercise its redemption rights within thirty days. The Court construes the motion as seeking to alter or amend a prior order pursuant to Federal Rule of Civil Procedure 59(e). Under that rule, the Court recognizes three grounds for vacating a prior order: (1) an intervening change in law, (2) the discovery of new evidence which was not available at the time the Court rendered its decision, and (3) the need to correct clear error or manifest injustice. Leonard v. Astrue, 487 F.Supp.2d 1333, 1341 (M.D. Fla. 2007). Because vacating or modifying a prior order is "an extraordinary remedy," the moving party must set forth "strongly convincing" reasons for the Court to change the prior decision. Id. at 1341-42. The United States moves to vacate the March 18, 2016 order on the grounds that the order ignored the mandated statutory procedure for foreclosing an interest held by the United States in real property. The Court therefore reads the United States' motion as asserting the need to correct clear error.

In order to foreclose an interest held by the United States in real property, the United States must be named in the lawsuit and the initial pleading must state with particularity the nature of the United States' interest. 28 U.S.C. § 2410(b). Upon foreclosure, the subject property must be sold by judicial sale. Id. § 2410(c). "A sale to satisfy a lien inferior to one of the United States shall be made subject to and without disturbing the lien of the United States, unless the United States consents that the property may be sold free of its lien. . . ." Id. However, where the subject property is sold to satisfy a lien prior to that of the United States, the United States shall have one year from the date of the sale to exercise its right of redemption. Id. The failure to follow these procedures results in the United States' lien surviving foreclosure and the purchaser of the foreclosed property taking that property encumbered by the United States' lien.4 See Myers v. United States, 647 F.2d 591, 600 n.12 (5th Cir. 1981); cf. United States v. Warford, 791 F.2d 1519 (11th Cir. 1986) (explaining that the United States is only bound by foreclosure judgments in which it has been named as a defendant).

The March 18, 2016 order suffers from a number of errors. First, U.S. Bank never named HUD as a party to the original foreclosure proceedings and never served HUD with the lawsuit. Second, U.S. Bank never particularly described HUD's interest in the subject property in its original complaint. As a result of these two deficiencies, foreclosure of HUD's interest in the subject property was no longer a legally available remedy when the order was entered. Third, U.S. Bank never notified HUD that it was being subjected to supplemental proceedings and, as a result, HUD was not afforded the opportunity to participate in those proceedings. Fourth, the order cuts the time for HUD to exercise its right of redemption from one year to thirty days, contrary to the governing law were redemption even permitted in this case. In short, the March 18, 2016 order is rife with error and must be vacated.

B. Motion to Dismiss

Next, the United States moves to dismiss this action for lack of subject matter jurisdiction. However, despite brief allusions to sovereign immunity, the Court is unclear as to the United States' argument. The Court presumes that the United States is referring to its sovereign immunity from being sued by U.S. Bank in the "supplemental proceedings" initiated in state court; however, the Court declines to enter an order of dismissal without being fully advised on the United States' sovereign immunity argument. Accordingly, the Court will deny the motion to dismiss and request that the United States renew its motion to include a properly supported memorandum of law.

C. Sanctions Against U.S. Bank and its Counsel

In its motion, the United States suggests that U.S. Bank instituted the supplemental proceedings in state court for the purpose of evading federal law so that it could extinguish HUD's interest in the subject property without HUD's realization. Upon review of the record on removal, the United States' position is well-founded. U.S. Bank obtained its final judgment of foreclosure in 2013 without ever notifying HUD and without identifying the interest held by HUD, despite the fact that HUD's mortgage was filed in the public records of Orange County, Florida. Three years later, through new counsel, U.S. Bank filed its ex parte motion to institute supplemental proceedings against HUD in order to extinguish that mortgage. However, the law is clear that U.S. Bank's failure to name HUD in the original complaint precluded such relief. U.S. Bank also did not include HUD on the ex parte motion's service list, and it was not until after the ex parte motion was granted by the state court that U.S. Bank finally acted to notify HUD. Moreover, U.S. Bank's ex parte motion attached a proposed order for the state court to enter. That proposed order, which ultimately became the now-vacated March 18, 2016 order, threatened to extinguish HUD's interest in the subject property within thirty days, in blatant disregard of the governing law. It therefore appears that U.S. Bank overtly attempted to circumvent well-established federal law in order to acquire clear title to the subject property without HUD's knowledge.

The Court will therefore order U.S. Bank and the counsel who filed the ex parte motion on U.S. Bank's behalf, Molly E. Carey and Marinosci Law Group, P.C., to answer why they should not be sanctioned for forwarding claims and legal contentions that were frivolous, without legal justification, and made for an improper purpose. See Fed. R. Civ. P. 11(b)(1), (2). U.S. Bank and its counsel shall also explain how their conduct does not constitute the unreasonable and vexatious multiplication of proceedings before this Court, see 28 U.S.C. § 1927, and how their conduct was not taken in bad faith so as to subject them to the Court's inherent sanctioning power, see Mack v. Delta Air Lines, Inc., No. 15-11945, 2016 WL 197162, at *4 (11th Cir. Jan. 15, 2016) (per curiam). Lastly, U.S. Bank's counsel, Molly E. Carey and Marinosci Law Group, P.C., shall answer how their above-referenced conduct does not violate the Florida Bar's Rules of Professional Conduct— specifically, Rule 4-3.1 (Meritorious Claims and Contentions), Rule 4-3.3 (Candor Toward the Tribunal), and Rule 4-3.4 (Fairness to Opposing Party and Counsel).

III. CONCLUSION

For the aforementioned reasons, it is ORDERED AND ADJUDGED as follows:

DONE AND ORDERED.