U.S. v. Premises Known as 717 South Woodward Street, Allentown, Pa.

• Decision Date: 20 August 1993
• Docket Number: No. 92-1916,92-1916
• Citation: 2 F.3d 529
• Parties: UNITED STATES of America v. PREMISES KNOWN AS 717 SOUTH WOODWARD STREET, ALLENTOWN, PENNSYLVANIA; a Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania; Premises Known as 245-247 North Second Street, Allentown, Pennsylvania; A Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania; Premises Known as 209-217 North Second Street, Allentown, Pennsylvania; A Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania; and Any and All Proceeds From the Sale of Said Property. 717 South Woodward Street, Allentown, Pennsylvania; 245 and 247 North Second Street, Allentown, Pennsylvania; and 209-217 North Second Street, Allentown, Pennsylvania, Wyrma Acevedo Rivera and Luis Rivera * , Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 529

2 F.3d 529

27 Fed.R.Serv.3d 1

UNITED STATES of America v. PREMISES KNOWN AS 717 SOUTH WOODWARD STREET, ALLENTOWN PENNSYLVANIA; a Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania Premises Known as 245-247 North Second Street, Allentown Pennsylvania; A Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania Premises Known as 209-217 North Second Street, Allentown, Pennsylvania; A Parcel of Real Property and All Improvements Thereon, and All Appurtenances Thereto, Lying in the County of Lehigh, Commonwealth of Pennsylvania; and Any and All Proceeds From the Sale of Said Property. 717 South Woodward Street, Allentown, Pennsylvania; 245 and 247 North Second Street, Allentown, Pennsylvania; and 209-217 North Second Street, Allentown, Pennsylvania, Wyrma Acevedo Rivera and Luis Rivera ^*, Appellants. No. 92-1916.

United States Court of Appeals, Third Circuit.

Argued May 17, 1993.

Decided Aug. 20, 1993.

Louis T. Savino, Jr., Robert Rebstock (argued), Philadelphia, PA, for appellants.

Michael M. Baylson, U.S. Atty., Sonia C. Jaipaul, Asst. U.S. Atty., Chief, Financial Litigation Div., James H. Swain (argued), Asst. U.S. Atty., Philadelphia, PA, for appellee.

Before: STAPLETON, ALITO and SEITZ, Circuit Judges.

OPINION OF THE COURT

STAPLETON, Circuit Judge:

We consider here whether, under some circumstances, a claimant asserting the innocent owner defense to forfeiture of property used in federal drug offenses may successfully oppose a motion for summary judgment solely by declaring under oath that he or she did not know of the activity giving rise to forfeiture. On the present record, we hold that a reasonable juror could believe the assertions of claimants Wyrma Acevedo Rivera and Luis Rivera and that there is thus a genuine issue of fact for trial.

I.

The United States brought this civil forfeiture action pursuant to the Controlled Substances Act, 21 U.S.C. Sec. 881(a)(7), against three parcels of real property in Allentown, Pennsylvania, used by Jaime Rivera to facilitate cocaine distribution. Utilizing the evidence from its successful prosecution of Jaime, the government showed probable cause to believe that the defendant property was used to facilitate violations of the federal drug laws. The burden then shifted to the claimants to the property, Jaime Rivera's wife, Wyrma Acevedo Rivera, and another man, Luis Rivera, to show by a preponderance of the evidence that the property was not used to further drug crimes, or that they were innocent owners because the illegal activity occurred either without their knowledge or without their consent. Id. ("no property shall be forfeited ... to the extent of an interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner"); United States v. Property Known as 6109 Grubb Road, 886 F.2d 618, 626 (3d Cir.1989). Wyrma and Luis asserted, in sworn pleadings and answers to interrogatories, that they were owners within the meaning of the forfeiture statute, ¹ and that they did not know of Jaime's drug activity.

The facts concerning the defendant properties, and Jaime Rivera's drug activity there, are not in dispute. The property at 717 South Woodward Street was the residence of Jaime and Wyrma, who held title as tenants by the entireties. Jaime arranged to consummate a three kilogram deal there on July 31, 1991. Pursuant to a search warrant executed that afternoon, officers found a brown paper bag containing three kilos on the table in the dining room and also found drug paraphernalia in a box and trash bag in the basement.

The second defendant property housed the El Nuevo Puerto Rican Food Market, which Wyrma operated with her husband; they again held title as tenants by the entireties. Jaime often kept cocaine there and received deliveries from a courier there about three times a month. It was also the site of meetings and telephone calls between Jaime and a government informant to arrange drug transactions.

Jaime Rivera was the sole record owner of the third property, known as the Liederkranz Club. Luis Rivera claims an ownership interest, however, by virtue of a resulting trust arising from his contribution to the down payment on this property. Jaime used the Liederkranz property to negotiate and consummate several cocaine transactions.

In response to the government's complaint of forfeiture, Wyrma and Luis claimed to be innocent owners, she of all three properties and he of the Liederkranz Club. In her verified pleadings and answers to interrogatories, Wyrma asserted that she did not know of her husband's drug dealing, that there was no evidence that she did, and that during the course of Jaime's criminal conduct she operated the food market and used earnings from it to maintain the South Woodward residence, thus explaining that her support and the support of the marital household came from a legitimate source. The district court granted summary judgment for the government, 804 F.Supp. 716 (1992), reasoning that Wyrma's "bare denial coupled with whatever tenuous inferences can be drawn from her allegations" was merely "colorable" and "not significantly probative" considering the frequency and kind of drug activity occurring where she lived and worked; the court also found that Wyrma had no ownership interest in the Liederkranz property and thus could not assert the innocent owner defense in regard to it. As for Luis, the court recognized that there was no evidence to suggest that he knew of Jaime's activity but nonetheless found his bare denial of knowledge insufficient to create a triable issue of fact.

The district court's subject matter jurisdiction was conferred by 21 U.S.C. Sec. 881 and 28 U.S.C. Sec. 1335, and our jurisdiction, following the entry of summary judgment, rests on 28 U.S.C. Sec. 1291. Our review of a grant of summary judgment is, as always, plenary. Metzger v. Osbeck, 841 F.2d 518, 519 (3d Cir.1988).

II.

A.

Although there is case law that can be read to suggest otherwise, we know of no basis for concluding that the precepts governing resolution of summary judgment motions generally are not equally applicable to summary judgment motions in forfeiture proceedings. To the contrary, it is clear that Federal Rule of Civil Procedure 56 and the case law interpreting that rule control the disposition of summary judgment motions in forfeiture proceedings. United States v. One 107.9 Acre Parcel of Land Located in Warren Township, 898 F.2d 396, 398 (3d Cir.1990); United States v. Lot 4, Block 5 of Eaton Place, 904 F.2d 487, 490 (9th Cir.1990). Accordingly, we begin our analysis with a review of Rule 56 jurisprudence and the cases which have applied that jurisprudence in the context of forfeiture proceedings.

Summary judgment is appropriate if the moving party shows that there is no genuine issue of material fact. Fed.R.Civ.P. 56(c). A genuine issue exists, and thereby precludes summary judgment, when there is evidence from which a reasonable trier of fact could find in favor of the nonmoving party, viewing the record as a whole in light of the evidentiary burden the law places on that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56, 106 S.Ct. 2505, 2512-14, 91 L.Ed.2d 202 (1986). Although entitled to the benefit of all justifiable inferences from the evidence. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513, the nonmoving party may not, in the face of a showing of a lack of a genuine issue, withstand summary judgment by resting on mere allegations or denials in the pleadings; rather, that party must set forth "specific facts showing that there is a genuine issue for trial," else summary judgment, "if appropriate," will be entered. Fed.R.Civ.P. 56(e). Moreover, if the nonmoving party's evidence, when viewed in the context of all of the evidence, could not be credited by a rational juror, summary judgment may be granted. Anderson, 477 U.S. at 248-49, 106 S.Ct. at 2510-11.

In accordance with these general principles, a motion for summary judgment in a civil forfeiture action must be evaluated "in light of the statutory law of forfeitures, and particularly the procedural requirements set forth therein." United States v. Lot 4, Block 5 of Eaton Place, 904 F.2d 487, 490 (9th Cir.1990) (citation omitted). A claimant resisting forfeiture of property based on the innocent ownership defense must prove by a preponderance of the evidence that the activity giving rise to forfeiture occurred either without the claimant's knowledge or without the claimant's consent. Grubb Road, 886 F.2d at 626. Thus, when the government seeks summary judgment against such a claimant, the claimant must come forward with sufficient evidence to warrant a reasonable juror's concluding that there was a lack of knowledge or consent.

It is clear that a claimant's bare denial of knowledge or consent may be insufficient to withstand summary judgment in a forfeiture case. In United States v. One 107.9 Acre Parcel of Land Located in Warren Township, 898 F.2d 396 (3d Cir.1990), for example, we upheld summary judgment for the government on a wife's claim that she had not consented to her husband's marijuana harvesting; although the wife averred in an affidavit that she had pleaded with her husband to stop and had threatened to leave him, her self-serving statements were insufficient to create a triable issue in light of undisputed facts showing her substantial and protracted participation in the operation, including her preparation and maintenance of elaborate records. Id. at 398-99. In a similar vein is United States v. Property Located at 15 Black Ledge Drive, 897 F.2d 97 (2d Cir.1990), where the wife of a convicted drug dealer asserted without elaboration that she had no knowledge that...