U.S. v. Four Parcels of Real Property in Greene and Tuscaloosa Counties in State of Ala.

Citation893 F.2d 1245
Decision Date06 February 1990
Docket NumberNo. 89-7061,89-7061
PartiesUNITED STATES of America, Plaintiff-Appellant, v. FOUR PARCELS OF REAL PROPERTY IN GREENE AND TUSCALOOSA COUNTIES IN the STATE OF ALABAMA, etc.; J.C. Pate, Jr.; Rita Pate; et al., Defendants, Donald K. Daniel, Claimant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

Frank W. Donaldson, U.S. Atty., James D. Ingram, Birmingham, Ala., for plaintiff-appellant.

Stanley Sikes, Sikes & Kelly, John W. Kelly, Selma, Ala., for claimant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before TJOFLAT, Chief Judge, HATCHETT, Circuit Judge, and MORGAN, Senior Circuit Judge.

HATCHETT, Circuit Judge.

In this forfeiture action, the government urges the reversal of the district court's ruling that the government failed to sufficiently allege and prove the forfeitability of property a convicted drug dealer purchased with cash, but titled in the name of a person not involved in drug dealing who claims to be the supplier of the cash. We affirm.


Donald K. Daniel ("Daniel"), the claimant, has been in the logging business since 1979. During July of 1983, he purchased a used International model TD15D dozer from J.C. Pate, Jr. for $16,000. Pate and Daniel were life-long friends, and Pate frequently operated dozers for Daniel. Daniel uses the dozer to build access roads for his logging trucks. When the dozer needed repairs, Daniel asked Pate to haul the dozer to a repair shop. When the repairs were estimated at more than the value of the dozer, the tractor dealer offered to accept the used dozer as a trade-in on a new TD12 dozer.

On August 9, 1983, Daniel brought $65,000 in cash to the home of Dorothy Daniel, his sister-in-law and bookkeeper. She delivered the cash to Pate, and he purchased the new dozer, putting it initially in the name of Bobby Daniel, Dorothy Daniel's husband. On August 18, 1983, Dorothy Daniel received the bill of sale for the dozer through the mail. She asked Daniel and her husband about the name on the bill of sale, and subsequently arranged for Daniel's name to appear on the bill of sale. Daniel placed the dozer on the books of the logging business and depreciated it on the business's state and federal income tax returns.


On April 4, 1988, the government filed a civil complaint for forfeiture of real property belonging to Jackie D. Wilson, J.C. Pate, Jr., and Rita Pate. The complaint also sought the forfeiture of $35,350.22 in cash, and one International Hough Model TD 12 dozer with all appurtenances and equipment--the dozer in Daniel's name.

In paragraph one (1) of the complaint, the government alleged that the defendant properties were subject to forfeiture pursuant to 21 U.S.C. Sec. 881(a)(6). 1 Paragraph seven (7) of the complaint, which described the dozer, makes no reference to the controlling statute or to the theory supporting forfeiture pursuant to the statute. 2 The government expressly referred to the statute and to a substantial connection between the described property and illegal drug transactions concerning each of the other properties.

On April 18, 1988, Daniel filed an answer to the complaint and a motion for judgment on the pleadings, which the district court treated as a motion for summary judgment. Daniel supported his motion with two affidavits showing that he purchased the dozer for his logging business and that he purchased it with "legitimate" funds. The government submitted an affidavit of Donald W. McArthur, Special Agent, Federal Bureau of Investigation (FBI), stating that Pate purchased the dozer for Daniel with cash, and that Pate had been convicted of illegal drug trafficking. The FBI agent's affidavit further stated that Pate had shown a pattern of buying real and personal property in the names of other individuals, that he was a close associate of Donald Daniel and Bobby Daniel, and that the purchase of the dozer for $65,000 in cash is characteristic of individuals involved in illegal drug activity.

On December 8, 1988, the district court granted summary judgment in favor of Daniel, finding no genuine issue as to any material fact and that Daniel was entitled to a judgment as a matter of law. The district court found that the complaint did not show probable cause because the government did not specifically allege that Daniel acquired the dozer as a thing of value in exchange for a controlled substance or that the dozer was traceable to such an exchange as required under the statute. 3 The district court also found the FBI agent's affidavit insufficient to create a genuine material issue of fact when compared with the affidavits of Daniel and his bookkeeper that the dozer was purchased with Daniel's $65,000 in cash. The district court specifically found no substantial evidence that Daniel or his bookkeeper filed false affidavits. It also found no substantial evidence to support a reasonable inference that Pate owned the dozer.

On December 8, 1988, the district court granted Daniel's motion for summary judgment and ordered the government to relinquish possession and control of the property to Daniel. On December 22, 1988, the government filed a motion seeking a stay of the return of the dozer and a motion for reconsideration of the district court's order granting summary judgment. The court denied both motions. Finally, on January 17, 1989, the district court denied the government's second motion for a stay of the December 8 order.


The government contends that release of the dozer from the custody of the United States Marshal does not deprive the court of jurisdiction. The government also contends that the district court erred in granting summary judgment because a genuine issue of material fact exists as to whether Daniel is an "innocent owner," as defined in 21 U.S.C. Sec. 881(a)(6). Daniel contends that his stipulation not to remove the dozer from the jurisdiction is an insufficient basis for this court to exercise jurisdiction over the dozer. Daniel also contends that the speculations and conjectures contained in the FBI agent's affidavit are not legally sufficient to create a genuine issue of material facts.


The issues presented are (1) whether this court has jurisdiction over the dozer, and (2) whether the district court properly granted Daniel's motion for summary judgment.

A. Jurisdiction

The court has jurisdiction over the dozer. In rem jurisdiction derives entirely from the court's control over the defendant res. United States v. One Lear Jet Aircraft, 836 F.2d 1571 (11th Cir.) (in banc), cert. denied, 487 U.S. 1204, 108 S.Ct. 2844, 101 L.Ed.2d 881 (1988). In One Lear Jet, the court held that it lacked in rem jurisdiction over the aircraft because it had been removed from the court's territorial jurisdiction at the time of the appeal. The claimant did not file a motion for stay of judgment with the district court or a supersedeas bond with the appellate court. After the expiration of the automatic ten-day stay provided by Federal Rule of Civil Procedure 62(a), the government removed the aircraft to a warehouse in Missouri. 4 In United States v. One (1) 1983 Homemade Vessel Named Barracuda, 858 F.2d 643 (11th Cir.1988), the court found that it had jurisdiction over a fishing vessel that lay sunken on the bottom of Biscayne Bay. The government argued that because of the physical changes in the vessel and because of the virtual impossibility of salvaging it, the court should treat the vessel as if it had been removed from the court's jurisdiction. The court declined to treat the ability to salvage the boat as dispositive; "once in rem jurisdiction has attached, it is not defeated solely because a physical change occurs in the res." One 1983 Homemade Vessel Named Barracuda, 858 F.2d at 647.

The government has diligently attempted to maintain the court's jurisdiction over the defendant dozer. The district court denied two motions seeking a stay of the return of the dozer. The government contends that jurisdiction is supported by Daniel's sworn affidavit filed on December 28, 1988, in support of his response in opposition to the government's motion for a stay. In this affidavit, Daniel states: "I will not remove my dozer from the Northern District [of Alabama] so long as there are any pending proceedings in this case. Therefore, there will be no loss of jurisdiction."

Daniel does not now assert that the dozer has been removed from this court's territorial jurisdiction. 5 Absent any claim that the dozer is not within the court's jurisdiction, we find in rem jurisdiction over it.

B. Summary Judgment

The government contends that the district court erred in granting summary judgment for Daniel because a genuine issue of material fact existed concerning the source of the funds used to purchase the dozer.

1. Probable Cause for Forfeiture

In order to establish probable cause for forfeiture under section 881(a)(6), the government must show that "a substantial connection exists between the property to be forfeited and an illegal exchange of a controlled substance." United States v. A Single Family Residence and Real Property Located at 900 Rio Vista Blvd., 803 F.2d 625, 628 (11th Cir.1986) (citing United States v. Four Million, Two Hundred Fifty-Five Thousand, 762 F.2d 895 (11th Cir.1985), cert. denied, 474 U.S. 1056, 106 S.Ct. 795, 88 L.Ed.2d 772 (1986)) ($4,255,625.39 ). In demonstrating a substantial connection between the property and illegal drug transactions, the government is not required to show a relationship between the property and a specific drug transaction. $4,255,625.39, 762 F.2d at 904. The government's burden of demonstrating probable cause requires "less than prima facie proof but more than mere suspicion." United States v. One 1978 Chevrolet Impala, 614 F.2d 983, 984 (5th Cir.1980).

The district court found that the...

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