United States of America v. 2005 Infiniti QX56, VIN: 5N3AA08A25N806191, License Number 6AEJ980, et al, No. 1:2009cv00012 - Document 34 (E.D. Cal. 2009)
Court Description: FINDINGS and RECOMMENDATIONS re 30 MOTION for DEFAULT JUDGMENT recommending 1. Plaintiff's motion for default judgment be GRANTED; 2. Plaintiff is entitled to, and the Clerk be directed to enter, a judgment that: (a) The interest/s of Jorge Le al, Elisa Leal, Johanna Leal, and Vanessa Leal in the Defendant properties are CONDEMNED and FORFEITED to the United States of America; and (b) The right, title, and interest of all potential claimants in the Defendant property, including but not lim ited to Jorge Leal, Elisa Leal, Johanna Leal, and Vanessa Leal, are FORFEITED to the United States of America, and are VESTED in the United States; and, (c) All persons claiming any right, title, or interest in or to the Defendant property have DEFAU LTED and no longer have any right, title, or interest in the Defendant property whatsoever; and, 3. The Clerk of Court ENTER final judgment of forfeiture forPlaintiff United States of America. Matter referred to Judge Wanger. Plaintiff is directed to serve these findings and recommendations on all potential claimants and file a proof of service. Within thirty (30) days afterbeing served with a copy, any party may file written objections with the court and serve a copy on all parties. Such a doc ument should be captioned "Objections to Magistrate Judges Findings and Recommendation." Replies to the objections shall be served and filed within ten (10) court days (plus three days if served by mail) after service of the objections. The 10/30/2009 hearing date is VACATED, signed by Magistrate Judge Sandra M. Snyder on 10/26/2009. (Timken, A)
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United States of America v. 2005 Infiniti QX56, VIN: 5N3AA08A25N806191, Li...e Number 6AEJ980, et al Doc. 34 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, 12 Plaintiff, 13 vs. 14 2005 Infiniti QX56, VIN: 5N3AA08A25N806191, License 15 Number 6AEJ980, et al., 16 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) 1:09-cv-00012-OWW-SMS ORDER VACATING HEARING ON PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AND DEEMING MATTER SUBMITTED FOR DECISION (DOC. 30) Vacated hearing date: October 30, 2009 Time: 9:30 a.m. 17 FINDINGS AND RECOMMENDATIONS RE: PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (Doc. 30) 18 19 ORDER DIRECTING PLAINTIFF TO SERVE THESE FINDINGS AND RECOMMENDATIONS ON ALL POTENTIAL CLAIMANTS AND FILE A PROOF OF SERVICE 20 21 22 23 24 Plaintiff is proceeding with an action for forfeiture in 25 this Court. Pending before the Court is Plaintiff’s ex parte 26 motion for default judgment, filed on August 7, 2009, with a 27 supporting declaration of Elisa Rodriguez, which proceeds before 28 1 Dockets.Justia.com 1 a Magistrate Judge pursuant to 28 U.S.C. § 636(b) and Local Rule 2 72-302(c)(19). 3 I. Vacating the Hearing on the Motion 4 Pursuant to Rule 78-230(h) of the Local Rules of Practice 5 for the United States District Court, Eastern District of 6 California, the Court finds that the Plaintiff’s ex parte motion 7 for default judgment is a matter that may appropriately be 8 submitted upon the record and briefs, including the Plaintiffs’ 9 motion, supporting memorandum of points and authorities, and 10 declaration of Elisa Rodriguez filed on August 7, 2009. 11 Accordingly, the hearing on the motion, presently set for 12 October 30, 2009, IS VACATED, and the motion IS DEEMED SUBMITTED 13 to the Court for decision. 14 II. Service of the Findings and Recommendations 15 The remainder of this document constitutes the Court’s 16 findings and recommendations with respect to Plaintiff’s motion 17 for default judgment. 18 Plaintiff IS DIRECTED to serve the findings and 19 recommendations on all potential claimants to Defendant property, 20 including Jorge Leal, Elisa Leal, Johanna Leal, and Vanessa Leal, 21 and to file proof of such service no later than ten days after 22 the date of service of this order. 23 24 25 III. Motion for Default Judgment A. Legal Standards A court has the discretion to enter a default judgment 26 against one who is not an infant, incompetent, or member of the 27 armed services where the claim is for an amount that is not 28 certain on the face of the claim and where (1) the defendant has 2 1 been served with the claim; (2) the defendant’s default has been 2 entered for failure to appear; (3) if the defendant has appeared 3 in the action, the defendant has been served with written notice 4 of the application for judgment at least three days before the 5 hearing on the application; and, (4) the court has undertaken any 6 necessary and proper investigation or hearing in order to enter 7 judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan 8 Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th 9 Cir. 1988). Factors that may be considered by courts in 10 exercising discretion as to the entry of a default judgment and 11 as to setting aside a default include the nature and extent of 12 the delay, Draper v. Coombs, 792 F.2d 915, 924-925 (9th Cir. 13 1986); the possibility of prejudice to the plaintiff, Eitel v. 14 McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986); the merits of 15 plaintiff's substantive claim, id.; the sufficiency of the 16 allegations in the complaint to support judgment, Alan Neuman 17 Productions, Inc., 862 F.2d at 1392; the amount in controversy, 18 Eitel v. McCool, 782 F.2d at 1471-1472; the possibility of a 19 dispute concerning material facts, id.; whether the default was 20 due to excusable neglect, id.; and, the strong policy underlying 21 the Federal Rules of Civil Procedure that favors decisions on the 22 merits, id. 23 With respect to default judgments in proceedings that are in 24 rem actions for forfeiture, both the general Federal Rules of 25 Civil Procedure and the Supplemental Rules for Certain Admiralty 26 and Maritime Claims (Supp. R.) apply, but the latter rules 27 prevail if there is an inconsistency. Supp. R. A(1). Supp. R. 28 G(1) provides that the rule governs a forfeiture action in rem 3 1 arising from a federal statute; to the extent that Rule G does 2 not address an issue, Supp. Rules C and E also apply. 3 Supplemental Rule G, which took effect on December 1, 2006, 4 incorporates a common-sense approach to notice grounded in 5 defined and recognized principles of due process of law. Supp. 6 Rule G, Adv. Comm. Note on 2006 Adoption. The Advisory Committee 7 Note indicates that the rule was added to bring together the 8 central procedures governing civil forfeiture actions; it also 9 states that the rule generally applies to actions governed by the 10 Civil Asset Forfeiture Reform Act of 2000 (CAFRA) as well as 11 those excluded from it; thus, the intended scope of application 12 is very broad. The rule permits flexibility as to the time of 13 service of any warrant and supplemental process. Id. The 14 provisions for notice incorporate the traditional means of 15 publication and adopt the general principle that notice should be 16 effectuated by means reasonably calculated to reach potential 17 claimants at a cost reasonable in the circumstances, and actual 18 notice precludes a challenge to the government’s failure to 19 comply with the specific requirements of the rule set forth in 20 Rule G (4)(b). Id. 21 22 23 B. The Court’s Findings 1. Notice The amended declaration of publication of Autumn Magee (Doc. 24 31) filed on August 7, 2009, establishes that a notice with the 25 contents required by Supp. R. G(4)(a) was published on the 26 official government internet site for thirty consecutive calendar 27 days as required by Supp. R. G(4)(a)(iv)(C). 28 With respect to the notice to persons reasonably appearing 4 1 to be potential claimants that is required by Supp. R. G(4)(B), 2 the verified complaint identifies Defendant vehicles that were 3 seized on or about August 13, 2008, by the FBI, and that are 4 presently in the custody of the United States Marshal, as 1) a 5 2005 Infiniti QX56, VIN 5N3AA08A25N806191 (Defendant Infiniti 6 SUV), seized at 1656 Barstow Avenue, Clovis, California; 2) a 7 2004 BMW 545i, VIN WBANB33564B107506 (Defendant 2004 BMW), seized 8 at 28542 Pittman Hill Road in Clovis, California; and 3) a 2001 9 Mercedes Benz, VIN WDBNG78J21A194676 (Defendant 2001 Mercedes), 10 seized at 28542 Pittman Hill Road in Clovis, California. 11 With respect to Jorge Leal, who resided at both 28542 12 Pittman Hill Road and 1656 Barstow Avenue in Clovis, and who was 13 making payments on the Defendant 2001 Mercedes (Cmplt. ¶¶ 8, 15), 14 the declaration of Elisa Rodriguez (Doc. 30-2) and the Marshal’s 15 service return (Decl., Ex. G; Doc. 15) establish that Jorge Leal 16 was personally served with the pertinent documents on January 26, 17 2009. Thus, the notice to Jorge Leal complied with the 18 requirements of Supp. R. G(4)(b). 19 With respect to the other potential claimants,1 it does not 20 appear that notice amounting to service of process that would be 21 legally sufficient to constitute service under Fed. R. Civ. P. 4 22 was effected upon Elisa, Johanna, or Vanessa Leal. However, they 23 were given notice that complies with Supp. R. G(4). The 24 25 26 27 28 1 Elisa Leal was the wife of Jorge Leal; she had been observed driving the Defendant 2005 Infiniti SUV, and she was the person to whom the 2004 BMW was registered. (Cmplt. ¶¶ 9, 12). Johanna Leal was the adult daughter of Jorge Leal; her personal documents, including a receipt for the cash purchase of a 2007 BMW convertible for a price of approximately $72,000, were found at the Pittman residence along with papers related to her father. Vanessa Leal was another adult daughter who had not worked for the past two years. (Cmplt. ¶¶ 13-14, 18.) 5 1 appropriate documentation was delivered by the Marshal to the 2 porch of the house at the Pittman address (the last known address 3 of Elisa, Johanna,, and Vanessa Leal) for all three persons on 4 January 22, 2009. (Doc. 14.) The documents were mailed to the 5 three persons at the Pitman Hill address on January 12, 2009. 6 (Rodriguez Decl., ¶¶ 3-5.) This notice was sent by means 7 reasonably calculated to reach to potential claimants and 8 complies with Supp. R. G(4)(b)(iii)((A), (D), and (E). 9 Further, the internal documentation of the United States 10 attorney’s Office and the Marshal’s Service are consistent with 11 the receipt of actual notice. The supporting declaration of Elisa 12 Rodriguez, based on personal knowledge, details the contact by 13 the Marshal’s Service with Johanna and Vanessa Leal, which 14 resulted in the Leal’s confirmation that all parties had received 15 copies of the relevant process. (Decl. ¶ 11.) Further, a memo to 16 file dated February 12, 2009, from Anne Gaskins, Deputy United 17 States Marshal, reflects that on February 11, 2009, Deputy 18 Gaskins called Johanna and Vanessa Leal at a specified telephone 19 number, and they both confirmed that all parties received copies 20 of the process. An additional notation reflected that paralegal 21 Autumn Magee at the Assistant United States Attorney’s Office in 22 Fresno had confirmed to Gaskins in a telephone conversation that 23 Magee received a call from the Leals indicating that they did 24 receive the paperwork. (Decl., Ex. I.) With respect to Johanna 25 Leal, a confirming letter to her from Autumn Magee reflects that 26 on or about February 4, 2009, the government granted Johanna 27 Leal’s request for an extension of time to March 6, 2009, in 28 which to file a claim and answer. (Decl. Rodriguez, ¶ 10, Ex. H.) 6 1 The Court finds that as to Jorge Leal (from whom the 2 Defendant 2005 Infiniti SUV was seized [Cmplt. ¶ 12]) and as to 3 Johanna Leal (from whom the other Defendant vehicles were seized 4 [Cmplt. ¶¶ 13-14]), Jorge Leal was personally served as required 5 by Local Rule A-540(a), and Johanna Leal received actual notice 6 and thus, pursuant to Supp. R. G(4)(b)(v), may not oppose or seek 7 relief from forfeiture because of a failure of notice. It has 8 likewise been demonstrated that the remainder of the claimants 9 also received actual notice. 10 The Court concludes that Plaintiff has demonstrated that it 11 has given notice by publication and the notice required to be 12 given to potential claimants by Rule G(4). 13 2. Notice of Judgment Sought and of Motion for Default Judgment 14 a. Judgment Sought 15 The Court concludes that the notice given of the judgment 16 sought satisfied Fed. R. Civ. P. 55(d) and 54(c), which require 17 that a judgment by default shall not be different in kind from 18 the relief sought, or exceed in amount that prayed for, in the 19 demand for judgment. Plaintiff expressly sought in the complaint 20 the types of relief sought by the instant application for default 21 judgment, including a judgment of forfeiture of the Defendant 22 currency to the Plaintiff United States. (Cmplt. p. 6.) 23 b. Motion for Default Judgment 24 The application for default judgment before the Court was 25 filed on an ex parte basis and thus was not served on the 26 Defendant property or on any persons who might reasonably appear 27 to be potential claimants. 28 7 1 Here, although there was informal contact between the 2 government and potential claimant Johanna Leal, the contact 3 related only to an extension of time to file any claim or answer. 4 No claim or answer was filed, and there are no later indications 5 that Johanna or any other potential claimant sought or intended 6 to defend this action on the merits. Accordingly, no notice 7 pursuant to Fed. R. Civ. P. 55(b)(2) is necessary. See, In re 8 Roxford Foods v. Ford, 12 F.3d 875, 879-81 (9th Cir. 1993). 9 10 3. Default and Entry of Default The declarations and the Court’s docket demonstrate that no 11 person or entity made a claim or answered the complaint within 12 the requisite thirty-day period for filing a claim of 18 U.S.C. § 13 983(a)(4)(A) and Supp. R. G(5), and/or within the twenty-day 14 period set forth in Supp. R. G(5) for filing an answer 15 thereafter. Therefore, the Clerk appropriately entered the 16 default of all four potential claimants on April 7, 2009. 17 18 19 4. Legal Sufficiency of the Complaint a. Legal Standards A default judgment generally bars the defaulting party from 20 disputing the facts alleged in the complaint, but the defaulting 21 party may argue that the facts as alleged do not state a claim. 22 Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392. 23 Thus, well pleaded factual allegations, except as to damages, are 24 taken as true; however, necessary facts not contained in the 25 pleadings, and claims which are legally insufficient, are not 26 established by default. Cripps v. Life Ins. Co. of North America, 27 980 F.2d 1261, 1267 (9th Cir. 1992); TeleVideo Systems, Inc. v. 28 Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). 8 1 Under the Civil Asset Forfeiture Reform Act (CAFRA), which 2 applies to this case, the government must prove by a 3 preponderance of evidence that the property is subject to 4 forfeiture. 18 U.S.C. § 983(c)(1). Further, if the government’s 5 theory of forfeiture is that the property was used to commit or 6 facilitate the commission of a criminal offense, or was involved 7 in the commission of a criminal offense, the government shall 8 establish that there was a substantial connection between the 9 property and the offense. § 983(c)(3). 10 Supp. Rule G(2) requires that the complaint in a forfeiture 11 action in rem arising from a federal statute be verified; state 12 the grounds for subject-matter jurisdiction, in rem jurisdiction 13 over the Defendant property, and venue; describe the property 14 with reasonable particularity; identify the statute under which 15 the forfeiture action is brought; and state sufficiently detailed 16 facts to support a reasonable belief that the government will be 17 able to meet its burden of proof at trial. 18 b. The Complaint 19 The complaint filed in this action was verified. 20 The bases for jurisdiction are identified as 28 U.S.C. §§ 21 1345 and 1355 (jurisdiction of civil proceedings commenced by the 22 United States or an agency or officer thereof, and of actions to 23 recover or enforce penalties or forfeitures under acts of 24 Congress, respectively) and 21 U.S.C. § 881(a)(6) (subjecting to 25 forfeiture all money or other things of value furnished or 26 intended to be furnished in exchange for a controlled substance, 27 all proceeds traceable to such an exchange, and money used to 28 facilitate any violation of the subchapter). (Cmplt. ¶¶ 1, 3.) 9 1 The bases of venue are identified as 28 U.S.C. § 1395 2 (placing venue for a civil forfeiture proceeding where the 3 property is found) and 21 U.S.C. § 881(j) (placing venue in the 4 place where there is found the owner of property who is charged 5 with a violation that is the basis for forfeiture of the property 6 or where the criminal prosecution is brought). (Cmplt. ¶ 4.) 7 The property is described with reasonable particularity. 8 It is stated that the Plaintiff United States proceeds 9 pursuant to 21 U.S.C. § 881(a)(6), and that the Defendant 10 properties, seized in August 2008 in Clovis, California, 11 constitute money or other things of value furnished or intended 12 to be furnished in exchange for a controlled substance or listed 13 chemical, proceeds traceable to such an exchange, and/or money 14 used or intended to be used to facilitate one or more violations 15 of 21 U.S.C. § 841 et seq. (Cmplt. ¶¶ 1-2.) 16 In the complaint there are alleged sufficiently detailed 17 facts to support a reasonable belief that the government would be 18 able to meet its burden of proof at trial. Controlled buys of 19 large quantities of methamphetamine from Jorge Leal at his 20 residence in December 2007, follow-up investigation and 21 surveillance, and a search of the two residences of the Leals 22 revealed over seventeen grams of methamphetamine and a loaded 23 firearm at the Barstow residence, and materials concerning 24 manufacture of methamphetamine at the Pittman Hill Road 25 residence. (Cmplt. ¶¶ 12-13.) EDD records revealed that Jorge 26 Leal had not worked for two years, Elisa had been receiving 27 disability compensation for the past year, and neither Johanna 28 nor Vanessa had worked for two years; tax documents, public 10 1 records, and evidence et the homes revealed that the Leal family 2 would not be able to afford the luxury vehicles without drug 3 proceeds as income. (Cmplt. ¶ 18.) 4 These facts support a reasonable inference that the 5 expensive vehicles were subject to forfeiture as 6 proceeds/property traceable to proceeds or as property intended 7 to be used to facilitate other violations. The totality of the 8 circumstances reflects that a substantial connection between the 9 property and the related drug offenses (violations of 21 U.S.C. 10 §§ 841()(1) and 841(b)(1)(A)) was demonstrated. 11 5. Status of Potential Claimants and Discretionary Factors 12 Here, no one has claimed an interest in the Defendant 13 property or otherwise responded to the complaint despite adequate 14 notice. It does not appear that there is any risk of mistake or 15 excusable neglect on the part of anyone with a potential interest 16 in the property or of a dispute as to a material fact essential 17 to the government’s case. No just cause for delay appears. It is 18 apparent from the declarations submitted to the Court that none 19 of the potential claimants is an infant, incompetent, or member 20 of the armed services. There does not appear to be any reason why 21 the general policy in favor of a decision on the merits would 22 warrant refusing to enter the requested default judgment. 23 Accordingly, the Court finds that Plaintiff has shown its 24 entitlement to a default judgment of forfeiture. 25 6. Form of the Judgment 26 A successful plaintiff in a forfeiture action is entitled to 27 a judgment against the property, Waterloo Distilling Corp. v. 28 11 1 U.S., 282 U.S. 577, 581 (1931), affecting the interests of all 2 persons in the property, Hanson v. Denkla, 357 U.S. 235, 246 n.12 3 (1958). 4 IV. Recommendation 5 Accordingly, it is hereby RECOMMENDED that: 6 1. Plaintiff’s motion for default judgment be GRANTED; 7 2. Plaintiff is entitled to, and the Clerk be directed to 8 enter, a judgment that: 9 (a) The interest/s of Jorge Leal, Elisa Leal, Johanna 10 Leal, and Vanessa Leal in the Defendant properties are CONDEMNED 11 and FORFEITED to the United States of America; and 12 (b) The right, title, and interest of all potential 13 claimants in the Defendant property, including but not limited to 14 Jorge Leal, Elisa Leal, Johanna Leal, and Vanessa Leal, are 15 FORFEITED to the United States of America pursuant to 21 U.S.C. § 16 881(a)(6), and are VESTED in the United States; and, 17 (c) All persons claiming any right, title, or interest 18 in or to the Defendant property have DEFAULTED and no longer have 19 any right, title, or interest in the Defendant property 20 whatsoever; and, 21 3. The Clerk of Court ENTER final judgment of forfeiture for 22 Plaintiff United States of America. 23 These findings and recommendation are submitted to the 24 United States District Judge assigned to the case, pursuant to 25 the provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 72-304 of 26 the Local Rules of Practice for the United States District Court, 27 Eastern District of California. Within thirty (30) days after 28 being served with a copy, any party may file written objections 12 1 with the court and serve a copy on all parties. Such a document 2 should be captioned “Objections to Magistrate Judge’s Findings 3 and Recommendation.” Replies to the objections shall be served 4 and filed within ten (10) court days (plus three days if served 5 by mail) after service of the objections. The Court will then 6 review the Magistrate Judge’s ruling pursuant to 28 U.S.C. § 636 7 (b)(1)(C). The parties are advised that failure to file 8 objections within the specified time may waive the right to 9 appeal the District Court’s order. Martinez v. Ylst, 951 F.2d 10 1153 (9th Cir. 1991). 11 12 IT IS SO ORDERED. 13 Dated: icido3 14 October 26, 2009 /s/ Sandra M. Snyder UNITED STATES MAGISTRATE JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13
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