Sanchez v. US

• Decision Date: 20 November 1991
• Docket Number: Civ. 91-1439 (JAF).
• Citation: 781 F. Supp. 835
• Parties: Jesus M. SANCHEZ a/k/a "El Cura", Carmelo Davila, Rene Feliciano, Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Puerto Rico

781 F. Supp. 835

Jesus M. SANCHEZ a/k/a "El Cura", Carmelo Davila, Rene Feliciano, Plaintiffs, v. UNITED STATES of America, Defendant.

Civ. 91-1439 (JAF).

United States District Court, D. Puerto Rico.

November 20, 1991.

Antonio Córdova González, San Juan, P.R., for plaintiffs.

Miguel A. Fernández, Asst. U.S. Atty., Daniel F. López-Romo, U.S. Atty., District of Puerto Rico, San Juan, P.R., for defendant.

OPINION AND ORDER

FUSTE, District Judge.

Plaintiffs Jesús M. Sánchez, Carmelo Dávila, and René Feliciano commenced this action seeking replevin of certain United States Currency which was the subject of a prior forfeiture proceeding pursuant to 21 U.S.C. § 881(a)(6). See United States of America v. Approximately Forty Three Million Dollars in U.S. Currency, etc., Civil No. 90-1652(GG) (D.P.R. Aug. 6, 1990). Plaintiffs' claim is that the currency, allegedly discovered by them in barrels buried on land owned by indicted narcotics trafficker Ramón Torres González,¹ represents hidden treasure and that, as finders, they are entitled to at least half of the proceeds pursuant to Article 285 of the Civil Code of Puerto Rico, 31 L.P.R.A. § 1116.²

Before the court is defendant United States of America's motion to dismiss pursuant to Fed.R.Civ.P. 12(b). In the alternative, defendant has moved for summary judgment pursuant to Fed.R.Civ.P. 56. Because evidence outside the pleadings has been used to rule on the motions, we will decide the case under the rubric of Rule 56.

Based on the finding that plaintiffs failed to timely file a verified claim, they lack statutory standing to challenge the government's forfeiture of the property. Also, because plaintiffs do not have an ownership interest in the currency based on Puerto Rico law, they have no claim to the currency. Accordingly, we grant defendant's summary judgment motion and dismiss the action.

I. Background

The res which forms the basis of this action was allegedly discovered by plaintiffs sometime in late 1989 or early 1990 on a parcel of land in Barrio Espinosa, Dorado, Puerto Rico. This land was owned at the time by Ramón Torres González.

In 1990, a joint investigation by the Federal Bureau of Investigation ("FBI") and the Drug Enforcement Administration ("DEA") found that Torres González had been involved in the importation of cocaine from Colombia into Puerto Rico and the Continental United States. It was the proceeds from these drug transactions that constituted the "buried treasure" found on the property.

After commencement of the criminal action, the civil forfeiture action, No. 90-1652(GG), was commenced. In an Affidavit of Publication filed with the court on June 6, 1990, the government attested that proper notice had been caused to be published three times in a newspaper of general circulation in Puerto Rico, giving potential claimants the opportunity to file notices of claims with the court.

Plaintiffs Dávila and Feliciano filed no claims seeking recovery of the currency in the forfeiture action. Plaintiff Sánchez did file an answer and a counterclaim as to certain properties subject to forfeiture. The government moved to strike Sánchez' filings because of his failure to timely file his verified claim pursuant to Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims.³ In an Order filed July 20, 1990 (Docket Document No. 4, Exhibit 1 at 2-4), Judge Gierbolini granted the government's motion to strike plaintiff Sánchez' answer.

Subsequently, in two Partial Decrees filed August 7, 1990 and January 8, 1991, respectively, the court ordered forfeited, inter alia, both the Barrio Espinosa property and the currency contained in the twenty-two barrels.

Plaintiffs commenced the present collateral action on April 9, 1991.

II. Discussion

In substance, plaintiffs are contesting the forfeiture of the currency to the government. They allege that, as finders of lost treasure, they have acquired a possessory interest sufficient to entitle them to at least half the amount of the monies forfeited. Also, they argue that, as individuals not connected to any illegal activity, they fall within the "innocent owner" exception to 21 U.S.C. § 881(a)(6) and, once their possessory interest is established, this defense should defeat forfeiture by the government. For a number of reasons, we disagree.

A. Supplemental Rule C(6)

First of all, plaintiffs Dávila and Feliciano did not comply with Supplemental Rule C(6) by filing a verified claim in the prior forfeiture action in the principal forfeiture case. The filing of a verified claim pursuant to Supp. Rule C(6) is necessary to confer statutory standing upon a claimant in a forfeiture action. U.S. v. One Dairy Farm, 918 F.2d 310, 311-13 (1st Cir.1990); U.S. v. Currency $267,961.07, 916 F.2d 1104, 1108 (6th Cir.1990); U.S. v. One Urban Lot Located at 1 Street A-1, 885 F.2d 994, 999-1001 (1st Cir.1989); Mercado v. U.S. Customs Service, 873 F.2d 641, 645 (2d Cir.1989); U.S. v. $175,918.00 in United States Currency, 755 F.Supp. 630, 632-33 (S.D.N.Y.1991) ("This rule is designed to provide the government with timely notice of a claimant's interest in contesting the forfeiture and, by requiring a sworn claim, to deter the filing of false claims."); United States v. One 1978 BMW, 624 F.Supp. 491, 492 (D.Mass.1985). Where a party completely disregards the requirements of Supp. Rule C(6), dismissal of the claim by the district court should normally result. One Dairy Farm, 918 F.2d at 312; One Urban Lot, 885 F.2d at 998. Here, Dávila and Feliciano have come forward with no allegation or with any other proof that they ever filed a claim in the earlier forfeiture action or that the final forfeiture decree in the main case, No. 90-1652(GG), is invalid. Therefore, they lack statutory standing to challenge the forfeiture.

Plaintiff Sánchez' position is somewhat different vis-a-vis the issue of Supp. Rule C(6) compliance. In Judge Gierbolini's July 20, 1990 Order, the following dates were specified. On May 17, 1990, Sánchez was served with process. Therefore, under Supp. Rule C(6), he had until May 27, 1990 to file his claim. Sánchez' answer and counterclaim were filed on May 30, 1990. On June 13, 1990, the government moved to strike Sánchez' answer on the ground that no verified claim had been filed. The court granted the government's motion on this basis.

Here, we note that the First Circuit has instructed district courts, in the civil forfeiture context, to follow the "time-honored admiralty principle that pleadings and procedural practices should be applied liberally." One Urban Lot, 885 F.2d at 1001; United States of America v. One Parcel of Real Property with Buildings, Appurtenances and Improvements Known as 116 Emerson Street, Located in the City of Providence, Rhode Island, 942 F.2d 74, 77-78 (1st Cir.1991). In One Parcel, the appellate court opined that, in order that cases be decided on the merits, district courts should exercise their "discretion to grant additional time for the filing of a claim ... when the goals underlying the time restrictions ... are not thwarted." 942 F.2d 74, 77 (quoting United States v. 1982 Yukon Delta Houseboat, 774 F.2d 1432, 1436 (9th Cir.1985). After considering both the mitigating factors and the extent to which the government would be prejudiced by an untimely-filed claim, the court in One Parcel went on to allow claimant to proceed to contest the forfeiture on the merits despite both an untimely and an unverified Supp. Rule C(6) claim. Id. at 78. Also in One Urban Lot, our circuit has held that "where the claimant timely filed a verified answer containing all the information required in the claim, the answer may be deemed to have fulfilled the function of a claim in terms of establishing the owner's standing." One Urban Lot, 885 F.2d at 999; One Dairy Farm, 918 F.2d at 313.

Here, the record fails to show whether any mitigating factors existed which might have excused Sánchez' failure to file a verified claim. We do note that, leaving aside the obvious and difficult res judicata issue,⁴ at least three of the four mitigating factors found in One Parcel, 942 F.2d at 78, are not present here. First, unlike the claimant in One Parcel, here Sánchez was served in the first proceeding. Also, whereas a trial on the merits had not yet been held when the claimant intervened, here the court has ruled and the properties have been forfeited. A third consideration is that in this case, unlike the situation found in One Parcel, ordering the forfeiture action to be relitigated would most certainly prejudice the government. Finally, in One Parcel, the court noted that the claimant actively pursued the litigation once the claim was filed. Here there is no evidence before this court that Sánchez either moved the court for reconsideration of its order striking his answer or timely filed an appeal. Therefore, regardless of what transpired in the earlier action, we think that the lack of mitigating factors and the extent of potential government prejudice distinguishes the present case from One Parcel and we find that the holding of One Dairy Farm mandates the dismissal of Sánchez' claim for failure to file a verified claim in compliance with Supp. Rule C(6).

B. Merits of Plaintiffs' Claim

Even if we were to find that plaintiffs could be deemed to have complied with the requisite filing of their verified claims (which we do not), their claim must fail on the merits.

As a preliminary matter, the court must examine whether the complaint alleges a sufficient interest in the seized property. Before a potential claimant can contest a forfeiture, there must be a sufficient claim of interest in the property. One Parcel, 942 F.2d at 78-79; Mercado, 873 F.2d at 644-45; U.S. v. One Parcel of Real Property with Bldgs., etc., 764 F.Supp. 9, 12-13 (D.R.I.1991); United States v. One Rural Lot, 739 F.Supp. 74, 77-78 (D.P.R.1990); U.S. v. All That Lot of Ground Known as 2511 E. Fairmount Ave.,...