Com. v. One 1985 Dark Blue Mercedes Benz Car

• Citation: 571 A.2d 482,391 Pa.Super. 507
• Parties: COMMONWEALTH of Pennsylvania v. ONE 1985 DARK BLUE MERCEDES BENZ CAR seized from Richard E. Isaac. Appeal of Ronald E. ISAAC.
• Decision Date: 16 March 1990
• Court: Superior Court of Pennsylvania

Page 482

571 A.2d 482

391 Pa.Super. 507

COMMONWEALTH of Pennsylvania v. ONE 1985 DARK BLUE MERCEDES BENZ CAR seized from Richard E. Isaac.

Appeal of Ronald E. ISAAC.

Superior Court of Pennsylvania.

Argued August 15, 1989.

Decided Jan. 5, 1990.

Reargument Denied March 16, 1990.

William T. Lawson, Philadelphia, for appellant.

David S. Thalheimer, Asst. Dist. Atty., Philadelphia, for Com., appellee.

Before WIEAND, BECK and MONTGOMERY, JJ.

WIEAND, Judge:

This appeal has been taken from an order which denied a petition by the registered owner of a Mercedes Benz vehicle for a return thereof and directed forfeiture of the vehicle to the Commonwealth.

On May 2, 1988, police seized from the streets of Philadelphia a dark blue, 1985 Mercedes Benz automobile. On June 17, 1988, a petition for return of the vehicle was filed by Ronald Isaac, the registered owner thereof. The Commonwealth resisted the petition, contending that the real owner was Richard Isaac who had been engaged in the illegal distribution of drugs.

At a hearing thereon, Ronald Isaac showed that he was the registered owner of the Mercedes vehicle. This fact is not disputed. His ownership interest, therefore, was sufficient to confer standing upon Ronald Isaac to maintain an action for the vehicle's return. In order to participate in a forfeiture contest, a contestant need not prove the merit of his underlying claim; he must merely be able to show "a facially colorable interest in the proceeding." United States v. One 18th Century Columbian Monstrance, 797 F.2d 1370, 1375 (5th Cir.1986), cert. denied, 481 U.S. 1014, 107 S.Ct. 1889, 95 L.Ed.2d 496 (1987). Indeed, "[a] claimant need not own the property in order to have standing to contest its forfeiture; a lesser property interest, such as a possessory interest, is sufficient standing." United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1544 (11th Cir.1987). The fact that Ronald Isaac was the registered owner of the Mercedes Benz automobile was a sufficient interest to permit his participation in the instant forfeiture case. The Pennsylvania statute, at 35 P.S. § 780-129(d), expressly provides that "[u]pon the filing of a claim for the property setting forth a right of possession, the case shall be deemed at issue...." (emphasis added).

Ronald Isaac testified further at the hearing regarding the manner in which he had purchased the vehicle. During his cross-examination, however, the lawyer for the Commonwealth was able to cast doubt upon Ronald's contention that he was the real owner of the vehicle. For example, the Commonwealth was able to establish that the vehicle had been used by Ronald's brother, Richard, and that Ronald was unfamiliar with various features of the vehicle, such as the sunroof, the windshield wiper, and the cost of a car telephone. The Commonwealth also showed that the license plate displayed the words, "Rick's 190."

The Commonwealth, on the other hand, failed to produce any evidence that illegal drugs had been found in the Mercedes vehicle or that it had ever had any connection whatsoever with illegal drug transactions. The Commonwealth showed only that two years earlier, in 1986, Richard Isaac had been arrested on three occasions for drug dealing and that, on those occasions, illegal drugs had been found in the white Cadillac which he then had been driving.

From this evidence, the trial court found that Ronald Isaac was a "sham owner" and that Richard Isaac was the real owner of the Mercedes vehicle. The court concluded, therefore, that Ronald Isaac lacked "standing" to assert a right to the vehicle. However, the court not only refused to return the vehicle to Ronald Isaac, but it also ordered the vehicle forfeited to the Commonwealth. It did so without any evidence that the vehicle had ever been used or possessed for an unlawful purpose by either Ronald or Richard Isaac. This was error.

At the time when the Mercedes vehicle was seized by the police, forfeiture proceedings were governed by The Controlled Substance, Drug, Device and Cosmetic Act of April 14, 1972, P.L. 233, No. 64, § 1, as amended, 35 P.S. §§ 780-128 and 780-129. With respect to the burden of proof, the statute provided at 35 P.S. § 780-129(e) as follows:

(e) At the time of the hearing, if the Commonwealth produces evidence that the property in question was unlawfully used or possessed, the burden shall be upon the claimant to show:

(1) That the claimant is the owner of the property or the holder of a chattel mortgage or contract of conditional sale thereon;

(2) That the claimant lawfully acquired the property;

(3) That it was not unlawfully used or possessed by him;

(4) In the event that it shall appear that the property was unlawfully used or possessed by a person other than the claimant, then the claimant shall show that the unlawful use or possession was without his knowledge or consent. (Emphasis added).

This law remained in effect when the instant action was commenced by petition. As such, it is applicable to our review. See: Duquesne Light Co. v. U.S. Industrial Fabricators, Inc., 334 Pa.Super. 444, 447 n. 2, 483 A.2d 534, 536 n. 2 (1984); Trinity Area School District v. Dickson, 223 Pa.Super. 546, 551, 302 A.2d 481, 484 (1973). ¹

Under this statute, "the Commonwealth had the initial burden of producing evidence that the property sought to be forfeited had been unlawfully used or possessed, i.e., that it was contraband." Commonwealth v. One 1985 Cadillac Seville, 371 Pa.Super. 390, 395, 538 A.2d 71, 74 (1988). See: Estate of Peetros by Peetros v. County Detectives and District Attorney's Office, 341 Pa.Super. 558, 492 A.2d 6 (1985); Commonwealth v. 1978 Toyota, 321 Pa.Super. 549, 468 A.2d 1125 (1983). See also: Sugalski v. Cochran, 365 Pa.Super. 370, 377, 529 A.2d 1104, 1107 (1987). It is only after the Commonwealth has sustained its initial burden of proof that the burden shifts to the claimant seeking a return of the property. Commonwealth v. One 1985 Cadillac Seville, supra at 395-396, 538 A.2d at 74. ²

Property subject to forfeiture includes items which are illegal per se and which have been denoted contraband. Also subject to forfeiture is property which has been derived from or used in furtherance of illegal activity, such as money derived from the illegal sale of drugs. This is known as derivative contraband. See: Commonwealth v. Fassnacht, 246 Pa.Super. 42, 46, 369 A.2d 800, 802 (1977). In Commonwealth v. Landy, 240 Pa.Super. 458, 465, 362 A.2d 999, 1002 (1976) the Court stated, "Money proceeds directly derived from and directly traceable to the sale of a controlled substance are derivative contraband subject to forfeiture." By logical extension, illegal proceeds traceable to specific property would also be derivative contraband. See: U.S. v. Premises Known as 8584 Old Brownsville Rd., Shelby Co., Tenn., 736 F.2d 1129 (6th Cir.1984); U.S. v. One 1980 Chevrolet Blazer Auto, 572 F.Supp. 994 (E.D.N.Y.1983); U.S. v. Certain Real Property Situated at Rt 3, Box 247 E., Mountain Home, Ark., 568 F.Supp. 434 (W.D.Ark.1983).

Property is not derivative contraband merely because it is owned by or occasionally used by a drug offender for legitimate purposes. Objects do not acquire "guilt by association" merely because they are owned by a person who has been engaged in criminal conduct. Petition of Maglisco, 341 Pa.Super. 525, 533, 491 A.2d 1381, 1385 (1985). The Commonwealth cannot deprive a person of his or her property and thereby impose a penalty upon him by seizing his property without showing that the property was derived from or was used to further criminal activity. The requirement that a sufficient nexus exist between the property and the prohibited criminal activity serves to mitigate the potentially harsh results of permitting the Commonwealth to penalize a citizen by a civil action against his property rather than a criminal action against his person. Comment, Due Process Implications of Shifting The Burden of Proof in Forfeiture Proceeding Arising Out of Illegal Drug Transactions, 1984 Duke L.J. 822, 831.

A Mercedes Benz vehicle is not illegal per se. Although it can become derivative contraband if it is connected with illegal drug activity, in this case the Commonwealth failed to offer even a scintilla of evidence that the Mercedes automobile had been used in the conduct of or to further illegal drug transactions. Similarly, it failed to show that proceeds of illegal drug transactions had been used to purchase the Mercedes vehicle. There was, in short, no proof of any nexus between criminal drug activity and the vehicle seized by the police. At best, the Commonwealth showed that the vehicle had been used as a means of transportation by Richard Isaac, who was suspected of being involved in the illegal drug trade.

In the absence of evidence establishing a nexus between criminal activity and the Mercedes vehicle, the trial court could not properly order the vehicle forfeited to the Commonwealth. Even if Ronald Isaac were a "sham owner," the vehicle could not be forfeited unless the Commonwealth showed that it had been used for an unlawful purpose. In the absence of such evidence, the trial court was required to return the vehicle to the registered owner. It was not for the trial court to determine further whether Ronald Isaac or Richard Isaac was the real owner of the vehicle. Irrespective of who the real owner was, without evidence that the vehicle was subject to forfeiture, the vehicle could not be awarded to the Commonwealth.

We do not hold, as the dissent accuses us of doing, that anyone can challenge the forfeiture of property by the Commonwealth. However, it is clear that a registered owner has a sufficient interest in property to participate in a proceeding to forfeit the same. Standing to participate in the proceeding is identified in subsection (d) of the statute (35 P.S. § 780-129(d)) and must be distinguished from the proof required of a party before ...