US v. Real Property Located at Incline Village

• Decision Date: 31 December 1990
• Docket Number: No. CV-N-90-130-ECR.,CV-N-90-130-ECR.
• Parties: UNITED STATES of America, Plaintiff, v. REAL PROPERTY LOCATED AT INCLINE VILLAGE, et al., Defendants.
• Court: U.S. District Court — District of Nevada

755 F. Supp. 308

UNITED STATES of America, Plaintiff, v. REAL PROPERTY LOCATED AT INCLINE VILLAGE, et al., Defendants.

No. CV-N-90-130-ECR.

United States District Court, D. Nevada.

December 31, 1990.

U.S. Atty. by Will Mattly, Asst. U.S. Atty., Reno, Nev., for plaintiff.

Daniel W. Stewart and C. Frederick Pinkerton, Reno, Nev., for Brian J. Degen and Karyn Degen (claimants to defendant property).

ORDER

EDWARD C. REED, Jr., Chief Judge.

On October 24, 1989, a federal grand jury in Nevada returned an indictment against Brian J. Degen, charging him in various counts of United States v. Ciro Wayne Mancuso, et al., CR-N-89-24-ECR. A warrant was issued for Degen's arrest. On the same day, plaintiff instituted a civil forfeiture action against certain real property in Incline Village owned by Degen, and possibly, by Degen's wife Karyn Degen, as well. Plaintiff asserts that Brian purchased such property with illegal drug money he obtained in the criminal enterprise alleged in the indictment.

Brian currently resides in Switzerland and is aware of both the indictment and the civil forfeiture action. On April 6, 1990, Donald H. Heller, attorney for Brian and Karyn, filed separate claims for each of them to the property that is the subject of the forfeiture action. Heller also filed answers to the Amended Complaint for Forfeiture on behalf of Brian and Karyn.

Plaintiff filed a motion seeking to strike the claims and answers of both Brian and Karyn, and seeking summary judgment in its favor (document # 8). Plaintiff claims that as a fugitive from justice, Brian is disentitled from appearing in the forfeiture action. The Degens, through Heller, filed an opposition (document # 14). Plaintiff filed a reply (document # 20). Heller, on behalf of the Degens, filed a Request for Oral Argument on the Motion to Strike Claims and Answers and Motion for Summary Judgment (document # 21). On December 27, 1990, this court heard oral argument from both sides on the motion for summary judgment and motion to strike, as against Brian only.

In this Order, we address only the Motion to Strike and Motion for Summary Judgment against Brian Degen. In tackling plaintiff's motions against Brian, we must first determine whether Brian is a fugitive from justice. Brian argues that he left Nevada and the United States for Switzerland before he knew of the indictment against him and before he knew of the civil forfeiture action. That is, he did not flee the country as a result of a criminal case against him.

However, case law indicates that to be a fugitive, a person need not flee the state or country with the intent of avoiding a prosecution or an anticipated prosecution. In King v. United States, 144 F.2d 729, 731 (8th Cir.1944), the court held:

To be a fugitive, ... it is not necessary that the party should have left the state ... where the crime is alleged to have been committed ... for the purpose of avoiding an anticipated prosecution, but that, having committed a crime within a state ..., he has left and is found in another jurisdiction.

In this case, whether Brian left before or after the indictment is irrelevant. Having allegedly committed a crime, Brian left the United States and is in Switzerland.

The Ninth Circuit has adopted the reasoning of the Eighth. In United States v. Wazney, 529 F.2d 1287, 1289 (9th Cir.1976), the court held that an intent to avoid prosecution (conferring the "fugitive" status) could be inferred where the defendant knows that he is wanted by the police and fails to submit to arrest. The Ninth Circuit reaffirmed this decision in United States v. Ballesteros-Cordova, 586 F.2d 1321, 1323 (9th Cir.1978) and United States v. Gonsalves, 675 F.2d 1050, 1052 (9th Cir.1982). In this case, Brian knows that he is wanted by the police, but refuses to submit to arrest, even though he professes his innocence. Thus, we conclude that Brian Degen is a fugitive.

Having concluded that Brian is a fugitive, we now address whether the disentitlement doctrine precludes him from contesting the civil forfeiture action against him. In Molinaro v. New Jersey, 396 U.S. 365, 90 S.Ct. 498, 24 L.Ed.2d 586 (1970), the Supreme Court refused to adjudicate the merits of an appeal from a criminal conviction because defendant was a fugitive. Id. at 366, 90 S.Ct. at 498. The Court held that defendant's status as a fugitive "disentitled him to call upon the resources of the Court for determination of his claims." Id. Thus, the disentitlement doctrine emerged for criminal proceedings.

In Conforte v. Commissioner, 692 F.2d 587 (9th Cir.1982), the Ninth Circuit extended the disentitlement doctrine to a civil proceeding based on a prior criminal conviction. While this extension went beyond a criminal appeal, it did not address whether the disentitlement doctrine applies to a civil forfeiture proceeding. However, the Ninth Circuit addressed that issue in United States v. $129,374 in U.S. Currency, 769 F.2d 583 (9th Cir.1985). The court noted:

The issue before us in this case is one of first impression: whether the Molinaro/Conforte disentitlement doctrine should bar intervention in a civil forfeiture proceeding by a fugitive's successor in interest. We conclude that the limited extension of that doctrine to this situation is compelled as a matter of sound policy.

Id. at 587. If the disentitlement doctrine bars a fugitive's successor from defending a civil forfeiture proceeding, it surely also bars the fugitive. In fact, the $129,374 court noted "If the fugitive is deprived of presenting any claim or defense in this action as the result of his fugitive status, the conservator of his estate must suffer the same consequences." Id. at 587. Thus, the disentitlement doctrine may apply to Brian Degen.

In opposing plaintiff's motions, Brian asserts that his case differs from $129,374. First, he presents many pages of assertions that he acquired the property in question with legitimate funds. This may well be true. However, Brian may not present this argument if the disentitlement doctrine bars him from defending the civil forfeiture proceeding. Whether the disentitlement doctrine applies is a standing issue. Determining the source of funds Brian used to purchase the property goes to the merits of the forfeiture action. Thus, we need not determine the source of funds unless the disentitlement doctrine does not apply to Brian.

Brian also argues that his situation differs from the situation of the fugitive in $129,374. In that case, the fugitive was arrested, convicted and released on bond pending sentencing. Before sentencing, the fugitive fled the jurisdiction, with knowledge of the civil forfeiture proceeding. The court held that the fugitive and his successor in interest were disentitled from challenging the civil forfeiture because "the disentitlement doctrine should apply with greater force in civil cases where an individual's liberty is not at stake." Id. at 588.

However, in this case, plaintiff has not obtained a criminal conviction against the civil claimant. Brian argues that this factual variation should render the disentitlement doctrine inapplicable. In $129,374, the government had already obtained a criminal conviction against the civil claimant related to the property in question in the forfeiture action. Brian argues that the disentitlement doctrine should not apply when the civil claimant has not been convicted, but only faces an ongoing prosecution, as is the case with him. Brian notes that he was already in Switzerland when he was indicted and when plaintiff instituted the forfeiture action.

In $129,374, the Ninth Circuit stated explicitly that it need not decide whether the disentitlement doctrine applies when the fugitive seeks relief from forfeiture in the absence of a prior criminal conviction directly related to the property in question. Further, since $129,374, the Ninth Circuit has not addressed the issue. Thus, we must now decide for the first time whether the disentitlement doctrine should apply in the absence of a criminal conviction.

Other circuits have addressed this specific issue, and more generally, in what circumstances the disentitlement doctrine should apply to civil forfeiture proceedings. In reaching their conclusions, other courts have focused on five factors: (1) the policy behind the disentitlement doctrine; (2) the relatedness of the property in the forfeiture action to the crime; (3) the claimant's control over his fugitive status and his ability to assert his rights to the property in question; (4) whether the claimant is a "plaintiff" or a "defendant"; and (5) whether the government obtained a prior criminal conviction against the claimant.

(1) The policy behind the disentitlement doctrine — Various courts have offered interpretations of the policy behind the disentitlement doctrine. In Molinaro, supra, the Supreme Court announced that an individual should not be able to call upon the resources of a court to determine his claims when he flouts that court's power to prosecute him. In a general sense, Brian is attempting to do just that. He wants this court to listen to his claims in the forfeiture proceeding without subjecting himself to this court's jurisdiction in the criminal matter. On the other hand, Brian has not called upon the resources of the court to determine his claims. The United States has called upon the resources of the court. We will explore this situation in more detail in (4) below.

In Katz v. United States of America, 920 F.2d 610 (9th Cir.1990), the court noted that the disentitlement doctrine prevents an individual from attempting to bargain with or obtain a tactical advantage over the court by awaiting a judicial result and returning to the jurisdiction if the result is favorable and remaining a fugitive if the result is unfavorable. That is, a person should not be able to invoke the power of judicial review and obey the order only if the person likes it.

In this case,...