US v. Premises Located at Highway 13/5

• Decision Date: 12 September 1990
• Docket Number: Civ. A. No. 89-AR-5451-NW.
• Citation: 747 F. Supp. 641
• Parties: UNITED STATES of America, Plaintiff, v. PREMISES LOCATED AT HIGHWAY 13/5 PHIL CAMPBELL, ALABAMA (PARCEL 2), Premises Located at 207 West Washington St., Athens, Alabama (Parcel 4); Defendants, Rose Marie Sharpe and Leland Sharpe, Claimants to Parcel 2, Thomas Ray Smith and Andy Smith, Claimants to Parcel 4.
• Court: U.S. District Court — Northern District of Alabama

747 F. Supp. 641

UNITED STATES of America, Plaintiff, v. PREMISES LOCATED AT HIGHWAY 13/5 PHIL CAMPBELL, ALABAMA (PARCEL 2), Premises Located at 207 West Washington St., Athens, Alabama (Parcel 4); Defendants,

Rose Marie Sharpe and Leland Sharpe, Claimants to Parcel 2,

Thomas Ray Smith and Andy Smith, Claimants to Parcel 4.

Civ. A. No. 89-AR-5451-NW.

United States District Court, N.D. Alabama, Northwestern Division.

September 12, 1990.

Frank W. Donaldson, U.S. Atty., James D. Ingram, Asst. U.S. Atty., Birmingham, Ala., for U.S.

Charles N. Parnell, III, Judith Carmela D'Alessandro, Parnell Crum & Anderson, Montgomery, Ala., for Manufacturers Hanover Servicing, Inc.

Louie Lee Sims, Jr., Oliver & Sims, Alexander City, Ala., for Land, Phil Campbell, premises located at Highway 13/5 Phil Campbell, Ala.

William K. Hewlett, Hewlett Black & Marks, Tuscumbia, Ala., for Land, Tuscumbia, premises located at 2219 Woodmont Drive, Tuscumbia, Ala.

J. Stephen Salter, Birmingham, Ala., for Land, Athens, premises located at 207 West Washington Street, Athens, Ala.

Harvey B. Morris, Morris Smith Siniard Cloud & Fees P.C., Huntsville, Ala., J. Stephen Salter, Birmingham, Ala., for Thomas Ray and Andy Smith.

John E. Higginbotham, Higginbotham & Whitten, Florence, Ala., for Lyndon and Sandra Letson.

J. Paul Lowery, Montgomery, Ala., Louie Lee Sims, Jr., Oliver & Sims, Alexander City, Ala., for Leland and Rose Sharpe.

William K. Hewlett, Hewlett Black & Marks, Tuscumbia, Ala., for Robbie W. and Nancy Carol Johnson.

Gerald B. Hooper, Muscle Shoals, Ala., pro se.

Betty Jo Hooper, Muscle Shoals, Ala., pro se.

H. Thomas Heflin, Jr., Munsey Ford & Heflin, Tuscumbia, Ala., for Colonial Bank.

MEMORANDUM OPINION

ACKER, District Judge.

The history and posture of the above-entitled case as of March 12, 1990, is outlined in U.S. v. Premises Located at 207 W. Washington St., 732 F.Supp. 1128 (N.D. Ala.1990). There is no reason here to repeat what was said there. That opinion suffices as a background and starting point for this opinion.

Originally, the United States undertook to obtain the forfeiture of four widely separated parcels of real property situated within the Northern District of Alabama and alleged to have been used in illegal gambling operations. From the counties in which the parcels were originally alleged to be located, it would appear that Parcels 1, 2 and 3 are located in the Northwestern Division of this court, whereas Parcel 4 is located in the Northeastern Division. The complaint was filed in the Northwestern Division. On March 16, 1990, Thomas Ray Smith and Andy Smith, claimants to Parcel 4, withdrew their objection to the stay which had been granted at the government's request — probably the Smiths withdrew their objection because of this court's opinion of March 12, 1990 — and on March 19, 1990, this court vacated the order which had set a "probable cause" hearing for March 30, 1990. The court reimposed the stay sought by the government but made it clear that a lengthy stay would not be tolerated. The court expressly stated:

This stay shall not be indefinite. It shall be in effect until one of the claimants moves for a removal of the stay or until 4:30 P.M., June 29, 1990, whichever event first occurs.

(emphasis in original).

At an oral hearing that which preceded the order of March 19, the United States was made fully aware of the fact that it could not postpone the indictment of persons it believed to be guilty of criminal conduct for an indefinite period while holding hostage these pieces of real property. The court suggested that if the United States had "probable cause" in September of 1989 (when the civil cover sheet was signed by the Assistant United States Attorney) to believe that this property, or any of it, had been used for illegal gambling, the United States, no later than June 29, 1990, certainly should have enough evidence to meet its burden of demonstrating "probable cause" to a grand jury. Time passed! The deadline of June 29, 1990 passed. After claimant's motions for summary judgment now under consideration were filed by the Smiths and by Rose Marie Sharpe and Leland Sharpe, claimants to Parcel 2, the United States asked for and was granted an extension within which to respond to the Rule 56 motions, and on August 30, 1990, before this opinion could be written but after the submission date, Andy Smith, one of the four claimants, was indicted by the United States on a charge of illegal gambling. None of the other three claimants has been indicted. The court speculates that one reason the United States asked for the extension is that it would be able to indict at least one claimant before this court could render an opinion on claimants' motions for summary judgment.

The United States had dismissed its claim to Parcel 3 prior to the opinion of March 12, 1990. On June 15, 1990, the United States voluntarily dismissed its claim to Parcel 1, asserting that the balance due on an outstanding mortgage exceeded Parcel 1's market value. This left only Parcel 2 and Parcel 4 in the case.

The words of the complaint have never tried to tie together any of the original four parcels or to explain why parcels so widely separated by geography and by ownership were named defendants in one proceeding. If multifariousness were still a serious law school subject, this complaint would provide a good example for classroom discussion. The United States obviously believes (and it may be correct) that one hundred separate parcels, connected in no way except by the fact that each was allegedly used at some time to facilitate an illegal gambling operation, can be named in rem defendants in a single forfeiture proceeding, so long as the one hundred parcels are located within the same federal judicial district. The Northern District of Alabama contains 31 counties. With as many professional gamblers as are probably plying their trade within the Northern District of Alabama, theoretically, under the government's theory, a hundred separate parcels in one forfeiture action may be more than a theoretical possibility.

Parcel 4 was seized under a warrant of arrest which contained a legal description somewhat different from the description in the order of seizure of October 4, 1989, and the legal description was quite materially amended thereafter without any further order of seizure or in rem process. The pertinent procedural details will be explored more thoroughly in the later discussion of the applicable law. The United States has never attempted to justify or to explain its amendment of the legal description of Parcel 4 after the arrest warrant. Neither has it attempted to justify its not obtaining an amended arrest warrant or a new forfeiture order employing the substitute legal description. Lastly, it has not attempted to justify its failure to obtain a new order for publishing notice against Parcel 4 as finally described by metes and bounds.

After the deadline of June 29, 1990, without having heard anything from the United States, the court, on July 3, 1990, set the matter for a status and scheduling conference. At this conference, held on July 25, 1990, the court pointed out in no uncertain terms that both Parcels 2 and 4 had been seized in October of 1989, and that by order of October 4, 1989, title was tentatively vested in the United States without any pre-seizure hearing having been conducted and without the United States ever thereafter having formally charged any of claimants with involvement in an alleged illegal gambling business in violation of 18 U.S.C. § 1955. The court orally expressed severe reservations about the government's case in several respects.

On July 12, 1990, the Smiths filed their motion for summary judgment. On July 27, 1990, the Sharpes filed their motion for summary judgment. On August 2, 1990, the United States moved for its extension of the submission date, and with claimants not objecting, the extension was granted. In its motion for an extension, the United States said nothing about its intention to obtain an indictment during the period of the extension, but in its last-day response to claimants' motions for summary judgment filed on August 27, 1990, the United States revealed that it did intend to present a case to the grand jury against Andy Smith during the week of August 27. This court takes judicial notice of the subsequent fact that Andy Smith was indicted on August 30, 1990.

The Smith brothers own Parcel 4 together. The Sharpes, who are husband and wife, own Parcel 2 together. Both sets of claimants have paid the ad valorem taxes due on their respective properties. Of course, if the properties are legally owned by the United States, they are exempt from state, county, and municipal taxes. Since the seizure of Parcel 2, the Sharpes have made their regular mortgage payments due Manufacturers Hanover Bank, which holds a first mortgage on Parcel 2. Manufacturers Hanover has filed a claim in order to protect its lien. Colonial Bank, which holds a second mortgage on Parcel 2, has also filed a claim. It goes without saying that the titles to both parcels have been unmarketable since October 2, 1989. The Sharpes do have a written agreement with the United States by which they can remain in possession during this proceeding. The Smiths, who run a clothing store located in Parcel 4, have no such agreement, so that under this court's order of October 4, 1989, the United States can forcibly remove the Smiths from Parcel 4 at any time.

Claimants, who in this civil case can invoke Rule 56, F.R.Civ.P., if the rule is appropriate, make several arguments in support of their contentions that these undisputed material facts require a final disposition in their favor, divesting the United States of all right, title, claim and interest in and to these two parcels of real property. Claimants' various contentions in this regard, and the counter-arguments of the United States, will be...