U.S. v. Indoor Cultivation Equipment from High Tech Indoor Garden Supply

• Decision Date: 26 May 1995
• Docket Number: No. 93-2817,93-2817
• Citation: 55 F.3d 1311
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. INDOOR CULTIVATION EQUIPMENT FROM HIGH TECH INDOOR GARDEN SUPPLY, One 1986 Nissan Pick-up Truck VIN JN6ND11S6GW003022, One 1986 Shoreland'r Trailer VIN 1MDBEET15GC269277, and One 1985 Starcraft Boat VIN STRP7061E585 with 140 Horsepower Mercruiser Engine, Defendants, Rayburn D. Pollard, Jr., Claimant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1311

55 F.3d 1311

31 Fed.R.Serv.3d 832

UNITED STATES of America, Plaintiff-Appellee, v. INDOOR CULTIVATION EQUIPMENT FROM HIGH TECH INDOOR GARDEN SUPPLY, One 1986 Nissan Pick-up Truck VIN JN6ND11S6GW003022 One 1986 Shoreland'r Trailer VIN 1MDBEET15GC269277, and One 1985 Starcraft Boat VIN STRP7061E585 with 140 Horsepower Mercruiser Engine, Defendants Rayburn D. Pollard, Jr., Claimant-Appellant.

No. 93-2817.

United States Court of Appeals Seventh Circuit.

Argued Feb. 9, 1995.

Decided May 26, 1995.

Estaban F. Sanchez (argued), Office of the U.S. Atty., Springfield, IL, for plaintiff-appellee.

Allen E. Shoenberger and Melissa Murphy-Petros, Law Student (argued), Loyola University School of Law, Chicago, IL, for appellant.

Before BAUER and COFFEY, Circuit Judges, and CRABB, District Judge. ^*

CRABB, District Judge.

Claimant-appellant Rayburn Pollard, Jr. appeals from the denial of his motion under Fed.R.Civ.P. 60(b) to set aside a default judgment entered against his indoor marijuana cultivation equipment, pick-up truck, powerboat and trailer in a forfeiture action brought by the United States pursuant to 21 U.S.C. Secs. 881(a)(2), (a)(4) and (a)(6). Pollard suffered the default by failing to answer the government's in rem complaint. For the reasons expressed below, we affirm in part and reverse in part, holding that the district court properly declined to vacate the judgment against Pollard's cultivation equipment, but should have vacated the judgment against his pick-up truck, powerboat and trailer because the late filing of the government's complaint rendered the judgment void against those conveyances.

FACTUAL BACKGROUND

The facts are of record and undisputed. On October 26, 1989, after months of investigating the business operations of High Tech Indoor Garden Supply in Washington, Illinois, federal Drug Enforcement Administration agents arrested its owner, Rayburn Pollard, Jr., and seized the company's indoor cultivation equipment as well as Pollard's 1986 Nissan pick-up truck, Starcraft powerboat and Shoreland'r trailer. On January 8 and February 5, 1990, Pollard contested the On April 24, 1991, Pollard pleaded guilty to manufacturing marijuana in violation of 21 U.S.C. Sec. 841(a)(1). Approximately three months later, on July 30, 1991, the United States began a civil forfeiture proceeding against Pollard's seized property, filing a verified four-count in rem complaint in the United States District Court for the Central District of Illinois. In Count I, the government sought forfeiture of Pollard's indoor cultivation equipment on the grounds that it had been used to manufacture a controlled substance under 21 U.S.C. Sec. 881(a)(2) and constituted proceeds traceable to an exchange for a controlled substance under 21 U.S.C. Sec. 881(a)(6). In Count II, the government sought forfeiture of Pollard's pick-up truck under the theory that it represented the proceeds of drug transactions under 21 U.S.C. Sec. 881(a)(6) and also had been used to facilitate drug transactions under 21 U.S.C. Sec. 881(a)(4). In Counts III and IV, the government sought forfeiture of Pollard's powerboat and trailer solely under 21 U.S.C. Sec. 881(a)(6) on the ground that both were purchased with proceeds of drug transactions.

forfeiture of his property by filing the appropriate claims and cost bonds.

On August 21, 1991, Pollard filed a claim of ownership, and on September 3, 1991, through his privately retained attorney, moved unsuccessfully to dismiss the government's complaint. After the district court denied his motion on February 19, 1992, Pollard failed to file an answer within twenty days as required by Rule C(6) of the Supplemental Rules of Certain Admiralty and Maritime Claims, which govern the procedures for civil forfeiture actions. On March 26, 1992, the government moved for entry of default and mailed a copy of the motion to Pollard's attorney as well as to the lawyer who had represented Pollard in his underlying criminal case. On April 10, 1992, after no response to the motion had been filed, the district court entered a default order against Pollard's cultivation equipment, pick-up truck, powerboat and trailer. Five days later the government moved for entry of default judgment and again mailed a copy of its motion to each of Pollard's attorneys. No response was filed and on April 17, 1992, the district court entered default judgment in favor of the government.

Pollard contends he learned of the default judgment for the first time on September 20, 1992, while incarcerated, and immediately began educating himself about in rem forfeiture procedures. He filed a pro se motion to vacate the judgment on November 24, 1992, asserting several grounds for relief, including his attorney's failure to notify him of the pending default or to respond on his behalf. He also argued that the government's complaint was time-barred under the applicable forfeiture laws, thereby rendering the default judgment void. Rejecting each of the asserted grounds for Rule 60(b) relief, the district court denied Pollard's motion on May 26, 1993.

OPINION

To prevail on a motion to vacate a default judgment under Rule 60(b), a party must show (1) good cause for the default; (2) quick action to correct the default; and (3) the existence of a meritorious defense to the original action. Jones v. Phipps, 39 F.3d 158, 162 (7th Cir.1994); United States v. Di Mucci, 879 F.2d 1488, 1495 (7th Cir.1989). We review a district court's denial of a Rule 60(b) motion for an abuse of discretion. Jones, 39 F.3d at 162. Under this standard, we will reverse the district court only if we conclude that no reasonable person could agree with its holding. Id.

A. Forfeiture of Pollard's Pick-up Truck, Powerboat, and Trailer

In November of 1988, Congress enacted a series of provisions substantially heightening the procedural requirements applicable to the forfeiture of conveyances seized by the government for drug-related offenses. See Anti-Drug Abuse Act of 1988, Pub.L. No. 100-690, 102 Stat. 4181, 4326 (codified at 21 U.S.C. Sec. 888). These provisions give owners of such conveyances several procedural rights not enjoyed by claimants in other federal forfeiture actions. The provision most relevant to this case is codified at 21 U.S.C. Sec. 888(c). It requires the government to file its complaint for forfeiture against any conveyance it seizes for a drug-related offense not later than 60 days after a claimant contests the seizure by filing a claim and cost bond. Section 888(c) provides:

Not later than 60 days after a claim and cost bond have been filed under section 1608 of Title 19 regarding a conveyance seized for a drug-related offense, the Attorney General shall file a complaint for forfeiture in the appropriate district court.... If the Attorney General does not file a complaint as specified in the preceding sentence, the court shall order the return of the conveyance to the owner and the forfeiture may not take place. ¹

Though Pollard presents numerous challenges to the district court's denial of his motion to vacate, his primary argument is based on Sec. 888(c) and is directed only at that part of the default judgment relating to his pick-up truck, powerboat and trailer. Pollard contends that because the government did not file its civil complaint seeking the forfeiture of his property until July 30, 1991, over eighteen months after he filed the appropriate claims and cost bonds, the only jurisdiction the district court retained over these three conveyances, according to Sec. 888(c), was to order their return to him and prevent any forfeiture of them from taking place. In other words, the government's failure to comply with the 60-day requirement of Sec. 888(c) divested the district court of jurisdiction to enter any judgment (including a default judgment) against his conveyances, despite his failure to answer the government's complaint. Accordingly, Pollard maintains that the default judgment against his conveyances is void and that the district court should have set it aside under Rule 60(b)(4).

In opposition, the government does not dispute that its forfeiture complaint against Pollard's property was filed much later than 60 days after Pollard filed his claims and cost bonds. Nor does the government contest that Pollard's pick-up truck, powerboat, and trailer are all "conveyances." See Random House Dictionary of the English Language 445 (2d ed. 1987) (defining "conveyance" as "a means of transporting, esp. a vehicle, as a bus, airplane, or automobile"). Instead, the government argues that Sec. 888(c) simply does not apply in this case because Pollard's pick-up truck, powerboat and trailer are not conveyances seized "for a drug-related offense" within the meaning of the statute. According to the government, Congress's use of the modifying phrase "for a drug-related offense" limits the applicability of Sec. 888(c) to the forfeiture of conveyances seized solely on the ground that they "facilitated" drug transactions under 21 U.S.C. Sec. 881(a)(4); Congress never intended for Sec. 888(c) to apply to the forfeiture of conveyances sought as "proceeds traceable" to such transactions under 21 U.S.C. Sec. 881(a)(6). ² Thus, the government's argument runs, the expedited procedures of Sec. 888(c) are inapplicable here because the government sought forfeiture of Pollard's powerboat and trailer solely on the ground that they constituted "proceeds" under Sec. 881(a)(6), and sought forfeiture of Pollard's pick-up truck on the dual grounds that it both "facilitated" drug transactions under Sec. 881(a)(4) and constituted "proceeds" under Sec. 881(a)(6).

Addressing first the applicability of Sec. 888(c) to this case, we conclude that the government's narrow interpretation of the statute is flawed in several respects. To begin, the government's interpretation is inconsistent with the plain language of the statute. The unambiguous text of Sec. 888(c) does not...