State v. Champagne
| Decision Date | 01 March 1988 |
| Docket Number | No. 13192,13192 |
| Citation | 538 A.2d 193,206 Conn. 421 |
| Court | Connecticut Supreme Court |
| Parties | STATE of Connecticut v. Dennis CHAMPAGNE. |
Robert M. Casale, Branford, for appellant (defendant).
John M. Massameno, Asst. State's Atty., with whom, on the brief, was Leah Hawley, Asst. State's Atty., for appellee (state).
Before PETERS, C.J., and ARTHUR H. HEALEY, SHEA, CALLAHAN and HULL, JJ.
This appeal calls for a determination of the extent to which the state has the authority, in pretrial proceedings, to garnishee mortgage payments that are the cash proceeds of alleged illegal racketeering activity. The defendant, Dennis Champagne, stands accused of having knowingly engaged in a "pattern of racketeering activity" in violation of General Statutes § 53-395(c) 1 of the Corrupt Organizations and Racketeering Activity Act (CORA), General Statutes § 53-393 et seq. Pursuant to its authority under General Statutes § 53-398(a)(1), 2 the trial court, after a hearing, rendered an order prohibiting the defendant from "transferring, depleting or otherwise alienating or diminishing" any property that is subject to forfeiture to the state upon his conviction. The defendant brings this interlocutory appeal pursuant to General Statutes § 53-401(a), 3 claiming principally that the trial court erred in not allowing him to use a portion of the forfeitable property to pay for attorney's fees he will incur in defending the CORA prosecution. We conclude that there is error and remand for further proceedings.
The following facts and procedural history are undisputed. In July, 1980, the defendant purchased a parcel of real estate at 1 Island Brook Avenue in Bridgeport (Island Brook). This property was subsequently leased to D & T Auto Salvage, Inc., a Connecticut corporation engaged in the automobile repair and junkyard business. The defendant was an officer and stockholder in that corporation. In 1985, the defendant sold the real estate and his stock interest in the corporation. As part of the consideration for the sale, the defendant took back a purchase money mortgage 4 in the amount of $157,000 from the purchaser. 5
Roughly one year later, the defendant was arrested and charged with racketeering under CORA. The information alleges that the defendant and his associates bought or received stolen cars, which they dismantled and sold at a profit as component parts. The state further charged that this operation, colloquially known as a "chop shop," was operated at the Island Brook property previously owned by the defendant. As a penalty for operating the "chop shop," the state seeks the forfeiture of the defendant's interest in this property, represented by his monthly receipt of payments from the mortgagor of the property.
Prior to the commencement of trial on the criminal charges, the state invoked three separate CORA provisions that authorize the freezing of property that is potentially subject to CORA forfeiture. First, under General Statutes § 53-398(a)(1), the defendant was prohibited from transferring or depleting any forfeitable property. Second, under General Statutes § 53-398(a)(2), 6 a receivership was established to collect the defendant's mortgage payments. Third, under General Statutes § 53-399(e), 7 a lien on the forfeitable property in favor of the state was established by filing a lien notice in the land records of Bridgeport.
In accordance with the provisions of General Statutes § 53-400(c), 8 the defendant then filed a motion to discharge or modify the CORA lien notice. The filing of such a motion triggers a statutory requirement that a hearing be held, within ten days, at which the state bears the burden of proving that the property described in the lien notice is subject to forfeiture. General Statutes § 53-400(c)(1). 9
The defendant's motion for discharge or modification alleged lack of probable cause to believe that the mortgage payments attributable to the Island Brook property are forfeitable property. The defendant in his motion urged the trial court to hold that the lien was improper because: (1) the defendant's property was not forfeitable because he had sold his interest in Island Brook before the initiation of the CORA prosecution; (2) the defendant, being otherwise indigent, 10 needed access to his mortgage income in order to exercise his sixth amendment right to hire counsel of choice; and (3) the application of CORA to the defendant would unconstitutionally expose him to an ex post facto legislative enactment. In his brief in support of his motion, the defendant referred to a further ground for exempting the mortgage payments from pretrial garnishment: a statutory exemption for "net income or profits," contained in General Statutes § 53-398(b).
The trial court declined to discharge the lien. The court found probable cause to believe that the property described in the lien notice was forfeitable. In its rejection of the defendant's claim that a preprosecution conveyance necessarily sheltered property from the forfeiture provision of CORA, the court relied, at least in part, on established Connecticut law that a mortgagee has an ownership interest in the mortgaged property. The court considered the defendant's sixth amendment right to hire counsel of choice to be outweighed in this case by the state's interest in deterrence of organized crime and in punishment of illegal conduct. The court lastly found no merit in the defendant's ex post facto challenge, because the information charged the defendant with racketeering activity both prior and subsequent to the effective date of the statute. The trial court did not address the defendant's claim that he was entitled to an exemption for "net income or profits" under § 53-398(b).
On appeal, the defendant renews the claims that he made to the trial court. We will consider first his broad argument that property conveyed in a bona fide, arms-length transaction prior to the initiation of CORA proceedings is per se exempt from forfeiture. We will then turn to a consideration of the more limited contention that the express statutory exemption of "net income or profits" should be construed to protect the defendant's alleged sixth amendment right to hire counsel of his own choice. We find error only on the latter, more limited, ground.
The defendant argues broadly that the forfeiture and pretrial freeze provisions of CORA do not reach property that was transferred prior to the commencement of the prosecution unless the state proves that the transfer was made "with the intention of preventing its forfeiture" as specified under General Statutes § 53-397(b)(3). 11 Under that section, "the court may set aside" the fraudulent transfer and render appropriate orders "reasonably necessary to protect the rights of any innocent party to any such transfer." This claim of an implied limitation on CORA's reach finds support, according to the defendant, in the lack of any CORA provision relating the occurrence of forfeiture back to the time the offense was committed.
The state maintains, to the contrary, that the forfeitable property in this case, the purchase money mortgage on the Island Brook property, falls within the direct purview of forfeitures authorized by CORA. CORA authorizes forfeiture of "[a]ny property ... acquired, maintained or used in violation of this chapter, including profits derived therefrom and the appreciated value thereof, or, where applicable, the proceeds from the sale thereof." (Emphasis added.) General Statutes § 53-397(a)(1). CORA defines "property" as "any property, real or personal, or any interest therein or any beneficial interest of whatever kind." General Statutes § 53-394(g). According to the state, the set aside provision of § 53-397(b)(3) upon which the defendant relies is an unrelated remedy that comes into play only when the "proceeds from the sale thereof" are patently insufficient in relation to the value of the property that was previously transferred.
The issue before us, therefore, is whether, in light of CORA's language and purpose, its forfeiture provisions encompass the defendant's mortgage payments as "proceeds from the sale" of real and personal property that was "acquired, maintained or used" in the commission of illegal racketeering activity. In our construction of the applicable statutory language, our goal is to "ascertain and give effect to the apparent intent of the legislature." State v. Blasko, 202 Conn. 541, 553, 522 A.2d 753 (1987). In reaching this goal, we consider first whether the language of the statute yields a plain and unambiguous resolution. Rhodes v. Hartford, 201 Conn. 89, 93, 513 A.2d 124 (1986). Any latent ambiguity in the statutory language itself is normally resolved by turning for guidance to the legislative history and the purpose the statute is to serve. State v. Kozlowski, 199 Conn. 667, 673, 509 A.2d 20 (1986).
The defendant in this case urges us to apply a further maxim of statutory construction: the criminal sanction of forfeiture must be strictly construed. In support of this claim, the defendant asserts that the penalty of forfeiture is "foreign" to our law. In the unqualified form in which this assertion is stated, it is inaccurate. Recourse to forfeiture in certain cases is an ancient, albeit sparingly used, fixture in our criminal jurisprudence, as a brief review of the historical record demonstrates.
The common law of England recognized two principal types of forfeiture. The value of an object, or the object itself, that caused the accidental death of a King's subject was forfeited to the Crown as a deodand. J. Finkelstein, "The Goring Ox: Some Historical Perspectives on Deodands, Forfeitures, Wrongful Death and the Western Notion of Sovereignty," 46 Temp.L.Q. 169, 197 (1973). The common law also imposed a forfeiture of estate consequent to conviction of a felony or treason. Note, "Bane of American Forfeiture...
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