U.S. v. One Single Family Residence Located at 6960 Miraflores Ave.

• Decision Date: 10 June 1991
• Docket Number: No. 90-5295,90-5295
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. ONE SINGLE FAMILY RESIDENCE LOCATED AT 6960 MIRAFLORES AVENUE, etc., Defendant, Republic National Bank of Miami, Claimant-Appellant, Thule Holding Corp., Claimant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1433

932 F.2d 1433

UNITED STATES of America, Plaintiff-Appellee, v. ONE SINGLE FAMILY RESIDENCE LOCATED AT 6960 MIRAFLORES

AVENUE, etc., Defendant,

Republic National Bank of Miami, Claimant-Appellant,

Thule Holding Corp., Claimant.

No. 90-5295.

United States Court of Appeals, Eleventh Circuit.

June 10, 1991.

Stanley A. Beiley, Robert M. Sondak, Miami, Fla., for claimant-appellant.

Dexter W. Lehtinen, U.S. Atty., Miami, Fla., Alan Dagen, Asst. U.S. Atty., Fort Lauderdale, Fla., Anne M. Hayes, Miami, Fla., Linda C. Hertz, Robert Rosenberg, Asst. Attys. Gen., Fort Lauderdale, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before KRAVITCH and BIRCH, Circuit Judges, and DYER, Senior Circuit Judge.

DYER, Senior Circuit Judge:

This is an appeal of a civil forfeiture case brought by the United States against a parcel of real property situated in the Southern District of Florida. During the pendency of the action below, the real property was sold pursuant to an order of interlocutory sale. The proceeds of the sale were placed in the United States Marshal's account. A final judgment of forfeiture was entered on March 15, 1990. The claimant, Republic National Bank, holder of a mortgage lien on the property, timely filed its notice of appeal, but did not file a motion to stay execution or post a supersedeas bond. On April 20, 1990, the United States Marshal executed on the judgment and transferred the proceeds of the interlocutory sale to the Asset Forfeiture Account of the United States Treasury. The United States filed its motion to dismiss the appeal on the ground that this transfer divested this court from exercising in rem jurisdiction over the case. We grant the motion and dismiss the appeal for want of jurisdiction.

Facts

The United States initiated this in rem action seeking civil forfeiture of a single family residence located in the Southern District of Florida. The complaint alleged that Indalecio Iglesias owned the property, that he had engaged in narcotics transactions, and had used the proceeds of the transactions to purchase the property. The complaint sought forfeiture under 21 U.S.C. Sec. 881(a)(6). Service perfecting in rem jurisdiction was made by arresting the defendant property and by publication of notice in conformity with Supplemental Rules for Certain Admiralty and Maritime Claims, Rule C(4). Additionally, the government sent a notice of the suit to the potential claimant Republic National Bank, who was a mortgagee of the defendant property. Republic filed a claim and answer asserting an "innocent owner" defense.

On May 25, 1988, the government filed an agreed motion seeking a court order authorizing an interlocutory sale of the residence. The motion provided that the proceeds of the sale would be held by the United States Marshal and that the claims to the residence would then attach to the proceeds held by the Marshal, and be subject to the future determination of the court, without prejudice to the rights of any claimant. On May 31, 1988, an order for interlocutory sale was entered by the district court. It provided that all interests of any lienors and claimants would automatically transfer to the proceeds of the sale. The order also instructed the United States Marshal for the Southern District of Florida to retain custody of the proceeds of the sale pending the court's further order. This property was thereafter sold for approximately one million dollars.

During the pendency of the action, the grand jury indicted Indalecio Iglesias in the Southern District of Florida. He was alleged to be the real owner of the property, although Thule Holding Corporation was the record owner. Iglesias was charged with criminal violations pertaining to the subject residence.

On March 15, 1990, the district court entered a final judgment of forfeiture and directed the United States to dispose of the remaining proceeds of the interlocutory sale, in accordance with law.

Republic timely filed its notice of appeal, but did not file a motion to stay execution of the final judgment or post a supersedeas bond. On April 20, 1990, the United States Marshal executed on the judgment and transferred the proceeds of the interlocutory sale to the Asset Forfeiture Account of the United States Treasury.

Contentions of the Parties

On the merits of this appeal, Republic, as mortgagee, seeks to reverse the judgment of forfeiture against it for two reasons. First, it argues that the district court erred in applying a "constructive knowledge", instead of an "actual knowledge", standard to forfeit Republic's mortgage; and second, the court utilized clearly erroneous findings of fact on which to base its legal conclusions. Since the government's motion to dismiss the appeal is dispositive, we do not reach the merits.

The United States contends that when the United States Marshal for the Southern District of Florida executed on the final judgment of forfeiture by transferring the substituted res from his custody to the Asset Forfeiture Account, no res remained in that district; ergo, the transfer divested the district court and this court from exercising in rem jurisdiction in this case.

Republic contends that there is continuing jurisdiction in this court because (1) by enacting 21 U.S.C. Sec. 881(j) Congress modified the requirement that the res be within the court's territorial jurisdiction for Sec. 881 forfeiture actions; (2) the district court had in personam jurisdiction; (3) there was consent to or estoppel to deny jurisdiction.

Jurisdiction Under 21 U.S.C. Sec. 881(j)

Republic argues that Congress has modified the requirement that the res be within the court's territorial jurisdiction for Section 881 forfeiture actions and gives this court continuing jurisdiction to hear this appeal. Section 881(j) provides:

In addition to the venue provided for in Section 1395 of Title 28 or any other provision of law, in the case of property of a defendant charged with a violation that is the basis for forfeiture of the property under this Section, a proceeding for forfeiture under this Section may be brought in the judicial district in which the defendant owning such property is found or in the judicial district in which the criminal prosecution is brought.

Republic reads the statute to mean that once Iglesias was indicted and found in the Southern District of Florida, the effect, under Section 881(j) is to add two bases, in addition to the fact that the property was located in this district, on which the court continues to have jurisdiction even after the property is removed from the district.

We find no support for this novel proposition. By its clear terms Section 881(j) simply affords the government a choice of venue as to where to bring a forfeiture action. It may choose to prosecute the forfeiture action either in the district where the res is located, in the district of the criminal prosecution, or the district in which the owner is found. This choice does not extend to claimants. Here the res, which was alleged to be owned by Iglesias, was forfeited in the Southern District of Florida. Republic filed its claim in the same district. The fact that Iglesias was indicted in the same district after the institution of the forfeiture proceeding is of no moment. Nor does the fact that Iglesias was found in the Southern District of Florida give continuing jurisdiction after the res has been removed. He never filed a claim and was never a party to the lawsuit. Finding Iglesias in the district was not necessary to effect the in rem forfeiture. Supplemental Rules for Certain Admiralty and Maritime Claims, Rule C(4) only requires publication and seizure of the defendant property to notify potential claimants. The only basis for jurisdiction in this case is that the defendant property was located and arrested in this district. Accordingly, we find the provisions of Section 881(j) to be irrelevant to this action.

United States v. One Lear Jet Aircraft, 836 F.2d 1571 (11th Cir.) (en banc), cert. denied, 487 U.S. 1204, 108 S.Ct. 2844, 101 L.Ed.2d 881 (1988) controls the result in this case. There the government initiated a forfeiture proceeding against a Lear Jet aircraft located in the Southern District of Florida pursuant to 8 U.S.C. Sec. 1324(b). The aircraft had been used to enter the United States by persons who made material misrepresentations on their visa applications. Leybda Corporation filed a claim to the aircraft, but, after trial, the district court entered a judgment of forfeiture for the United States. Leybda filed a timely notice of appeal, but did not file a motion for stay of judgment or a supersedeas bond. The government executed the judgment by removing the aircraft to Missouri. On en banc reconsideration of this in rem jurisdictional issue, the court held that:

We now hold that, because removal of the res from a court's territorial jurisdiction destroys that court's in rem jurisdiction, Pennington v. Fourth National Bank, 243 U.S. 269, 37 S.Ct. 282, 61 L.Ed. 713 (1917), this Court does not have jurisdiction to hear Leybda's appeal.

The general rule of in rem jurisdiction is that the court's power derives entirely from its control over the defendant res. Id. at 272, 37 S.Ct. at 283; ...