U.S. v. One Parcel of Prop. Loc. at 2556 Yale Ave., 96-3270D.

• Decision Date: 17 September 1998
• Docket Number: No. 96-3270D.,96-3270D.
• Citation: 20 F.Supp.2d 1212
• Parties: UNITED STATES of America, Plaintiff, v. ONE PARCEL OF PROPERTY LOCATED AT 2556 YALE AVENUE, et. al., Defendants.
• Court: U.S. District Court — Western District of Tennessee

20 F.Supp.2d 1212

UNITED STATES of America, Plaintiff, v. ONE PARCEL OF PROPERTY LOCATED AT 2556 YALE AVENUE, et. al., Defendants.

No. 96-3270D.

United States District Court, W.D. Tennessee, Western Division.

September 17, 1998.

Christopher E. Cotten, U.S. Atty's Office, Federal Office Bldg., Memphis, TN, for U.S.

James R. Garts, Jr., Harris Shelton Dunlap & Cobb, Memphis, TN, Gerald F. Easter, Law Offices of Gerald F. Easter, Memphis, TN, E.E. Edwards, III, Edwards & Simmons, Nashville, TN, for Defendants.

ORDER DENYING CLAIMANTS' MOTION TO DISMISS

DONALD, District Judge.

Before the court is the motion of Claimants, James Elkins, Carol Elkins, Renaissance Investments, Inc. and RICAS Properties, Inc., to dismiss thirteen (13) of Plaintiff's sixteen (16) consolidated forfeiture cases, for failure to state a claim upon which relief can be granted pursuant to Federal Rule Civil Procedure 12(b)(6). For the following reasons, the Court denies Claimants' 12(b)(6) motion to dismiss.

I. BACKGROUND FACTS

In July, 1996, Detectives Ralph Gary and Deon Cincinelli of the Memphis Police Department's Organized Crime Unit received information that marijuana was being grown in a building located at 155 Scott Street in Memphis, Tennessee. On, or about, August 21, 1996, after investigating this information, Detectives Gary and Cincinelli spoke with James Elkins, the owner of the building, at his home at 1270 Tutwiler in Memphis, Tennessee. Mr. Elkins, according to the affidavit of Special Agent Thomas Morgan of the Drug Enforcement Administration (DEA), gave the detectives his consent to search the building and agreed to accompany them there to let them in. On the way to the building, Elkins allegedly drove extremely slowly and took a circuitous route. The detectives allegedly discovered approximately five (5) pounds of processed marijuana inside the building located at 155 Scott Street in Memphis, Tennessee. During the search, detectives Gary and Cincinelli noticed a room in the building without a door. The detectives made a hole in the wall after obtaining Elkin's consent, according to Special Agent Thomas Morgan's affidavit. The officers entered and found what appeared to be a marijuana growing operation, which was not then in use, complete with lights, tanks, hoses, and chemicals and other equipment needed to grow marijuana. Subsequently, James Elkins and his wife, Carol Elkins, who was at the 155 Scott Street building when the detectives arrived, were placed under arrest, and subsequently charged with various violations of drug laws.

Search warrants were obtained that same day for buildings at 146 Neil Street and 2896 Walnut Grove Road, both in Shelby County, Memphis, Tennessee and owned by James Elkins and Carol Elkins.

Officers executing the search warrant at 2896 Walnut Grove Road, a warehouse-type building, discovered a complete, active marijuana growing operation, including equipment used for growing marijuana. The officers found approximately 1306 growing marijuana plants, firearms, and six (6) Mexican nationals who were apparently living in the warehouse.

The warehouse at 146 Neil Street housed a second active marijuana growing operation with all the necessary equipment. This marijuana operation was discovered during a search of the premises. An additional two (2) Mexican nationals were discovered inside the 146 Neil Street warehouse with approximately 320 growing marijuana plants and approximately 794 plants already harvested.

Memphis police officers served a search warrant at 1270 Tutwiler, the Elkins' residence. The officers discovered, what appeared to be, a dormant marijuana grow, and approximately four (4) pounds of processed marijuana in an upstairs attic. On the stairwell leading to the attic, officers discovered approximately 253 grams of cocaine.

Once the arrest of James Elkins and Carol Elkins had taken place, law enforcement officials seized all financial records for Elco Construction, Renaissance Properties, and Rica Properties found in the principal business offices for these entities. These were all companies owned and controlled by the Elkins. The business records for these companies were examined by Special Agent John Rankin of the Internal Revenue Service. According to Special Agent Morgan's affidavit, ledgers, spreadsheets, or any other accounting documents reflecting money or other income coming into any of these companies was absent. The records reportedly showed payments to vendors and employees, as well as any other business conducted by the companies, was done almost entirely in cash, cashier's checks, and money orders. The bank statements and other company records of the Elkins show almost no evidence of funds coming into these companies from their business activities, but show a substantial amount of money being paid out. According to Special Agent Morgan's affidavit, records show outgoing payments from the businesses exceeding the deposits into the companies' bank accounts by more than $100,000.

Further police investigation of public records, and business records of the Elkins, show James Elkins and Carol Elkins owning a number of parcels of real property, either personally or through companies controlled by them, the following properties: One parcel of real property located at 101 South Front Street, Memphis, Tennessee; One parcel of real property located at 880 North Germantown Parkway, Cordova, Tennessee; One parcel of real property located at 2896 Walnut Grove Road, Memphis, Tennessee; One parcel of real property located at 155 Scott Street, Memphis, Tennessee; One parcel of real property located at 139 Scott Street, Memphis, Tennessee; One parcel of real property located at 137 Scott Street, Memphis, Tennessee; One parcel of real property located at 165 Neil Street, Memphis, Tennessee; One parcel of real property located at 2459 Harvard Street, Memphis, Tennessee; One parcel of real property located at 2473/2475 Harvard, Memphis, Tennessee; One parcel of real property located at 2469 Harvard Street, Memphis, Tennessee; One parcel of real property located at 2463 Harvard Street, Memphis, Tennessee; One parcel of real property located at 146 Neil Street, Memphis, Tennessee; One parcel of real property located at 183 Neil Street, Memphis, Tennessee; One parcel of real property located at 83 Madison Avenue, Memphis, Tennessee; One parcel of real property located at 115 South Front Street, Memphis, Tennessee; One parcel of real property located at 646 East Street, Memphis, Tennessee; One boat slip, Number D-25, located at East Harbor Bend Marina, Memphis, Tennessee; One parcel of real property located at 1270 Tutwiler, Memphis, Tennessee; One parcel of real property located at 1254 Tutwiler, Memphis, Tennessee; One parcel of real property located at 2468 Hale, Memphis, Tennessee; One parcel of real property located at 395 North Willet, Memphis, Tennessee; One parcel of real property located at 2499 Hollins, Memphis, Tennessee; One parcel of real property located at 2495 Hollins, Memphis, Tennessee; One parcel of real property located at 2503 Hollins, Memphis, Tennessee.

Agent Rankin has examined the sale documents for some of the properties in question. The sales contracts, for several of the properties, show a price which was considerably less than the money actually paid to the seller at closing. The additional payments were reflected in a "private addendum" for each purchase found among the Elkins' records, but not made part of the closing documents according to the affidavit of Special Agent Morgan. Jeanette Martin, the seller of the real property at 115 S. Front Street to the Elkins, told Agent Rankin that James Elkins refused to provide her with a copy of the private addendum used in the sale.

II. SUBJECT MATTER JURISDICTION

This civil action is brought in response to a forfeiture of real property proceeding, by the United States, regarding real properties 2556 Yale Avenue, et al., located in Shelby County, Memphis, Tennessee, and the territory of the U.S. District Court, Western Division. Therefore, the Court has subject matter jurisdiction under 28 U.S.C. §§ 1345 and 1355.

III. STANDING

A person must have standing to become a claimant in a forfeiture action brought by the United States. The claimant has the burden of proving an interest in the property sufficient to establish his standing under 28 U.S.C. § 881 to contest the seizure and resulting forfeiture. United States v. Premises Known as 526 Liscum Drive, 866 F.2d 213 (6th Cir.1989). The affidavit of complaint, by Agent Morgan, is sufficient evidence to show the claimants have an interest in the real property subject to forfeiture. See United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993). Therefore, the claimants have standing to challenge the government's forfeiture action.

IV. STANDARDS OF REVIEW

A. Motion to Dismiss Pursuant to Rule 12(b)(6):

A motion to dismiss under Fed.R.Civ.P. 12(b)(6) requires the court to construe the complaint in the light most favorable to the plaintiff, accept all the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the claims that would entitle relief. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.1990). The court is limited to examining whether plaintiffs complaint sets forth allegations sufficient to make out the elements of a cause of action. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983). The court may not grant such a motion to dismiss based upon a disbelief of a complaint's factual allegations. Lawler v. Marshall, 898 F.2d 1196, 1199 (6th Cir.1990). All facts alleged in the complaint must be accepted as true. Nishiyama v. Dickson County, Tennessee, 814 F.2d 277, 279 (6th Cir.1987). The court should not weigh evidence or evaluate the credibility of witnesses. Miller v. Currie, 50 F.3d 373, 377 (6th Cir.1995). Ad...