Opinion
Civil Action No. 02-11498-GAO.
June 14, 2004
MEMORANDUM AND ORDER
The plaintiff, United States of America, moves for summary judgment in this action for civil forfeiture granting it an ownership interest in the defendant property, which was used to facilitate the commission of narcotics violations. Claimant Ruth Allyne Goodspeed ("Ruth") opposes the motion on the grounds that she is an innocent owner of the defendant property. Claimant Benjamin C. Goodspeed ("Benjamin") does not oppose the motion. After careful consideration of the parties' briefs, the evidence presented, and after oral argument, I conclude that the government's motion ought to be granted.
I. Background
In 1981, Ruth and her husband purchased the defendant property located at 198 Training Field Road, Chatham, Massachusetts. Sometime in 1982 or 1983, their son Benjamin began living in the house on the defendant property continuously, while Ruth and her husband lived at another address in North Chatham, Massachusetts, where they continue to reside. In 1989, Ruth and her husband conveyed the defendant property to Ruth alone for recited consideration of less than one hundred dollars. In 1996, Ruth conveyed the defendant property to herself and Benjamin as joint tenants with the right of survivorship for recited consideration of one dollar.
Not long after moving into the defendant property, Benjamin began selling drugs out of the house. In March, April, May, and June of 2002, Benjamin sold cocaine to a confidential government source through controlled purchases at the defendant property. On June 14, 2002, police executed a search warrant at the defendant property and recovered drugs, drug-related paraphernalia, and United States currency. Benjamin was arrested during the execution of the search warrant for selling drugs out of the defendant property.
Although Benjamin was arrested on June 14, 2002, his parents were not aware of his arrest until five days later, when Ruth's sister-in-law called and told her there was an article in the Cape Cod Chronicle concerning Benjamin's arrest. Ruth obtained a copy of the article, which said that Benjamin had been arrested on Friday, June 14, 2002, and charged with "cocaine trafficking and marijuana possession," and that the defendant property was searched and police "allegedly seized a large amount of cocaine and marijuana." R. Goodspeed Aff., Ex. 1. Upon receiving notice of Benjamin's arrest, Ruth says she was still unaware that Benjamin had been selling drugs out of the defendant property. She says she wasn't aware until "much later" that Benjamin had "actually been selling drugs from the property." Id. at ¶ 8. Ruth did not receive notice of the proceedings in this action until late August, 2002. Id. at ¶ 11.
Upset over the news of Benjamin's arrest, Ruth decided "that the house would be taken away from him for his behavior." Id. at ¶ 9. On August 15, 2002, two months after Benjamin was arrested, Benjamin and Ruth conveyed the defendant property to Ruth for recited consideration of one dollar. It is this conveyance that is the primary focus of the dispute.
II. Discussion
In general, real property is subject to forfeiture if it is used, or intended to be used, to commit, or to facilitate the commission of, a felony drug offense. See 21 U.S.C. § 881(a)(7). Pursuant to the Civil Asset Forfeiture Reform Act of 2000, 18 U.S.C. § 983 (2000) ("CAFRA"), the government must prove by a preponderance of the evidence that the property is subject to forfeiture. See 18 U.S.C. § 983(c)(1). Where, as here, the government contends that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the government "shall establish that there was a substantial connection between the property and the offense." Id. § 983(c)(3).
The CAFRA provides a defense to forfeiture for "innocent owners." A claimant's interest in the subject property will not be forfeited if the claimant can prove by a preponderance of the evidence that she is an "innocent owner." Id. § 983(d)(1). In this case, an "innocent owner" is one who, at the time she acquired the interest in the property, "(i) was a bona fide purchaser . . . for value; and (ii) did not know and was reasonably without cause to believe that the property was subject to forfeiture." Id. § 983(d)(3)(A). If the court determines that an innocent owner has a partial interest in property subject to forfeiture, or a joint tenancy or tenancy by the entirety in such property, the court may enter an appropriate order severing the property, transferring the property to the government for compensation, or permitting the innocent owner to retain the property subject to a government lien. Id. § 983(d)(5).
At the time of Benjamin's arrest, he and Ruth owned the defendant property as joint tenants with the right of survivorship. The government concedes that Ruth is an innocent owner with respect to her pre-August 15, 2002 ownership interest in the joint tenancy with Benjamin, but argues that she cannot claim an innocent owner's interest in the entire defendant property as a result of the August 15, 2002 conveyance, because she was not a bona fide purchaser without notice that the property was subject to forfeiture. Accordingly, the government seeks forfeiture of Benjamin's interest in the defendant property by severing the claimants' joint tenancy, which existed prior to the August 15, 2002 conveyance, and converting the defendant property to a tenancy in common.
I find that the government has met its burden of proving that the defendant property is subject to forfeiture and that there was a substantial connection between the defendant property and the drug offenses. The issue is whether Ruth was an innocent owner with respect to the entire defendant property as a result of the August 15, 2002 conveyance. I conclude that she was not.
A. Bona Fide Purchaser for Value
The CAFRA does not define "bona fide purchaser for value." Similar language in the Continuing Criminal Enterprise Act, 21 U.S.C. § 853(n)(6)(B), has been liberally construed to include "all persons who give value . . . in an arms'-length transaction with the expectation that they would receive equivalent value in return." United States v. Reckmeyer, 836 F.2d 200, 208 (4th Cir. 1987). Here, Benjamin conveyed his interest in the defendant property by quitclaim deed to Ruth on August 15, 2002, for recited consideration of one dollar. Benjamin and Ruth were not unrelated parties each acting in his and her own self interest, and one dollar was not a fair exchange for the property interest given. Ruth was not a bona fide purchaser for value.
B. Ruth's Knowledge at the Time of Conveyance
Ruth is also unable to satisfy the second prong of the innocent owner defense. The question here is whether she did not know and reasonably lacked belief that the defendant property was subject to forfeiture at the time she acquired Benjamin's interest in the defendant property.
At the time of the August 15, 2002, conveyance, Ruth knew at least what she had read in the Cape Cod Chronicle article — i.e. that Benjamin had been arrested on June 14, 2002, and charged with "cocaine trafficking and marijuana possession," and that the defendant property was searched and police "allegedly seized a large amount of cocaine and marijuana." R. Goodspeed Aff., Ex. 1. Upon receiving notice of Benjamin's arrest, Ruth says she was still unaware that Benjamin had been selling drugs out of the defendant property. She says it wasn't until "much later" after Benjamin was arrested that she found out that he had "actually been selling drugs from the [defendant] property," id. at ¶ 8, though it is unclear whether Ruth found this out prior to August 15, 2002.
The government argues that Ruth's knowledge, prior to August 15, 2002, that the defendant property had been used to facilitate drug dealing was sufficient to give her cause to believe that the defendant property was subject to forfeiture. Ruth maintains that she did not know at the time of the August 15, 2002, conveyance that the defendant property could be forfeited because Benjamin sold drugs from the property. Id. at ¶ 10. I agree with the government. Ruth knew soon after Benjamin's arrest and before the conveyance that police searched the defendant property, seized large amounts of drugs, and arrested Benjamin for cocaine trafficking. While Ruth may not have known for certain on August 15, 2002 of the initiation of these proceedings or that the defendant property was subject to forfeiture, she was not reasonably without cause to believe that the defendant property was subject to forfeiture at that time.
For the foregoing reasons, I find that Ruth is unable to prove by a preponderance of the evidence that she is an innocent owner with respect to the entire defendant property as a result of the August 15, 2002, conveyance, and the government is therefore entitled to summary judgment. Since it is undisputed that Ruth still has a partial interest in the defendant property, the Court will enter an appropriate order severing the defendant property, pursuant to 18 U.S.C. § 983(d)(5)(A). The government is directed to propose an order forthwith to accomplish the severance.
It is SO ORDERED.