State v. Gallaga (In re U.S. Currency Totaling $75,000.00)

• Docket Number: S-23-0048
• Decision Date: 30 November 2023
• Parties: IN THE MATTER OF U.S. CURRENCY TOTALING $75,000.00: v. LORENZO GALLAGA, Appellee (Defendant). THE STATE OF WYOMING, Appellant (Plaintiff),
• Court: Wyoming Supreme Court

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2023 WY 114

IN THE MATTER OF U.S. CURRENCY TOTALING $75,000.00:

THE STATE OF WYOMING, Appellant (Plaintiff),
v.
LORENZO GALLAGA, Appellee (Defendant).

No. S-23-0048

Supreme Court of Wyoming

November 30, 2023

Appeal from the District Court of Laramie County The Honorable Catherine R. Rogers, Judge

Representing Appellant: Bridget Hill, Wyoming Attorney General; Jenny L. Craig, Deputy Attorney General; Kristen R. Jones, Senior Assistant Attorney General; Kellsie J. Singleton, Senior Assistant Attorney General. Argument by Ms. Singleton.

Representing Appellee: Donald E. Miller, Miller Law Firm, Cheyenne, Wyoming.

Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY, and FENN, JJ.

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KAUTZ, Justice.

[¶1] After law enforcement seized $75,000 in United States currency from Lorenzo Gallaga, the State of Wyoming filed a civil in rem action for forfeiture of the currency. The district court denied forfeiture because it decided the State had failed to meet its burden of showing Mr. Gallaga's presence in Wyoming with the currency was an act in furtherance of a conspiracy violative of the Wyoming Controlled Substances Act. It concluded Mr. Gallaga was merely passing through Wyoming with the currency, which was insufficient to establish a violation of the Wyoming Controlled Substances Act. We reverse the district court's order because it erred in applying Wyoming's forfeiture and controlled substances laws.

ISSUE

[¶2] Did the district court err in applying Wyoming's civil forfeiture and controlled substances laws when it denied the State's request for forfeiture of the currency?

FACTS

[¶3] On July 29, 2020, a Wyoming highway patrol trooper stopped Mr. Gallaga for speeding while he was driving westbound on Interstate 80 in Laramie County. Mr. Gallaga told the trooper he was traveling from Illinois to California. As they were talking, the trooper smelled raw marijuana; when questioned about the smell, Mr. Gallaga "produced a carton of hemp cigarettes as the explanation for the odor." The trooper detained Mr. Gallaga to search the vehicle, which yielded $75,000 in U.S. currency and numerous controlled substances including marijuana, concentrated tetrahydrocannabinols (THC), and MDMA (otherwise known as Ecstasy). Law enforcement also discovered five cell phones and written records showing transactions involving the sale of marijuana products. Downloads from the cell phones revealed voicemails discussing what law enforcement believed to be marijuana growing and distribution operations.

[¶4] Mr. Gallaga was arrested for possession of controlled substances and agreed to be interviewed by law enforcement. He admitted to possession of items, which testing confirmed had illegal amounts of THC. He explained the currency had come from "his bank" and said he planned to use it to purchase real property in Illinois to grow cannabis. He claimed he had earned the money "over the course of . . . working" in "his businesses," which included the "sneaker and cannabis trades," "house flipping," and renting out properties he owned in California.

[¶5] The State filed a civil in rem action for forfeiture of the $75,000 found in Mr. Gallaga's possession, claiming it was proceeds from, or used to facilitate, activities which violated the Wyoming Controlled Substances Act. Wyo. Stat. Ann. §§ 35-7-1001 through 35-7-1063 (LexisNexis 2023). See also, Matter of U.S. Currency Totaling $14,245.00,

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2022 WY 15, ¶ 21, 503 P.3d 51, 57 (Wyo. 2022) ("[t]he forfeiture statute states that '[t]he proceedings and judgment of forfeiture shall be in rem and shall be against the property itself'" (quoting § 35-7-1049(q))). The district court held a bench trial on the State's forfeiture petition, issued detailed findings of fact and conclusions of law, and denied the State's request. The State appealed. We will provide additional facts in our discussion of the issues.

STANDARD OF REVIEW

[¶6] The district court conducted a bench trial on the State's request for forfeiture of the $75,000 found in Mr. Gallaga's vehicle. The court's factual findings "'are not entitled to the limited review afforded a jury verdict.'" Galiher v. Johnson, 2018 WY 145, ¶ 6, 432 P.3d 502, 507 (Wyo. 2018) (quoting Graybill v. Lampman, 2014 WY 100, ¶ 25, 332 P.3d 511, 519 (Wyo. 2014), and Helm v. Clark, 2010 WY 168, ¶ 6, 244 P.3d 1052, 1056 (Wyo. 2010)). Instead, we review the factual findings for clear error. PNS Stores, Inc. v. Capital City Props., LLC, 2022 WY 101, ¶ 19, 515 P.3d 606, 611 (Wyo. 2022) (citing Davis v. Harmony Dev., LLC, 2020 WY 39, ¶ 31, 460 P.3d 230, 240 (Wyo. 2020), and Ekberg v. Sharp, 2003 WY 123, ¶ 10, 76 P.3d 1250, 1253 (Wyo. 2003)).

While the factual findings of a [district court] are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail reweighing disputed evidence. . . . A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. We assume that the evidence of the prevailing party below is true and give that party every reasonable inference that can fairly and reasonably be drawn from it

TEP Rocky Mountain LLC v. Record TJ Ranch Ltd. P'ship, 2022 WY 105, ¶ 37, 516 P.3d 459, 472 (Wyo. 2022) (quoting Shriners Hosps. for Children v. First N. Bank of Wyo., 2016 WY 51, ¶ 27, 373 P.3d 392, 403 (Wyo. 2016) (quotation marks, brackets, and citations omitted)). See also, Bowman v. Study, 2022 WY 139, ¶ 9, 519 P.3d 985, 988 (Wyo. 2022). We review the district court's conclusions of law de novo. Galiher, ¶ 6, 432 P.3d at 507 (citation omitted).

DISCUSSION

[¶7] Wyo. Stat. Ann. § 35-7-1049 identifies the types of property subject to civil forfeiture. Matter of United States Currency Totaling $470,040.00, 2020 WY 30, ¶ 18, 459 P.3d 430, 435 (Wyo. 2020)

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("Civil asset forfeiture under Wyo. Stat. Ann. § 35-7-1049 'is appropriate only with respect to certain types of property which the legislature has deemed to be subject to forfeiture.'" (quoting State v. Eleven Thousand Three Hundred Forty-Six Dollars & No Cents in U.S. Currency, 777 P.2d 65, 67 (Wyo. 1989) (some quotation marks and citations omitted))). As relevant to this case, § 35-7-1049(a)(viii) permits forfeiture of "property or other thing of pecuniary value furnished in exchange for a controlled substance in violation of this act including any proceeds, assets or other property of any kind traceable to the exchange and any money . . . used to facilitate a violation" of the Wyoming Controlled Substances Act. Consequently, forfeiture is proper if the money was shown to be (1) "furnished in exchange for a controlled substance" in violation of the Wyoming Controlled Substances Act, or (2) "used to facilitate" a violation of the Wyoming Controlled Substances Act. Id. The essence of the district court's decision was that the evidence was insufficient to show a violation of the Wyoming Controlled Substances Act.

[¶8] The State has the burden of proving "by clear and convincing evidence the extent to which, if any, the property is subject to forfeiture." Section 35-7-1049(k). "'Clear and convincing evidence is that kind of proof that would persuade a trier of fact that the truth of a contention is highly probable.'" Ailport v. Ailport, 2022 WY 43, ¶ 35, 507 P.3d 427, 440 (Wyo. 2022) (quoting In re JPL, 2021 WY 94, ¶ 21, 493 P.3d 174, 180 (Wyo. 2021), and Harmon v. State of Wyo., Dep't of Family Servs. (In re DKS), 2020 WY 12, ¶ 19, 456 P.3d 918, 924 (Wyo. 2020)).

[¶9] The district court's findings of fact are undisputed. It found law enforcement seized illegal controlled substances and $75,000 in currency from Mr. Gallaga. Law enforcement also discovered five cell phones in Mr. Gallaga's vehicle, which contained numerous voicemails from 2018 through 2020. The messages were from: an unidentified caller referring to "the freshest nicest greenish shiniest, yumm yumm yumm[] that we're looking for"; another person encouraging Mr. Gallaga to "wait no longer to get those plants in the dirt dude, every day that you['re] waiting you['re] losing"; "Steve" telling Mr. Gallaga to "grab those dudes and come over here as soon as possible, greenhouse #2 collapsed, the cookie one, the one we're harvesting, so I'm gonna start cutting it up and just getting it into bins, so hurry up"; callers referring to "shipments" and "weed"; "Daryl" stating "[h]ey, get ahold of me I need to see if I can get that 4gg[]s from ya"; another caller saying "I was going to get some of that mac now all of a sudden Steve says I gotta talk to you before I get any of the mac"; and "Daniel" at Hendrx Farms. A Division of Criminal Investigation (DCI) agent testified: the voicemails referred to strains of marijuana "that contained above 0.3% THC," including "yum yum," "4GGs" ("Gorilla Glue"), "cookie," and "MAC" ("Magic Alien Cookie"); a number of the messages pertained to marijuana cultivation and production, such as mentions of "plants" and "greenhouses"; and Hendrx Farms was a "clone nursery in northern California . . . specializ[ing] in selling marijuana clones."

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[¶10] The district court also found Mr. Gallaga owned farmland and a trailer in California and the financial documentation he provided in discovery did not identify a legal source of the funds he used to acquire the properties. Mr. Gallaga said he was renting out the farmland, but "he did not know what the tenants were renting these properties for or what the renters were growing" on it. Law enforcement also seized documents and other paperwork from Mr. Gallaga's vehicle, including receipts for "agricultural supply purchases" and ledgers showing "marijuana variants" and "transactions"...