Opinion
CV F 96-5948 AWI SMS
December 14, 2000
ORDER RE: MOTION TO DENY AND OBJECT AND COUNTER MOTION FOR ORDER DETERMINING DISPOSITION OF COUNTERFEIT COINS
Judgment in this action was entered May 6, 1998, and was later affirmed by the Ninth Circuit. On May 5, 1998, the court filed an Order of Judicial Sale, which was amended by Order entered on April 27, 2000, respecting the sale of coins. On October 24, 2000, the court granted the United States' request to amend the Order of Judicial Sale, respecting the sale of real property, and the same day the court filed an Amended Order of Judicial Sale.
On October 27, 2000, Dr. Simmons filed a motion to deny and object to the Amended Order of Judicial Sale. This motion was apparently prepared after Dr. Simmons received the United States' proposed amended ordered of judicial sale but before Dr. Simmons received the court's October 24, 2000 Amended Order of Judicial Sale. Pursuant to Dr. Simmons' request, the court has construed this filing as a motion for reconsideration of the October 24, 2000 Amended Order of Judicial Sale.
On November 20, 2000, the United States filed an opposition to Dr. Simmons' October 27, 2000 motion and filed a counter-motion for a court order determining disposition of counterfeit coins. The United States contends that Dr. Simmons' arguments in his motion have already been addressed by the court. The United States then asks that the court find certain coins, which are part of the court ordered judicial sale, to be counterfeit and order that they be forfeited to the United States Secret Service. In support of the United States' motion, the United States attaches the declaration of an employee of Heritage Numismatic Auctions, Inc. ("Heritage") identifying certain coins as counterfeit,
On December 11, 2000, Dr. Simmons filed a reply supporting his October 27, 2000 motion. Dr. Simmons argues that at this stage of the proceeding the court cannot amend the Order of Judicial Sale. Concerning Defendants' motion, Dr. Simmons objects to transferring the coins to the Secret Service and demands that they be returned to him because they have never been circulated and never will be circulated and because they were illegally seized.
DISCUSSION
A. Motion For Reconsideration
As Dr. Simmons acknowledges, most of the arguments he raises in his motion for reconsideration and reply have already been considered and rejected by the court. Dr. Simmons again argues that the real property should be returned to him because the United States did not commence the sale of the real property with thirty days, as stated in the original Order of Judicial Sale. The court already determined that any problem with the original Order of Judicial Sale could be resolved by a new order of judicial sale. An Amended Order of Judicial Sale was filed on October 24, 2000. This Amended Order of Judicial Sale contains no time restrictions. Dr. Simmons' arguments do not provide any new basis to revisit the court's prior finding.
Dr. Simmons again argues that the Amended Order of Judicial Sale is invalid because it allows the Internal Revenue Service ("IRS") to sell the property instead of the United States Marshal. The court has previously determined that the judicial sale "shall be upon such terms and conditions as the court directs "see 28 U.S.C. § 2001 (a), and the court has broad discretion in setting the terms and conditions of a judicial sale. See United States v. Branch Coal Corp., 390 F.2d 7, 10 (3d Cir. 1968); United States v. Heasley, 283 F.2d 422, 426 (8th Cir. 1960);Revere Copper Brass, Inc. v. Adriance Machine Works, 68 F.2d 708, 709 (2d Cir. 1934). The court previously found that 28 U.S.C. § 2001 and 2002 did not mandate sale by the United States Marshal and did not prohibit the court from delegating the sale to the IRS. Further, the court found the United States Marshal's inability to conduct the sale at this time provided good cause to allow the IRS to conduct the sale. Thus, Dr. Simmons' arguments are without merit.
Dr. Simmons again argues that the sale of the coins is invalid because it took place outside Fresno County. The court previously found it had discretion when ordering the sale of personal property to deviate from the procedures of 28 U.S.C. § 2001. See United States v. Stonehill, 83 F.3d 1156, 1160 (9th Cir. 1996). The court determined that sale through a professional catalog and an auction before a convention of coin collectors and dealers would be beneficial to the parties because it would likely maximize the return to the judgment creditor, the United States, and cause a larger reduction in the judgment entered against Dr. Simmons. Dr. Simmons' argument in the motion for reconsideration provide no basis for reconsideration of the court's prior finding.
Dr. Simmons again argues that the sale violates 26 U.S.C. § 6304 (a). As previously explained, the sale of the real property and sale of the coins are under 26 U.S.C. § 2001, not 26 U.S.C. § 6335, which concerns administrative sales by the IRS. See 26 U.S.C. § 6330 et. seq. Thus, no motion for reconsideration will be granted on this argument.
Dr. Simmons also argues extensively in his reply that it is too late for the court to allow amendment to the Order of Judicial Sale under Rule 59 or Rule 60 or the Federal Rules of Civil Procedure. The court has previously determined that amending the Order of Judicial Sale does not amend the judgment filed on May 6, 1998. The May 6, 1998 judgment was affirmed by the Ninth Circuit. Under the judgment, Dr. Simmons remains liable for $2,072,364.71, plus interest, the federal tax lien placed on the real property may be enforced, and the real property may be sold by the United States to satisfy in part the monetary judgment. The May 5, 1998 Order of Judicial Sale is a separate order apart from the judgment. Amending the May 5, 1998 Order of Judicial Sale has no effect on the May 6, 1998 judgment.
Dr. Simmons argues the court should not have amended the May 5 1998 Order of Judicial Sale because it was upheld by the Ninth Circuit and is therefore final. Contrary to Dr. Simmons' assertion, it was the May 6, 1998 judgment that was upheld by the Ninth Circuit. The May 5, 1998 Order of Judicial Sale was not mentioned in the Ninth Circuit's ruling. Further, this court regained jurisdiction over the district court case once the mandate issued following the Ninth Circuit's order affirming the judgment. Finally, while there are some time limitations for granting relief from judgment, the court previously found that no such restrictions applied to a situation such as this one where good cause justified amendment to the Order of Judicial Sale.
Dr. Simmons' final argument appears to not have been addressed earlier by the court. In the motion, Dr. Simmons argues that the sale from judicial lien is invalid pursuant to 28 U.S.C. § 1962, 1963, and 1964 for failure to comply with the California Code of Civil Procedure's rules for perfecting liens. First, and most importantly, 28 U.S.C. § 1962 exempts judgments entered in favor of the United States from the section's requirements. Second, Dr. Simmons has failed to provide any evidence or argument showing that the lien on his real property has not been registered. Third, 28 U.S.C. § 1963 has no connection to this case because the property at issue is within this judicial district. Fourth, 28 U.S.C. § 1964 also has no relevance to this case because this action is no longer "pending." Thus, the court finds Dr. Simmons' arguments under 28 U.S.C. § 1962, 1963, and 1964 do not invalidate the Amended Order of Judicial Sale. Accordingly, the court finds Dr. Simmons has not shown good cause to reconsider the October 24, 2000 order amending the Order of Judicial Sale and the October 24, 2000 Amended Order of Judicial Sale. As such, Dr. Simmons' motion for reconsideration is Denied.
B. Counter Motion For Order Determining Disposition of Counterfeit Coins
As part of the United States' opposition to Dr. Simmons' motion for reconsideration, the United States filed a counter motion requesting a court order determining that certain coins identified in the motion are counterfeit and directing that they be forfeited to the United States Secret Service. The United States provides evidence that after Heritage accepted some of the coins for consigned sale, Leo Frese, a Consignment Coordinator with Heritage, informed the United States that some of the coins appeared to be counterfeit. The United States provides evidence that the coins were then examined by experts in the Heritage Dallas Office, and the Heritage experts determined certain coins to be counterfeit. Based on these findings, the United States requests a court order finding the coins to be counterfeit and order them forfeited to the Secret Service. The United States plans to request that the Secretary of the Treasury smelt the coins and return the bullion to be sold.
In his reply brief, Dr. Simmons briefly discusses the United States' counter motion. Dr. Simmons states that he objects to the alleged counterfeit coins being forfeited to the Secret Service and demands that they be returned to him as they have never been circulated and never will be circulated. In addition, Dr. Simmons argues that the coins were illegally seized.
Title 18 U.S.C. § 492 mandates that all counterfeit coins of the United States or any foreign government be forfeited to the United States. Counterfeit coins are contraband per se, their mere possession is illegal, and they must be forfeited to the United States. See Boggs v. Merletti, 987 F. Supp. 1 (D.C.C. 1997), affirmed sub nom., Boggs v. Rubin, 161 F.3d 37 (D.C. Cir. 1998). In light of 18 U.S.C. § 492, the court cannot order the return of any counterfeit coin to Dr. Simmons because any counterfeit coin must be forfeited to the United States Secret Service. While the court has no reason to doubt Dr. Simmons' assurance that he would not circulate the coins, possession of them by Dr. Simmons would be illegal.
To the extent Dr. Simmons argues for the coins return because they were illegally seized, this argument does not concern whether the coins should be forfeited to the Secret Service because they are counterfeit. Any arguments concerning an alleged illegal seizure should have been raised in the underlying action. Because all counterfeit coins must be forfeited to the Secret Service, returning the coins to Dr. Simmons is not an option. Thus the coins cannot simply be returned to Dr. Simmons.
The issue remains, however, as to whether the coins are in fact counterfeit. The United States has offered evidence that in the opinion of Heritage the coins are counterfeit. There appears to be some veracity to this evidence in light of Heritage's financial interest against finding the coins counterfeit. Dr. Simmons has not stated whether he contests the United States' evidence that the coins are counterfeit. Dr. Simmons' reply brief only asked that the coins be returned to Dr. Simmons. Thus, Dr. Simmons will be given the option of contesting the United States' evidence that the coins are counterfeit and the opportunity to provide his own evidence of the coins' authenticity.
ORDER
Accordingly, the court ORDERS that:
(1) Dr. Simmons' October 27, 2000 motion to deny and object to Amended Order of Judicial sale, which has been construed as a motion for reconsideration of the court's October 24, 2000 Amended Order of Judicial Sale, is DENIED;
(2) Dr. Simmons is given thirty (30) days to file a formal opposition to Defendants' counter motion for an order determining disposition of counterfeit coins in which Dr. Simmons should state whether he contests the United States' evidence that the coins are counterfeit, submit Dr. Simmons' own evidence of the coins' authenticity, and propose a plan for examination of the coins by Dr. Simmons' expert; and
(3) Within fifteen (15) days of the date any opposition by Dr. Simmons is filed, the United States may file a reply.