US v. One Parcel of Real Estate

• Decision Date: 15 September 1993
• Docket Number: No. 91-0443-CIV.,91-0443-CIV.
• Citation: 831 F. Supp. 1578
• Parties: UNITED STATES of America, Plaintiff, v. ONE PARCEL OF REAL ESTATE LOCATED AT 6640 S.W. 48th STREET, MIAMI, DADE COUNTY, FLORIDA, etc., Defendant.
• Court: U.S. District Court — Southern District of Florida

831 F. Supp. 1578

UNITED STATES of America, Plaintiff, v. ONE PARCEL OF REAL ESTATE LOCATED AT 6640 S.W. 48th STREET, MIAMI, DADE COUNTY, FLORIDA, etc., Defendant.

No. 91-0443-CIV.

United States District Court, S.D. Florida.

September 15, 1993.

John F. O'Donnell, Ft. Lauderdale, FL, for claimants.

Vivian Rosado, Asst. U.S. Atty., Miami, FL, for plaintiffs.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DENYING CLAIMANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

HIGHSMITH, District Judge.

This Cause comes before this Court on Plaintiff United States of America's ("United States") motion for summary judgment, filed May 20, 1992; and Claimant Jose A. Larraz, Sr.'s cross-motion for summary judgment, filed June 5, 1992. This Court has jurisdiction of this cause of action, pursuant to 28 U.S.C.A. §§ 1345, 1355, and 1395 (West 1976 and Supp.1993).

STANDARD OF REVIEW

In deciding a summary judgment motion, a court must apply the standard stated in Fed. R.Civ.P. 56(c):

The judgment sought shall be rendered forthwith 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 a judgment as a matter of law.

In applying this standard the Eleventh Circuit has stated that:

The party seeking summary judgment bears the exacting burden of demonstrating that there is no genuine dispute as to any material fact in the case. In assessing whether the movant has met this burden, the courts should view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. All reasonable doubts about the facts should be resolved in favor of the non-movant.

Clemons v. Dougherty County, Ga., 684 F.2d 1365, 1368-69 (11th Cir.1982) (citations omitted). Moreover, "the party opposing the motion for summary judgment bears the burden of responding only after the moving party has met its burden of coming forward with proof of the absence of any genuine issues of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The United States Supreme Court has provided significant additional guidance as to the evidentiary standard which trial courts should apply in ruling on a motion for summary judgment:

The summary judgment standard mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which is that the trial judge must direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. Brady v. Southern R. Co., 320 U.S. 476, 479-480, 64 S.Ct. 232, 234-235, 88 L.Ed. 239 (1943).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The Court in Anderson further stated that "the mere existence of a scintilla of evidence in support of the position will be insufficient; there must be evidence on which the jury could reasonably find for the non-movant." Id. at 252, 106 S.Ct. at 2512.

UNDISPUTED FACTS

The defendant property is a residential parcel of land and appurtenant dwelling originally owned by Reinaldo Luis and Maria Del Carmen Moguel de Mendicuti, as joint tenants. In April 1990, United States Customs Service Agent Edward J. Kacerosky received information from confidential informants regarding Luis' alleged smuggling activities. The confidential informants, working under Kacerosky's supervision, attended a series of meetings with Luis at the defendant property during May, June, and July of 1990. At these meetings, the informants learned that Luis was arranging maritime transportation for organizations seeking to smuggle large quantities of cocaine from the Caribbean into South Florida.

On August 8, 1990, in Luis' presence at the defendant property, one of Luis' associates offered a $15,000 cash deposit to the confidential informants to entice them to travel to Aruba to obtain over 1500 kilograms of cocaine. The confidential informants accepted the $15,000 and departed for Aruba. On September 7, 1990, Luis was arrested at the defendant property. Two days after his arrest, Luis met with claimant, attorney Jose Larraz, Sr., to discuss the possibility of legal representation. Larraz, Sr. informed Luis that he would represent Luis in the criminal matter for $50,000.00. On September 10, 1990, Luis was formally charged with conspiring to import 1500 kilograms of cocaine, in violation of 21 U.S.C. § 963.

On September 12, 1990, United States Magistrate Judge Linnea R. Johnson held a pre-trial detention hearing. At this hearing, the court was informed of the conspiratorial meetings that took place at the defendant property. Larraz, Sr.'s son and law partner, Jose Larraz, Jr., acted as Luis' attorney at this hearing. Larraz, Sr. was not present at the hearing, but Larraz, Sr. stipulated at his deposition that he was aware of the government's detailed allegations concerning drug-related meetings at the defendant property during or prior to the September 12, 1990 hearing. Consequently, it is undisputed that Larraz, Sr. possessed actual knowledge of the government's accusations against Luis prior to the transfer of the defendant property.

Later that day, Luis executed a warranty deed, prepared by Larraz, Sr., transferring his interest in the defendant property to Mendicuti, the co-owner of the defendant property. Mendicuti then executed a promissory note payable to Larraz, Sr., and a mortgage deed, both in the amount of $50,000.00 in favor of Larraz, Sr. Both the warranty deed and the mortgage deed were recorded in the Dade County Property Records on September 13, 1990.¹ A short time later, Luis was convicted of conspiracy to import 1497 kilograms of cocaine in violation of 21 U.S.C. § 963.

On March 5, 1991, the United States filed this civil forfeiture action against the defendant property. A default judgment was entered against Mendicuti on December 4, 1991, as owner of record, because she failed to file a claim to the defendant property. Larraz, Sr. filed a claim against the defendant property for $50,000 on December 19, 1991.

DISCUSSION

I. Civil Forfeiture Law

Congress enacted the Comprehensive Drug Abuse Prevention and Control Act of 1970 ("Drug Control Act") to attack the growing menace of drug abuse by providing, among other things, more effective law enforcement tools in the war on drugs. Brad A. Chapman and Kenneth W. Pearson, Comment, The Drug War and Real Estate Forfeiture Under 21 U.S.C. § 881: The "Innocent" Lienholder's Rights, 21 Tex. Tech.L.Rev. 2127, 2130 (1990). Specifically, the Drug Control Act provides modern prosecutors with a potent weapon by authorizing the civil forfeiture of drug-related property. See 21 U.S.C. § 881. This forfeiture provision applies to controlled substances, containers of controlled substances, records associated with illegal drug transactions, and conveyances used to violate the controlled substance statutes. Id. The Drug Control Act also permits warrantless seizure of property subject to forfeiture if the United States demonstrates probable cause to believe that the property was intentionally used to help facilitate a controlled substance transaction. Id.

In 1984, Congress amended the Drug Control Act through the passage of the Crime Control Act of 1984 ("1984 Act"). The 1984 Act contains three critical changes in the law of forfeiture. First, it expands the scope of 21 U.S.C. § 881 by expressly allowing the forfeiture of real property used or intended to be used to commit a drug crime.² Second, the 1984 Act attempts to codify the common law relation-back doctrine. 21 U.S.C. § 881(h). The statutory relation-back doctrine provides, in pertinent part:

All right, title, and interest in property described in subsection (a) of this section shall vest in the United States upon commission of the act giving rise to forfeiture under this section.

21 U.S.C.A. § 881(h) (West 1993). Finally, the 1984 Act adds a statutory exemption that protects an innocent owner's interest in forfeited property. 21 U.S.C.A. § 881(a)(6) & (a)(7) (West 1993). This provision allows an innocent owner to avoid forfeiture "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 the owner." 21 U.S.C.A. § 881(a)(7) (West 1993).

In 1993, the United States Supreme Court conducted its first detailed examination of the forfeiture provisions of the 1984 Act. United States v. 92 Buena Vista Ave., ___ U.S. ___, 113 S.Ct. 1126, 122 L.Ed.2d 469 (1993) (plurality opinion). In Buena Vista, the Court held that: (1) The innocent owner defense is not limited to bona-fide purchasers, but may apply to donees; and (2) The statutory relation-back doctrine vests ownership of a defendant property in the United States at the time of entry of the final order of forfeiture, with title relating back to the time of the commission of the underlying offense. Id. at ___, ___, 113 S.Ct. at 1134, 1137. Prior to this decision, courts had interpreted the time of vesting as occurring at the time of the offense, thereby precluding persons who obtained an interest in a forfeited property after the commission of the underlying offense from filing innocent owner claims. See United States v. 3181 S.W. 138th Place, 778 F.Supp. 1570, 1572 (S.D.Fla.1991). In pre-Buena Vista cases, therefore, ownership never vested in these post-illegal act transferees because ownership of the property had already vested in the United States at the moment of the illegal act.

II. Application of Forfeiture Law Doctrine to Larraz' Claim

The first step in a forfeiture proceeding, pursuant to § 881, is for the United States to establish probable cause that the claimant's property was used to violate 21 U.S.C. § 881(a)(7). United States v. 900 Rio Vista Blvd., 803 F.2d 625, 628 (11th Cir. 1986). Once...