F & H Investments Inc. v. State

• Decision Date: 01 August 2001
• Docket Number: No. 10-00-181-CV,10-00-181-CV
• Citation: 55 S.W.3d 663
• Parties: (Tex.App.-Waco 2001) F & H INVESTMENTS INC., Appellant v. THE STATE OF TEXAS, Appellee
• Court: Texas Court of Appeals

Page 663

55 S.W.3d 663 (Tex.App.-Waco 2001)

F & H INVESTMENTS INC., Appellant v. THE STATE OF TEXAS, Appellee

No. 10-00-181-CV

Court of Appeals of Texas, Waco

August 1, 2001

From the County Court at Law No. 1 Johnson County, Texas Trial Court # C99-00281

[Copyrighted Material Omitted]

John Stephen Fenoglio, Anatole R. Barnstone, Austin, for appellant.

William F. Lewis, Jr., Johnson County Asst. County Atty., Austin, Bill Moore, Johnson County Asst., Stuart Madison, Johnson County Asst. Atty., Cleburne, for appellee.

Before Chief Justice Davis, Justice Vance, and Justice Gray

OPINION

BILL VANCE, Justice

This appeal is brought by F & H Investments Inc. ("F & H") from an Order of Forfeiture declaring F & H's property to be a gambling device, gambling paraphernalia, and gambling proceeds under article 18.18(b) of the Code of Criminal Procedure. Tex. Code Crim. Proc. Ann. art. 18.18(b) (Vernon Supp. 2001). F & H claims, among other things, that the trial court abused its discretion in not excluding evidence after the State failed to comply with certain discovery requests. We agree. The judgment of the trial court is reversed and remanded for further proceedings consistent with this opinion.

BACKGROUND

On February 3, 1999, pursuant to a search warrant and article 18.18(b) of the Code of Criminal Procedure, the State seized personal property, $2,206.20 in U.S. currency, and three membership cards from C'Mon 8's, a video game establishment located in Johnson County. F & H's "Lucky Shamrock Emergency Phone Card Dispenser" ("dispenser"), which is similar to an "eight liner in appearance," and its contents were among the items seized. No criminal prosecution has arisen from the seizure of F & H's dispenser.

On April 22, 1999, the State filed its original "Petition to Forfeit Property" in Cause No. C99-00058, which listed F & H's property, along with all the other property seized during the February 3rd raid, as items to be forfeited.

On June 30, 1999, F & H filed a "Notice of Appearance" in Cause No. C99-00058 and requested a hearing to "show cause" why its property or proceeds should not be returned. See Tex. Code Crim. Proc. Ann. art. 18.18(f).

On July 2, 1999, the State received the following discovery requests from F & H: 1) Request for Disclosure, 2) Request for Production, and 3) First Set of Interrogatories. The State has yet to answer, respond to, or file written objections to these requests.¹

On July 23, 1999, F & H filed a "Motion to Compel Answers to Discovery, Motion to Bifurcate and Reschedule the Trial on the Merits and for Imposition of Sanctions." According to F & H's motion:

[The State has informed F & H] that it is refusing to produce any discovery responses because [it] contends that civil discovery rules do not apply to a civil forfeiture hearing. Presumably, the [State] will timely file objections to the discovery requests on or before July 29, 1999, but as of this date, the [State] has not filed any responses and/or objections. Since the trial on the merits in this proceeding is set for August 10 and 11, 1999, and so as to notify the Court of this discovery dispute as quickly as possible so that [F & H]'s discovery rights are not compromised, [F & H] is filing this objection in order to secure a hearing on this discovery dispute before the trial on the merits.

F & H then requested the entry of an order bifurcating and rescheduling the forfeiture trial, so that it would have adequate time to obtain responses to the discovery sought and to prepare additional discovery requests if necessary.

On August 4, 1999, the trial court severed the State's claim relating to F & H's property from claims relating to other property seized at the same time and assigned it a new Cause No. C99-00281.² However, the trial court did not rule on F & H's motion to compel or impose sanctions.

On October 28, 1999, the State filed its "First Amended Petition to Forfeit Property." In the petition, the State alleged that F & H's dispenser and its contents were "gambling devices, gambling paraphernalia, gambling proceeds, and/or a criminal instrument and is therefore subject to forfeiture pursuant to Article 18.18(b) of the Texas Code of Criminal Procedure."

On November 12, 1999, the day of trial, F & H filed a "Motion for Discovery Sanctions" due to the State's continued refusal to answer the original discovery requests. In the motion, F & H requested the court to exclude all of the State's witnesses, alleging that "The State's wholehearted failure to respond to [F & H]'s proper discovery requests has seriously affected [F & H]'s ability to prepare a defense." In response, the State repeated its contention that it did "not have to respond" to the discovery requests. The State also raised additional defenses that it had already informally provided some of the items requested and that F & H's motion for sanctions was an "ambush tactic" and was "not timely." The trial court denied F & H's motion for sanctions, but offered a continuance which F & H refused because it had out-of-state witnesses present for the trial. Later, during the trial, F & H renewed its motion to exclude testimony and evidence but was again overruled by the trial court. The record does not show that the trial court ever heard evidence or made any findings to support or explain its denial of F & H's motion.

DISCUSSION

We must first determine whether the Rules of Civil Procedure apply to forfeiture proceedings under article 18.18(b) of the Code of Criminal Procedure. Tex. Code Crim. Proc. Ann. art. 18.18(b). If the civil rules of procedure apply, we must next determine whether the trial court abused its discretion in not excluding evidence after the State failed to comply with F & H's discovery requests.

Do the rules of civil procedure apply to forfeiture proceedings under article 18.18(b)?

Article 18.18 of the Code of Criminal Procedure provides two alternative procedures for the disposition of "criminal instruments" and certain forms of illegal property. Id. art. 18.18. The first, article 18.18(a), follows the conviction of a person for illegal use or possession of the property in question. Id. art. 18.18(a). No notice or hearing is afforded the property's owner. Id.; Martin v. State, 873 S.W.2d 457, 460 (Tex. App. Waco 1994, no pet.). Article 18.18(a) does not apply to this case. The State has conceded that no criminal prosecution is pending against F & H, nor is any intended.

By contrast, a proceeding under article 18.18(b) applies only if "there is no prosecution or conviction following seizure." Tex. Code Crim. Proc. Ann. art. 18.18(b). In such a case, due process requires notice, an opportunity for the owner to challenge the forfeiture, and an opportunity for an evidentiary hearing. Martin, 873 S.W.2d at 460.

In Fleming v. State, the State, acting on information that the appellant was involved in an aggravated robbery, obtained a search warrant for the appellant's residence. Fleming v. State, 704 S.W.2d 530, 531 (Tex. App. Houston [1st Dist.] 1986, writ ref'd n.r.e.). Law enforcement officers seized numerous weapons during the search. Id. The appellant was later prosecuted for aggravated robbery and found not guilty. Id. Several months after the verdict, the State filed a petition for forfeiture of the weapons seized. Id. Because there was a prosecution, the forfeiture proceeding was under article 18.18(a). Compare Tex. Code Crim. Proc. Ann. art. 18.18(a) (applies "[f]ollowing the final conviction of a person"), with art. 18.18(b) (applies "[i]f there is no prosecution or conviction following seizure").

In Fleming, the issue was whether the civil rule requiring the appellant to perfect his appeal by filing a cost bond applied to the forfeiture proceeding. Fleming, 704 S.W.2d at 531. The Houston First Court held that although the case involved "a civil forfeiture proceeding arising from an action originally criminal in nature . . . the forfeiture of personal property is one in rem and is a proceeding of a civil nature, therefore the rules of civil procedure apply." Id. (citing State v. Rumfolo, 545 S.W.2d 752, 754 (Tex. 1976) ("A statutory proceeding for the forfeiture of personal property is one in rem, not against the owner but against the property itself, and is a proceeding of a civil nature in that it does not involve the conviction of the owner or possessor of the property seized.").

In Underwood v. Bridewell, we held that the Rules of Civil Procedure apply to forfeiture proceedings under Chapter 59 of the Code of Criminal Procedure.³ Underwood v. Bridewell, 931 S.W.2d 645, 647 (Tex. App. Waco 1996, no writ) ("Because forfeiture proceedings are 'civil,' Underwood had the right to institute discovery proceedings after the petition was filed."). We also recognized that the civil rules themselves apply to "all actions of a civil nature." Id. (citing Tex. R. Civ. P. 2).

Following the Houston Court's lead and our own precedent, we hold that the Rules of Civil Procedure apply to forfeiture proceedings under article 18.18(b) of the Code of Criminal Procedure. Tex. Code Crim. Proc. Ann. art. 18.18(b).

Did the trial court abuse its discretion in not excluding evidence?

F&H filed the motion for sanctions on the day of trial. It was heard immediately prior to the commencement of the presentation of evidence. At the hearing neither party actually treated it as a motion for sanctions for discovery abuse under Rule of Civil Procedure 215. Tex. R. Civ. P. 215. Rather both parties argued the motion as if it were an objection to the introduction of evidence under Rule of Civil Procedure 193.6. Tex. R. Civ. P. 193.6. Further, F&H requested the automatic relief provided by 193.6, exclusion of all evidence not produced in response to a proper discovery request. The State even attempted to utilize the defenses available under 193.6, thus reinforcing our belief that both parties have treated this as a written objection to the admission of...