U.S. v. One Single Family Residence Located at 18755 North Bay Road, Miami

• Decision Date: 10 February 1994
• Docket Number: No. 92-4833,92-4833
• Citation: 13 F.3d 1493
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. ONE SINGLE FAMILY RESIDENCE LOCATED AT 18755 NORTH BAY ROAD, MIAMI, Including all appurtenances, fixtures, and improvements Therein and Thereon, Defendant, Yolanda Delio, Claimant-Appellant, Emilio Delio, Claimant-Appellant, Fred M. Ganz, Tax Collector, Dade County, Claimant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1493

13 F.3d 1493

62 USLW 2579

UNITED STATES of America, Plaintiff-Appellee, v. ONE SINGLE FAMILY RESIDENCE LOCATED AT 18755 NORTH BAY ROAD,

MIAMI, Including all appurtenances, fixtures, and

improvements Therein and Thereon, Defendant,

Yolanda Delio, Claimant-Appellant,

Emilio Delio, Claimant-Appellant,

Fred M. Ganz, Tax Collector, Dade County, Claimant.

No. 92-4833.

United States Court of Appeals, Eleventh Circuit.

Feb. 10, 1994.

Rodney W. Bryson, Miami, FL, for claimants-appellants.

Michael A. Rosen, Miami, FL, for Emilio Delio.

Madeleine R. Shirley, Linda Collins Hertz, Jeanne M. Mullenhoff, Barbara A. Ward, Miami, FL, for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before FAY ^*, DYER and SMITH ^**, Senior Circuit Judges.

DYER, Senior Circuit Judge:

This is an appeal of an in rem forfeiture under 18 U.S.C. Sec. 1955. Pursuant to the statute, the government sought forfeiture of real property that was used in an alleged gambling operation. The district court granted summary judgment in favor of the government. The owners of the real property, Emilio and Yolanda Delio, assert numerous grounds to challenge the order of forfeiture. We conclude that the grant of summary judgment of forfeiture against Yolanda Delio was based on an improper application of collateral estoppel. We vacate the judgment against her, and remand for further proceedings.

The judgment of forfeiture against Emilio Delio is reversed and the case remanded for further proceedings to determine the proper proportionality of damages suffered by the government.

FACTUAL BACKGROUND

This in rem civil forfeiture action was instituted by the government on October 11, 1990 against a single-family residence, which is the home of Emilio and Yolanda Delio. The property is located at 18755 North Bay Road, Miami Beach, Florida. The value of the property is approximately $150,000.00.

The forfeiture action resulted from the government's investigation of a poker game conducted by Mr. Delio at his home, involving some of his relatives and associates. The investigation included surveillance at the property on the evenings of September 12, 1990 (Wednesday), September 16, 1990 (Sunday), September 26, 1990 (Wednesday), and October 3, 1990 (Wednesday). On October 10, 1990, pursuant to a search warrant for the premises, the government seized from various rooms in the house, gambling records, poker tables, poker chips, decks of cards and cash.

The poker game was held at the Delio residence on Wednesday nights when "enough people showed up." The game was conducted in the enclosed patio area of the property. Individuals who were identified as operators, card dealers, cashiers or bookkeepers for the game, including Emilio Delio, were indicted on March 26, 1991. Yolanda Delio and her daughter, Maria, who were not indicted, had been at the premises during the poker games. They cooked and served food and drinks to the gamblers.

In this forfeiture proceeding, Emilio and Yolanda Delio, as claimants, answered the government's complaint. Emilio Delio is an 80-year old invalid residing at the property with his 66-year old wife, Yolanda. Their adult children also resided at the property.

The property is titled in the names of Emilio Delio and Yolanda Delio, his wife, as tenants by the entireties. Since the seizure of their home, the claimants have occupied the property under the terms and conditions of an occupancy agreement with the United States Marshal Service.

The Delios denied that the property was the situs of an illegal gambling business, as defined in 18 U.S.C. Sec. 1955(b). ¹ Yolanda Delio also affirmatively asserted an "innocent owner" defense in the district court, but has abandoned that issue on appeal.

On April 2, 1991, the government filed a motion for summary judgment, which was denied. The government's renewed motion for summary judgment was filed on December 2, 1991, after the criminal trial against Emilio Delio and his four codefendants was concluded. Yolanda Delio was not a party to the criminal proceedings. On October 30, 1991, Emilio Delio was convicted of all counts of conducting an illegal gambling operation. Three of the codefendants, Emilio's son Salvatore, Michael Metzger and David Oretsky were also found guilty. ² Codefendant Raymond Canino, the boyfriend of Maria Delio, was acquitted.

The government relied on the conviction of Emilio Delio to support its renewed motion for summary judgment on the issue of probable cause to establish a violation of 18 U.S.C. Sec. 1955. The renewed motion was founded upon the identical record upon which the original motion had been denied, with the exception of the additional facts involving the convictions in Emilio Delio's criminal case.

The parties consented to the matter being tried before a United States Magistrate Judge. Summary judgment was granted in favor of the government, and the district court ordered forfeiture of the real property. This appeal followed.

ISSUES RAISED

The Delios assert numerous grounds for reversal. The issues raised by Yolanda Delio concern the erroneous application of the doctrine of collateral estoppel and the existence of disputed factual issues to overcome the granting of summary judgment in favor of the government. The appellants jointly raise issues asserting violations of the state constitutional protection of the Florida homestead provision and the federal protection against excessive fines under the Eighth Amendment. Emilio Delio asserts a violation of the Fifth Amendment double jeopardy provision by reason of being subjected to two punishments for the same gambling offense.

I. Summary Judgment

A. Collateral Estoppel

Pursuant to 18 U.S.C. Sec. 1955(d), the subject property may be forfeited ³ to the United States if there is probable cause to believe that it was used in connection with the conducting, financing, managing, supervising, directing or owning of an illegal gambling business. Grant of summary judgment in favor of the government was based upon the district court's giving preclusive effect to Emilio Delio's criminal conviction with respect to both his claim and his wife's claim in the civil forfeiture proceeding. The district court expressly stated that:

Emilio Delio's conviction in the related criminal proceeding serves a dual function. For purposes of the government's initial burden, it provides sufficient evidence of probable cause. At the same time, it estops all would-be claimants from attempting to refute an issue of fact already decided, namely, that the property was used to facilitate a Sec. 1955 violation, thereby Yolanda Delio asserts that the district court improperly applied the doctrine of collateral estoppel against her based on her husband's criminal conviction. She argues that she should not be collaterally estopped to attack probable cause since she did not have an opportunity to litigate her position in the criminal trial in which she was not a party. We agree. We hold that Mrs. Delio is not bound by the factual determinations made in connection with her husband's criminal trial. See, e.g., Citibank, N.A. v. Data Lease Fin. Corp., 904 F.2d 1498, 1501-03 (11th Cir.1990).

putting an end to any probable cause defense. [Emphasis added].

The application of the doctrine of collateral estoppel as to Yolanda Delio in this civil forfeiture action was an error of law. She is not bound by facts established in a prior proceeding where she was not a party, her interests were not represented, and she was not in privity with a party, her husband.

We have not overlooked the general proposition that in a forfeiture action the defendant property is alleged to have committed the offense. The property is considered the guilty party, not necessarily the individuals who make claims therein. See, e.g., Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993); United States v. Four Parcels of Real Property on Lake Forrest Circle, 870 F.2d 586, 590 nn. 10-11 (11th Cir.1989). However, that concept does not deny the rights of a claimant who seeks to introduce evidence of disputed facts.

The error of applying the doctrine of collateral estoppel against Yolanda Delio established the basis for forfeiture. Therefore, the judgment against Yolanda Delio must be vacated and the case remanded to the district court for further proceedings to determine the factual basis for forfeiture upon the presentation of evidence.

B. Disputed Issues of Fact

Yolanda Delio contends that summary judgment was improperly granted in favor of the government because a genuine dispute existed as to the facts supporting probable cause under 18 U.S.C. Sec. 1955. A Section 1955 violation is established by a probable cause showing of the following three elements: first, the enterprise violates state law; second, the illegal gambling business involves five or more persons who conduct, finance, manage, supervise, direct or own all or part of such business; and third, the business was either in substantially continuous operation for a period in excess of thirty (30) days or had a gross revenue of $2,000.00 in a single day. 18 U.S.C. Sec. 1955(b) (1988); United States v. Tucker, 638 F.2d 1292, 1294 (5th Cir.Unit A Mar. 1981), cert. denied, 454 U.S. 833, 102 S.Ct. 132, 70 L.Ed.2d 111 (1981).

The government has the initial burden of establishing probable cause to believe that the property was used to facilitate a violation of 18 U.S.C. Sec. 1955. See United States v. One 1979 Porsche Coupe, 709 F.2d 1424, 1426-27 (11th Cir.1983). Once this burden is met, the burden shifts to the claimant to establish a defense to forfeiture, either by attacking probable cause or by establishing an innocent owner defense. To successfully overcome the government's initial probable cause showing, the claimant must establish its defense by a preponderance of the evidence. Failure to meet this burden results in forfeiture. See ...