United States v. One 1976 Lincoln Mark IV

• Decision Date: 11 January 1979
• Docket Number: Civ. A. No. 78-537.
• Citation: 462 F. Supp. 1383
• Parties: UNITED STATES of America, Plaintiff, v. ONE 1976 LINCOLN MARK IV, Serial # 6Y89A876578 Michigan License # TWP 951, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

462 F. Supp. 1383

UNITED STATES of America, Plaintiff, v. ONE 1976 LINCOLN MARK IV, Serial # 6Y89A876578 Michigan License # TWP 951, Defendant.

Civ. A. No. 78-537.

United States District Court, W. D. Pennsylvania.

January 11, 1979.

COPYRIGHT MATERIAL OMITTED

Robert J. Cindrich, U. S. Atty., Pittsburgh, Pa., for plaintiff.

Wayne V. DeLuca, Damian & Damian, Pittsburgh, Pa., for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND OPINION

COHILL, District Judge.

This Court has before it a difficult decision to make between the Government's action for the forfeiture of one 1976 Lincoln Mark IV and the claim to the car by its owner, Paul B. Kallaway, who was totally uninvolved in the criminal activity giving rise to the Government's action against the car.

FINDINGS OF FACT

The facts were developed at a hearing held before this Court. We find the following to have been established by stipulation and/or by testimony:

From July 6, 1977 to the present, Paul B. Kallaway ("Kallaway") has been the registered owner of a 1976 Lincoln Mark IV, Serial No. 6Y89A876578, Michigan License No. TWP 951 (the "Lincoln"). Kallaway is an employee of Ford Motor Company.

The Lincoln was insured through the Fowler Agency of Southfield, Michigan, from August 11, 1976 through December 30, 1977. It was listed as one of a fleet under a company fleet insurance policy ultimately insured by Citizens Mutual Insurance Company, Howell, Michigan, Policy No. K389873, and the Hartford Insurance Company. One of the named insured parties under this policy was Robert J. Pesci ("Pesci").

Kallaway and Pesci are brothers-in-law, their two wives being sisters. Pesci owned a trucking company, Franco Freight. Although Kallaway was the sole owner of the Lincoln, he had his brother-in-law insure it through the Franco Freight fleet policy noted above because Kallaway purchased the car from Ford to resell it.

In September of 1977, Kallaway was residing at Pesci's house, 14626 LeBlanc, Lincoln Park, Michigan. Kallaway and Pesci had been living together since June, 1977, because Kallaway had sold his house and was waiting for construction of a new house to be completed. Both their wives were staying at their family's vacation cottage. On September 19, 1977, Pesci asked for, and was granted, permission to use the Lincoln. (The specific arrangement is in dispute: Kallaway testified that he loaned Pesci the car because Pesci's van was in the repair shop, but the Government contends that Kallaway gave Pesci the car over the weekend in exchange for the use of Pesci's van over the same weekend.) Pesci had used the car on several earlier occasions.

Early in the morning hours of September 20, 1977, Pesci, along with one Charles Benevides, was arrested by Agents of the Drug Enforcement Administration (DEA) in the parking lot of the Holiday Inn in Coraopolis, Pennsylvania. The arrest occurred after Benevides and Pesci had transferred thirteen ounces of heroin for an agreed price of $16,900 to Agent Carroll Gibson who at the time was acting in an undercover capacity as a street dealer.

The arrests were the culmination of several months of undercover work by Agent Gibson and others during which time Gibson had met once with Benevides at the Detroit International Airport and spoken with him several times by phone. At the Detroit meeting, Gibson had purchased three ounces of heroin from Benevides for $4,500.00. On or about September 15 and 16, 1977, Agent Gibson, relying on what had been told to him by one Arturo Montano, was expecting Benevides to bring two pounds of heroin to Pittsburgh.

Late in the day on September 19, 1977, Benevides called "Boots" Gipson (a government informant involved in this investigation and not to be confused with Agent Gibson) to advise that he was in Pittsburgh and to arrange a meeting with Gibson. Informant Gipson went to the Holiday Inn in Coraopolis, Pennsylvania, met Benevides in the lobby and then went to Pesci's room, where Pesci showed him thirteen ounces of heroin he had hidden under the mattress. Benevides then left the motel with informant Gipson to go back to Gipson's apartment, stopping first to get a change of clothes from the Lincoln in the motel parking lot.

Negotiations for the sale transpired later the same evening at a bar inside the Holiday Inn with Pesci setting the price per ounce and computing the amount of the sale. Agent Gibson also initiated negotiations for a future, larger sale through Pesci.

The transfer occurred inside Agent Gibson's car in the motel parking lot, with Gibson, informant Gipson, Pesci, and Benevides present, and with the actual exchange of drugs and money passing between Benevides and Agent Gibson. After other agents closed in for the arrest, Pesci gave Agent Gibson the keys to the Lincoln.

Pursuant to this arrest, the Lincoln, which had been used by Pesci and Benevides to travel from Detroit to Pittsburgh in order to negotiate and carry out the heroin transfer, was seized in Coraopolis, Pennsylvania, by duly authorized agents of the DEA. Thereafter, the United States brought this civil action for forfeiture of the Lincoln, pursuant to 49 U.S.C. §§ 781 and 782 and 21 U.S.C. § 881, 28 U.S.C. §§ 1345 and 1355 and 19 U.S.C. § 1610.

The Government has no evidence which would implicate Kallaway in any way in the events surrounding the arrests of Pesci and Benevides on September 20, 1977. There is also no evidence that Kallaway had any knowledge on September 19, 1977 that his car, the Lincoln, would be used in a scheme to distribute narcotics, nor that he even had any knowledge that the car was being taken to Pittsburgh. He testified that he would not have loaned Pesci the car if he had known Pesci had planned to go to Pittsburgh. At the time Kallaway loaned his car to Pesci, he did know that Pesci had been convicted of a securities violation in 1973 and had served time for this offense. However, he testified he had no knowledge that Pesci was involved with drugs.

Kallaway filed a claim for the Lincoln with this Court on May 26, 1978 and has contested the legality of the seizure. He also filed a petition for remission with the Attorney General pursuant to 19 U.S.C. § 1618, but was denied relief.

CONCLUSIONS OF LAW

The Government did have probable cause to believe that the Lincoln was used to transport narcotics or to facilitate the sale of narcotics, and the Lincoln was therefore properly seized. There is sufficient evidence to establish probable cause without the testimony of the Government witnesses which the claimant has objected to as hearsay. Probable cause for seizure having been demonstrated by the Government, forfeiture was established, and the burden shifted to the claimant to prove the forfeiture was not within 21 U.S.C. § 881 and 49 U.S.C. §§ 781-782.

Innocence of crime, by itself, is not a defense to a forfeiture proceeding. U. S. v. One 1971 Lincoln Continental, 460 F.2d 273 (8th Cir. 1972); U. S. v. One 1961 Cadillac, 337 F.2d 730 (6th Cir. 1964). Courts have little, if any, discretion in statutory forfeiture cases, and authority to remit forfeiture in appropriate cases is vested in representatives of the executive branch of government, not in the judiciary. 18 U.S.C. § 3617, U. S. v. One 1971 Porsche Coupe, 364 F.Supp. 745 (E.D.Pa.1973).

Provisions vesting unlimited discretion in the Attorney General to remit forfeiture of vehicles used in violation of federal regulations do not bear on the constitutionality of forfeiture in individual cases. U. S. v. One 1962 Ford Thunderbird, 232 F.Supp. 1019 (N.D.Ill.1964).

The United States Supreme Court has recognized a narrow exception to its general holding that forfeiture statutes are constitutional even where the owner of a forfeited vehicle is innocent of the crime with which the vehicle is charged. Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 690, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974).

In order to fit within the constitutional claim exception to the forfeiture statute the owner of a vehicle must prove "not only that he was uninvolved in and unaware of the wrongful activity but also that he had done all that reasonably could be expected to prevent the proscribed use of his property." Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S 663, 689, 94 S.Ct. 2080, 2095, 40 L.Ed.2d 452 (1974).

It has been stipulated by the parties as a matter of fact that the claimant herein was uninvolved in and unaware of any wrongful activity, and since the Court finds that he acted as a reasonably prudent person under all the circumstances, doing all that could be expected of him to prevent illegal use of his property, forfeiture in this case would be improper under the standard established by the Supreme Court. Nor would the purpose of the forfeiture statute —"to impose a penalty only upon those who are significantly involved in a criminal enterprise" be furthered by its use in this case. United States v. United States Coin and Currency, 401 U.S. 715, 721-22, 91 S.Ct. 1041, 1045, 28 L.Ed.2d 434 (1971).

Therefore, the Government's petition for forfeiture will be denied.

DISCUSSION

This is indeed a difficult area of the law—one in which logic and legal principle struggle against established precedent and practice. District courts which have recently taken up the battle have split in their decisions and differed in their reasoning.

In this case we are asked to decide whether Mr. Kallaway, who the Government admits was not in any way involved in illegal activity, must forfeit an automobile which he lawfully owns because that automobile itself was involved in criminal activity.

I. The Hearsay Question and Probable Cause

We will first dispose of a hearsay question raised during the forfeiture hearing before discussing the state of the law in forfeiture actions. The claimant, Kallaway, objected to the testimony of several government witnesses which included statements made to them by the criminal defendants, Pesci and Benevides,...