U.S. v. One Urban Lot Located at 1 Street A-1, Valparaiso, Bayamon, Puerto Rico
| Decision Date | 22 September 1989 |
| Docket Number | A-1,BAYAMO,Nos. 88-1274,LOPEZ-RIOS and L,VALPARAIS,PUERTO,s. 88-1274 |
| Citation | 885 F.2d 994 |
| Parties | UNITED STATES of America, Plaintiff, Appellee, v. ONE URBAN LOT LOCATED AT 1 STREETRICO, etc., et al., Defendants, Appellees (Two Cases). Appeal of Carmen Gloria ORTIZ, Petitioner. Appeal of Elpidioaudelina Nieves, Petitioners. UNITED STATES of America, Plaintiff, Appellee, v. ONE RURAL LOT NO. 55,221 LOCATED AT SIERRA TAINA WARD NO. 8, BAYAMON, PUERTO RICO, et al., Defendants, Appellees. Appeal of Margarita BRUNO, Petitioner. to 88-1276. |
| Court | U.S. Court of Appeals — First Circuit |
Antonio Cordova-Gonzalez, San Juan, P.R., on consolidated brief, for petitioners.
Daniel F. Lopez-Romo, U.S. Atty., Hato Rey, P.R., and Miguel A. Fernandez, Asst. U.S. Atty., Old San Juan, P.R., on consolidated brief, for plaintiff, appellee.
Before COFFIN and BOWNES, Circuit Judges, and BROWN, * Senior Circuit Judge.
These three cases consolidated on appeal all arise out of two Government complaints for forfeiture in rem of properties used to commit or facilitate illegal drug transactions involving Jose Valentin Lopez Nieves (Johnny) and Samuel Serrano (Sammy). The owners of interests in these properties--Lot # 69, 1 Lot # 71, 2 Lot # ADD-9, 3 and Sierra Taina 4--seek review of the district court's denials of (i) motions to vacate forfeiture decrees (Lots 69, 71 and ADD-9) and (ii) a motion to reconsider an order denying a motion to vacate a forfeiture decree as to Sierra Taina.
The consolidated appeals were submitted to us for decision on the briefs. We affirm the denial of the motions to vacate as to Lots 69, 71, and ADD-9, and reverse the denial of the motion to reconsider the motion to vacate as to Sierra Taina and direct the trial court to consider the merits of 88-1276 on remand.
Although as earth-bound as Puerto Rican law makes it, this appeal turns largely on hoary, barnacle encrusted principles and practices of the admiralty.
Pursuant to 21 U.S.C. Sec. 881(a)(6) & (7), the Government filed a complaint on August 19, 1986, seeking forfeiture in rem of various properties including Sierra Taina. Civil No. 1337(PG). An amended complaint filed on August 28, 1986, added No. 69, No. 71 and ADD-9 to the list of properties of which the Government sought forfeiture. For ease of reference, we will first consider the facts involving Lots 69, 71 and ADD-9 (88-1274 and 88-1275), respectively, and then focus on Sierra Taina (88-1276).
A warrant of arrest and a warrant of seizure and monition for publication in an English newspaper of general circulation (both based on the Government's amended complaint and motions of August 28, 1986) for these properties were issued by the Clerk of Court on September 15 & 16, 1986, respectively. The U.S. Marshal Service served process on Lots 69, 71 and ADD-9 on September 30, 1986, and served Nieves, Lopez and Ortiz with copies of the amended complaint and warrant of arrest in rem on October 2, 1986. 5 Due to a delay on the part of the U.S. Attorney, publication of the September 16, 1986 warrant for seizure and monition could not be carried out before the deadline for claimants to file claims. Thus a second warrant for seizure and monition was issued on November 26, 1986; the warrant was published on November 30, 1986, and all interested persons were given until December 10, 1986 to file claims.
On December 2, 1986, the district court granted the Government's motion to stay the proceedings pursuant to 21 U.S.C. Sec. 881(i) 6 until the final disposition of criminal proceedings related to this civil forfeiture case. That stay was lifted on August 11, 1987 for the purpose of establishing the validity of the claims filed.
On August 28, 1987, there being neither a claim, answer nor appearance of any kind by any property owner, the district court ordered the default of all persons who might claim any right, title or interest in the seized properties. On October 30, 1987 this decree of default and forfeiture became a final judgment forfeiting those properties to the United States.
Although property owners Ortiz (ADD-9), Lopez and Nieves (Lots 69 & 71) never filed a claim or answer in the judicial forfeiture proceeding, they filed motions requesting that the decree of forfeiture be vacated. The motion with respect to No. 69 and No. 71 was denied on February 9, 1988, and the motion with respect to ADD-9 was denied on May 10, 1988.
Ortiz and Lopez and Nieves each filed a notice of appeal on February 22, 1988. The Government filed motions for summary disposition of these appeals. On June 1, 1988 this Court denied the Government motion but limited review to the district court's February 9, 1988 denial of the Lopez and Nieves motion to vacate judgment on Lots 69 and 71, and the Ortiz motion to vacate judgment on ADD-9. 7
The Government proceeded against Sierra Taina belonging to Samuel Serrano (Sammy) and his wife, Margarita Bruno (Bruno), in its August 19, 1986 in rem forfeiture complaint. A warrant of arrest in rem as to Sierra Taina was issued on August 20, 1986, and 2 days later the Clerk of Court issued a warrant for seizure and monition for publication in a newspaper of general circulation. Publication occurred on August 30, 1986.
On September 29, 1986 Sammy and Bruno were served as property owners with copies of the complaint of forfeiture and the warrant of arrest in rem. Bruno filed a motion to dismiss the complaint on October 23, 1986. The next day, October 24, 1986, Bruno and her husband filed a verified answer to the forfeiture complaint.
On December 8, 1986, the district court granted the Government's motion to stay the proceedings pursuant to 21 U.S.C. Sec. 881(i). The stay was lifted on August 11, 1987 for the exclusive purpose of establishing the validity of the claims filed. The same day the Court, presumably on the basis that the property owners had not filed a claim and thus had no standing to file an answer, granted the Government's motion to strike the October 24, 1986 answer filed by Bruno and her husband.
The district court issued a default decree on August 27, 1987 and ordered Sierra Taina forfeited to the United States. Bruno's motion to stay and vacate the judgment or its execution was denied as was her motion requesting reconsideration of that denial. Bruno filed a notice of appeal which the Government sought to dismiss on the grounds that it was time barred. The Government's motion was denied by this Court, which limited Bruno's appeal to the denial of her motion for reconsideration.
The disposition of a motion to set aside a default entry of judgment under F.R.Civ.P. 55(c) 8 is a matter left to the sound discretion of the district court, and that court's decision should not be reversed unless clearly wrong. E.g., Sires v. Berman, 834 F.2d 9, 14 (1st Cir.1987); Taylor v. Boston & Taunton Transp. Co., 720 F.2d 731, 732 (1st Cir.1983); American & Foreign Ins. Ass'n v. Commercial Ins. Co., 575 F.2d 980, 982 n. 3 (1st Cir.1978). As Judge Selya has said for us, Coon v. Grenier, 867 F.2d 73, 76 (1st Cir.1989) (citation omitted).
Since as to Lots 69 and 71 (88-1275) and ADD-9 (88-1274) the appellants failed to make any appearance prior to final judgment, our review of the district court proceeds under Rule 60(b) and not the "good cause" standard of Rule 55(c). United States v. One Urban Lot Located at 1 Street A-1, 865 F.2d 427, 429 (1st Cir.1989) (). However, in Sierra Taina (88-1276) we apply the Rule 55(c) good cause standard because Bruno filed an answer prior to the final judgment. Id.
At first blush it might seem inconsequential whether the review of motions to vacate is under Rule 55(c) or Rule 60(b), but the standard for relief under Rule 55(c) is less demanding than its Rule 60(b) counterpart. Coon, 867 F.2d at 76; 10 Wright & Miller, Federal Practice and Procedure Sec. 2692 at 471-72 (1983 and 1989 Supp.).
The crux of the problem with respect to Lots 69, 71 and ADD-9 is that appellants Ortiz, Lopez and Nieves failed to file a claim or otherwise make any appearance until after the judgment of forfeiture was entered. It was not until January 26, 1987 that these appellants made their first, and only, appearance (and then a special appearance to challenge the jurisdiction of the district court), and requested that the default judgment be vacated. Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims 10 provides:
The claimant of property that is the subject of an action in rem shall file a claim within 10 days after process has been executed, or within such additional time as may be allowed by the court, and shall serve his answer within 20 days after the filing of the claim.
Given the failure of Ortiz, Lopez and Nieves to file any sort of claim or answer, or make any persuasive showing of reasons for this failure in the motion to vacate, we find no merit to their bald contention that the existence of excusable neglect and a meritorious defense merited Rule 60(b) relief. 11 Finding no abuse of discretion by the district judge in denying Rule 60(b) relief, we are left to consider only whether a defect in the content of process or its service requires reversal of the default judgment. Finding no defect in process, we address the arguments respecting service of process on Lopez and Nieves (Lots 69 and 71). 12
Lopez and Nieves (Lots 69 and 71) argue that service was...
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