City of Lake Oswego v. $23,232.23

• Decision Date: 01 May 1996
• Citation: 140 Or.App. 520,916 P.2d 865
• Parties: CITY OF LAKE OSWEGO, a municipal corporation, Clackamas County, Oregon, Respondent, v. $23,232.23 in cash, Motorola Pager, Defendants, and Rodney S. Mituniewicz, Appellant. 91-5-372; CA A77119. Court of Appeals of Oregon, In Banc
• Court: Oregon Court of Appeals

Page 865

916 P.2d 865

140 Or.App. 520

CITY OF LAKE OSWEGO, a municipal corporation, Clackamas County, Oregon, Respondent, v. $23,232.23 in cash, Motorola Pager, Defendants and Rodney S. Mituniewicz, Appellant.

91-5-372; CA A77119.

Court of Appeals of Oregon,

In Banc.

Argued and Submitted March 31, 1995.

Resubmitted In Banc Jan. 9, 1996.

Decided May 1, 1996.

[140 Or.App. 521-A] Jenny Cooke, Portland, argued the cause and filed the briefs for appellant.

[140 Or.App. 521-B] Cynthia L. Phillips, Lake Oswego, argued the cause and filed the brief for respondent.

De MUNIZ, Judge.

Claimant appeals a judgment forfeiting his interest in defendants $23,232.23 in United States currency and a Motorola pager ¹ following an in rem forfeiture proceeding. We affirm.

On May 10, 1991, claimant was stopped in Washington County for speeding. He consented to a pat down and told the officers that he had $23,000 in cash. He was handcuffed and searched, and the police discovered a folded paper that they opened. The paper contained tar heroin. The owner of the car later consented to a search, and the police found a plastic bag with a syringe and spoon.

Plaintiff City of Lake Oswego (City) brought this forfeiture proceeding in May 1991 pursuant to Oregon Laws 1989, chapter 791, as amended by Oregon Laws 1991, chapter 934 (Act). ² Trial was in August 1992, and a judgment of forfeiture was entered in September.

The incident also led to the criminal prosecution of claimant in a separate proceeding. In June 1992, he was convicted of, inter alia, possession of a controlled substance (heroin). Claimant appealed that conviction, challenging the denial of his motion to suppress. We held that his motion should have been allowed. We held that the heroin was illegally seized, and, therefore, that his statements about his use and possession of heroin were tainted by the illegality. State v. Mituniewicz, 125 Or.App. 41, 864 P.2d 1359 (1993). We reversed the conviction for possession and remanded for a new trial.

We first address claimant's arguments that our ruling in the criminal case requires reversal of the forfeiture here. He argues that a prior determination regarding admissibility in a related criminal proceeding is binding in a forfeiture action, U.S. v. $28,980 in U.S. Currency, 786 F.Supp. 899, 901 (D.Or.1990), and that evidence derived from an illegal search is inadmissible in a forfeiture proceeding. One Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 85 S.Ct. 1246, 14 L.Ed.2d 170 (1965). He contends that, without the evidence that was suppressed in the criminal proceeding, City failed to meet its burden in this forfeiture case of proving that there was probable cause to believe that the property was subject to forfeiture.

However, even assuming that claimant is correct, he has waived any objection to admissibility of the evidence here. Claimant stipulated that the finding of facts from the motion to suppress, including that tar heroin was discovered, would be entered in the forfeiture hearing. ³

We next address claimant's assignment that the trial court erred in finding that City proved the allegations of its complaint. City alleged that

"[o]n or about May 11, 1991, defendants, $23,232.23 in cash and Motorola pager, were used and/or intended to be used to commit and facilitate the:

"1) possession of heroin, a controlled substance; and/or

"2) delivery of heroin[.]

"On or about May 11, 1991, defendants, $23,232.23 in cash and Motorola pager, were profit and/or proceeds of delivery of heroin, a controlled substance[.]"

Claimant argues that the only evidence was that the currency was to pay for a kilo of cocaine and that City presented "absolutely no evidence" to support its allegations that the currency was used in the possession or delivery of heroin or was profit from the delivery of heroin.

At the forfeiture hearing, the arresting officers testified that claimant originally stated that the source of the $23,000 was from an insurance settlement and the 1981 sale of a house, that he had buried the money because he did not trust banks and that he was going to use the money for a down payment on a house. The officers testified that claimant later told them that a kilo of cocaine would cost $23,000 on the market, and, when the officers confronted claimant with the fact that $23,000 was the amount of money he had and that the money appeared not to have been buried, claimant then told them that he was delivering kilos of cocaine, and the money was in payment.

Claimant denied that he had given that information to the police. His testimony was that the money came from the sale of a farm and from a judgment in a personal injury case and that, when he was stopped, he was on his way to give the money to the seller as a down payment on a house.

The trial court did not find claimant's testimony credible. It found:

"Claimant did obtain a kilo of heroin from some dealer in Wilsonville and transported it to a party in Vancouver, Washington, travelling through Clackamas and Multnomah Counties, and obtained $23,000 plus in exchange for the cocaine and was coming back to Wilsonville to pay that money to the dealer.

" * * * * *

"[T]he $23,000 that claimant had when he was stopped was from the sale of drugs, whether cocaine or heroin, which claimant was intending to purchase."

City argues that any variance between the allegation that the money was used to facilitate the sale of heroin and the proof that it was used in the sale of cocaine is not material. City argues that, even though the court's findings interrelated heroin and cocaine, the court clearly found that the currency constituted profits and proceeds from the sale of controlled substances. It argues that that is the conduct that is prohibited under Section 2(11) ⁴ and that it met its burden.

Judicial forfeiture proceedings "shall be governed by the Oregon Rules of Civil Procedure to the extent that they do not conflict with specific provisions of chapter 791, Oregon Laws 1989." Section 7(4). ⁵ City did not move to amend the pleadings to conform to the evidence. ORCP 23 B. However, under ORCP 12 B,

"[t]he court shall, in every stage of an action, disregard any error or defect in the pleadings or proceedings which does not affect the substantial rights of the adverse party."

Before enactment of ORCP, a variance was not deemed material unless it was prejudicial to the adverse party. Goad v. Maxwell, 273 Or. 553, 556, 542 P.2d 488 (1975). The party that asserted prejudice must have been misled or denied a fair presentation of its case. Tauscher v. Doernbecher Mfg. Co., 153 Or. 152, 158, 56 P.2d 318 (1936); Stokes v. Brown, 20 Or. 530, 532, 26 P. 561 (1891).

The pleadings allege that City's claim of forfeiture arose from the events that occurred on May 11 and that the claim was brought pursuant to Oregon Laws 1989, chapter 791. Under Section 3(6), items subject to forfeiture include

"[a]ll moneys * * * furnished or intended to be furnished by any person in the course of prohibited conduct, all proceeds of or from prohibited conduct, and all moneys * * * used or intended to be used to facilitate any prohibited conduct[.]"

"Prohibited conduct" includes conduct under ORS 475.992. Section 2(11). ORS 475.992, in turn, makes it a crime to possess, manufacture or deliver either cocaine or heroin.

Claimant has not demonstrated how the variance between pleading and proof was prejudicial to him. He does not argue that the allegation that the drug involved was heroin, instead of cocaine, misled him or denied him the opportunity to fairly present his case. We conclude that any defect in the pleadings did not affect a substantial right of claimant and that the trial court did not err in finding that plaintiff had proved the allegations of its complaint.

Claimant next argues that the trial court erred in finding that it had jurisdiction and that City had standing to sue for forfeiture. City brought this action in Clackamas County. Section 7(7) provides that the forfeiture action

"shall be commenced and tried:

"(a) In the case of real property, in the circuit court in a county in which the property is situated; or

"(b) In all other cases, in the circuit or district court of the county in which the property was seized or the county in which any part of the prohibited conduct took place."

Claimant contends that Section 7(7) is jurisdictional and requires that the forfeiture action against defendant property had to be commenced in the county in which it was seized. Here, that was Washington County. City argues that claimant confuses jurisdiction with venue, and that claimant waived any challenge to venue.

Section 7(7) requires only that "any part" of the prohibited conduct is to have occurred in the county where the action is brought. Prohibited conduct includes the delivery of controlled substances. The trial court found that the res was the proceeds from the sale of drugs obtained from a dealer in Wilsonville and that claimant traveled through Clackamas and Multnomah counties while transporting the drug to a party in Vancouver, Washington. We do not agree with claimant that that is an insufficient "connection" to Clackamas County so as to preclude the action being brought in Clackamas County.

Claimant also argues that City did not have "standing" to bring this action because there is no connection between defendant currency and City, "except that [City] has seized defendant and wishes to keep it." He argues that the lack of nexus means that there is no justiciable controversy between the parties. However, under the forfeiture statutes, the "forfeiting agency" is the party proceeding against the seized property. The forfeiting agency is not required to be the same agency that seized the property. ⁶ The evidence showed that the Lake Oswego and Tigard Police Departments had an interagency agreement to investigate narcotics violations jointly. City is the political subdivision...