US v. ALL ASSETS & EQUIP. OF WEST SIDE BLDG., 89 C 2736.

• Decision Date: 02 February 1994
• Docket Number: No. 89 C 2736.,89 C 2736.
• Parties: UNITED STATES of America, Plaintiff, v. ALL ASSETS AND EQUIPMENT OF WEST SIDE BUILDING CORPORATION, et al., Defendants, v. Clara PENNY and West Side Building Corporation, Claimants.
• Court: U.S. District Court — Northern District of Illinois

843 F. Supp. 377

UNITED STATES of America, Plaintiff, v. ALL ASSETS AND EQUIPMENT OF WEST SIDE BUILDING CORPORATION, et al., Defendants, v. Clara PENNY and West Side Building Corporation, Claimants.

No. 89 C 2736.

United States District Court, N.D. Illinois, E.D.

November 23, 1993.

Opinion Denying Reconsideration January 25, 1994.

As Amended February 2, 1994.

COPYRIGHT MATERIAL OMITTED

Terry M. Kinney, U.S. Attorney's Office, Chicago, IL, for plaintiff.

Michael D. Monico, Barry A. Spevack, Monico, Pavich & Spevack, Chicago, IL, for defendants.

MEMORANDUM OPINION

KOCORAS, District Judge:

This matter is before the Court on the government's motion for summary judgment of forfeiture pursuant to 21 U.S.C. § 881(a)(4), (6), and (7). For the reasons that follow, we grant the motion.

BACKGROUND

This is a drug-related forfeiture action. The plaintiff is the United States Government. The government alleges that the defendant properties were acquired or improved with proceeds from illegal drug activity and/or were used to facilitate felony drug offenses. This Court (Grady, J.) found probable cause to believe that the property was subject to forfeiture and issued an order April 4, 1989 on the government's ex parte motion, allowing the government to seize the defendant property.

Clara Penny ("Penny") was the only owner to file a verified claim to the defendant property. She filed claims as an individual and as the president of West Side Building Corporation.¹ Penny's husband, Jonathan Penny, did not file a claim within the allotted time and therefore, a default judgment of forfeiture of his interests in the defendant assets was entered by this Court on August 15, 1990.

Penny stated several defenses in her answer to the verified complaint. Penny stated that two parcels of real estate and two vehicles were acquired before the effective date of the forfeiture statute; that three parcels of real estate were not purchased by Penny or West Side Building Corporation but were gifts from Penny's father; and that one vehicle was not purchased by Penny or West Side but was a gift to Penny and her husband.² Further, she stated that two vehicles were purchased with funds from Penny's credit union.

Penny responded to interrogatories on July 26, 1990. The government deposed Penny April 7, 1992. At the deposition, Penny asserted her Fifth Amendment privilege against self-incrimination in response to all questions relevant here. Penny states that her reason for doing so was that she was told that she was the subject of a grand jury investigation, that indictments had been returned, and that her testimony could be used against her in a criminal proceeding. Penny's Response, at 5. Penny was not, in fact, indicted, but her husband was. Jonathan Penny was convicted on September 10, 1993 in a jury trial on both counts of a two-count indictment. The indictment charged violations of 21 U.S.C. §§ 841(a)(1) and 846. Jonathan Penny was found guilty of selling, distributing, or dispensing narcotics and conspiracy to do the same.

The government now seeks summary judgment of forfeiture of Penny's interests in the defendant assets. The government's Local Rule 12(m) Statement cites its Amended Verified Complaint and the affidavit of Lawrence Evans, which was submitted with the Amended Verified Complaint.

LEGAL STANDARD

Summary judgment is appropriate if the pleadings, answers to interrogatories, admissions, affidavits, and other materials show that there is "no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). Only those disputes over facts that might affect the outcome of the suit under the governing law properly prevent a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A genuine issue exists if there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id. at 249, 106 S.Ct. at 2511.

The party seeking summary judgment has the initial burden of showing that no such issue of material fact exists. When a properly supported motion for summary judgment has been made, the opposing party must then "set forth specific facts showing that there is a genuine issue for trial." Cooper v. Ford Motor Co., 748 F.2d 677 (Fed.Cir.1984). The opposing party is entitled to the benefit of all favorable inferences that can reasonably be drawn from the underlying facts, but not every conceivable inference. DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir.1987). It is in consideration of these principles that we turn to the present motion for summary judgment.

DISCUSSION

At the outset, we wish to acknowledge the candor displayed in Penny's brief regarding unfavorable precedent. While this integrity should not be cause for comment, unfortunately, we see far too little of it.

In support of its motion, the government states that the earlier finding of probable cause for forfeiture in this case shifts the burden of proof to Penny to prove by a preponderance of the evidence that the defendant property is not subject to forfeiture. See United States v. Certain Real Property, 943 F.2d 721, 725 (7th Cir.1991). The government argues that we can infer that Penny is unable to meet this burden from the fact that she invoked the Fifth Amendment during her deposition.

Penny raises several points in opposition to the government's motion for summary judgment. First, she argues that she is unable to properly respond to the motion because the relevant documents were seized by the government. Therefore, she requests a continuance pursuant to Rule 56(f). Next, she urges that the government has failed to make a showing that there are no genuine issues of material fact. Penny also seeks a grant of immunity from prosecution for criminal acts for any testimony she gives regarding the defendant properties. Finally, she argues that the forfeiture of all the defendant properties is disproportionate to any crime and therefore violates the Cruel and Unusual Punishment Clause of the Eighth Amendment.

Initially, we will consider the Rule 56(f) continuance requested by Penny. Federal Rule of Civil Procedure 56(f) authorizes the District Court to grant a continuance to allow a party against whom a summary judgment motion has been filed to take discovery to obtain information necessary to respond to the motion. To obtain such relief, the party seeking it must set forth in affidavits reasons why it cannot produce affidavits supporting its opposition of the summary judgment motion. Fed.R.Civ.P. 56(f).

We will not grant relief to Penny under Rule 56(f) because she has not complied with the procedure for obtaining such a continuance. Penny did not file an affidavit explaining why she cannot produce evidence to oppose the motion. Penny states a plausible reason in her memorandum: that the relevant documents are in the possession of the government, and that her counsel must search through 14 boxes of documents to find the relevant ones. However, a memorandum is not an affidavit, and Penny does not indicate why this search process was not even begun yet. Further, we note that this same excuse was tendered last year when Penny did not appear for her scheduled deposition. At that time, we allowed time for those documents to be reviewed. We are not inclined to do so here, where Penny ignores the procedural steps for obtaining such relief.

Before we can reach the substantive arguments in support of and in opposition to this motion, we must consider another procedural shortcoming by the claimant. The Local Rules of the Northern District of Illinois require the party seeking summary judgment to file a statement of material facts as to which the movant contends there is no genuine issue. Local Rule 12(m). The party opposing summary judgment must respond to the facts set forth in the 12(m) Statement, admitting them or controverting them by specific references to the record. Local Rule 12(n)(1). The party opposing summary judgment must also set forth, with references to the record, any facts that are in dispute and which require the denial of summary judgment. Local Rule 12(n)(2). If the opponent fails to respond as required by Rule 12(n), the facts set forth in the movant's 12(m) Statement are deemed admitted, and summary judgment may be entered for the movant. Here, Penny has not filed a response to the 12(m) Statement; hence, she is deemed to have admitted the facts therein. Summary judgment against her on all claims would be appropriate on these grounds.³ However, we will also briefly consider the merits of the arguments raised in her Response Memorandum. That examination will show that summary judgment is also appropriate on the merits.

Once the government has met its burden of showing that probable cause exists, the burden of proof shifts to the property owner to show that the property is not subject to forfeiture. U.S. v. Certain Real Property, 943 F.2d 721, 725 (7th Cir.1991). The standard of persuasion for the owner is a preponderance of the evidence. Id. Here, the Court found probable cause. U.S. v. All Assets & Equipment of West Side Building Corp., No. 89C2736, Order at 1 (N.D.Ill. Apr. 4, 1989) (Grady, J.). Penny challenged that finding of probable cause through a motion to dismiss the forfeiture complaint. We denied Penny's motion and refused to disturb Judge Grady's probable cause determination. U.S. v. All Assets & Equipment of West Side Building Corp., No. 89C2736, Order at 4, 1989 WL 84636 (N.D.Ill. July 14, 1989) (Kocoras, J.). Thus, the government's burden being met, we now evaluate Penny's evidence to determine if she has met her burden.

Penny raised three defenses in her Response Memorandum: lack of knowledge of narcotics activities, acquisition of certain properties before the enactment of the forfeiture statute, and acquisition with legitimate income....