US v. Certain Real Property, Civ. A. No. 91-74974.

• Decision Date: 22 September 1992
• Docket Number: Civ. A. No. 91-74974.
• Citation: 800 F. Supp. 547
• Parties: UNITED STATES of America, Plaintiff, v. CERTAIN REAL PROPERTY LOCATED AT 750 EAST SHORE DRIVE, WHITMORE LAKE, WASHTENAW COUNTY, MICHIGAN, Together with all of its Fixtures, Improvements and Appurtenances, Defendant.
• Court: U.S. District Court — Western District of Michigan

800 F. Supp. 547

UNITED STATES of America, Plaintiff, v. CERTAIN REAL PROPERTY LOCATED AT 750 EAST SHORE DRIVE, WHITMORE LAKE, WASHTENAW COUNTY, MICHIGAN, Together with all of its Fixtures, Improvements and Appurtenances, Defendant.

Civ. A. No. 91-74974.

United States District Court, E.D. Michigan, S.D.

September 22, 1992.

Stephen J. Markman, U.S. Atty. by Joyce Todd, Asst. U.S. Atty., Detroit, Mich., for U.S.

Michael C. Moran, Stein, Moran, Ann Arbor, Mich., for Titus.

ORDER GRANTING IN PART CLAIMANTS' MOTION FOR SUMMARY JUDGMENT

GADOLA, District Judge.

The government filed a complaint seeking civil forfeiture of the residence of Stephen Titus under 21 U.S.C. § 881. On October 12, 1991, claimants Charles and Marian Titus, Stephen Titus' parents, filed an answer to the complaint and a claim to the property to the extent of an unrecorded mortgage. Claimants filed the instant motion for summary judgment July 20, 1992; the government filed a response July 27, 1992; and claimants filed a reply August 5, 1992. Oral argument was heard September 17, 1992.

BACKGROUND FACTS

On September 5, 1990, claimants executed a document which memorialized a monetary loan to their son Stephen. The document specifies a loan amount, $60,000.00; an interest rate, 5% compounded monthly; and a payment schedule, $400 per month beginning February 1, 1994. The document states that the loan is secured "with the deed to Stephen's property at 750 East Shore Drive, Whitmore Lake, MI as collateral." Claimants' ex. A, part B. The document is dated and bears the signatures of Charles, Marian and Stephen Titus; however, the document was never recorded.

One year later, on September 11, 1991, police officers participating in "Operation Hemp" were flying in a helicopter over an area around Whitmore Lake. The officers observed marijuana plants growing on the subject property and relayed this information to officers on the ground, who subsequently found marijuana drying on a ladder inside Stephen's residence. On May 20, 1992, Stephen pleaded guilty to a misdemeanor charge of growing marijuana "without remuneration and not to further commercial distribution," a violation of Mich.Comp.Laws Ann. § 333.7410(7).

APPLICABLE LAW

Pursuant to the federal civil forfeiture statute,

(a) Subject property. The following shall be subject to forfeiture to the United States and no property right shall exist in them:

(7) All real property, including any right, title, and interest (including any leasehold interest) in the whole of any lot or tract of land and any appurtenances or improvements, which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, a violation of this title punishable by more than one year's imprisonment, except that no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.

21 U.S.C. § 881(a)(7). In addition, "All right, title, and interest in property described in subsection (a) shall vest in the United States upon commission of the act giving rise to forfeiture under this section." 21 U.S.C. § 881(h). However, "the government can succeed to no greater interest in the property than that which belonged to the wrongdoer whose actions have justified the seizure." In re Metmor Fin., Inc., 819 F.2d 446, 449 (4th Cir.1987).

The United States Court of Appeals for the Sixth Circuit has ruled that it will not develop a body of federal common law regarding property rights in civil forfeiture proceedings. The court "concluded that recognition of state laws governing property rights does not contravene the federal forfeiture scheme, and that the application of state law is the most appropriate method of determining the interest of an innocent owner under 21 U.S.C. § 881(a)(7)." United States v. Certain Real Property Located at 2525 Leroy Lane, 910 F.2d 343, 347 (6th Cir.1990).

Under Michigan law, "Every conveyance of real estate ..., which shall not be recorded as provided in this chapter, shall be void as against any subsequent purchaser in good faith and for a valuable consideration, ... whose conveyance shall be first duly recorded." Mich.Comp.Laws Ann. § 565.29 (emphasis added). A mortgage is a conveyance for the purposes of this statute. Michigan Fire & Marine Ins. Co. v. Hamilton, 284 Mich. 417, 419, 279 N.W. 884 (1938). A "purchaser" is defined as a "person to whom any estate or interest in real estate, shall be conveyed for a valuable consideration...." Mich.Comp.Laws Ann. § 565.34.

The definition of mortgage is provided in Mich.Comp.Laws Ann. § 565.154 and reads as follows:

Any mortgage of lands worded in substance as follows: `A.B. mortgages and warrants to C.D., (here describe the premises) to secure the re-payment of' (here recite the sum for which the mortgage is granted, or the notes or other evidence evidences of debt, or a description thereof, sought to be secured, also the date of the re-payment), the said mortgage being dated and duly signed, sealed and acknowledged by the grantor, shall be deemed and held to be a good and sufficient mortgage to the grantee, his heirs, assigns, executors and administrators, with warranty from the grantor and his legal representatives, of perfect title in the grantor, and against all previous incumbrances. And if in the above for the words `and warrant' be omitted, the mortgage shall be good, but without warranty.

Finally, pursuant to Mich.Comp.Laws Ann. § 565.221

All written instruments conveying or mortgaging real estate or any interest therein, hereafter executed, shall state whether any and all male grantors, mortgagors, or other parties executing the instrument are married or single, and the register of deeds of the county in which the instrument is offered for record shall refuse to receive the instrument for record unless it conforms to the provisions of this act.

This provision also allows that an instrument which has been recorded without a recitation of marital status may be supplemented by affidavit and that the recorded affidavit will render the instrument "valid and effectual as if it had contained a statement showing the marital status of the male person or persons executing it." Id.

STANDARD OF REVIEW

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have the effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect the application of appropriate principles of law to the rights and obligations of the parties." Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir. 1984) (citation omitted) (quoting Black's Law Dictionary 881 (6th ed. 1979)). The court must view the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).

The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Gregg v. Allen-Bradley Co., 801 F.2d 859, 861 (6th Cir.1986). The initial burden on the movant is not as formidable as some decisions have indicated. The moving party need not produce evidence showing the absence of a genuine issue of material fact. Rather, "the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.

To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986),

There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the nonmovant's evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

(Citations omitted). See Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552-53; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). The standard for summary judgment mirrors the standard for a directed verdict under Fed. R.Civ.P. 50(a). Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. Consequently, a nonmovant must do more than raise some doubt as to the existence of a fact; the...