Unpublished Disposition, 912 F.2d 470 (9th Cir. 1986)

In these consolidated forfeiture cases, claimants Richard Angelo Calabrese ("Richard, Jr."), Richard Allen Calabrese ("Richard, Sr."), Carol Ann Calabrese, and Janice Edmunds appeal the district court's grant of summary judgment in favor of the United States. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm in part, reverse in part, and remand for further proceedings.¹ 

* In civil forfeiture cases, the summary judgment procedures of Rule 56 " 'must necessarily be construed in the light of the statutory law of forfeitures.' " United States v. One 56-Foot Yacht Named Tahuna, 702 F.2d 1276, 1281 (9th Cir. 1983) (citations omitted). Pursuant to 19 U.S.C. § 1615, the government has the initial burden of demonstrating probable cause to believe that the property was traceable to an illegal drug transaction. See United States v. $5,644,540 in U.S. Currency, 799 F.2d 1357, 1362 (9th Cir. 1986). To meet its burden, the government must show that the aggregate of facts gives rise to more than a mere suspicion, but less than prima facie proof, that the property was related to an illegal drug transaction. United States v. Padilla, 888 F.2d 642, 643-44 (9th Cir. 1989); $5,644.540 in U.S. Currency, 799 F.2d at 1362-63. Once the government has established probable cause, the burden then shifts to the claimant to show, by a preponderance of the evidence, that the property was not related to an illegal drug transaction. United States v. 1 Parcel of Real Property, Lot 4, Block 5 of Eaton Acres, 904 F.2d 487, 491 (9th Cir. 1990).

As a preliminary matter, we note that at oral argument counsel for appellants asserted that the district court applied an incorrect legal standard: namely, that the district court held appellants to a burden other than the "conventional burden" of Fed. R. Civ. P. 56(e). This argument is without merit.

There is nothing in the district court's opinion and order to indicate that the court applied anything other than the "conventional" standard of Rule 56(e) in the context of the forfeiture proceedings. The civil forfeiture statute gives the government substantial procedural advantages, 1 Parcel of Real Property, 904 F.2d at 491, and these advantages are reflected in summary judgment proceedings. Once the government meets its relatively light burden of showing probable cause, the onus is on the claimant to present evidence sufficient to allow a reasonable trier of fact to find in her favor. See id. The district court explicitly found that appellants "failed to either rebut the government's showing of probable cause or to raise a genuine issue of material fact as to the legality of the source of the funds for purchase of the property in question." Excerpt of Record at 31. Although we disagree with the district court's conclusion with regard to the property claimed by Richard, Sr., we see no error in the court's general application of Rule 56.

II

To establish probable cause for forfeiture, the government relied primarily on the large amounts of cash spent by the Calabreses in the purchases of real and personal property and the absence of any legitimate source of income. The government's assertions were supported by the affidavits of several FBI agents, as well as by evidence adduced at the criminal trial concerning the Calabreses' cash expenditures. In addition, the government relied on the Calabreses' conviction for conspiracy to distribute methamphetamine, and the evidence upon which their conviction was based.

The aggregate of facts presented by the government gives rise to more than a mere suspicion that the properties were traceable to proceeds from drug transactions. The Calabreses spent over one million dollars on various items of property in 1983 and 1984, with several extremely large cash purchases, yet the Calabreses' tax returns for the years 1978 through 1982 showed an average taxable income of approximately $15,000, and in 1983, taxable income of $118,678. The Calabreses were convicted of conspiracy to distribute methamphetamine, were in possession of counterfeit driver's licenses, were linked to a known methamphetamine dealer, and a search of their residence revealed a list of ingredients to manufacture methamphetamine in Carol Calabrese's handwriting. Viewed together, these facts suggest that the property was traceable to illegal drug transactions; thus, the district court correctly concluded that there was probable cause to support forfeiture.

III

Appellants contend, however, that summary judgment was inappropriate because there are genuine issues of material fact regarding the sources of the forfeited property.

Richard, Jr. and Carol Calabrese assert that their real and personal property assets were acquired with legitimate income or have been in the Calabrese family for some time. As evidence of at least $500,000 in legitimate income, Richard, Jr. and Carol Calabrese have directed the court to the Presentence Report. The Report summarizes Richard Jr.'s explanation of the source of funds used to purchase various assets, as told to the U.S. probation officer. See Excerpt of Record at 61. Such hearsay evidence, however, is inadmissible and cannot be considered by this court on review of a summary judgment. Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 667 (9th Cir. 1980).

With regard to "heirloom" property, at oral argument, counsel for appellants stated that documents were filed showing that many of the weapons seized were antiques that had been in the Calabrese family for generations. Our review of the record reveals no such documents. In opposing the government's motion for summary judgment, the Calabreses referred to the affidavit of Special Agent Santala to show that certain weapons had been in the Calabrese family for a long time. Memorandum in Opposition to Motion for Summary Judgment at 12, United States v. Numerous Firearms (Nos. CV 86-17-BU-CCL, 86-8-BU-CCL). Santala's affidavit, however, merely states that Richard, Jr. told him that there "was one .22 rifle that was 'not part of this' and that he had had it 'forever.' " Affidavit of Steve Santala at 1, attached as Exh. 1 to Motion for Summary Judgment, United States v. Numerous Firearms (Nos. CV 86-17-BU-CCL, 86-8-BU-CCL). The government apparently disd not subject this one .22 rifle to forfeiture. See Motion for Summary Judgment at 2; Reply Brief at 5 n. 1).² 

With regard to "heirloom" property, at oral argument, counsel for appellants stated that documents were filed showing that many of the weapons seized were antiques that had been in the Calabrese family for generations. Our review of the record reveals no such documants. In opposing the government's motion for summary judgment, the Calabreses referred to the affidavit of Special Agent Santala to show that certain weapons had been in the Calabrese family for a long time. Memorandum in Opposition to Motion for Summary Judgment at 12, United States v. Numerous Firearms (Nos. CV 86-17-BU-CCL, 86-8-BV-CCL). The government apparently did not subject this one .22 rifle to forfeiture. See Motion for Summary Judgment at 2; Reply Brief at 5 n. 1).²

We have stated, and Fed. R. Civ. P. 56(e) so provides, that a party opposing a summary judgment motion must provide "specific facts" showing that there is a genuine issue of material fact for trial. $5,644,540 in U.S. Currency, 799 F.2d at 1363. These "specific facts" must be introduced in the form of affidavits or as otherwise provided by Rule 56; general assertions in legal memoranda are insufficient to raise a triable issue of fact. British Airways Board v. Boeing Co., 585 F.2d 946, 952 (9th Cir. 1978), cert. denied, 440 U.S. 981 (1979); see Fed. R. Civ. P. 56(e). In opposing the government's motion for summary judgment, Richard, Jr. and Carol Calabrese failed to present any admissible evidence concerning their legitimate income or heirloom property. Thus, the district court correctly concluded that Richard, Jr. and Carol Calabrese failed to raise any triable issues of fact.

Richard, Sr., on the other hand, provided a detailed affidavit concerning his ownership and purchase of the Calabrese residence in Montana ("14.204 acres"). In his affidavit, Richard, Sr. states that he paid the $90,000 balance on the 14.204 acres using his life savings. He further states that he supplied the money to Elene White, a realtor in California frequently used by Richard, Jr. This is consistent with Richard, Sr.'s testimony at the criminal trial. However, it contradicts a statement made by Richard, Sr. to FBI agents in which he denied any business dealings with Ms. White. See Affidavit of Bernard Hubley at 3 n. 1 (filed in support of the government's Motion for Summary Judgment dated April 17, 1986). In addition, Ms. White told FBI agents on three occasions that Richard, Sr. was not involved in the purchase of the 14.204 acres. Id.

We disagree with the district court's conclusion that Richard Sr.'s affidavit failed to raise a genuine issue of material fact. The district court discounted the affidavit as " 'incredible and contradictory,' " citing United States v. 1980 Red Ferrari, etc., 827 F.2d 477, 480 n. 3. Excerpt of Record at 34. However, unlike the deposition testimony at issue in Red Ferrari, Richard, Sr.'s affidavit is not internally contradictory. Moreover, the court in Red Ferrari relied primarily on the fact that, even if the main proposition of the deposition testimony was accepted as correct, the claimant still failed to raise a triable issue of fact. See id. at 480. Nor is this a case in which the affiant contradicts previous deposition testimony, thereby allowing the judge to discount the affidavit presented in opposition to summary judgment. See, e.g., Foster v. Arcata Associates, Inc., 772 F.2d 1453, 1462 (9th Cir. 1985), cert. denied, 475 U.S. 1048 (1986). Here, the only "contradictory" evidence presented by the government consists of hearsay statements made to FBI agents, as presented in Agent Hubley's affidavit.

The well established general rule is that a judge may not make credibility determinations on a motion for summary judgment; rather, the evidence of the nonmovant must be accepted as true. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Nothing in the case law or the record supports deviation from this general rule here. We have recently held that a claimant's evidence cannot be rejected "simply because it consists entirely of the property owner's self-serving testimony"; to the contrary, "where conflicting evidence is presented, the government must subject its case to the judgment of the trier of fact." 1 Parcel of Real Property, 904 F.2d at 492. Richard, Sr.'s affidavit raises a genuine issue of material fact as to the source of the funds used to purchase the 14.204 acres; we therefore hold that the district court erred in granting summary judgment as to this property.

IV

We briefly address a secondary argument presented by appellants that the government has failed to show any nexus between the properties and illegal drug transactions. Specifically, appellants contend that the government "has the obligation of showing a drug transaction which resulted in the proceeds being used to purchase [the] specific items involved." Appellants' Brief at 17. In civil forfeiture cases, however, the government is not required to prove that the defendant property was, in fact, traceable to a specific drug transaction. See 1 Parcel of Real Property, 904 F.2d at 491 (government need not prove property was, in fact, involved in advancing a drug transaction); see also United States v. Four Million, Two Hundred Fifty-five Thousand, etc., 762 F.2d 895, 904 (11th Cir.), cert. denied, 474 U.S. 1056 (1986) (government need not allege or prove a specific drug transaction). Rather, as stated above, the government need only establish probable cause to believe that the property is related to illegal drug transactions. Furthermore, the Ninth Circuit has refused to require the government to show any "substantial connection" between the property subject to forfeiture and an illegal activity. $5,644,540 in U.S. Currency, 799 F.2d at 1362.

V

We summarize our conclusions as follows. We affirm the district court's finding that the government met its burden of showing probable cause for forfeiture of the subject properties. We also affirm the summary judgment as to all relevant properties except the 14.204 acres. With regard to this parcel of property, we reverse and remand for proceedings consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART, and REMANDED.