United States v. Devries
| Decision Date | 16 July 2020 |
| Docket Number | No. CR17-3041-LTS,CR17-3041-LTS |
| Citation | 473 F.Supp.3d 901 |
| Parties | UNITED STATES of America, Plaintiff, v. Clint DEVRIES, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Anthony Morfitt, Martin J. McLaughlin, US Attorney's Office, Cedar Rapids, IA, for Plaintiff.
This matter is before me on a motion (Doc. No. 54) by non-party Elma Devries1 for return of property and to quash the garnishment as to her property. The Government moved for a hearing pursuant to 28 U.S.C. § 3205(c)(5) and, with the parties' agreement, I held a telephonic evidentiary hearing on May 19, 2020. See Doc. No. 63. The Government called Bradley Assman, Vice President of First Community Bank, as a witness and did not present any exhibits. See Doc. Nos. 62, 63. Elma testified on her own behalf and also presented testimony from Clint. Doc. No. 63. Elma also offered the following exhibits:
Doc. No. 60. The parties submitted briefs following the hearing. See Doc. Nos. 66, 67. With the Government's agreement and the court's permission, Elma also supplemented the record with Exhibit G, consisting of various banking documents from First Community Bank and other bank accounts in Clint's name, showing, among other things, the addresses associated with his accounts and the address at which Clint received communications from First Community Bank.
Clint pleaded guilty to two counts of making false statements to First Community State Bank in violation of 18 U.S.C. § 1014 and one count of bankruptcy fraud in violation of 18 U.S.C. § 152(2). See Doc. No. 30. He was sentenced to 18 months' imprisonment and ordered to pay restitution in the amount of $1,190,696.12. Id. He currently owes $1,164,556. See Doc. No. 66 at 2. He is now on supervised release and paying restitution pursuant to a payment plan. See Doc. No. 54 at 1.
On December 12, 2019, the Government served a Writ of Continuing Garnishment on Steve Seidl/Chris Ludwig Auctioneers on information from Community State Bank that Clint Devries had a substantial nonexempt interest in toys and other tractor and farm memorabilia sold at auction. Doc. No. 66 at 2. The Answer of the Garnishee disclosed that the garnishees were in possession of $24,850 of property, but did not identify the property as belonging to Clint Devries or otherwise provide any description of Clint Devries' interest in the property. Chris Ludwig Auctions later sent a letter to the court, filed January 2, 2020, stating it held a "DeVries Family Auction" but did not provide a description of the ownership of the property or otherwise indicate it was owned by Clint. The Government received the proceeds from the auction. It has not served a writ of garnishment on Elma, who claims she was the owner of the property sold at the auction in question. See Doc. No. 54 at 1-2.
On February 3, 2020, the Government subpoenaed Elma to a judgment debtor exam and requested she bring personal financial papers. Even though she is not a judgment debtor, she cooperated and sat for the exam, at which she testified that the monies held by the Government from the auction belong to her, not Clint. Following the exam, Elma requested the monies be returned to her. After no response was received to her requests, she filed the instant motion through counsel on April 9, 2020, stating the items sold belonged to her and not Clint.
Bradley Assman is Vice President and Ag Loan Officer of First Community Bank in Rockwell City, Iowa. He was involved in the refinancing of Clint's loans that were the subject of Clint's criminal prosecution. In 2015, he visited Clint's farm at 2144 390th Street in Lake City, Iowa, to review the security for Clint's loans. This was a general, routine visit to observe equipment and crops. Assman reported that during the visit, Clint asked Assman if he wanted to see "his" toy collection. He said they went to the basement of the farmhouse2 where he observed hundreds of toys (mostly toy tractors) many of which appeared to be in their original boxes as well as signs and other items that were in totes. Assman believed that the toys had value. At the time of Assman's visit, Clint knew he was in financial trouble and wanted to assure Assman he had sufficient assets to secure the loans.
Clint sold3 the farm to Mark Schleisman later that year and the bank received the proceeds, which fell short of the amount owed. Assman testified that the bank became aware in fall 2015 that Clint was selling grain in Elma's name, contrary to the bank's security interest. When completing the bank's victim impact statement, Assman was concerned whether the toys had been liquidated.4 Assman later became aware that the toys were going to be sold at auction in December 2019. He reviewed the toys on the auctioneer's website. The items were similar in terms of quantity and types of toys he had observed during the 2015 farm visit. Assman noted the website listed "the Devries family" as the seller. Assman has no knowledge regarding the toys that were sold at the auction and the toys that were retained. At no time did Clint include a toy collection in his financial statements with the bank, even though the statements include a line for household items and other assets.
Elma testified that Clint moved in with her and her husband, Delroy, after his divorce in 2014 and again following his release from imprisonment in 2019. The farm at 2144 390th Street is an acreage that had been built by her in-laws in the 1970s. In 2014 and 2015, her father-in-law, Rupert Devries, lived at 2144 390th Street until he passed away in March 2015. No one lived there after his passing or moved into the house later. Clint never lived in the house at any point. Elma and Delroy purchased the 2144 390th Street acreage from her in-laws and sold it to Clint around 2010 when she and her Delroy were experiencing financial difficulties. Elma and Delroy filed bankruptcy around this time and never disclosed any of the toys on the bankruptcy schedule.5 Around 2010, Clint worked on the farm. He continued living with his parents after he purchased the acreage and received mail at his parents' house at 2361 390th Street. He lived in Rockwell City from 2011 through late 2013.
Rupert collected toys since at least 1970. He had five children. Elma and Delroy also collected toys. Elma's father worked for John Deere. She and Delroy have been collecting toys since the time they married. Elma noted that she and Delroy stored some of their toys in the basement at the acreage when they moved back to Iowa from Colorado in 1992. Other children stored items in the basement as well. Elma and Delroy's toys became mixed with Rupert's toys. There were times when Elma and Delroy purchased toys for Rupert's collection and for Clint. Clint also purchased toys for Elma and Delroy and for Rupert. Elma never kept a list of who purchased what for whom or when. Rupert passed away intestate in March 2015. The children agreed that if they wanted items from the house, they could take them. Some children came to the acreage and took items they wanted. No one took the toys and Elma considered anything that was left in the farmhouse to be hers and Delroy's.
As noted above, Clint sold the acreage and adjoining farmland to Schleisman in 2015. Schleisman owned the property from approximately 2015 through 2017. During this time, the toys were still in the basement of the farmhouse and Schleisman never disposed of or removed them. Elma purchased the acreage back from Schleisman in 2017, but not the adjoining farmland. The toys were still in the basement when she took ownership. No one moved into the house at this time and only Elma's name appears on the mortgage for the property. She had Chris Ludwig come do an appraisal of the items in the basement as well as items at her home when she needed extra money to make a mortgage payment. Elma then arranged for an auction and chose the items to sell. Elma did not sell all of the items listed in the appraisal. See Doc. No. 61-3. She kept some for sentimental value. Some of the items sold originally belonged to Rupert but became hers and Delroy's after Rupert passed away and none of his other children claimed them.
Clint never lived at 2144 390th Street in Lake City, Iowa, even during the time he owned the acreage. Clint never identified the toys as assets on his financial statements. See Doc. No. 61-2.6 The toy collection is also not identified in other financial documents. See Doc. No. 61-4, 61-5. Clint has never moved any of the toys to his other residences or otherwise claimed ownership of the toys. Clint bought toys as gifts for other members of his family7 that were in the collection but has never claimed ownership of those toys.
The parties disagree who bears the burden of proof. Elma argues it is the Government's burden. The Government argues it is Elma's burden, as the objecting party. The Government's argument is based on 28 U.S.C. § 3205(c)(5), which provides that the judgment debtor or the United States may file a written objection to the answer and request a hearing and that the objecting party bears the burden of proving the grounds for the objection. Of course, Elma is not the judgment debtor nor the United States. The Government points out that under 28 U.S.C. § 3013, the court may deny, limit, condition, regulate, extend or otherwise modify a garnishment upon motion of an...
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