State v. Residence Located at 5708 Paseo, Kansas City, Mo., WD

• Citation: 896 S.W.2d 532
• Decision Date: 25 April 1995
• Docket Number: No. WD,WD
• Parties: STATE of Missouri, Appellant, v. RESIDENCE LOCATED AT 5708 PASEO, KANSAS CITY, MISSOURI, Richard M. Elbert and Chandra R. Mercer, Respondents. 49042.
• Court: Court of Appeal of Missouri (US)

Page 532

896 S.W.2d 532

STATE of Missouri, Appellant, v. RESIDENCE LOCATED AT 5708 PASEO, KANSAS CITY, MISSOURI, Richard M. Elbert and Chandra R. Mercer, Respondents.

No. WD 49042.

Missouri Court of Appeals,

Western District.

April 25, 1995.

Jeremiah W. (Jay) Nixon, Atty. Gen., Theodore A. Bruce, Asst. Atty. Gen., Jefferson City, for appellant.

Richard M. Elbert, Kansas City, pro se.

Chandra R. Mercer, Kansas City, pro se.

Before HANNA, P.J. and BRECKENRIDGE and SMART, JJ.

BRECKENRIDGE, Judge.

The State appeals a decision of the Circuit Court of Jackson County, denying its petition for forfeiture of real property under the Criminal Activity Forfeiture Act (CAFA), §§ 513.600 et seq., RSMo 1986. ¹ The judgment is affirmed.

The State raises one point on appeal, arguing that the court erred in failing to hold that ongoing criminal activity occurred at 5708 Paseo (the House), since uncontroverted evidence established that the House was the site of illegal liquor sales, gambling, weapons violations, and crack cocaine storage and distribution. The State maintains that these criminal activities subjected the House to forfeiture under CAFA because the owners of the House, Richard M. Elbert and Chandra R. Mercer, were either aware of the activities or consciously chose to ignore them. Accordingly, the State charges that the trial court misapplied the law and ruled against the weight of the evidence in determining that criminal activity did not occur pursuant to CAFA.

In civil matters such as forfeitures, the appellate court views the evidence in the light most favorable to the judgment, providing all reasonable inferences to the prevailing party. State v. Meister, 866 S.W.2d 485, 488 (Mo.App.1993). Because the State is challenging the weight of the evidence, however, the facts favorable to both sides will be presented.

The evidence at trial established that, in April of 1991, Richard Elbert and Chandra Mercer jointly purchased a house at 5708 Paseo. The mortgage is held by Carl I. Brown & Company, an innocent lienholder, with no knowledge of criminal activity. ² Both Mr. Elbert and Ms. Mercer resided in the House until Ms. Mercer moved out following the couple's apparent break-up. Mr. Elbert and Ms. Mercer agreed that, upon her departure, he would make all mortgage payments. Ms. Mercer, however, is still obligated on the mortgage and renders the payments when Mr. Elbert is financially unable.

Mr. Elbert operates two corporations, Hope Incorporated and Nightlife Incorporated, also known as the "High Roller's Club." ³ Nightlife Incorporated raises funds for Hope Incorporated, which uses the finances to promote development in the community and to provide drug alternative programs. According to Mr. Elbert, corporate business is conducted at the House, in that he throws parties and solicits membership donations for the benefit of Nightlife Incorporated. Although alcohol is served at the parties, Mr. Elbert admits that he has never possessed a liquor license. ⁴ He also testified that while Ms. Mercer lived in the House, no parties took place.

Ms. Mercer is employed by the Kansas City Post Office between the hours of 2:00 a.m. and 10:30 a.m., six days a week. Ms. Mercer stated that, since she moved from the House, she has seen flyers advertising Mr. Elbert's parties, but that she has never attended any of them.

On August 15, 1992, during one of Mr. Elbert's parties, uniformed police approached the House in an effort to curtail an alleged noise disturbance. When they arrived, Mr. Elbert was inside the foyer with a .9 millimeter gun in his pocket. He told police about his weapon, at which time they requested him to relinquish it. No arrests ensued.

On September 17, 1992, Officer Robert Starbuck was assigned to the Kansas City Police Department's Drug Enforcement Unit, which was attempting to arrange an undercover drug transaction through the efforts of an informant. The undercover operation apparently involved Mr. Elbert's half brother, Cray Parris, who had set up a drug sale with a DEA informant. The sale was supposed to take place at a location other than the House. It did not occur, however, and Mr. Elbert's half brother came to the House instead.

It appears that, upon learning of Mr. Parris' whereabouts, the police proceeded to the House. Although the officers did not possess a search warrant for the House, they were permitted to search the premises when Mr. Elbert voluntarily signed a consent form. The police seized 1,837 grams of crack cocaine, as well as $7,000 from a black leather purse found in the House. Mr. Elbert's half brother was arrested and convicted of possession of a controlled substance. Mr. Elbert claimed that he was unaware that his half brother had carried drugs into the House, and that he did not condone such behavior. He further testified that Ms. Mercer, who no longer resided in the House, had no knowledge of the incident until she read about it in the paper.

Approximately one month later, on October 31, 1992, Officer Floyd Mitchell and Officer Martin Cobbianah proceeded to the House to conduct an undercover investigation of potentially illegal liquor sales at Mr. Elbert's parties. Upon arriving at the House, they encountered Mr. Elbert. According to Officer Mitchell, Mr. Elbert told them there was a twenty-five dollar membership fee to gain entrance, and such fee included three free drinks on Friday and Saturday nights. The officers paid the money, and Mr. Elbert entered their names, addresses and telephone numbers into a laptop computer. He also inquired as to their favorite food and drink, so that those refreshments could be provided on their birthdays. The officers were then searched before being allowed to enter the House.

Once inside, they viewed approximately thirty-five to fifty people drinking and dancing. After receiving their free beverages, the officers were informed by Mr. Elbert that they could "get" more alcohol upstairs and, according to Officer Mitchell's testimony, they then purchased intoxicants upstairs.

On April 10, 1993, Officers Karen Bumpas, Ernest Baskerville and Jeffrey Stockdale went to one of Mr. Elbert's parties as part of an undercover vice team which investigated potential liquor violations. Once the officers arrived, they were asked if they had memberships. An employee informed them that, on this occasion, they could enter for a five dollar fee, but that subsequent visits would require a membership. Officers Baskerville and Stockdale were patted down before being admitted, and Officer Bumpas' purse was searched.

Inside, approximately seventy-five people were drinking and dancing downstairs, while another twenty-five were gathered upstairs. Wet bars were set up on both floors of the House. Officer Baskerville claimed to have purchased a Michelob and a Mystic Water on the first floor. On the second floor, Officer Bumpas witnessed what she believed was a dice game entailing the exchange of money. Mr. Elbert, however, testified that only pool, dominoes and cards were permitted upstairs, and that gambling did not occur. The following evening, Officers Bumpas and Baskerville attempted to return, but were denied entry because they did not possess a membership.

On October 5, 1993, Officer Jeffrey Stockdale telephoned the House to inquire about becoming a member of Nightlife Incorporated. He was told to come to the residence to sign up and, on October 7, 1993, he did so in an undercover capacity. Approximately one week later, Officer Stockdale attended a party in plain clothes. Officer Stockdale claimed to have purchased a Michelob from a female behind the bar, but stated that he never saw any gambling at the House.

Mr. Elbert testified that, despite contrary testimony by officers, there was no fee for entry into his home. Nor does he charge anyone for liquor once they are inside the residence, although members can give donations at any time and place.

Neither Mr. Elbert nor Ms. Mercer was ever arrested for any of the above incidents. However, Mr. Elbert was arrested and charged in Kansas City Municipal Court for illegally selling alcoholic beverages on a different date, November 7, 1992. ⁵ After entering a plea of not guilty, Mr. Elbert was acquitted on July 15, 1993.

The State then filed the instant suit against Mr. Elbert and Ms. Mercer, claiming that the House was used in the perpetration of criminal activity or, alternatively, that the House was obtained or paid for through criminal activity, in violation of CAFA, and that forfeiture was the appropriate remedy. In its petition, the State alleged that:

a. On August 15, 1992, Richard M. Elbert was in the possession of a 9mm pistol while creating a disturbance.

b. On September 17, 1992, the residence was used to store and distribute 1,837 grams of crack cocaine.

c. On November 7, 1992, the residence was illegally used as a "party house" in which alcoholic beverages were sold and distributed without a state or local license having been obtained.

d. On April 10, 1993, the residence was illegally used to promote gambling and to sell alcoholic beverages without a state or local license having been obtained.

e. The residence has been continually used as a "party house" where illegal gambling and illegal sales of alcoholic beverages have been ongoing and where the activity has been actively advertised as available.

The case was tried to the court on December 20, 1993. At trial, the State abandoned the claim that the House was purchased by moneys gained from illegal activities and proceeded only on its claim that the House was used in the commission of crimes. At the conclusion of the bench trial, the court dismissed the State's petition and denied its request for forfeiture. In its Findings of Fact, the court stated that CAFA:

does not require a finding of criminal responsibility to sustain an order of forfeiture. While a plea of guilty or a finding of guilty arising out of a seizure transaction may...