U.S. v. 228 Acres of Land and Dwelling Located on Whites Hill Road in Chester, Vt.

• Decision Date: 17 October 1990
• Docket Number: D,No. 1358,1358
• Parties: UNITED STATES of America Drug Enforcement Agency, Plaintiff-Appellee, v. 228 ACRES OF LAND AND DWELLING LOCATED ON WHITES HILL ROAD IN CHESTER, VT., et al., Defendants, Saverio Moreno, Claimant-Appellant. ocket 90-6072.
• Court: U.S. Court of Appeals — Second Circuit

Page 808

916 F.2d 808

UNITED STATES of America Drug Enforcement Agency, Plaintiff-Appellee, v. 228 ACRES OF LAND AND DWELLING LOCATED ON WHITES HILL ROAD

IN CHESTER, VT., et al., Defendants,

Saverio Moreno, Claimant-Appellant.

No. 1358, Docket 90-6072.

United States Court of Appeals,

Second Circuit.

Argued May 15, 1990.

Decided Oct. 17, 1990.

Christopher B. Baril, Rutland, Vt., Asst. U.S. Atty., D. Vt. (George J. Terwilliger, III, U.S. Atty., D. Vt., Helen M. Toor, Asst U.S. Atty., of Counsel), for plaintiff-appellee.

Murray Appleman, New York City, for claimant-appellant.

Before OAKES, Chief Circuit Judge, PRATT, Circuit Judge, and LEVAL, District Judge for the Southern District of New York, sitting by designation.

GEORGE C. PRATT, Circuit Judge:

Claimant Saverio Moreno appeals from decrees of forfeiture granted by James S. Holden, Judge of the United States District Court for the District of Vermont, in two forfeiture actions, which were consolidated in the district court in anticipation of trial, and which are being heard as a single appeal. Moreno argues that the district court erred in denying his motion for summary judgment in the first action. He made no such motion in the second action. For the reasons discussed below, we affirm the district court's order denying Moreno's summary judgment. Furthermore, because the district court did not abuse its discretion in granting the defaults that required dismissal of Moreno's claims in both forfeiture actions, we affirm the judgments of the district court.

I. BACKGROUND

This appeal involves two separate in rem civil forfeiture actions brought by the government in the District of Vermont after claimant Moreno pled guilty in the United States District Court for the District of New Jersey to a conspiracy to distribute heroin. In the first action, the government sought the forfeiture of six parcels of real property, a $50,000 mortgage interest on another parcel, five pieces of John Deere farming equipment, and four all-terrain vehicles. In the second, the government sought the forfeiture of a collection of antiques.

Moreno filed claims in both actions, but both claims were ultimately dismissed because he failed to fulfill his obligations as a litigant. In the first action, his claim was dismissed under Fed.R.Civ.P. 37 for failing to comply with the district court's discovery order; his claim in the second action was dismissed under Fed.R.Civ.P. 16(f) for failing to appear at a pretrial conference. On this appeal Moreno does not challenge the decisions of the district court holding him in default; rather, he focuses his appeal primarily on his challenge to the government's claim of probable cause for the forfeiture, a challenge that the district court rejected when it denied Moreno's motion for summary judgment made in the first action. In addition, Moreno attacks the reliability of the affidavit by the DEA agent, used by the government to establish probable cause. He also advances a perfunctory challenge to the constitutionality of the forfeiture statutes.

In order to clarify the issues on appeal, we must review the procedural history of these two actions in some detail.

A. The first action.

On August 2, 1988, the government filed a civil forfeiture complaint under 21 U.S.C. Sec. 881(a)(6), seeking the forfeiture of six parcels of real property, a mortgage interest, five pieces of farming equipment, and four all-terrain vehicles. Copies of the summons and complaint were mailed on August 8th to Moreno, who acknowledged receipt thereof on August 24, 1988. Pursuant to a warrant issued by the district court, the subject properties were seized on August 8th and 9th. Moreno, who was in prison, filed his claim pro se on September 1st, and through counsel, his answer to the government's complaint on October 11th. Joanne Niece, who with Moreno jointly owned some of the subject parcels and to whom Moreno had transferred full title of other parcels, also filed a claim to some of the properties.

In December 1988 the parties agreed on, and the district court approved, a discovery schedule that contemplated completion of all discovery by July 15, 1989. Moreno failed to respond to the government's first discovery request, but the government twice granted his requests for extensions. When Moreno still failed to respond, however, the government moved to compel discovery. Claiming that the length of the interrogatories and his distance from the court had made compliance difficult, Moreno requested still more time. The court ordered Moreno to comply by March 15, 1989.

When Moreno failed to meet even this deadline, the government, on March 17, 1989, moved for a default judgment. In opposition, Moreno filed a memorandum of law. In addition, claiming that there was no probable cause for forfeiture, he moved for a summary judgment dismissing the action. The district court denied both motions, but assessed nominal attorney's fees against Moreno, and fixed a further deadline for Moreno to comply with the government's discovery demands.

Moreno still failed to comply, however, and on June 8, 1989, the government moved again to compel discovery. Moreno filed a response on June 14, 1989, and the government, on June 21st, then made its second motion for a default. This time, the district court, on July 25, 1989, granted the government's motion for a default and dismissed Moreno's claim on the ground that he had failed to provide discovery as required by Fed.R.Civ.Proc. 37. Dismissal of Moreno's claim left Joanne Niece's claim against some of the subject properties as the only unresolved matter in the first action.

B. The Second Action.

On October 18, 1988, the government commenced the second civil forfeiture action, which sought the forfeiture of a number of antiques that the government had found in two of the houses located on parcels that were the subject of the first forfeiture action. The antiques were formally seized, pursuant to a warrant, on October 24, 1988. On November 11, 1988, Moreno filed both his answer to the complaint and his claim to the antiques; he was the only claimant.

By the beginning of August 1989, Niece was the only claimant left in the first proceeding, and Moreno was the only claimant in the second. Because of overlapping factual and legal issues in the two actions, the government moved for consolidation. On August 8, 1989, the district court granted the motion to consolidate and scheduled a pretrial conference for October 10, 1989. Neither Moreno nor his attorney appeared for the conference, and they submitted no pretrial brief, contrary to the court's earlier direction.

The government then moved for a default judgment against Moreno in the second action, and on December 21, 1989, the court granted that motion. Two days earlier the court had approved the settlement of Niece's claim in the first proceeding.

With all claims in both actions thus disposed of--Niece's claim in the first action by settlement, and Moreno's claims in both actions by defaults--the court signed final decrees of forfeiture in the two actions on December 21, 1989.

II. DISCUSSION

A. Issues on Appeal.

Moreno has not challenged the defaults; indeed, he made no motion in the district court to be relieved of either one. On appeal, moreover, he has offered no explanation and presented no justification for his litigation conduct. No circumstance that might otherwise mitigate the defaults is apparent on this record. Absent any legal reason, therefore, as to why these determinations were improper, the district court did not abuse its discretion in entering the defaults and granting judgments to the government.

Moreno contends, however, that the defaults are in effect irrelevant, because the government's case was legally deficient in that at the very outset the government lacked probable cause for the forfeitures. Particularly, he argues that the district court erred in determining on his motion for summary judgment that the government had probable cause to believe that the defendant properties were forfeitable.

In opposition, the government first seeks dismissal of the appeal in the first action, claiming that the summary judgment order, which Moreno concedes is the primary target of that appeal, was a nonfinal order that cannot be reviewed on appeal. The government confuses, however, the concepts of appealability and reviewability. An order that denies summary judgment or grants partial summary judgment cannot by itself be the basis for an appeal, since it is nonfinal. See e.g., Group Health Inc. v. Blue Cross Ass'n, 793 F.2d 491, 496 (2d Cir.1986). But simply because it cannot be the basis for an appeal, this does not mean that such an order can never be subject to review. On the contrary, upon the entry of a final judgment, such as the judgments of forfeiture in these cases (even when such judgments are granted on default), the earlier, nonfinal orders that affect those judgments become subject to appellate review. An order on summary judgment, if not a final order that can be immediately appealed, does "fall[ ] within the large class of orders that are indeed reviewable on appeal after final judgment * * *." Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 377, 101 S.Ct. 669, 675, 66 L.Ed.2d 571 (1981). Thus, the district court's order denying summary judgment to Moreno and granting partial summary judgment to the government on the issue of probable cause is reviewable on this appeal from the final decree of forfeiture.

On oral argument Moreno's counsel made the point that his only opposition to the government's forfeiture claim was advanced in the legal issues tendered by his summary judgment motion. Having lost that motion on the law, and having no opposition to the government's factual claims, he saw no need for discovery in the case and no need to require a trial on the merits. While we think that greater candor with the district court and with the U.S....