People v. 25651 Minoa Dr.

• Decision Date: 13 January 1992
• Docket Number: No. G010170,G010170
• Citation: 2 Cal.App.4th 787,3 Cal.Rptr.2d 577
• Court: California Court of Appeals
• Parties: The PEOPLE, Plaintiff and Respondent, v. REAL PROPERTY LOCATED AT 25651 MINOA DR., MISSION VIEJO, CALIFORNIA, Defendant; Steven M. Keen, Defendant and Appellant.

Page 577

3 Cal.Rptr.2d 577

2 Cal.App.4th 787

The PEOPLE, Plaintiff and Respondent, v. REAL PROPERTY LOCATED AT 25651 MINOA DR., MISSION VIEJO, CALIFORNIA, Defendant Steven M. Keen, Defendant and Appellant.

No. G010170.

Court of Appeal, Fourth District, Division 3, California.

Jan. 13, 1992.

As Modified Feb. 5, 1992.

Gregory W. Jones, Santa Ana, for defendant and appellant.

Daniel E. Lungren, Atty. Gen., George Williamson, Chief Asst. Atty. Gen., John A. Gordnier, Sr. Asst. Atty. Gen., and Gary W. Schons, Deputy Atty. Gen., for plaintiff and respondent.

OPINION

SILLS, Presiding Justice.

Steven Keen appeals after the trial court ordered the profits from the sale of his residence forfeited pursuant to Health & Safety Code section 11470, subdivision (g). ¹ The trial court found that the profits were subject to forfeiture because Keen's residence was "related to" a violation of section 11366, which prohibits the maintenance of any place for the sale of controlled substances. Many of the issues raised by Keen touch upon the fundamental issue of whether this forfeiture action is essentially "criminal" or "civil" in nature. One of the forfeiture statutes specifically provides that "[t]he Code of Civil Procedure shall apply to proceedings under this chapter...." (§ 11488.4, subd. (i).) For this and other reasons, we ultimatelyconclude this indeed is a civil action, and our holding aids the People in this case. Like the thorns that accompany the rose, however, the application of civil procedure rules to forfeiture proceedings carries with it the spectre of discovery battles, depositions, and demurrers. Although we believe the judgment in this case should be affirmed, prosecutor's offices should be aware that the forfeiture statutes open up a veritable Pandora's box of discovery, in which their investigators, their confidential informants, and their very files may be fair game.

FACTS

In the first weeks of January 1989 a confidential informant purchased cocaine from Keen at the Keen residence. ² Based on this information, the police obtained a search warrant for Keen's house. They found a half ounce of cocaine in Keen's pocket and approximately 27 ounces, in individualized packets, in three different locations throughout the house. The officers also found $3,800 secreted behind some paneling. As will be explained in more detail infra, Keen told the officers that he conducted all his narcotics business at his desk in the spare bedroom which he used as an office. He said he had been selling cocaine for about two years. During this conversation, Gayle Sieting arrived at Keen's house and Keen told the officers the purpose of Sieting's visit was to purchase cocaine.

On July 24, 1989, the prosecution filed a "Petition for Forfeiture" of the residence, of which Keen was the sole owner. The petition alleged that Keen's real property was subject to forfeiture, but mentioned nothing as to whether Keen's equity interest in the property would also be forfeitable should the property be sold. ³ Keen's property was for sale at the time, however, and the People obviously knew this; concurrently with the filing of the petition, they also filed a lis pendens on the property. The next day, Keen pleaded guilty to a violation of section 11351, possession of cocaine for sale, in the Superior Court of Orange County. (The file from this criminal action is not before us, so we do not know whether Keen was ever charged with a violation of section 11366, which prohibits maintaining a place for trafficking controlled substances.) A few days later, Keen filed a form opposition to the forfeiture petition.

About two months later, on September 19, 1989, the trial court issued an "order for seizure of proceeds subject to forfeiture...." In that order the trial judge (Judge Carter) stated: "I am satisifed that there is probable cause to believe that said proceeds/property is subject to seizure and forfeiture...." (Italics added.) The trial court's order authorized any peace officer to seize the proceeds of any sale of the property, less commission and other items, from Escrow Enterprises, Inc., referencing escrow number 2923. The order also directed Escrow Enterprises to assist any peace officer by turning over the proceeds. At no time did Keen object to this order.

The escrow for the sale of the house closed on October 13, 1989, and a modification of the seizure order was filed October 23, 1989. The escrow company presented a check to the Orange County Sheriff's Department for the profits from the sale of the Keen residence, on October 31, 1989, in accordance with the seizure order. ⁴ The prosecution recorded the release of the lis pendens on November 13, 1989, after receiving the check.

Trial on the petition for forfeiture commenced on September 14, 1990, with both parties waiving jury. The prosecution's case consisted solely of a declaration by the investigating officer, which was accepted into evidence by stipulation. ⁵ According to perhaps the most important part of the declaration, Keen had told the officer when he was arrested that he conducted his cocaine business from a desk at his house for the past two years. As the officer stated: "Keen told me that the desk is where he conducted business and once he weighed out the amount of cocaine to be sold, he would make a line from that for the customer to do [i.e., to ingest] while he watched." The officer also stated that, at the time of Keen's arrest, a number of items of "drug paraphernalia" were found on top of or inside the desk, including an Ohaus scale, a mirror, plastic baggies and two "cutting agents" used to dilute the purity of cocaine.

The only "live" witness at trial was Steven Herrera, called to testify by Keen. Herrera works part time as a special deputy marshall for the federal government, and part time as a dental laboratory technician. Herrera rented a room in the Keen house for about five years for use as a dental laboratory. Herrera testified he never saw drugs in the house and had no idea that Keen was selling cocaine. In addition to Herrera's testimony, Keen submitted a declaration in which he summarized his interest in the property, that he had purchased the property as a family residence, and that he had earned approximately $2,000 a month from legitimate businesses in the year preceding his arrest. A further stipulation established the monthly mortgage payments on the residence were $1,200.

After a full discussion, the court ordered all proceeds from the sale of the residence forfeited, subject to a 30-day stay. The court stated it was "impressed" by the argument of Keen's counsel that the People were required to prove beyond a reasonable doubt that Keen had maintained his residence as a place for selling controlled substances (the underlying violation under section 11366), and stated, "I'm satisfied that the evidence rises to that level in this case, that one of the purposes of maintaining the residence was for the purpose of violating 11366. [p] I'm satisfied with that beyond a reasonable doubt." This appeal followed. ⁶

DISCUSSION

I.

The superior court properly obtained jurisdiction over the real property and the proceeds from its sale.

The petition for forfeiture in this case alleged that Keen's property was subject to forfeiture, but not Keen's equity interest in the property in the event of its sale. The People never amended their petition to include Keen's equity interest, although they knew all along that Keen's property was on the market. However, two months after filing the petition, the People obtained an order from the trial court that clearly contemplated the seizure of the proceeds from the sale of the property; indeed, it authorized any peace officer to seize those proceeds. It is not clear from the record exactly how this order was obtained, but it is clear that Keen never objected to it, either at the time or a month later, when the order was modified to reflect the specifics of the sale. Keen now asserts that, by virtue of the petition for forfeiture, the superior court only had jurisdiction over the real property itself, not the proceeds. He argues that the superior court lost jurisdiction over the real property when the People released their lis pendens following the sale and, since the court never had jurisdiction over the proceeds, there is nothing left to forfeit.

Keen's argument is novel, but we reject it for a variety of legal and practical reasons. First and foremost is the language of section 11470, subdivision (h), which provides that if evidence at a trial proves the realty is forfeitable, "[a]ll right, title, and interest in any property ... vest[s] in the state upon commission of the act giving rise to forfeiture under this chapter." (Italics added.) The act giving rise to the forfeiture in Keen's case occurred January 13, 1989, the date of Keen's arrest. Thus, we believe the court's jurisdiction over the property and its proceeds vested long before Keen placed the house on the market or sold it to the third party.

Second, we believe the language of subdivision (g) of section 11470, which authorizes the forfeiture of real property, is consistent with subdivision (h) and contemplates the defendant's monetary interest in the property. After providing that real property related to a violation of certain sections of the Health and Safety Code is forfeitable, subdivision (g) states: "However, an interest not to exceed one hundred thousand dollars ($100,000) in real property which is used as a family residence and which is owned by two or more persons shall not be subject to forfeiture." (Italics added.) ⁷

Third, acceptance of Keen's argument would create an impediment to selling forfeitable real property in the conventional real estate market, forcing authorities to hold the property until after the forfeiture trial and then selling it at a public auction or sale. We think this situation should be avoided wherever...