In re $15,379 In U.S. Currency, 2 CA–CV 2015–0166

CourtCourt of Appeals of Arizona
Citation388 P.3d 856,754 Ariz. Adv. Rep. 28,241 Ariz. 462
Docket NumberNo. 2 CA–CV 2015–0166,2 CA–CV 2015–0166
Parties IN RE $15,379 IN U.S. CURRENCY
Decision Date22 December 2016

Kenneth S. Countryman, P.C., Tempe, By Kenneth S. Countryman, Counsel for Appellant Corrina Macias

M. Lando Voyles, Pinal County Attorney, By Alex Mahon, Deputy County Attorney, Florence, Counsel for Appellee the State of Arizona

Chief Judge Eckerstrom authored the opinion of the Court, in which Judge Staring and Judge Fink1 concurred.


ECKERSTROM, Chief Judge:

¶ 1 In this civil forfeiture proceeding, appellant Corrina Macias challenges the trial court's refusal to award attorney fees, costs, and prejudgment interest when the proceeding terminated in her favor. She further contends the court erred in not ordering the state either to immediately return the currency seized from her or to issue payment. For the reasons that follow, we reverse the court's order denying the immediate return of the property or an equivalent payment, the order denying costs, and the order denying sanctions under Rule 11, Ariz. R. Civ. P. We otherwise affirm the judgment.

Factual and Procedural Background

¶ 2 On May 28, 2013, a Pinal County Sheriff's deputy seized over $15,000 in cash from a vehicle driven by Macias's husband, who was also transporting a sizeable load of marijuana. Macias filed a claim in the trial court seeking the return of the money. Due to defects in the resulting forfeiture action, the trial court determined it lacked jurisdiction over the proceeding and ordered the currency returned to Macias, with one qualification. The court specifically ordered that the property be returned "to the extent that this $15,379.00 is not being held as evidence in any criminal matter." The court subsequently denied Macias's request for attorney fees, costs, and expenses. It further denied her request for immediate release of the property or an equivalent payment, again citing the pending criminal matter against her husband and the prosecutor's assertion that the currency was being held as evidence.

¶ 3 Although the trial court's order initially lacked certification pursuant to Rule 54(c), Ariz. R. Civ. P., we stayed the appeal sua sponte and revested jurisdiction in the trial court to obtain such certification. See Ariz. R. Civ. App. P. 3(b) ; Madrid v. Avalon Care Ctr.–Chandler, L.L.C. , 236 Ariz. 221, ¶ 5, 338 P.3d 328, 330–31 (App. 2014). With a formal judgment now included in the appellate record, we have jurisdiction pursuant to A.R.S. §§ 12–120.21(A)(1) and 12–2101(A)(1).

Return of Currency or Payment

¶ 4 On appeal, Macias contends the state's action is "unlawful" and violates due process "because the state has no legitimate basis for the refusal to issue payment" or return the property. Regardless of whether this argument was preserved below,2 we address its merits because doing so is necessary to avoid an erroneous decision on appeal. See Nold v. Nold , 232 Ariz. 270, ¶ 10, 304 P.3d 1093, 1096 (App. 2013) (noting waiver a discretionary doctrine). "[W]hen interpretation and application of statutes are involved, we are not necessarily ‘limited to the arguments made by the parties if that would cause us to reach an incorrect result.’ " Odom v. Farmers Ins. Co. of Ariz. , 216 Ariz. 530, ¶ 18, 169 P.3d 120, 125 (App. 2007), quoting Yarbrough v. Montoya–Paez , 214 Ariz. 1, n.6, 147 P.3d 755, 762 n.6 (App. 2006).

¶ 5 Our forfeiture statutes generally provide that property not subject to forfeiture must be returned.3 See A.R.S. §§ 13–4310(B), 13–4314(E). However, those statutes also implicitly recognize, as does our case law, that the state may retain seized property as evidence for criminal prosecutions. See A.R.S. § 13–4306(G)(2) ; State v. Fifteen Slot Machines , 45 Ariz. 118, 119, 40 P.2d 748, 749 (1935) ; cf. A.R.S. §§ 13–3941(C) (stolen or embezzled property), 13–4429(A), (B) (crime victim's property, generally). The power to seize evidence has long existed under the common law, Smith v. Jerome , 47 Misc. 22, 93 N.Y.S. 202, 202–03 (N.Y. Sup. Ct. 1905), but that power is limited by the "fundamental principle that our Constitution protects ... against unreasonable ... seizures." Search Warrants C–419847 & C–419848 v. State , 136 Ariz. 175, 176, 665 P.2d 57, 58 (1983) (emphasis added). Accordingly, even when a lawful arrest and seizure have occurred, the retention of property as evidence for a criminal prosecution must be reasonable under the Fourth and Fourteenth Amendments to the United States Constitution. Krimstock v. Kelly , 464 F.3d 246, 250–51 (2d Cir. 2006).

¶ 6 Whether items are seized for civil forfeiture or criminal prosecution, a deprivation of property occurs whenever the state retains someone's belongings, and the owner who is affected may be an innocent party not involved in a criminal case. See id. at 254 ; Greehling v. State , 135 Ariz. 498, 500, 662 P.2d 1005, 1007 (1982). People therefore may seek the return of their seized property under the Fourteenth Amendment's Due Process Clause or article II, § 4 of the Arizona Constitution.4 See In re Approximately $50,000 , 196 Ariz. 626, ¶¶ 8, 11, 2 P.3d 1271, 1274, 1275–76 (App. 2000).

¶ 7 Although we have found no Arizona authority addressing the particular issue in this case, numerous federal appellate courts recognize that "[a] prosecutor's right to retain material evidence necessary for trial does not mean that prosecutors can decide unilaterally that [the property] is material and its retention necessary." Krimstock , 464 F.3d at 255 ; accord Black Hills Inst. of Geological Research v. U.S. Dep't of Justice , 967 F.2d 1237, 1240–41 (8th Cir. 1992) (while government "may take whatever steps necessary to establish proof of the evidence," government "may not in all cases insist on holding the [property] itself as evidence to be presented to the jury"); In re Smith , 888 F.2d 167, 168 (D.C. Cir. 1989) (per curiam) ("bald assertion" that money has evidentiary value is insufficient to justify withholding property). The procedural due process framework set forth in Mathews v. Eldridge , 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), applies to motions to return seized property. See Krimstock , 464 F.3d at 253–54. This means, at minimum, that a trial court must subject the state's asserted need for property "to scrutiny for reasonableness," "weighing the competing interests ... in light of less drastic means." Id. at 251. "If the [state]'s sole interest in retaining ... currency is for its use as evidence, the court should consider whether this purpose would be equally well served by the alternatives to holding the money itself...." United States v. 608 Taylor Ave. , 584 F.2d 1297, 1304 (3d Cir. 1978).

¶ 8 Here, the trial court did not reach the question of reasonableness presented by Macias's motions. She sought either the immediate return of her currency or an equal payment because "[m]oney is fungible." Ariz. Dep't of Revenue v. M. Greenberg Constr. , 182 Ariz. 397, 401, 897 P.2d 699, 703 (App. 1995), abrogated on other grounds by Valencia Energy Co. v. Ariz. Dep't of Revenue , 191 Ariz. 565, ¶¶ 10 & n.3, 34, 959 P.2d 1256, 1261 & n.3, 1267 (1998). She also argued below, and the state did not dispute, that actual cash is typically not presented as evidence in criminal cases. Such evidence usually takes the form of photographs and photocopies, which were in fact obtained by the state here in the related criminal case.

¶ 9 The record does not disclose why the prosecutor insisted upon retaining the actual currency. The state failed to file a written response to Macias's request for the immediate release of the money or repayment, and the state articulated no specific evidentiary need for this property at the subsequent hearing. Thus, in taking under advisement Macias's request for immediate relief, the trial court observed, "I don't think that you are making an unreasonable request, I just want to make sure under the law ... I'm not messing up anything in the criminal matter." To the extent the court believed that it was not empowered to order the relief requested, or did not consider the reasonableness of retaining the currency in light of the available alternatives, this was an error of law representing an abuse of the court's discretion. See State v. Mangum , 214 Ariz. 165, ¶ 6, 150 P.3d 252, 254 (App. 2007). Furthermore, given the state's failure to allege any particular need to retain the currency as evidence, the record is devoid of any ground to support the order denying relief. See Little v. Little , 193 Ariz. 518, ¶ 5, 975 P.2d 108, 110 (1999) ("An abuse of discretion exists when the record, viewed in the light most favorable to upholding the trial court's decision, is ‘devoid of competent evidence to support’ the decision."), quoting Fought v. Fought , 94 Ariz. 187, 188, 382 P.2d 667, 668 (1963).

¶ 10 On appeal, the state offers several arguments to support the trial court's ruling, essentially echoing the court's observation that "there is a division" between the benches of the superior court. The state contends, specifically, that civil forfeiture and criminal prosecution are "parallel" and "entirely separate" proceedings, with a "civil trial court" lacking "jurisdiction" or "authority" to return property held as evidence in a pending criminal case. The state further suggests that the court could grant Macias no relief beyond declaring her interest in the property. We are not persuaded by these assertions, many of which the state offers in conclusory fashion.

¶ 11 Proceedings to return seized property are often civil in nature, yet that characterization does not limit a trial court's power to grant relief. See, e.g. , Greehling , 135 Ariz. at 500, 662 P.2d at 1007. Indeed, when a court is authorized to order the return of property, it is irrelevant that the disposition may affect a related criminal case over which the court does not have jurisdiction. See State ex rel. Milstead...

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