U.S. v. Parcel of Real Property Known as 6109 Grubb Road, Millcreek Tp. Erie County, Pa.

• Citation: 886 F.2d 618,110 A.L.R.Fed. 553
• Decision Date: 15 December 1989
• Docket Number: Nos. 89-3201,89-3202,s. 89-3201
• Parties: , 28 Fed. R. Evid. Serv. 1463 UNITED STATES of America v. PARCEL OF REAL PROPERTY KNOWN AS 6109 GRUBB ROAD, MILLCREEK TOWNSHIP ERIE COUNTY, PENNSYLVANIA and Buildings and Improvements Erected Thereon. Appeal of Jane DiLORETO.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 618

886 F.2d 618

110 A.L.R.Fed. 553, 28 Fed. R. Evid. Serv. 1463

UNITED STATES of America v. PARCEL OF REAL PROPERTY KNOWN AS 6109 GRUBB ROAD, MILLCREEK

TOWNSHIP ERIE COUNTY, PENNSYLVANIA and Buildings

and Improvements Erected Thereon.

Appeal of Jane DiLORETO.

Nos. 89-3201, 89-3202.

United States Court of Appeals, Third Circuit.

Argued June 28, 1989.

Decided Oct. 2, 1989.

Rehearing and Rehearing In Banc Denied Dec. 15, 1989.

^*

John Paul Garhart (argued), Dunlavey, Nichols, Ward & Krill, Erie, Pa., for appellant.

Paul J. Brysh, Constance M. Bowden (argued), U.S. Atty's, Office, Pittsburgh, Pa., for appellee.

Before MANSMANN, SCIRICA and SEITZ, Circuit Judges.

OPINION OF THE COURT

MANSMANN, Circuit Judge.

In this appeal from an order of forfeiture, the wife of a defendant convicted of several violations of narcotics statutes presents us with the question of whether the wife's knowledge of her husband's violations alone is sufficient to result in forfeiture of the marital property held by tenants by the entireties used to further the illegal transactions pursuant to Sec. 306(a) of the Comprehensive Crime Control Act of 1984, Pub.L. 98-473, codified at 21 U.S.C.A. Sec. 881(a)(7) (West 1989 Supp.), or whether the defense of lack of consent is still available. In addition, we are faced with the challenge to the district court's admission of hearsay evidence used to rebut the wife's innocent owner defense.

We conclude that the forfeiture statute provides that an owner or an individual with an interest in real property can avoid forfeiture by proving by a preponderance of the evidence that the illegal act or omission was committed or omitted either without his knowledge or without his consent. Further, we conclude that the district court erred by considering the hearsay evidence introduced by the government for any purpose other than to determine probable cause. Consequently, we will vacate the order of forfeiture entered by the district court and remand for further proceedings consistent with this opinion.

I.

In April 1988, the government filed civil forfeiture proceedings pursuant to Sec. 306(a) of the Comprehensive Crime Control Act of 1984, 21 U.S.C.A. Sec. 881(a)(7) (West 1989 Supp.), seeking to have two parcels of real property seized and forfeited. The property consisted of two parcels; one located at 6109 Grubb Road, Erie County, the other located at 708-710 West Ninth Street, Erie, Pennsylvania. The Grubb Road parcel was the residence of the appellant Jane DiLoreto, her husband Richard and their five children. Prior to the purchase of the Grubb Road property, the DiLoretos lived at the West Ninth Street address, which was subsequently held as rental property.

The forfeiture proceedings came after an investigation by the Federal Bureau of Investigation, Drug Enforcement Administration, and Pennsylvania State Police disclosed that Richard DiLoreto used both parcels to further the trafficking of illegal narcotics. The proceedings were stayed pending outcome of the trial. Richard DiLoreto was convicted in a jury trial in the Western District Court of Pennsylvania of conspiring to possess with intent to distribute and distributing cocaine (21 U.S.C.A. Sec. 846), use of the telephone to facilitate the conspiracy (21 U.S.C.A. Sec. 843(b)), and failing to report income received from the sale of cocaine (26 U.S.C.A. Sec. 6723).

Thereafter, the stay was lifted and the forfeiture proceedings commenced. The DiLoretos conceded that there was probable cause to believe that the premises had been used to commit or facilitate the commission of narcotics violations. Jane DiLoreto contended, however, that she either did not have knowledge of the use or did not consent to the use of the property for facilitating narcotic violations.

At the forfeiture hearings, the government produced deposition testimony of several witnesses which was read into the record by the government's witness, Agent Kelly of the FBI. DiLoreto objected to the use of the deposition testimony because it was impermissible hearsay with regard to the issue of the innocent owner defense. The government stated the evidence was being introduced for the purpose of establishing probable cause for forfeiture pursuant to Sec. 881(a)(7).

The district court determined, based on all the evidence before it, that Jane DiLoreto had failed to carry her burden of showing innocent ownership by a preponderance of the evidence. ¹ Consequently, the district court entered an order forfeiting the interest of Jane and Richard DiLoreto in the two parcels of property. In so doing, the district court also rejected the DiLoretos' arguments that: 1) 21 U.S.C.A. Sec. 881 was unconstitutional because it was essentially criminal in nature and violated the due process clause of the fifth amendment by putting the burden of proof on them; 2) Sec. 881 violated the bill of attainder clause of the Constitution and the eighth amendment prohibition against cruel and unusual punishment; and, 3) that the forfeiture amounted to double jeopardy because it imposed an additional punishment against Richard for his narcotics violations conviction. Jane DiLoreto appeals from the district court's order of forfeiture.

Because review of the district court's order involves the interpretation of legal principles and statutory provisions, our review is plenary. Thus, we reverse only if we determine that the district court committed an error of law. As to the district court's decision concerning the admissibility of evidence, we review for an abuse of discretion.

II.

A) Hearsay Evidence

In a forfeiture proceeding, the government must first meet its burden of showing probable cause for the seizure of the property. United States v. 55,518.05 In U.S. Currency, 728 F.2d 192 (3d Cir.1984). Probable cause is defined as a reasonable ground for belief in guilt. Ted's Motors v. United States, 217 F.2d 777 (8th Cir.1954). "The determination of probable cause in a forfeiture proceeding simply involves the question whether the information relied on by the government is adequate and sufficiently reliable to warrant the belief by a reasonable person that" the property was used to further the trafficking of illegal narcotics. United States v. One 56-Foot Motor Yacht Named Tahuna, 702 F.2d 1276, 1282 (9th Cir.1983). Probable cause can be established by hearsay. United States v. A Single Family Residence, 803 F.2d 625 (11th Cir.1986), and United States v. One 56-Foot Yacht Named Tahuna, 702 F.2d at 1283. Consequently, the government introduced the deposition testimony of five lay-witnesses through the testimony of a government agent who read the depositions into the record. Jane DiLoreto contends that this is the improper use of hearsay which deprived her of her right to cross-examine the witnesses.

Because forfeiture proceedings under 21 U.S.C.A. Sec. 881 are considered civil proceedings, not criminal, see United States v. Premises Known as 2639 Meetinghouse, 633 F.Supp. 979 (E.D.Pa.1986), and United States v. D.K.G. Appaloosas, Inc., 829 F.2d 532 (5th Cir.1987), apart from a due process challenge DiLoreto cannot invoke the sixth amendment right to confront the witnesses against her. In addition, because the question of whether the government has established probable cause to seek forfeiture depends not upon the admissibility of evidence upon which the government relies but upon the legal sufficiency and reliability of the evidence, DiLoreto cannot challenge the use of deposition testimony as impermissible hearsay as to the issue of probable cause. See United States v. One 56-Foot Yacht Named Tahuna, 702 F.2d at 1283 (affidavit in support of probable cause determination may be based on hearsay).

DiLoreto's counsel objected to the use of the deposition testimony at the forfeiture hearing because, having already conceded that there was probable cause to believe the property had been used to further narcotics violations, it was up to DiLoreto to prove her lack of knowledge or consent as part of the innocent owner defense. Thus, DiLoreto contends, the government's use of the deposition testimony was unnecessary to show probable cause. Instead, the government allegedly used the testimony of Agent Kelly reading the depositions to rebut DiLoreto's innocent owner defense. As such, DiLoreto argues, this was inadmissible hearsay.

Under the Federal Rules of Evidence, Rule 802 states that "hearsay is not admissible except as provided by these rules or by other rules prescribed by the Supreme Court...." The two rules which list exceptions are Rules 803 and 804. Deposition testimony is admissible under Rule 804 where the declarant is unavailable to testify. ² Generally, the burden of showing unavailability of a witness is placed on the proponent of the hearsay deposition testimony. See Complaint of Bankers Trust Co., 752 F.2d 874 (3d Cir.1984) and United States v. York, 852 F.2d 221 (7th Cir.1988). The unavailability of an individual to testify cannot be premised solely on the fact that the proponent of the testimony--here, the government--does not feel their presence is necessary.

The government argues that it cannot be forced to stipulate to probable cause and can introduce the hearsay testimony to meet the threshold issue of probable cause. We do not disagree with that argument--to that point. The government then argues that once the evidence is admitted it can be considered for any purpose. With that contention, the government is in error. See David B. Smith, Prosecution and Defense of Forfeiture Cases, [hereinafter Smith] p 11.03 (1988) ("government's hearsay is only admissible on the preliminary probable cause issue and not on the merits of the dispute").

It is well settled law that evidence which is relevant and admissible as to one issue, here probable cause, can be inadmissible as to another issue, i.e., to rebut the innocent owner defense. See McCormick on Evidence, Secs. 59, 60 (3d ed. 1984) and D....