Keszthelyi v. U.S.

Decision Date16 May 2011
Docket NumberCase No. 1:05-cv-303
PartiesRUDOLF KESZTHELYI, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.
CourtU.S. District Court — Eastern District of Tennessee

Judge Edgar

MEMORANDUM AND ORDER

Plaintiff Rudolf Keszthelyi is the father of convicted criminal defendant and federal prisoner Rudolph Keszthelyi. Although these two persons share the same last name, they can be distinguished by the fact that the plaintiff/father spells his first name "Rudolf while the son spells his first name "Rudolph." Plaintiff brings this suit seeking to set aside the judicial forfeiture of certain property to the United States of America. The forfeited property consists of two items: (1) The Hartford Mutual Funds, Inc. account 7206782-2 in the name of Rudy Keszthelyi; and (2) American General Annuity contract TE203870 in the name of Rudy Keszthelyi. The Court will refer to the forfeited property as the Hartford account and the American General account.

On September 14, 2001, this Court entered an amended final order of judicial forfeiture of this property in a civil forfeiture in rem action styled United States of America v. The Hartford Mutual Funds, Inc., Account Number 7206782-2, in the Name of Rudy Keszthelyi and American General Annuity, Contract Number TE203870, in the Name of Rudy Keszthelyi, United States District Court for the Eastern District of Tennessee at Chattanooga, Case No. 1:01-cv-11. The forfeiture arose out of and is directly connected to the criminal conviction of the plaintiffs son inUnited States of America v. Rudolph Keszthelyi, also known as "Rudy," United States District Court for the Eastern District of Tennessee at Chattanooga, Case No. 1:99-cr-100.

In the present case, plaintiff Rudolf Keszthelyi claims that he has an ownership interest in the forfeited property and there was a lack of due process notice to him of the judicial forfeiture in Case No. 1:01-cv-11. The parties have made cross-motions for summary judgment under Fed. R. Civ. P. 56. After reviewing the record in the light most favorable to the plaintiff, the Court concludes that the summary judgment motion by the United States of America, as amended [Court Doc. Nos. 5, 7], will be granted. The plaintiff s complaint will be dismissed with prejudice and the plaintiffs summary judgment motion [Court Doc. No. 10] will be denied.

I. Plaintiff's Application to Proceed In Forma Pauperis

Before ruling on the summary judgment motions, the Court must first address the plaintiffs application to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a). [Court Doc. No. 1]. Magistrate Judge Carter entered an order directing the Clerk of the District Court to file the plaintiffs complaint without prepayment of the standard filing fee. [Court Doc. No. 2].

The Magistrate Judge's order provided that process will not issue until further order of the District Court. The order contains a footnote explaining that: (1) the application for leave to proceed in forma pauperis had not yet been reviewed by the District Judge; and (2) the Magistrate Judge's order has no bearing on whether the application will ultimately be granted or denied by the District Judge and whether a filing fee will be assessed.

Before the District Judge could rule on the application, defendant United States made its motion to dismiss the plaintiffs complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. In the alternative, the defendant moves for summaryjudgment pursuant to Fed. R. Civ. P. 56. [Court Doc. No. 5]. It is not clear from the record whether the plaintiff has effected service of process upon defendant United States in accordance with Fed. R. Civ. P. 4(i). The United States does not contend that there is a lack of service of process. In any event, the Court concludes that the plaintiff's application for leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a) [Court Doc. No. 1] is GRANTED. The Court will not require plaintiff Rudolf Keszthelyi to pay the standard civil action filing fee.

II. Standard of Review: Fed. R. Civ. P. 56

Summary judgment is proper if there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a mater of law. Fed. R. Civ. P. 56(c); Van Gorder v. Grand Trunk Western Railroad, Inc., 509 F.3d 265, 268 (6th Cir. 2007); Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1245 (6th Cir. 1995). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, 477 U.S. 242, 247-48 (1986) (emphasis in original); accord Lovelace v. BP Products North America, Inc., 252 Fed. Appx. 33, 39 (6th Cir. 2007); Talley, 61 F.3d at 1245. Material facts are only those facts that might affect the outcome of the action under the governing substantive law. The applicable substantive law will identify and determine which facts are material. Anderson, 477 at 248; Lovelace, 252 Fed. Appx. at 39; Talley, 61 F.3d at 1245.

As the moving party, defendant United States bears the initial burden of demonstrating there are no genuine issues of material fact in dispute. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986); Rodgers v. Banks, 344 F.3d 587, 595 (6th Cir. 2003); Talley, 61 F.3d at 1245. Once the defendant meets this initial burden, the burden shifts to the plaintiff to come forward with more thanmere allegations. To defeat the defendant's summary judgment motion, plaintiff Rudolf Keszthelyi is required to come forward with admissible evidence to support his claim and show that, at the very least, there is a genuine issue of material fact in dispute that precludes summary judgment. Celotex Corp., 477 U.S. at 322; Anderson, 477 U.S. at 249; Van Gorder, 509 F.3d at 268; Rodgers, 344 F.3d at 595. A mere scintilla of evidence is insufficient. There must be evidence on which a fact finder could reasonably find in the plaintiffs favor. Anderson, 477 U.S. at 252; Van Gorder, 509 F.3d at 268; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000); Hartsell v. Keys, 87 F.3d 795, 799 (6th Cir. 1996); Talley, 61 F.3d at 1245; Mitchell v. Toledo Hospital, 964 F.2d 577, 581-82 (6th Cir. 1992).

Summary judgment is appropriate against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party bears the burden of proof. Celotex Corp., 477 U.S. at 322-23. Because plaintiff Rudolf Keszthelyi bears the burden of proving that he has a viable claim to the forfeited property, he must present probative facts and admissible evidence showing that he is entitled to summary judgment or there is a genuine issue of material fact in dispute that precludes the Court from granting summary judgment in the defendant's favor. Id.;Van Gorder, 509 F.3d at 268; Collyer v. Darling, 98 F.3d 211, 220 (6th Cir. 1996); Hartsell, 87 F.3d at 799.

The Court's role at the summary judgment stage is to determine whether the record contains sufficient facts and admissible evidence from which a fact finder could reasonably find in favor of the plaintiff. Anderson, 477 U.S. at 248; Rodgers, 344 F.3d at 595; National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001); Talley, 61 F.3d at 1245. The Court views the facts in the record and all reasonable inferences that can be drawn from those facts in the light mostfavorable to the plaintiff. Matsushita Elec. Indus. Co. v. Zenith Radio Corp, 475 U.S. 574, 587 (1986); Van Gorder, 509 F.3d at 268; National Satellite Sports, 253 F.3d at 907. The Court cannot weigh the evidence, judge credibility of witnesses, or determine the truth of matters reasonably in dispute. Anderson, 477 U.S. at 249; Talley, 61 F.3d at 1245.

III. Facts and Procedural History

To put plaintiff Rudolf Keszthelyi's complaint into context, it is necessary to summarize the relevant facts and procedural history concerning the underlying criminal case of the plaintiff's son, Rudolph, and the civil judicial forfeiture of the property.

A. Criminal Conviction and Sentencing of Plaintiff's Son, Rudolph Keszthelyi

The facts of the underlying criminal case are set forth in the Sixth Circuit's opinion affirming the judgment of conviction and sentence on direct appeal. United States v. Rudolph Keszthelyi, 308 F.3d 557 (6th Cir. 2002). On March 28, 2000, the federal grand jury returned a third superseding indictment in United States v. Rudolph Keszthelyi, also known as "Rudy," Case No. 1:99-cr-100. The third superseding indictment contained 87 counts. Rudolph Keszthelyi was charged with conspiracy to distribute cocaine hydrochloride, engaging in monetary transactions in criminally derived property (money laundering), distributing cocaine hydrochloride, possessing firearms in connection with drug trafficking, possessing firearms as an alien illegally in the United States, and obstructing justice and attempting to persuade witnesses to withhold testimony. The third superseding indictment contained forfeiture allegations pursuant to 21 U.S.C. § 853 seeking forfeiture of Rudolph Keszthelyi's interest in seven named assets, including the Hartford account and American General account.

On July 5, 2000, pursuant to a written plea agreement, Rudolph Keszthelyi pled guilty toCount 2, money laundering in violation of 18 U.S.C. § 1957(a), and Count 42, distributing cocaine hydrochloride in violation of 21 U.S.C. § 841. As part of the plea agreement, he agreed to forfeit his Hartford and American General accounts to the United States. Rudolph Keszthelyi executed the plea agreement on July 5, 2000. In exchange for the guilty plea and Rudolph Keszthelyi's agreement to forfeit the property, the United States Attorney agreed to dismiss the remaining numerous criminal charges in the third superseding indictment. The United States...

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