U.S. v. Coluccio

• Decision Date: 24 March 1995
• Docket Number: No. 771,D,771
• Parties: UNITED STATES of America, Appellee, v. Richard COLUCCIO, Defendant, Theresa Coluccio, Claimant-Appellant. ocket 94-6062.
• Court: U.S. Court of Appeals — Second Circuit

Page 337

51 F.3d 337

UNITED STATES of America, Appellee, v. Richard COLUCCIO, Defendant Theresa Coluccio, Claimant-Appellant.

No. 771, Docket 94-6062.

United States Court of Appeals, Second Circuit.

Argued Nov. 4, 1994.

Decided March 24, 1995.

Theresa Coluccio, claimant-appellant pro se.

Elliot M. Schachner, Asst. U.S. Atty., Brooklyn (Zachary W. Carter, U.S. Atty. for the E.D.N.Y., Brooklyn, NY, Varuni Nelson, Asst. U.S. Atty., Brooklyn, NY, of counsel), for appellee.

Before: CARDAMONE, PIERCE, and MINER, Circuit Judges.

PIERCE, Circuit Judge:

Theresa Coluccio ("Ms. Coluccio"), claimant, appeals from a February 2, 1994 order, 842 F.Supp. 663, of the United States District Court for the Eastern District of New

                York (I. Leo Glasser, Judge ), which denied Ms. Coluccio's application for return of $2,500 securing a cost bond posted by Richard Coluccio ("Mr. Coluccio"), her son, in order that he might contest the seizure of his aircraft.  This civil action stems from criminal proceedings brought against Mr. Coluccio.  The United States (the "Government") sought to seize the funds securing the cost bond in order to partially satisfy a criminal fine imposed on Mr. Coluccio as part of a sentence and, thus, made application to execute upon the bond pursuant to the Federal Debt Collection Procedures Act ("FDCPA"), 28 U.S.C. Secs. 3001 et seq.   Ms. Coluccio contests the seizure of the cost bond on the ground that she provided Mr. Coluccio with the $2,500;  she, thus, made application in the district court to have the $2,500 returned to her.  Although the district court found that Ms. Coluccio did own the $2,500 prior to the posting of the bond, 842 F.Supp. at 666, the court nevertheless held that the cost bond was subject to forfeiture since "[t]he $2,500 ... is property in which [Mr. Coluccio] has a 'substantial ... interest'...."  Id. at 667.   The central issues on appeal are:  (1) whether the fine owed by Mr. Coluccio is a "debt" within the meaning of Sec. 3002(3)(B) of the FDCPA, thereby making it subject to forfeiture;  (2) whether Ms. Coluccio has standing;  and (3) whether Mr. Coluccio has a "substantial interest" in the bond, thereby making the bond subject to seizure pursuant to the FDCPA.  For the reasons set forth below, we vacate and remand
                

BACKGROUND

On March 3, 1987, Mr. Coluccio pleaded guilty to a charge of knowingly and intentionally possessing cocaine with intent to distribute, in violation of 21 U.S.C. Sec. 841(a)(1). The district court (Bramwell, J.) sentenced him on April 16, 1987 to twelve years imprisonment, a $150,000 ¹ fine and a special assessment of $50. ²

On September 29, 1986, the Drug Enforcement Agency ("DEA") seized a 1969 Piper Aztec airplane (the "airplane") owned by Mr. Coluccio and commenced an administrative forfeiture proceeding against the airplane pursuant to 21 U.S.C. Sec. 881. Mr. Coluccio was given notice of this forfeiture proceeding on December 31, 1986, and he was informed at that time that he would have to post a $2,500 cost bond in order to contest the forfeiture, pursuant to 19 U.S.C. Sec. 1608. Mr. Coluccio posted the bond and submitted a letter contesting the forfeiture. In March 1991, the Government commenced a civil action for forfeiture of the airplane and Mr. Coluccio moved to dismiss the complaint. On March 23, 1992, the district court (Spatt, J.) dismissed the complaint, after finding that the Government failed to set forth sufficient evidence to show a nexus between the seized property and the illegal drug trafficking. The court granted the Government 30 days to amend the complaint; when the Government failed to do so, the court dismissed the action on May 6, 1992.

On April 15, 1992, the Government filed an Application for Writ of Execution pursuant to the FDCPA, 28 U.S.C. Sec. 3203(c)(1) in order to sell the airplane and to apply the sale proceeds to partially satisfy Mr. Coluccio's criminal fine. By letter dated April 28, 1992, Mr. Coluccio objected to the Writ of Execution and requested that a hearing be held in the United States District Court for the Eastern District of Michigan, the district where Mr. Coluccio was incarcerated. The district court (Sifton, J.) transferred the case to Michigan solely for the purpose of conducting a hearing with regard to the airplane. The district court sitting in Michigan (Zatkoff, J.) granted the writ of execution on the airplane and that decision was affirmed.

United States v. Coluccio, 19 F.3d 1115 (6th Cir.1994).

On June 12, 1992, the Government filed a second Application for Writ of Execution--this time against the $2,500 which secured the cost bond. Mr. Coluccio was served with notice of the cost bond application but did not respond. Because Ms. Coluccio asserted an interest in the cost bond during a telephone conversation with the Assistant United States Attorney, she was mailed a copy of the writ as well. On June 16, 1992, Ms. Coluccio filed a request for a hearing with the Clerk of the Eastern District.

The district court held a hearing on this matter on September 24, 1993. At the hearing, Ms. Coluccio testified that she withdrew a total of $2,500 from three separate accounts, which she held at the Greater New York Savings Bank, and supplied the money to her son to post the bond. She further testified that there was an implicit understanding that she would get the money back when the forfeiture hearing ended.

In an order dated February 2, 1994, the district court denied Ms. Coluccio's request to have the funds securing the cost bond returned. Although the district court found that Ms. Coluccio did provide the $2,500 for the cost bond, the court nevertheless held that because Mr. Coluccio benefitted from the bond, he had a "substantial interest" in it and, therefore, the bond was subject to execution pursuant to the FDCPA. This appeal followed.

DISCUSSION

On appeal, Ms. Coluccio first contends that the criminal fine imposed on Mr. Coluccio is not a "debt" within the meaning of Sec. 3002(3)(B) of the FDCPA and, therefore, the FDCPA cannot be used to seize the funds securing the cost bond as partial satisfaction of the fine. This contention is without merit.

The FDCPA "provides the exclusive civil procedure[ ] for the United States to recover a judgment on a debt." 28 U.S.C. Sec. 3001(a)(1). The Act applies to judgments "entered in favor of the United States ... arising from a civil or criminal proceeding regarding a debt." Id. Sec. 3002(8) (emphasis added). A "debt" is defined as, inter alia, "an amount that is owing to the United States on account of a ... fine." Id. Sec. 3002(3)(B). Here, the Government applied for the Writ of Execution against the cost bond in order to partially satisfy a fine imposed on Mr. Coluccio in a criminal proceeding. Thus, the application clearly falls within the purview of the FDCPA. See Coluccio, 19 F.3d at 1117; United States v. Gelb, 783 F.Supp. 748, 752 (E.D.N.Y.1991).

Next, Ms. Coluccio argues that the Government cannot execute upon the bond pursuant to the FDCPA because she, and not Mr. Coluccio, is the rightful owner of the bond. In response, the Government first argues that Ms. Coluccio does not have standing to contest the forfeiture of the bond. Although acknowledging that the district court found that Ms. Coluccio owned the $2,500 used to post the bond, the Government argues that she lacks standing because the act of giving Mr. Coluccio the $2,500 to post the bond was either a gift or a loan. If Ms. Coluccio did indeed give or loan the money to Mr. Coluccio, then she would not have standing to contest the forfeiture of the cost bond. United States v. Schwimmer, 968 F.2d 1570, 1581 (2d Cir.1992) (general creditors do not have sufficient interest to contest forfeiture); United States v. $280,505, 655 F.Supp. 1487, 1495 (S.D.Fla.1986) (mother who gave son the money to purchase vehicle lacked standing to contest forfeiture of vehicle); United States v. One 1971 Porsche Coupe Auto., Vehicle Identification No. 9111100355, 364 F.Supp. 745, 748 (E.D.Pa.1973) (since vehicle was gift from father to son, father did not have standing to contest forfeiture of vehicle); see also United States v. $38,570 U.S. Currency, 950 F.2d 1108, 1113 (5th Cir.1992) (to establish standing to contest a forfeiture, claimant must show some evidence of ownership). However, it is not clear that the act of providing the money in order that Mr. Coluccio could challenge the forfeiture of his airplane must be characterized as a gift or loan. Our recent decision in Torres v. $36,256.80 U.S. Currency, 25 F.3d 1154 (2d Cir.1994), is instructive in this regard. In Torres, the district court had We believe that Ms. Coluccio has similarly alleged sufficient facts which, if proven, would demonstrate that she is the beneficiary of a constructive trust as to the $2,500 which secured the cost bond. Generally, New York law requires that a person establish four elements before a court will impose a constructive trust: (1) a confidential or fiduciary relationship; (2) a promise, express or implied; (3) a transfer of the subject res made in reliance on that promise; and (4) unjust enrichment. In re Koreag, Controle et Revision, S.A., 961 F.2d 341, 352 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 188, 121 L.Ed.2d 132 (1992); Bankers Sec. Life Ins. Soc'y v. Shakerdge, 49 N.Y.2d 939, 428 N.Y.S.2d 623, 624, 406 N.E.2d 440, 440-41 (1980); Simonds v. Simonds, 45 N.Y.2d 233, 408 N.Y.S.2d 359, 363-64, 380 N.E.2d 189, 193-95 (1978). Although these elements are meant to "provide important guideposts, the constructive trust doctrine is equitable in nature and should not be 'rigidly limited.' " In re Koreag, 961 F.2d at 352 (quoting Simonds, 408 N.Y.S.2d at 363, 380 N.E.2d at 194), accord Lines v. Bank of Am. Nat'l Trust & Sav. Ass'n, 743 F.Supp. 176, 180 (S.D.N.Y.1990) (the elements are not talismanic and courts have imposed a constructive trust in the absence of some of these elements).

                granted the

...