U.S. v. 15 Bosworth St., 00-1215

• Decision Date: 04 December 2000
• Docket Number: No. 00-1215,00-1215
• Parties: (1st Cir. 2001) UNITED STATES OF AMERICA, Plaintiff, Appellant, v. 15 BOSWORTH STREET, Defendant. HENRY T. KONICK AND DELORES KONICK, Claimants, Appellees. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 50

236 F.3d 50 (1st Cir. 2001)

UNITED STATES OF AMERICA, Plaintiff, Appellant, v. 15 BOSWORTH STREET, Defendant.

HENRY T. KONICK AND DELORES KONICK, Claimants, Appellees.

No. 00-1215

United States Court of Appeals For the First Circuit

Heard December 4, 2000

Decided January 4, 2001

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Edward F. Harrington, U.S. District Judge]

[Copyrighted Material Omitted] Shelbey D. Wright, Assistant United States Attorney, with whom Donald K. Stern, United States Attorney, was on brief, for appellant.

Roger Witkin for appellees.

Before Selya and Stahl, Circuit Judges, and Lisi,^* District Judge.

SELYA, Circuit Judge.

In this forfeiture action, the United States sought to seize a structure housing a tavern in which drug dealers had set up shop. The building was owned by a married couple, Henry and Delores Konick. They answered the complaint and filed a claim to the property, asserting that they neither knew of the drug trafficking nor had given their imprimatur to it. The district court ruled in the claimants' favor.

The government appeals, arguing that the court impermissibly eased the claimants' burden of proving their "innocent owner" defense. We agree that the district court erred, but we fear that the court's comments about the burden of proof, voiced at various stages of the bench trial, may have lulled the claimants into a false sense of security. To guard against that possibility, we vacate the judgment and remand for further proceedings before a new trier.

I. BACKGROUND

In 1981, the claimants purchased the land and building located at 15 Bosworth Street, Boston, Massachusetts (the Property). The Property comprises a three-story brick frame structure with entrances on both Bosworth and Bromfield Streets. It houses three businesses: a delicatessen, a jewelry store, and Ye Olde Province Tavern (colloquially known as Hanks Bar). The delicatessen and the jewelry store share the entrance at 53-55 Bromfield Street.

The tavern, which operates on the second floor of the building, has its own entrance at 15 Bosworth Street. Its public area consists of an open space with tables and an L-shaped bar. Delores Konick is the president of the corporation that holds the liquor license for the premises, and the Konicks' son Stephen is the treasurer and clerk.

The Boston police began investigating Hanks Bar in 1995. Their probe revealed evidence of gambling and a flourishing trade in stolen goods. Although the police hierarchs eventually decided not to press charges, the officers supervising the investigation repeatedly warned Henry Konick that they would not tolerate continued illicit activity on the premises.

These admonishments did little good. In a matter of months, the authorities began to receive anonymous tips that a different type of criminal conduct had reared its head. The informants suggested that the claimants' sons Ronald and Robert (who were, respectively, the day manager and the night manager of Hanks Bar) were trafficking in controlled substances. The suspicions generated by this suggestion intensified when, on December 1, 1997, two patrons overdosed on heroin in the bar's restroom. The police responded to the ensuing emergency call and recovered six glassine bags coated with heroin residue. Following this incident, the municipal licensing board held a series of hearings. Stephen, Ronald, and Robert Konick all testified and offered solemn assurances that they were exercising due vigilance to prevent drug use on the Property.

In 1998, the Boston police launched a covert investigation. An undercover detective became a "regular" at the tavern and, over an eight-month interval, bought drugs there on approximately twenty-five occasions. These transactions included purchases of cocaine and other controlled substances from Robert Konick and two other members of the tavern's work force. On August 14, 1998, matters reached a predictable climax; police officers executed a search warrant at the premises and recovered a substantial quantity of cocaine, along with marijuana, codeine, and sundry drug paraphernalia. Three employees of the tavern, including Robert Konick, were charged criminally and eventually convicted.

On November 2, 1998, the United States commenced a forfeiture action in which it alleged that the Property had been used, or was intended for use, to distribute narcotics in violation of 21 U.S.C. § 856(a),¹ and thus was forfeitable under 21 U.S.C. § 881(a)(7). The following day, the district court authorized the filing of a notice of lis pendens. The Konicks opposed the petition for forfeiture and timely filed a claim to the Property.

The case was tried to the court. The government presented testimony from two law enforcement officers (including the detective who had infiltrated the bar). This testimony clearly established that the Property had been used over a substantial period of time for the unlawful distribution of controlled substances. Neither witness, however, made much mention of the claimants.² When the United States completed its case in chief, the district court denied the claimants' motion for judgment as a matter of law. After a brief recess, the claimants rested without calling any witnesses. The court entertained arguments and then found that the claimants had proved by a preponderance of the evidence that they neither knew about, nor had consented to, the commission of any proscribed act on the Property. The court entered judgment accordingly. This appeal ensued.

II. THE STANDARD OF REVIEW

When a district court conducts a bench trial, its legal determinations engender de novo review. Smith v. F.W. Morse & Co., 76 F.3d 413, 420 (1st Cir. 1996). This includes its determinations about the sufficiency of the evidence. Sierra Fria Corp. v. Evans, 127 F.3d 175, 181 n.2 (1st Cir. 1997). In contrast, the court's factual findings are entitled to considerable deference. Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir. 1990). This deference comports with common sense: a judge, sitting jury-waived, has the opportunity to see and hear the witnesses at first hand and to immerse himself in the nuances of the proof. Consequently, the appellate process ought to respect the trial judge's superior "feel" for the case and his enhanced ability to weigh and evaluate conflicting evidence. Anderson v. City of Bessemer City, 470 U.S. 564, 574-75 (1985).

We hasten to add that respect does not mean blind allegiance. Despite the deference due, an appellate court will displace factual findings made in the aftermath of a bench trial if those findings are clearly erroneous. Jackson v. United States, 156 F.3d 230, 232-33 (1st Cir. 1998); Fed. R. Civ. P. 52(a). Moreover, when a trial court bases its findings of fact on an inaccurate appraisal of controlling legal principles, the rationale for deference evaporates entirely. See Vinick v. United States, 205 F.3d 1, 6-7 (1st Cir. 2000); Johnson v. Watts Regulator Co., 63 F.3d 1129, 1138 (1st Cir. 1995).

We append one final observation. When doubt arises, the duty to determine whether the "clearly erroneous" standard applies in a particular case lies with the court of appeals, not with the district court. Just as litigants cannot evade the clearly erroneous standard by relabelling issues of fact as issues of law, e.g., Johnson, 63 F.3d at 1138, so too a trial judge may not insulate a decision from plenary review by characterizing a determination of law as a factual finding.

With this prelude, we proceed to analyze the decision below. In the course of that analysis, the relevance of the preceding discussion will become apparent.

III. ANALYSIS

Congress has devised a mechanism for civil forfeiture of assets and property used in connection with certain drug violations. See 21 U.S.C. § 881. Insofar as real estate is concerned, the statute authorizes the forfeiture of:

All real property, including any right, title, and interest . . . in the whole of any lot or tract of land and any appurtenances or improvements, which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, [certain drug violations], except that no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.

Id. § 881(a)(7). It is this provision that the government invoked against the Property.

In section 881(a)(7) cases, as in all civil forfeiture cases brought pursuant to section 881, the customs laws dictate the progression of proof. See id. § 881(d) (mandating reference to the customs laws); 19 U.S.C. § 1615 (codifying relevant provisions of the customs laws). In practice, then, if the United States brings a forfeiture action against a parcel of real estate and a person claiming an interest in the real estate chooses to contest the forfeiture, the government bears the burden of demonstrating probable cause to support a belief that a nexus existed between the real estate and some specified illegal activity sufficient to justify forfeiture. United States v. One Parcel of Real Property (Great Harbor Neck, New Shoreham, R.I.), 960 F.2d 200, 204 (1st Cir. 1992); United States v. Parcel of Land (28 Emery St.), 914 F.2d 1, 3-4 (1st Cir. 1990); United States v. Parcels of Real Property (1933 Commonwealth Ave.), 913 F.2d 1, 3 (1st Cir. 1990). Once the government carries its relatively modest burden of showing probable cause, the devoir of persuasion shifts to the claimant, who must refute the government's prima facie case in one of two ways: either (1) by demonstrating that the property was not in fact used for the specified illegal activity, or (2) by proving that she (the claimant) neither knew about, nor consented to, the illicit activity. Great Harbor Neck, 960 F.2d at 204. The...