United States of America v. Approximately $11,320.00 in U.S. Currency, No. 2:2010cv01930 - Document 14 (E.D. Cal. 2011)
Court Description: FINDINGS and RECOMMENDATIONS signed by Magistrate Judge John F. Moulds on 2/9/2011 RECOMMENDING that Pltf's 11 motion for default judgment be granted. The Clerk be directed to enter final judgment for Pltf. Referred to Judge Garland E. Burrell, Jr.. Objections to F&R within 30 days. (Zignago, K.)
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United States of America v. Approximately &#036;11,320.00 in U.S. Currency Doc. 14 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 UNITED STATES OF AMERICA, Plaintiff, 11 12 13 No. CIV 2:10-cv-1930-GEB-JFM vs. APPROX. $11,320.00 IN U.S. CURRENCY, et al., 14 Defendants. FINDINGS & RECOMMENDATIONS 15 / 16 Before the court is plaintiff United States of America’s November 10, 2010 17 motion for default judgment, requesting (1) entry of default judgment against the interests of 18 spouses Juan Brambilla-Lopez (“Brambilla-Lopez”) and Paula Reyes Lara (“Lara”) in 19 approximately $11,320.00 in U.S. currency (“the defendant currency”) and (2) entry of final 20 judgment of forfeiture vesting plaintiff all right, title and interest in the defendant currency. 21 FACTUAL BACKGROUND 22 On March 19, 2010, the West El Dorado Narcotics Enforcement Taskforce 23 (“WENET”) set up surveillance at Brambilla-Lopez’s residence at 4671 Holly Drive, Shingle 24 Spring, California, after the El Dorado County Sheriff’s Department received information that 25 Brambilla-Lopez possessed methamphetamine. (Compl., ¶ 7.) Officers saw Brambilla-Lopez 26 1 Dockets.Justia.com 1 leave the residence at approximately 1:30 p.m. (Id.) At approximately 1:40 p.m., Branbilla- 2 Lopez was pulled over by other officers for speeding. (Id.) Brambilla-Lopez consented to a 3 search and officers found 2.1 grams of a substance that tested positive for methamphetamine in a 4 cigarette pack in his pocket. (Id.) Brambilla-Lopez was arrested and transported to El Dorado 5 County Jail. (Id.) 6 Also on March 19, 2010, WENET officers executed a search warrant at 7 Brambilla-Lopez’s residence. (Compl., ¶ 8.) During the course of that search, officers found 8 two plastic bags containing 99.4 grams of a substance that tested positive for methamphetamine, 9 as well as another bag with 3.8 grams of a substance that tested positive for methamphetamine. 10 (Id.) Officers also found $11,320.00 in U.S. currency inside a stuffed animal that was inside a 11 black nylon bag with luggage tags bearing Brambilla-Lopez’s name. (Compl., ¶ 9.) Both 12 Brambilla-Lopez and his wife Lara denied any knowledge of the money or drugs. (Compl., ¶¶ 9- 13 10.) Neither Brambilla-Lopez nor Lara had any employment history from 2006 to present. 14 (Compl., ¶ 11.) PROCEDURAL BACKGROUND 15 On July 21, 2010, plaintiff filed the present complaint for forfeiture in rem against 16 17 the defendant currency. On July 21, 2010, a warrant for arrest of articles in rem was issued. On 18 July 29, 2010, the warrant was executed. On July 22, 2010, plaintiff sent separate packets, each with copies of the 19 20 complaint, application and order for publication, order regarding clerk’s issuance of warrant for 21 arrest, warrant for arrest, order setting status conference, and court notices, to Brambilla-Lopez 22 and Lara by first class mail and by certified mail. (Mot. for Def. J., Teglia Decl. at ¶¶ 3-4, Exs. 23 A-B.) Both packets were signed by “Paula Reyes” (Lara) on July 26, 2010. (Id.) 24 On July 20, 2010, personal service was attempted by the U.S. Marshal’s Service 25 on both Brambilla-Lopez and Lara at 4671 Holly Drive, Shingle Springs, CA 95682. (Doc. No. 26 ///// 2 1 7.) Service was unsuccessful, however; the woman who answered the door denied knowing 2 either Brambilla-Lopez or Lara, and also denied that they lived at the residence. (Id.) 3 Plaintiff further asserts that Brambilla-Lopez had actual knowledge of this 4 forfeiture action. (Mot. for Def. J. at 5.) On August 25, 2010, Brambilla-Lopez’s attorney David 5 Dratman in the state criminal action contacted the plaintiff’s attorney to discuss possible 6 settlement and to discuss a date by which Brambilla-Lopez might file a claim. (Id., Door Decl., 7 ¶¶ 4-5.) 8 On August 3, 2010, the undersigned authorized publication of the forfeiture 9 action via the internet forfeiture website (www.forfeiture.gov) for at least thirty days. According 10 to plaintiff’s Declaration of Publication (Doc. No. 8), a Notice of Civil Forfeiture was published 11 on the official government internet site (www.forfeiture.gov) for thirty days beginning on 12 August 4, 2010. To date, no claim or answer has been filed on behalf of Brambilla-Lopez or 13 Lara. 14 On October 5, 2010, plaintiff moved for entry of default against Brambilla-Lopez 15 and Lara. On October 7, 2010, default was entered as to both. On November 10, 2010, plaintiff 16 filed a motion for default judgment and final judgment of forfeiture. 17 18 LEGAL STANDARD A court has the discretion to enter a default judgment against one who is not an 19 infant, incompetent, or member of the armed services where the claim is for an amount that is 20 not certain on the face of the claim and where (1) the defendant has been served with the claim; 21 (2) the defendant’s default has been entered for failure to appear; (3) if the defendant has 22 appeared in the action, the defendant has been served with written notice of the application for 23 judgment at least three days before the hearing on the application; and, (4) the court has 24 undertaken any necessary and proper investigation or hearing in order to enter judgment or carry 25 it into effect. Fed. R. Civ. P. 55(b); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 26 1392 (9th Cir. 1988). Factors that may be considered by courts in exercising discretion as to the 3 1 entry of a default judgment and as to setting aside a default include the nature and extent of the 2 delay, Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); the possibility of prejudice to 3 the plaintiff, Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986); the merits of plaintiff’s 4 substantive claim, id.; the sufficiency of the allegations in the complaint to support judgment, 5 Alan Neuman Productions, Inc., 862 F.2d at 1392; the amount in controversy, Eitel v. McCool, 6 782 F.2d at 1471-72; the possibility of a dispute concerning material facts, id.; whether the 7 default was due to excusable neglect, id.; and, the strong policy underlying the Federal Rules of 8 Civil Procedure that favors decisions on the merits, id. 9 With respect to default judgments in proceedings that are in rem actions for 10 forfeiture, both the general Federal Rules of Civil Procedure and the Supplemental Rules for 11 Certain Admiralty and Maritime Claims (“Supp. R.”) apply, but the latter rules prevail if there is 12 an inconsistency. Supp. R. A(1). Supp. R. G(1) provides that the rule governs a forfeiture action 13 in rem arising from a federal statute; to the extent that Rule G does not address an issue, Supp. 14 Rules C and E also apply. Supplemental Rule G, which took effect on December 1, 2006, 15 incorporates a common-sense approach to notice grounded in defined and recognized principles 16 of due process of law. Supp. Rule G, Adv. Comm. Note on 2006 Adoption. The Advisory 17 Committee Note indicates that the rule was added to bring together the central procedures 18 governing civil forfeiture actions; it also states that the rule generally applies to actions governed 19 by the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) as well as those excluded from it; 20 thus, the intended scope of application is very broad. The rule permits flexibility as to the time 21 of service of any warrant and supplemental process. Id. The provisions for notice incorporate 22 the traditional means of publication and adopt the general principle that notice should be 23 effectuated by means reasonably calculated to reach potential claimants at a cost reasonable in 24 the circumstances, and actual notice precludes a challenge to the government's failure to comply 25 with the specific requirements of the rule set forth in Rule G(4)(b). Id. 26 ///// 4 ANALYSIS 1 2 1. Judgment Sought The court concludes that the notice given of the judgment sought satisfied Fed. R. 3 4 Civ. P. 55(d) and 54(c), which require that a judgment by default shall not be different in kind 5 from the relief sought, or exceed in amount that prayed for, in the demand for judgment. 6 Plaintiff expressly sought in the complaint the types of relief sought by the instant application for 7 default judgment, including a judgment of forfeiture of the defendant currency to the plaintiff 8 United States. 9 2. Default and Entry of Default The declarations and the court’s docket demonstrate that no person or entity made 10 11 a claim or answered the complaint within the requisite thirty-day period for filing a claim of 18 12 U.S.C. § 983(a)(4)(A) and Supp. R. G(5), and/or within the twenty-day period set forth in Supp. 13 R. G(5) for filing an answer thereafter. Therefore, the Clerk appropriately entered the default of 14 potential claimants Brambilla-Lopez and Lara on October 7, 2010. 15 3. Notice The Declaration of Publication by plaintiff filed on September 7, 2010 establishes 16 17 that a notice with the contents required by Supp. R. G(4)(a) was published on the official 18 government internet site for thirty consecutive days as required by Supp. R. G(4)(a)(iv)(C). 19 With respect to Brambilla-Lopez and Lara, who both resided at 4671 Holly Drive, 20 Shingle Springs, CA 95682, the declaration of Tammy Teglia and the Marshal’s return of service 21 establish that Brambilla-Lopez and Lara were served with the pertinent documents on July 26, 22 2010. Thus, the notice to Brambilla-Lopez and Lara complied with the requirements of Supp. R. 23 G(4)(b). The undersigned concludes that plaintiff has demonstrated that it has given notice 24 25 by publication and the notice required to be given to potential claimants by Rule G(4). 26 ///// 5 1 2 4. Legal Sufficiency of the Complaint a. Legal Standard A default judgment generally bars the defaulting party from disputing the facts 3 4 alleged in the complaint, but the defaulting party may argue that the facts as alleged do not state 5 a claim. Alan Neuman Productions, Inc., 862 F.2d at 1392. Thus, well pleaded factual 6 allegations, except as to damages, are taken as true; however, necessary facts not contained in 7 the pleadings, and claims which are legally insufficient, are not established by default. Cripps v. 8 Life Ins. Co. of North America, 980 F.2d 1261, 1267 (9th Cir. 1992); TeleVideo Systems, Inc. v. 9 Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). 10 Under the CAFRA, which applies to this case, the government must prove by a 11 preponderance of evidence that the property is subject to forfeiture. 18 U.S.C. § 983(c)(1). 12 Further, if the government’s theory of forfeiture is that the property was used to commit or 13 facilitate the commission of a criminal offense, or was involved in the commission of a criminal 14 offense, the government shall establish that there was a substantial connection between the 15 property and the offense. § 983(c)(3). Supp. Rule G(2) requires that the complaint in a forfeiture action in rem arising 16 17 from a federal statute be verified; state the grounds for subject-matter jurisdiction, in rem 18 jurisdiction over the defendant property, and venue; describe the property with reasonable 19 particularity; identify the statute under which the forfeiture action is brought; and state 20 sufficiently detailed facts to support a reasonable belief that the government will be able to meet 21 its burden of proof at trial. 22 b. The Complaint 23 The complaint filed in this action was verified. (Compl. at 5.) 24 The bases for jurisdiction are identified as 28 U.S.C. §§ 1345 and 1355 25 (jurisdiction of civil proceedings commenced by the United States or an agency or officer 26 thereof, and of actions to recover or enforce penalties or forfeitures under acts of Congress, 6 1 respectively) and 21 U.S.C. § 881(a)(6) (subjecting to forfeiture, among other things, all things 2 of value furnished or intended to be furnished by any person in exchange for a controlled 3 substance or listed chemical, and all proceeds traceable to such an exchange). (Compl. at 1-2.) The bases of venue are identified as 28 U.S.C. §§ 1355(b) (placing venue for a 4 5 civil forfeiture action where the acts giving rise to the forfeiture occurred) and 1395 (placing 6 venue for a civil forfeiture proceeding where the property is found). (Compl. at 1.) 7 The property is described with reasonable particularity. 8 It is stated that plaintiff proceeds pursuant to 21 U.S.C. § 881(a)(6), and that the 9 defendant property, seized in March 2010 in Shingle Springs, California, constitutes money or 10 things of value furnished or intended to be furnished in exchange for a controlled substance of 11 listed chemical, proceeds traceable to such an exchange, and/or all moneys used or intended to 12 be used to facilitate one or more violations of 21 U.S.C. § 841 et seq. (Compl. at 2.) In the complaint there are alleged sufficiently detailed facts to support a 13 14 reasonable belief that the government would be able to meet its burden of proof at trial. The 15 complaint detailed a surveillance of Brambilla-Lopez’s residence based on information that 16 Brambilla-Lopez possessed methamphetamine. When Brambilla-Lopez left his residence on 17 March 19, 2010, officers pulled him over for speeding and, following his consent to a search, 18 found methamphetamine in Brambilla-Lopez’s possession. The officers then executed a search 19 warrant of Brambilla-Lopez and Lara’s residence where they found over 100 grams of 20 methamphetamine and the defendant currency. Neither Brambilla-Lopez nor his wife, Lara, had 21 an employment history since 2006. These facts support a reasonable inference that the defendant currency was 22 23 subject to forfeiture as proceeds/property traceable to proceeds or as property intended to be 24 used to facilitate other violations. The totality of the circumstances reflects that a substantial 25 connection between the property and the related drug offenses was demonstrated. 26 ///// 7 1 2 5. Status of Potential Claimants and Discretionary Factors Here, no one has claimed an interest in the defendant currency or otherwise 3 responded to the complaint despite adequate notice. It does not appear that there is any risk of 4 mistake or excusable neglect on the part of anyone with a potential interest in the property or of a 5 dispute as to a material fact essential to the government’s case. No just cause for delay appears. 6 There does not appear to be any reason why the general policy in favor of a decision on the 7 merits would warrant refusing to enter the requested default judgment. 8 9 Based thereon, the court finds that plaintiff has shown its entitlement to a default judgment of forfeiture. CONCLUSION 10 11 Accordingly, IT IS HEREBY RECOMMENDED that 12 1. Plaintiff’s November 10, 2010 motion for default judgment be granted; and 13 2. Plaintiff is entitled to, and the Clerk be directed to enter, a judgment that: A. The interest/s of Brambilla-Lopez and Lara in the defendant property 14 15 are condemned and forfeited to the United States of America; and B. The right, title, and interest of all potential claimants in the defendant 16 17 property, including but not limited to Brambilla-Lopez and Lara, are forfeited to the United 18 States of America pursuant to 21 U.S.C. § 881(a)(6), and are vested in the United States; and, 19 C. All persons claiming any right, title, or interest in or to the defendant 20 property have defaulted and no longer have any right, title, or interest in the defendant property 21 whatsoever; and, 22 3. The Clerk of Court enter final judgment of forfeiture for plaintiff. 23 These findings and recommendation are submitted to the United States District 24 Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Rule 25 72-304 of the Local Rules of Practice for the United States District Court, Eastern District of 26 California. Within thirty (30) days after being served with a copy, any party may file written 8 1 objections with the court and serve a copy on all parties. Such a document should be captioned 2 “Objections to Magistrate Judge's Findings and Recommendation.” Replies to the objections 3 shall be served and filed within ten (10) court days after service of the objections. The Court 4 will then review the Magistrate Judge’s ruling pursuant to 28 U.S.C. § 636(b)(1)(C). The parties 5 are advised that failure to file objections within the specified time may waive the right to appeal 6 the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 7 DATED: February 9, 2011. 8 9 10 11 /014;usa1930.def 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 9
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