U.S. v. West Indies Transport Co., Inc., Criminal Action No. 93-195 (D. V.I. 7/19/1999)

• Decision Date: 19 July 1999
• Docket Number: Criminal Action No. 93-195.,Civil Action No. 98-104.
• Parties: UNITED STATES OF AMERICA and GOVERNMENT OF THE VIRGIN ISLANDS, Plaintiffs, v. WEST INDIES TRANSPORT CO., INC., WIT EQUIPMENT CO., INC., and W. JAMES OELSNER, Defendants. WITWATER CORPORATION, Petitioner, v. MICHAEL E. MURPHY, in his capacity as Area Port Director for the United States Customs Service, Respondent.
• Court: U.S. District Court — Virgin Islands

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UNITED STATES OF AMERICA and GOVERNMENT OF THE VIRGIN ISLANDS, Plaintiffs, v. WEST INDIES TRANSPORT CO., INC., WIT EQUIPMENT CO., INC., and W. JAMES OELSNER, Defendants.

WITWATER CORPORATION, Petitioner, v. MICHAEL E. MURPHY, in his capacity as Area Port Director for the United States Customs Service, Respondent.

Criminal Action No. 93-195.

Civil Action No. 98-104.

United States District Court, D. Virgin Islands, Division of St. Croix, St. Thomas and St. John.

July 19, 1999.

James A. Hurd, Jr., Esq., United States Attorney, Curtis V. Gomez, Esq., Assistant U.S. Attorney, Federal Building & U.S. Courthouse, St. Thomas, VI, Attorneys for Plaintiff United States of America

Treston E. Moore, Esq., MOORE & DODSON, St. Thomas, VI, Attorney for Defendant W. James Oelsner

Andrew C. Simpson, Esq., BRYANT WHITE & BARNES, P.C., St. Croix, VI, Attorney for Petitioner Witwater Corporation.

Curtis Gomez, Esq., Assistant U.S. Attorney, James S. Carroll, Esq., Assistant U.S. Attorney, St. Thomas, VI, Attorneys for Respondent Michael E. Murphy

OPINION ON DEFENDANTS' MOTION TO QUASH AND OPPOSITION TO WRIT OF EXECUTION

OPINION ON MOTION OF WITWATER CORPORATION TO STAY OR QUASH EXECUTION OF WRIT

OPINION ON PETITION FOR ORDER OF MANDAMUS.

STANLEY S. BROTMAN, District Judge.

Presently before the Court are the following motions: (1) a motion filed by W. James Oelsner ("Oelsner") on behalf of all of the defendants to Criminal Action No. 93-195 to quash the writ of execution filed by the United States in that action; (2) a motion filed by Witwater Corporation ("Witwater") to stay or quash the writ of execution filed by the United States in Criminal Action No. 93-195; and (3) a petition for order of mandamus filed by Witwater in Civil Action No. 98-104.

I. FACTS AND PROCEDURAL BACKGROUND

On March 26, 1996, this Court entered a judgment against Oelsner ("Oelsner Judgment")¹ which imposed a prison sentence and required Oelsner to pay $1,440,450.00 in restitution² and $95,500 in fines. See Opp'n of the United States to the Emergency Mot. of Witwater Corporation to Intervene and to Stay or Quash Execution ("United States' Opposition"), Attach. 2. Also on March 26, 1996, this Court issued criminal judgments against West Indies Transport, Inc. ("West Indies") and WIT Equipment Co., Inc. ("WIT Equipment") in the same matter.³ All three judgments contained identical lists of vessels and real estate that the Court determined were subject to liens. See id. Included in the list was the vessel Wittug. See id.

On April 16, 1996, the United States recorded a lien against the Wittug at the Recorder of Deeds, Division of St. Croix to satisfy the $1,440,450.00 judgment previously entered against Oelsner. See id., Attach. 3. On November 9, 1998, the United States applied for a writ of execution on the Oelsner Judgment against the Wittug, serving Oelsner with a copy of the application by mail on November 10, 1998. Also on November 9, 1998, Witwater filed an emergency motion to intervene and to stay or quash execution of the writ. On November 12, 1998, this Court issued the writ. On November 23, 1998, Oelsner filed a motion to quash the writ of execution and to obtain a hearing on the matter.⁴

In addition to attempting to intervene in the United States' case against Oelsner, Witwater filed its own action regarding the Wittug. On May 22, 1998, Witwater filed a petition for order of mandamus, alleging that it owns the Wittug and that the United States Customs Service has wrongfully denied the Wittug clearance to depart St. Thomas, USVI where it is currently docked. See Pet. for Order of Mandamus, ¶¶ 6, 7, 9, 17. On August 7, 1998, the United States filed a motion to dismiss the petition, arguing that the Court lacked jurisdiction to issue an order of mandamus in such an action and that Witwater failed to exhaust its administrative remedies before filing the petition. On November 10, 1998, the Court heard argument on this motion and ordered that the hearing transcript be made part of the criminal action pending against Oelsner as well as part of the mandamus action Witwater initiated.

On December 16, 1998, the Court granted Oelsner's motion for a hearing on the writ of execution, permitting Witwater to intervene in the hearing for the limited purpose of challenging the writ. See United States v. West Indies Transport Co., Inc., 35 F.Supp.2d 450, 455, 458 (D.N.J. 1998). The Court stated that the hearing would be held for the purpose of determining the identity of the Wittug's owner, the value of the Wittug, and the cost of the remediation that remains to be done. See id. at 454, 458. At the same time, the Court denied the United States' motion to dismiss the petition for order of mandamus filed by Witwater in Civil Action No. 98-104. See id. at 457-58. Finally, the Court consolidated Criminal Action No. 93-195 and Civil Action No. 98-104 to the extent that the hearing on the writ would be a joint hearing on the question of the ownership of the Wittug. See id. at 458-59.

The hearing was held on April 19, 1999 at the U.S. Attorney's Office in St. Croix, USVI. Oelsner appeared at the hearing via satellite transmission. On May 10, 1999, Oelsner filed a memorandum in support of his motion to reduce restitution.⁵ See April 19, 1999 Hr'g Tr. at 104, 148 (giving parties leave to file post-hearing briefs clarifying the issues addressed at the hearing).

II. DISCUSSION

A. REQUEST FOR RESTITUTION REDUCTION

Oelsner has asked the Court to reduce the amount of restitution that is due and owing. See Defs.' Mot. to Quash, ¶ 5; Def. Oelsner's Mem. in Supp. of his Mot. to Reduce Restitution. The Oelsner Judgment indicates that "if the costs of [the United States'] cleanup efforts are less than the [restitution] amount to which the Court made reference of $1,440,450.00, credit will be given to the defendants to that extent." United States' Opp'n, Attach. 2. The Act prohibits the use of a writ to execute judgment on property that exceeds in value the aggregate amount of the judgment. See 28 U.S.C.A. § 3203(c)(2)(B)(i) (West 1994).

At the April 19, 1999 hearing, the Court permitted Oelsner to introduce evidence regarding the cost of the remediation that has been done and that remains to be done. The parties agreed that Oelsner has spent $50,000 to date removing six vessels, specifically the Witislander, the Witrollon, the Waterhaul, the Witbarge III, the Witbarge II, and the Witbridge. See Def.'s Ex. 49; April 19, 1999 Hr'g Tr. at 24. Oelsner testified that he has spent an additional $20,000 to date preparing two additional vessels for removal, specifically the M/V Mar and the Witdock. See April 19, 1999 Hr'g Tr. at 47. Oelsner predicted that the remaining remediation will cost approximately $32,000. See Def. Oelsner's Mem. in Supp. of his Mot. to Reduce Restitution at 9. The United States disputes this figure. See April 19, 1999 Hr'g Tr. at 90-91 (Commander Brian Salerno, Commanding Officer of the Coast Guard Marin Safety Office in San Juan, Puerto Rico, testifying that it would cost more than $40,000 to "accomplish the type of clean up contemplated by the site assessment for the motor vehicle Mar and the WIT Dock"). In addition, the United States points out that Oelsner has failed to account for two vessels which he was required to remove: the Witconcrete II and the Witcargo. See id. at 53-56; Def.'s Ex. 22. According to Oelsner, the Army Corps of Engineers removed the Witconcrete II; Oelsner has not reimbursed the Army Corps of Engineers for the expense it incurred in removing the vessel. See April 19, 1999 Hr'g Tr. at 54-55. Oelsner also testified that the Witcargo has not been removed. See id. at 55.

Because there is uncertainty surrounding the cost of the remediation that remains to be done, the Court will presently decline to reduce the amount of restitution that is due and owing. Once the clean-up is complete, Oelsner may move the Court to reduce the restitution amount indicated in the Oelsner judgment. Until that time, the amount will not be reduced.

B. MOTIONS TO QUASH THE WRIT OF EXECUTION

Both Oelsner and Witwater challenge the United States' right to execute judgment on the Wittug. They argue that Witwater, not Oelsner, is the owner of the vessel. The United States filed an application for a writ of execution pursuant to the Federal Debt Collection Procedures Act of 1990 ("FDCPA") which permits the United States, as a judgment creditor, to levy pursuant to a writ of execution upon "[a]ll property in which the judgment debtor has a substantial nonexempt interest." 28 U.S.C. § 3203(a) (West 1994). A writ of execution may be challenged by an individual or entity claiming an ownership interest in the property. See United States v. Coluccio, 842 F. Supp. 663, 665 (E.D.N.Y. 1994) (resolving a challenge to a writ of execution issued pursuant to the FDCPA where ownership of the subject property was in dispute), vacated on other grounds, 51 F.3d 337 (2^nd Cir. 1995). In such a situation, the burden of proving ownership of the subject property is borne by the claimant, not the judgment creditor. See id. (analogizing to civil forfeiture laws). To prove ownership, the claimant must do more than demonstrate that it is the record owner of the property; it must provide some evidence of control. See United States v. One 1982 Porsche 928, 732 F. Supp. 447, 451 (S.D.N.Y. 1990) ("While ownership may be proven by actual possession, dominion, control, title and financial stake, '[t]he possession of bare legal title to the res may be insufficient,' absent other evidence of control or dominion over the property."); see also United States v. One 1945 Douglas C-54 (DC-4) Aircraft, (Appeal 2), 647 F.2d 864, 866 (8^th Cir. 1981); United States v. One 1945 Douglas C-54 (DC-4) Aircraft, (Appeal 1), 604 F.2d 27, 28-29 (8^th Cir. 1979); United States v. One 1977 36 Foot Cigarette Ocean Racer, 624 F. Supp. 290, 294-95 (S.D.Fla.1985); United States v. One 1981 Datsun...