City of Montgomery v. Vaughn

• Decision Date: 19 April 2013
• Docket Number: 2110872
• Parties: City of Montgomery v. Sylvester Vaughn and Terrance Caffey
• Court: Alabama Court of Civil Appeals

City of Montgomery

v.Sylvester Vaughn and Terrance Caffey

2110872

ALABAMA COURT OF CIVIL APPEALS

OCTOBER TERM, 2012-2013

Dated: April 19, 2013

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

Appeal from Montgomery Circuit Court

(CV-10-1017)

PITTMAN, Judge.

The City of Montgomery ("the City") appeals from a summary judgment in a quasi in rem action, ordering it to return to Sylvester Vaughn and Terrance Caffey cash that had been seized from them by officers of the Montgomery Police Department ("the MPD"). We reverse.

Facts and Procedural History

On February 2, 2007, Caffey was stopped by an MPD officer for a traffic violation. A warrantless search of Caffey's vehicle revealed approximately $8,800 in cash and a controlled substance. Caffey was arrested and charged with trafficking in drugs, a violation of § 13A-12-213, Ala. Code 1975. On February 7, 2007, Montgomery police officers obtained a warrant from the Montgomery Municipal Court to search Caffey's residence, upon execution of the warrant, MPD officers seized $17,875 in cash from the residence and $3,500 from a vehicle in the driveway.

On August 6, 2008, Vaughn was arrested by an MPD officer for distribution of a controlled substance, a violation of § 13A-12-211, Ala. Code 1975. During a search incident to Vaughn's arrest, the officer seized $6,207 in cash from Vaughn.

On August 17, 2010, Vaughn filed an action against the City in the Montgomery Circuit Court, alleging that, after the seizure of his cash, the MPD had failed to notify state officials to institute prompt proceedings to forfeit the property to the State as required by § 20-2-93(c), Ala. Code1975; that, instead, the MPD had transferred the property to the Drug Enforcement Administration ("the DEA") to commence federal forfeiture proceedings; and that, at the conclusion of the federal forfeiture proceedings, the DEA had returned 80 to 90 percent of the forfeited cash to the MPD and had kept the remainder as an administrative fee. Vaughn further alleged that, because a municipality has no standing to institute a forfeiture proceeding under state law, the MPD had conspired with the DEA to have the property forfeited to the United States, thereby bypassing state law and "fil[ling its] own coffers with the spoils." Based on those allegations, Vaughn brought claims individually and on behalf of a putative class of "all individuals whose property was seized by any MPD officer acting in his capacity as such and subsequently turned over to the DEA, U.S. Customs, or Federal Bureau of Investigation for forfeiture purposes."

Vaughn amended the complaint several times. On December 2, 2010, Vaughn added Caffey's claim against the City, based on allegations similar to those that Vaughn had previously made — i.e., that the MPD had seized Caffey's cash and turned it over to the DEA to commence federal forfeiture proceedingsand that, at the conclusion of the federal forfeiture proceedings, the DEA had returned the majority of the cash to the MPD and had kept the remainder as an administrative fee. Vaughn also added the claims of Ronald Kidd and Teodosio Arroyo Martinez against defendants F.A. "Bubba" Bingham, the director of the Alabama Department of Public Safety ("the DPS"), and Alabama State Trooper Darrell Seymour (Bingham and Seymour are hereinafter referred to collectively as "the DPS defendants").¹

The City moved to dismiss the claims of Vaughn and Caffey, insisting that the claimants had failed to state a claim upon which relief could be granted and arguing, amongother things, that this court's decision in Green v. City of Montgomery, 55 So. 3d 256 (Ala. Civ. App. 2009) (holding that state court had properly exercised in rem jurisdiction in an action seeking return of seized currency because the claimants had filed that action before the currency had been transferred to the DEA and the DEA had adopted the seizure), barred the relief sought by the claimants because their state-court action seeking return of the cash had been filed after the claimants' cash had been transferred to the DEA and federal forfeiture proceedings had been commenced. The circuit court denied the City's motion to dismiss, and the City answered the complaint, asserting as to the claims of Vaughn and Caffey, among other defenses, collateral estoppel.

The parties filed cross-motions for a summary judgment. In a brief supporting its motion as to Vaughn's claim, the City asserted that Vaughn had "already argued to no avail before the United States District Court for the Middle District of Alabama that the state court and not the federal court had exclusive jurisdiction over the currency seized from him," citing United States v. Six Thousand Two Hundred Seven Dollars ($6,207.00) in United States Currency, (Wo.2:08-CV-999-MEF, July 20, 2009) (M.D. Ala. 2009) (not reported in F. Supp. 2d). On April 24, 2012, the circuit court granted Vaughn and Caffey's summary-judgment motion and denied the City's motion. The judgment states: "Neither party has offered any facts which may be considered by this court as to any transfer of either Caffey's or Vaughn's property to any federal agency for further proceedings. There is no record before this court of the institution of federal forfeiture proceedings against either Caffey's or Vaughn's property." The court concluded that the Montgomery Circuit Court had exclusive in rem jurisdiction over Vaughn's and Caffey's property by virtue of its having been seized pursuant to § 20-2-93 (b), Ala. Code 1975.

Standard of Review

"An order granting or denying a summary judgment is reviewed de novo, applying the same standard as the trial court applied. American Gen. Life & Accident Ins. Co. v. Underwood, 886 So. 2d 807, 811 (Ala. 2004). In addition, '[t]his court reviews de novo a trial court's interpretation of a statute, because only a question of law is presented.' Scott Bridge Co. v. Wright, 883 So. 2d 1221, 1223 (Ala. 2003). Where, as here, the facts of a case are essentially undisputed, this Court must determine whether the trial court misapplied the law to the undisputed facts, applying a de novo standard of review. Carter v. City of Haleyville, 669 So. 2d 812, 815 (Ala. 1995)."

Continental Nat'l Indem. Co. v. Fields, 926 So. 2d 1033, 1034-35 (Ala. 2005).

Discussion

On appeal, the City argues that the circuit court erred in ordering it to return the property seized from Vaughn and Caffey because, it asserts, "the DEA had already gained control over the currency and completed administrative forfeiture proceedings before this action was filed by Vaughn and Caffey in [Montgomery] Circuit Court on August 17, 2010, and December 2, 2010, respectively."

Vaughn and Caffey take issue with that assertion, contending that the circuit court was correct in stating that it had been presented with no facts indicating that property seized from Vaughn and Caffey had been transferred to a federal agency for federal forfeiture proceedings before Vaughn and Caffey had filed their action in state court seeking return of the property. Vaughn and Caffey insist that the City's assertion is based only upon the allegations of their complaint and the City's response to the complaint, but, they maintain, "[a] negations are not facts."

Caffey's Claim

Facts alleged in a complaint and not denied in the answer are taken as true. See Woods v. Wood, 219 Ala. 523, 524, 122 So. 835, 836 (1929). Moreover, the City did more than simply fail to refute the factual allegations of the complaint; it affirmatively acknowledged the truth of those allegations. There was, in the present case, simply no dispute as to the fact that, before Caffey brought a state-court action for return of the cash seized from him, the cash had been transferred to the DEA for federal forfeiture proceedings and that, at the conclusion of those proceedings, the DEA had returned the majority of the cash to the MPD and had kept the remainder as an administrative fee.

The "equitable sharing" of forfeited funds between federal and state or local entities to which Caffey referred in his pleadings does not occur until after a federal court has entered a final judgment forfeiting the property to the United States. See De Santis v. State, 384 Md. 656, 657, 866 A.2d 143, 144 (2005). The applicable statute, 21 U.S.C. § 881(e)(1)(A), provides:

"(e) Disposition of forfeited property

"(1) Whenever property is civilly or criminally forfeited under this subchapter the Attorney General may--

"(A) ... transfer the property to any directly in the seizure or forfeiture of the property."

In the present case, the parties' disagreement was not as to the existence of the underlying facts, but as to the legal import of those facts, namely: whether the MPD's transferring the property seized from Caffey to a federal agency for federal forfeiture proceedings barred Caffey's later state-court action seeking return of the property. The Supreme Court of Alabama definitively answered that question in Ervin v. City of Birmingham, [Ms. 1101555, March 22, 2013] ___ So. 3d ___ (Ala. 2013).

In Ervin, our supreme court held that a state-court action seeking the return of property that had previously been seized by municipal police officers, transferred to the DEA, and forfeited to the United States "amounts to a collateral attack in state court on a final judgment entered by a federal court. ... As the successor in title to the forfeitedproperty, the [municipality] is entitled to the res judicata benefit of that final judgment." ___ So. 3d at ___.

Caffey contends that the forfeiture of his property to the United States was not authorized because (a) the Montgomery Circuit Court...