U.S. v. Wingfield

• Citation: 822 F.2d 1466
• Decision Date: 15 June 1987
• Docket Number: No. 84-2197,84-2197
• Parties: -1098, 88-1 USTC P 9367 UNITED STATES of America, Plaintiff-Appellee, v. Lloyd Ferrell WINGFIELD, Defendant-Appellee. Appeal of COUNTY OF BOULDER, COLORADO.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1466

822 F.2d 1466

61 A.F.T.R.2d 88-1098, 88-1 USTC P 9367

UNITED STATES of America, Plaintiff-Appellee, v. Lloyd Ferrell WINGFIELD, Defendant-Appellee.

Appeal of COUNTY OF BOULDER, COLORADO.

No. 84-2197.

United States Court of Appeals, Tenth Circuit.

June 15, 1987.

William D. Meyer, Hutchinson, Black, Hill, Buchanan & Cook, Boulder, Colo., for appellant.

Francis M. Allegra, Dept. of Justice, Washington, D.C. (Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup and Carleton D. Powell, Dept. of Justice, Washington, D.C., and Robert N. Miller, U.S. Atty., were also on the brief), for appellee.

Before HOLLOWAY, Chief Judge, and BARRETT and McKAY, Circuit Judges.

HOLLOWAY, Chief Judge.

This case presents a series of tangled jurisdictional questions involving the district court's subject matter jurisdiction of this case and its jurisdiction as to the Government. The underlying merits involve the status of a federal tax lien on contents of property seized and forfeited pursuant to a Colorado statute as a public nuisance because of use for unlawful activities involving controlled substances. The Government says the contents passed to Boulder County after the tax lien attached. The County of Boulder disagrees and claims the property for itself, clear of the tax lien. The district court agreed with the Government. We affirm.

I FACTUAL BACKGROUND

On November 5, 1982, Lloyd Ferrell Wingfield was arrested at his home by FBI agents pursuant to a federal arrest warrant charging him with unlawful flight to avoid prosecution. The arresting FBI agents were accompanied by an officer of the Boulder Police Department. At the time of the arrest, the Boulder Police Officer observed marijuana in Wingfield's residence.

The officer obtained a state warrant authorizing a search of the premises. Execution of the search warrant by federal and county agents and officers resulted in the seizure of the following items, inter alia: (1) eighteen grams of cocaine; (2) approximately $89,676.00 in United States currency; (3) a personal check in the amount of $688.00; and (4) various foreign currency, mint proof sets, and bars of Englehart silver, collectively valued at approximately $35,000.

On November 8, 1982, the Government filed a complaint charging Wingfield with possession of a controlled substance with the intent to distribute. On the same date, the District Attorney for Boulder County filed a civil action against Wingfield in the District Court for Boulder County pursuant to the Colorado Abatement of Public Nuisance Statute, Colo.Rev.Stat. Sec. 16-13-307. The following day local authorities released the seized items for use as evidence in the federal criminal case. It is that case against Wingfield which produces the appeal now before us.

On November 16, 1982, the State court granted Boulder County's temporary restraining order against the seized items, finding that the seized items had been used in conducting, maintaining, aiding and abetting a public nuisance. The State court further ordered pursuant to Sec. 16-13-308 that no person take any action to encumber, transfer, or assert a right of immediate possession to the seized items.

On January 13, 1983, the Internal Revenue Service (IRS) assessed income tax deficiencies against Wingfield for federal income taxes and on January 19 filed notices of federal tax liens with the Clerk and Recorder of Boulder County. After a trial to the court on written stipulation Wingfield was convicted on February 11, 1983, on the federal criminal charge.

On May 17, 1983, the State court issued an order effective nunc pro tunc to the date of seizure of the property (November 5, 1982), finding that the items seized by federal and state agents in Wingfield's home on November 5, 1982, were seized from premises which constituted a class I public nuisance and thus were forfeited to the county. Furthermore, the court held that there was no evidence which would entitle Wingfield to redelivery of the seized items. Wingfield appealed the State court's decision.

On September 1, 1983, after various conflicting claims to the seized items had been asserted, the federal district court ordered that the funds be deposited with the Clerk of that court. The court further ordered that notice be sent to the IRS, the United States Attorney's Office, and the County of Boulder "so that claims can be presented and disposition effectuated." I R. 32.

Thereafter Wingfield, the IRS, and the County of Boulder filed claims to the seized items. After a hearing the district court held that the State forfeiture decree could not supplant a previously filed federal tax lien, finding that a "State statute cannot subvert the primary authority of the federal government to collect its taxes under these circumstances." III R. 14. The court ordered the clerk of the court to satisfy the claim of the IRS and, if any proceeds remained, to satisfy the claim of Boulder County. The claimant Wingfield was held not entitled to any of the funds.

On February 28, 1985, the Colorado Court of Appeals affirmed in part and reversed in part the forfeiture judgment of the Boulder County District Court. Colorado v. Lot 23, 707 P.2d 1001 (Colo.Ct.App.1985). The court affirmed the State district court's judgment of forfeiture except as to the Englehart silver bars found in buckets, the Canadian mint sets found in buckets, and the Canadian currency found in a glass pitcher. Id. at 1004-05. As to these items Wingfield's rights to ownership were restored.

On May 8, 1987, the Supreme Court of Colorado affirmed in part and reversed in part the Colorado Court of Appeals decision ordering the reinstatement of the district court's forfeiture order. Colorado v. Lot 23, 735 P.2d 184 (Colo.1987). The Colorado Supreme Court held that the Colorado Court of Appeals had misconstrued the proper burden of proof that the State must necessarily carry in abatement of public

                nuisance cases.  The proper standard was whether the State has proved by a preponderance of the evidence that the items seized were used in the criminal activity.   Id. at 188-89.  The court answered in the affirmative, stating that all of the seized property was properly forfeited to the State. 1
                

II JURISDICTION

A. Ancillary Jurisdiction

Initially we must confront the jurisdictional questions generated by the complex procedural posture of the case. The case began as a federal criminal prosecution for possession with intent to distribute a controlled substance. The defendant in the criminal case was Wingfield. In the instant appeal, the controversy centers on a dispute between the IRS and the County of Boulder concerning rights to items seized at Wingfield's residence. These items were held by the district court as possible evidence in the criminal trial. The court concluded that it had the authority to resolve conflicting claims to the seized items as a matter of ancillary jurisdiction. The County of Boulder contends that the district court could not properly exercise ancillary jurisdiction in these circumstances.

Ancillary jurisdiction rests on the premise that a federal court acquires jurisdiction of a case or controversy in its entirety. Jenkins v. Weinshienk, 670 F.2d 915, 918 (10th Cir.1982). The district courts have jurisdiction to enter orders ancillary to a criminal proceeding concerning disposition of materials legally seized in connection with the criminal investigation of a case. See, e.g., United States v. Rangel, 608 F.2d 120, 121 (5th Cir.1979) (and cases cited therein). The interests of judicial efficiency dictate that the conflicting claims to property seized as evidence should be resolved by the criminal court. United States v. LaFatch, 565 F.2d 81, 83 (6th Cir.1977), cert. denied, 435 U.S. 971, 98 S.Ct. 1611, 56 L.Ed.2d 62 (1978).

In Herzfeld v. United States District Court for the District of Colorado, 699 F.2d 503 (10th Cir.), cert. denied, 464 U.S. 815, 104 S.Ct. 70, 78 L.Ed.2d 84 (1983), we held proper the district court's exercise of ancillary jurisdiction to appoint a receiver in a criminal case to effectuate a disposition of property to accomplish restitution by the defendant. There the court observed:

A criminal proceeding in a United States district court is not in a separate compartment with the court exercising only a limited portion of its authority as the appellants argue. The federal courts obviously are of limited jurisdiction but the extent of the authority of the district courts in these circumstances is not limited or governed by whether the proceeding is criminal or civil.

Id. at 506.

Here the seized property was to be used as evidence in a federal criminal case. The property was in the custody and control of the federal district court. It is this court which must determine the proper distribution of funds currently in its possession. We conclude that the district court does have the jurisdiction to enter an order concerning disposition of seized property in its control. Although the defendant was convicted on his plea of guilty, the district court had before it the facts and circumstances of the case. Cf. United States v. Ortega, 450 F.Supp. 211, 212 (S.D.N.Y.1978). It would result in a needless waste of judicial resources not to exercise ancillary jurisdiction here. Moreover, the existence of adequate civil remedies neither discharges the court's duties nor disturbs its jurisdiction. See United States v. Wilson, 540 F.2d 1100, 1104 (D.C.Cir.1976).

Thus the court's ancillary jurisdiction was properly exercised to dispose of the claims to the property in the custody of the court.

B. Appellate Jurisdiction

The Government argues that this court lacks appellate jurisdiction over this matter. It also says that the present action is barred by the doctrine of sovereign immunity. Moreover, the Government contends that the district court exercised in rem jurisdiction over the seized property and that such jurisdiction ceased to be valid on the...