United States v. 2121 Celeste Road SW

• Decision Date: 31 May 2016
• Docket Number: No. CIV 13-0708 JB/LAM,CIV 13-0708 JB/LAM
• Citation: 189 F.Supp.3d 1208
• Parties: United States of America, Plaintiff, v. 2121 Celeste Road SW, Albuquerque, New Mexico, More Particularly Described as: TR a Land Div Land of Jerry & Jennie Padilla (Replat Tr 52-a MRGCD Map 57) Cont 0.449 AC M/L Defendant, and Jerry L. Padilla, III; Jerry L. Padilla, Jr.; and Cruz J. Fraire, Claimants.
• Court: U.S. District Court — District of New Mexico

189 F.Supp.3d 1208

United States of America, Plaintiff,

v. 2121 Celeste Road SW, Albuquerque, New Mexico, More Particularly Described as: TR a Land Div Land of Jerry & Jennie Padilla (Replat Tr 52-a MRGCD Map 57) Cont 0.449 AC M/L Defendant,andJerry L. Padilla, III; Jerry L. Padilla, Jr.; and Cruz J. Fraire, Claimants.

No. CIV 13-0708 JB/LAM

United States District Court, D. New Mexico.

Filed May 31, 2016

Damon P. Martinez, United States Attorney, Stephen R. Kotz, Joel R. Meyers, Assistant United States Attorneys, United States Attorney's Office, Albuquerque, New Mexico, Attorneys for the Plaintiff

Jason Bowles, Bowles Law Firm, Albuquerque, New Mexico and Robert J. Gorence, Gorence & Oliveros PC, Albuquerque, New Mexico, Attorneys for the Defendant

MEMORANDUM OPINION AND ORDER¹

James O. Browning, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on: (i) Claimant Cruz J. Fraire's Motion for Summary Judgment, filed July 29, 2015 (Doc. 43)("Fraire MSJ"); and (ii) the United States' Motion for Summary Judgment and Memorandum Brief in Support, filed November 11, 2015 (Doc. 57)("United States MSJ"). The Court held hearings on November 2, 2015, January 5, 2016, and February 16, 2016, and a pre-trial conference on January 20, 2016. The primary issues are: (i) whether a genuine issue of material fact exists whether Claimant Cruz J. Fraire qualifies as an "owner" of 2121 Celeste Road, SW, Albuquerque, New Mexico ("2121 Celeste") for purposes of the innocent owner defense under § 983(d)(1) of the Civil Asset Forfeiture Act ("CAFRA"); (ii) whether a genuine issue of material fact exists whether Fraire qualifies as "innocent" under the CAFRA; (iii) whether the forfeiture of 2121 Celeste would violate the Excessive Fines Clause of the Eighth Amendment to the Constitution of the United States of America; and (iv) whether the delays in this case violate Fraire's due-process rights under the Fifth Amendment to the Constitution of the United States. The Court will deny the Fraire MSJ and grant the United States MSJ. First, the Court will deny the Fraire MSJ because a genuine issue of material fact exists whether Fraire qualifies as an "owner" of 2121 Celeste under the CAFRA and the United States has produced sufficient evidence that Fraire was aware of or willfully blind to the illegal activity taking place at 2121 Celeste, and that he did not do all that could reasonably be expected under the circumstances to terminate that activity. Second, the Court will grant the United States MSJ because, although a genuine issue of material fact exists whether Fraire qualifies as an "owner" of 2121 Celeste, no genuine issue of material fact exists whether Fraire qualifies as "innocent" under the CAFRA. Third, the Court concludes that the forfeiture of 2121 Celeste would not violate the Excessive Fines Clause of the Eighth Amendment. Fourth, the Court concludes that the delays in this case do not violate Fraire's due-process rights under the Fifth Amendment.

FACTUAL BACKGROUND

The Court will provide two factual sections. First, the Court will provide general background information to tell a coherent story and to provide context to this case. Second, the Court will set forth the undisputed material facts for purposes of deciding the two motions for summary judgment. The Court has drafted one undisputed material facts section based on the two motions, and it will rule on both parties' motions for summary judgment in this opinion.

1. General Background.

On August 1, 2013, Plaintiff United States of America filed its Verified Complaint for Forfeiture In Rem , listing Claimant Cruz J. Fraire as a person "who may claim an interest in Defendant Property." Verified Complaint for Forfeiture In Rem at 2, filed August 1, 2013 (Doc. 1)("Complaint"). On September 17, 2013, Fraire filed his Verified Claim and Statement of Interest (Doc. 10)("Verified Claim and Statement of Interest"), and his Answer to Verified Complaint for Forfeiture In Rem (Doc. 11)("Answer"), in which he asserted his lawful and innocent ownership of 2121 Celeste, and requested judgment in his favor, return of 2121 Celeste, costs, and attorney's fees. See Answer ¶¶ 2, 5, 7, at 1-2. Discovery commenced, and both sides served and responded to multiple Requests for Production. Fraire served interrogatories and deposed the Federal Bureau of Investigation ("FBI") case agent. See Certificate of Service of First Set of Interrogatories, filed September 25, 2014 (Doc. 17)("First Certificate of Service"); Certificate of Service of Second Set of Interrogatories, filed May 20, 2015 (Doc. 36)("Second Certificate of Service").

2. Undisputed Material Facts.

The Court divides its undisputed material facts into three sections. The Court will first describe Fraire's relationship with 2121 Celeste before the December 3, 2009, and March 28, 2011, FBI raids. Second, the Court will describe the use of 2121 Celeste beginning in December 2008, by members of the Los Padillas gang for drug trafficking. Third, the Court will describe the two FBI raids and Fraire's actions with respect to 2121 Celeste thereafter. The Court reminds the parties that at the January 5, 2016, hearing, the parties agreed to the Court writing one set of facts, drawn from all of the summary judgment motions, responses, and replies. See Transcript of Hearing at 53:10-58:5 (taken January 5, 2016)(Court, Gorence, Meyers)("Jan. 5th Tr.").²

a. Fraire's Relationship with 2121 Celeste Before the December 3, 2009, and March 28, 2011, FBI Raids.

Fraire purchased the undeveloped 2121 Celeste in 1993 as an investment. See United States' Response to Claimant's Motion for Summary Judgment at 3, filed November 16, 2015 (Doc. 58)("United States Response")(setting forth this fact); Claimant Cruz J. Fraire's Reply in Support of his Motion for Summary Judgment at 3, filed December 10, 2015 (Doc. 61)("Fraire Reply")(admitting this fact). Fraire has never resided at 2121 Celeste and he has never indicated to anyone else that he wanted to reside at 2121 Celeste. See United States MSJ ¶ 6, at 4 (setting forth this fact); Claimant Cruz J. Fraire's Response to United States' Motion for Summary Judgment and Memorandum Brief in Support ¶ 6, at 3, filed December 10, 2015 (Doc. 60)("Fraire Response")(admitting in part this fact).³ Fraire started to build a structure on the land. See United States Response at 3 (setting forth this fact); Fraire Reply at 3 (admitting this fact). Fraire was subsequently arrested and convicted of Conspiracy under 21 U.S.C. § 846, see United States Response at 3 (setting forth this fact); Fraire Reply at 3 (not disputing this fact), and was incarcerated from 1996 to 2005, see United States MSJ ¶ 8, at 4 (setting forth this fact); Fraire Response ¶ 8, at 4 (admitting this fact). At that time, 2121 Celeste "did not have plumbing, cabinets, toilets, or lighting." United States Response ¶ 1, at 3 (setting forth this fact). See Fraire Reply ¶, at 2-4 (not disputing this fact).⁴ Fraire also did not maintain insurance for 2121 Celeste because it was unfinished. See United States MSJ ¶ 11, at 4 (setting forth in part this fact); Fraire Response ¶ 11, at 4 (admitting this fact).⁵ 2121 Celeste had no appliances, and it was left vacant and vandalized for about four years.⁶ See United States Response at 3-4 (setting forth these facts); Fraire Reply at 3-4 (not disputing these facts).

From on or about 2007, Claimant Jerry L. Padilla, III began to reside at 2121 Celeste. See United States MSJ ¶ 10, at 4 (setting forth this fact); Fraire Response ¶ 10, at 4 (admitting this fact). Prior to Padilla, III residing at 2121 Celeste, the house was uninhabitable because Fraire had not finished building it when he went to prison. See United States MSJ ¶ 9, at 4 (setting forth in part this fact); Fraire Response ¶ 9, at 4 (admitting this fact).⁷ While Fraire was incarcerated, many of the bills for 2121 Celeste were in arrears. See United States MSJ ¶ 12, at 4 (setting forth this fact); Fraire Response ¶ 12, at 4 (admitting this fact).⁸ While Fraire was incarcerated, the property taxes for 2121 Celeste were in arrears.⁹ See United States MSJ ¶ 13, at 4 (setting forth this fact); Fraire Response ¶ 13, at 4 (admitting this fact). Padilla, III paid the property taxes for most of the years he resided at 2121 Celeste. See United States MSJ ¶ 14, at 4 (setting forth this fact); Fraire Response ¶ 14, at 4 (admitting this fact).¹⁰ While Fraire was in prison, Padilla, III completely renovated 2121 Celeste at his own expense, but the renovations were done as part of the agreement between Mr. Padilla and Mr. Fraire in lieu of rent payments. See United States MSJ ¶ 15, at 5 (setting forth this fact in part); Fraire Response ¶ 15, at 5 (admitting this fact).¹¹ Padilla, III did not consult with Fraire before making repairs. See United States MSJ ¶ 16, at 5 (setting forth this fact); Fraire Response ¶ 16, at 5 (admitting this fact). Fraire did not pay for the repairs to 2121 Celeste, but in consideration for the repairs, Fraire did not charge Padilla, III rent. See United States MSJ ¶ 17, at 5 (setting forth this fact); Fraire Response ¶ 17, at 5 (admitting this fact).¹²

Other than when Padilla, III was incarcerated, he has been residing at 2121 Celeste. See United States MSJ ¶ 18, at 5 (setting forth this fact); Fraire Response ¶ 18, at 5 (admitting this fact). Padilla, III did not pay regular rent to Fraire to stay at 2121 Celeste, but pursuant to the agreement Padilla, III agreed he would serve as caretaker, make repairs, and pay all bills associated with 2121 Celeste in exchange for being allowed to live there. See United States MSJ ¶ 19, at 5 (setting forth this fact in part); Fraire Response ¶ 19, at 5 (admitting this fact).¹³ There was no written rental or other tenancy agreement betweenFraire and Padilla, III, but the terms of the agreement were clear.¹⁴ See United States MSJ ¶ 20, at 5 (setting forth this fact); Fraire Response ¶ 20, at 5 (admitting this...