Savely v. Utah Highway Patrol

• Court: Utah Supreme Court
• Writing for the Court: Justice Himonas, opinion of the Court
• Citation: Savely v. Utah Highway Patrol, 427 P.3d 1174 (Utah 2018)
• Decision Date: 22 August 2018
• Docket Number: No. 20170266,20170266
• Parties: Kyle SAVELY, Appellant, v. UTAH HIGHWAY PATROL and Utah Department of Public Safety, Appellees.

427 P.3d 1174

Kyle SAVELY, Appellant,

v.UTAH HIGHWAY PATROL and Utah Department of Public Safety, Appellees.

No. 20170266

Supreme Court of Utah.

Filed August 22, 2018

James C. Bradshaw, Ann M. Taliaferro, Salt Lake City, for appellant

Sean D. Reyes, Att’y Gen., Tyler R. Green, Solic. Gen., Mark E. Burns, Asst. Att’y Gen., Stanford E. Purser, Deputy Solic. Gen., Salt Lake City, for appellees

Adam R. Pomeroy, Lehi, for amicus curiae Libertas Institute

John W. Huber, Adam S. Elggren, Salt Lake City, for amicus curiae United States of America

Justice Himonas authored the opinion of the Court, in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Pearce, and Judge Davis joined.

Having recused herself, Justice Petersen does not participate herein; District Court Judge Lynn W. Davis sat.

Justice Himonas, opinion of the Court:

INTRODUCTION

¶1 The Utah Highway Patrol and Utah Department of Public Safety (collectively UHP) seized nearly $500,000 from Kyle Savely under the Forfeiture and Disposition of Property Act (Act). Over the next seventy-five days, the money sat in a UHP bank account and no forfeiture proceedings were filed in a Utah state district court. During this time, a federal magistrate issued a seizure warrant for the money on behalf of the Drug Enforcement Agency (DEA). UHP sent a check for the cash amount to the DEA, but it was never cashed. Mr. Savely wants his money back.

¶2 To that end, Mr. Savely filed a petition in state district court, asking the court to force UHP to return his funds because prosecuting attorneys failed to take one of the actions necessary under Utah Code section 24-4-104(1)(a) to avert a duty on the part of law enforcement to "return [the] seized property." Initially agreeing with Mr. Savely, the state district court ordered UHP to return Mr. Savely’s seized funds. However, after UHP filed a motion to reconsider, the state district court reversed course, concluding that it lacked in rem jurisdiction of the seized funds based on principles of comity, and dismissed Mr. Savely’s petition.

¶3 Mr. Savely appealed this decision. We conclude that the state district court had in rem jurisdiction over Mr. Savely’s funds under the Act. Therefore, we reverse the state district court’s dismissal of Mr. Savely’s petition.

BACKGROUND

¶4 On November 27, 2016, a UHP trooper stopped Mr. Savely while Mr. Savely was driving on Interstate 80 through Summit County, Utah. In response to his K-9’s alert, the trooper detained the vehicle’s occupants and searched the vehicle. The trooper uncovered no drugs or other contraband but found a case containing 52 bundles of cash.

¶5 The trooper seized the cash and provided Mr. Savely with an asset seizure notification form, providing him notice, pursuant to section 24-4-103(1) of the Act, that the cash had been seized for purposes of forfeiture. The cash was deposited into a UHP bank account for seized currency.

¶6 No further action was taken in regard to the seized cash until January 13, 2017, when a federal magistrate issued a seizure warrant for the cash. UHP sent a check in the amount of the seized cash to the DEA on January 24, 2017, but the check was never cashed or deposited.

¶7 On February 10, 2017, seventy-five days after UHP’s seizure, Mr. Savely filed a petition in state district court seeking the release of his property. In a hearing on February 21, 2017, the state district court ruled in favor of Mr. Savely, concluding that UHP was required by the Act to procure an order from a state district court that authorized UHP to release the seized cash to the DEA and, thus, that UHP had unlawfully transferred the funds. Additionally, the state district court concluded that UHP had failed to take one of the actions required by Utah Code section 24-4-104(1)(a) and therefore ordered UHP to return the funds to Mr. Savely.

¶8 UHP immediately stopped payment on the January 24, 2017 check sent to the DEA. In response, the DEA served UHP with a second federal seizure warrant on February 23, 2017, after which UHP requested that the state district court reconsider its initial ruling.

¶9 The state district court heard additional arguments in response to UHP’s motion to reconsider and set aside the original judgment. This time, the state district court concluded the federal court had begun exercising in rem jurisdiction by issuing the January 13, 2017 seizure warrant, prohibiting the state district court’s exercise of in rem jurisdiction when Mr. Savely filed his petition. As a result, the state district court granted the motions, dismissing Mr. Savely’s petition for lack of jurisdiction.

¶10 Mr. Savely appeals that decision. We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(j).

STANDARD OF REVIEW

¶11 We review questions of jurisdiction for correctness. State v. Finlayson , 2004 UT 10, ¶ 5, 84 P.3d 1193. Questions of statutory interpretation are also reviewed for correctness without deference to the lower court’s opinion. Bank of Am. v. Adamson , 2017 UT 2, ¶ 7, 391 P.3d 196.

ANALYSIS

¶12 After concluding that the federal court had exercised in rem jurisdiction over the seized property before any filing in a state court, the state district court dismissed Mr. Savely’s petition for lack of jurisdiction. The state district court determined that this result was compelled by Penn General Casualty Co. v. Pennsylvania , 294 U.S. 189, 55 S.Ct. 386, 79 L.Ed. 850 (1935). When two suits are proceeding in rem or quasi in rem over the same res , "the jurisdiction of one court must of necessity yield to that of the other." Penn Gen. , 294 U.S. at 195, 55 S.Ct. 386. In order "[t]o avoid unseemly and disastrous conflicts in the administration of our dual judicial system, and to protect the judicial processes of the court first assuming jurisdiction, ... the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other." Id. (citations omitted).

¶13 The parties disagree about whether the state district court or the federal court first exercised in rem jurisdiction over Mr. Savely’s money. Mr. Savely contends that the state district court first acquired in rem jurisdiction when UHP provided him with a notice of intent to seek forfeiture.¹ Conversely, UHP and its amicus, the United States, argue that a state court does not exercise in rem jurisdiction under the Act until there has been a filing in the court.² As a result, the United States contends that the federal court was the first to exercise in rem jurisdiction through its issuance of the first seizure warrant.

¶14 Therefore, this case presents two interrelated questions: (1) When does a Utah state district court begin exercising in rem jurisdiction over property seized under the Act? and (2) Did the federal court’s first seizure warrant constitute a valid exercise of in rem jurisdiction prior to the state district court’s exercise of in rem jurisdiction? We address each of these questions in turn.

I. EXERCISING IN REM JURISDICTION UNDER THE ACT

¶15 The first dispute we must resolve is when a Utah state district court begins exercising in rem jurisdiction over property seized under the Act.

¶16 Mr. Savely argues that a state district court has in rem jurisdiction over seized property as soon as a seizing agency serves a notice of intent to seek forfeiture, even if no "filing" has occurred in the court. He points to several provisions in the Act, including Utah Code sections 24-4-108(1), (4) and 24-4-114, to support this contention.

¶17 Conversely, UHP and the United States contend that in rem jurisdiction can never be vested until there has been a filing in the state district court. Moreover, relying on Utah Code section 24-1-103(1), they contend that the Act only recognizes in rem jurisdiction when an action has been filed.

¶18 Consequently, we must first decide if it is possible for a court to exercise in rem jurisdiction over property without any filing in the court. If it is possible, we must determine if the Act provides for in rem jurisdiction without a filing, and, if so, at what time. Finally, we must decide whether the state district court exercised in rem jurisdiction over Mr. Savely’s property.

A. Exercising In Rem Jurisdiction Without a Filing

¶19 "The basic requirement of jurisdiction in rem ... is that a court must have exclusive possession or control over the property in order to consider the suit and grant or deny the relief sought." Scarabin v. DEA , 966 F.2d 989, 994 (5th Cir. 1992) (citation omitted). When considering whether a state court has exercised in rem jurisdiction over seized property, other courts have focused on the state’s statutory scheme. Where "state law expressly provides jurisdiction as an integral element of its statutory warrant and seizure scheme," the state district court is imbued with in rem jurisdiction at the time provided by statute. Id. at 993–94. Courts have recognized two different types of statutory provisions that provide jurisdiction as an integral element of the statutory scheme: (1) provisions that place custody and control of seized property in the district court and (2) provisions that restrict or prohibit the transfer or turnover of seized property without the district court’s permission.

¶20 The first type of relevant statutory provision is one that places custody and control in the district court or otherwise restricts disposition of the property to court order. When a state’s statutory scheme does not provide for judicial control over seized property, courts have determined that in rem jurisdiction is not conferred by the seizure. See, e.g. , United States v. Certain Real Prop. 566 Hendrickson Boulevard, Clawson, Oakland Cty., Mich. , 986 F.2d 990, 993–94 (6th Cir. 1993) (concluding that "it is the filing of the forfeiture complaint in the state court which brings the res within the jurisdiction of the state courts" based on the language in that state’s statute); Commonwealth v. Rufo , 429 Mass. 380, 708...