Opinion
02 Civ. 3633 (GEL).
June 26, 2003.
Bret R. Williams, Assistant United States Attorney, Southern District of New York (James B. Comey, United States Attorney, on the brief), for Plaintiff.
Beatriz Montoya, Tallahassee, FL, pro se, for Claimant.
OPINION AND ORDER
In this civil forfeiture action, the Government seeks forfeiture of $7,300 in cash that was found with two kilograms of heroin at the home of claimant Beatriz Montoya ("claimant" or "Montoya"). See 21 U.S.C. § 881(a)(6) (2000). Montoya subsequently pled guilty to conspiring to distribute and possess with intent to distribute heroin, and was sentenced to 78 months in prison. She now seeks to recover the $7,300, arguing that the money represents the proceeds of the sale of a Toyota automobile. Both she and the Government have moved for summary judgment. For the reasons discussed below, both motions will be denied.
Montoya also moves to strike the Government's motion for summary judgment because it was filed a day after the original submission deadline. The Government sought, and received, permission from the Court for the late filing. (Endorsement Order dated March 25, 2003.) The motion to strike is therefore denied.
BACKGROUND
The following paragraphs summarize the facts asserted by the Government in its verified Complaint, which relies primarily on the statement Montoya gave to Federal Bureau of Investigation ("FBI") agents shortly after her arrest, as well as Special Agent David LeValley's account of the investigation that led to the arrest. Montoya now claims that her statement was false in several material respects noted below.
The Government's Complaint is verified by FBI Special Agent David J. LeValley, who avers that he was responsible for the investigation that led to Montoya's arrest, that he has personal knowledge of the allegations in the Complaint, and that the allegations are true to the best of his knowledge. (Compl. Verification of David J. LeValley.) A verified complaint may be treated as an affidavit for summary judgment purposes if it satisfies Fed.R.Civ.P. 56(e)'s requirements for affidavits in support of summary judgment. Gayle v. Convea, 313 F.3d 677, 682-83 (2d Cir. 2002). As Special Agent LeValley's verification establishes that the verified Complaint meets Fed.R.Civ.P. 56(e)'s requirements as to personal knowledge and competence to testify to the matters within the Complaint, the Court will treat the Complaint as an affidavit.
In December 1997, the FBI was investigating an alleged Colombian drug ring. (Compl. ¶ 4.) Through a confidential informant, the FBI learned that a courier, later identified as Jorge Lopez, would be delivering heroin to an address in Queens, New York. (Id.) After agents observed Lopez deliver a plastic shopping bag to Montoya's apartment in Queens, they stopped him, and he admitted having delivered two kilograms of heroin to Montoya. (Id. ¶ 5.) Accompanied by Lopez, the agents went to Montoya's apartment and received her consent to search it. (Id. ¶ 6.) They recovered two kilograms of heroin in a plastic bag, various drug paraphernalia, and $7,300 in cash, all in the same master bedroom closet. (Id. ¶ 11.)
Montoya agreed to speak to the agents, telling them that she had been contacted by a woman named Gladys earlier that day. (Id. ¶ 8.) Montoya stated that Gladys told her that someone would deliver a package of drugs and money to her apartment, and that she was to store the drugs and money separately. Montoya was to wait until she was paged later in the evening, and then deliver both the drugs and the money to the person who had paged her, at which point she would receive $1,000 for her services. (Id.) Montoya stated that Lopez had delivered the package, and that she placed the drugs on the top shelf of her bedroom closet, and the money on the bottom shelf. (Id. ¶ 10.)
Montoya does not contest the Government's recitation of the substance of her statements to the FBI agents (Montoya Aff.), but she now claims that her statements regarding the circumstances under which she came to possess the $7,300 were untrue. (Ans. ¶ 4; Montoya Aff.) She alleges that she was "nervous" at the time of her arrest, and that she told the agents that Lopez had given her the money along with the drugs because she thought that that was what they wanted to hear. (Montoya Aff.) In actuality, she asserts, the money represented the proceeds from the "recent" sale of a Toyota. (Id.) In support of this assertion, Montoya offers a xerox copy of two pages of a datebook that she purportedly used in 1997. (Letter of Oct. 8, 2002, from Montoya to the Court, enclosures 1 and 2.) The first page contains seven figures, such as "3650," "203," and "140," unlabeled and scattered down the page under the calendar heading, "Thursday." There is no date on the page. The figures were not labeled on the original document, but on the photocopy someone (presumably Montoya) has labeled each figure in ballpoint pen with such notations as "repair," "gas," and "parking." Montoya claims that these figures represent her calculation of the expenses related to the Toyota, for the purpose of determining the price at which to sell it. (Id.) The second page from the datebook, also not dated, containing two figures, "150" and "300," each labeled "parking" on the original document (not written in in pen as on the first page), and the word, "Toyota."
In February 1998, Montoya was indicted, with Jorge Lopez, on one count of conspiracy to distribute and to possess with intent to distribute heroin. (Williams Decl. Ex. C.) She pled guilty before Judge Baer in the Southern District of New York, and was sentenced in September 1999 to 78 months of imprisonment. (Id.) She is currently serving her sentence in Tallahassee, Florida. In May 2002, the Government instituted this action, alleging that the $7,300 constitutes "moneys . . . furnished or intended to be furnished in exchange for a controlled substance" within the meaning of 21 U.S.C. § 881(a)(6), subjecting it to forfeiture to the United States for disposition. (Compl. ¶ 16; G. Mem. 5.)
DISCUSSION
I. Summary Judgment Standard
Summary judgment is appropriate when there are no genuine issues of material fact in dispute and when, viewing the evidence in the light most favorable to the nonmoving party, no reasonable trier of fact could disagree as to the outcome of the case. Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir. 2000); see generally Celotex Corp. v. Catrett, 477 U.S. 317 (1986). While all ambiguities in the evidentiary record must be resolved in favor of the nonmoving party, "the nonmoving party may not rely on conclusory allegations or unsubstantiated speculation." Scotto v. Almenas. 143 F.3d 105, 114 (2d Cir. 1998). In addition, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court "is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Wevant v. Okst, 101 F.3d 845, 854 (2d Cir. 1996). On the other hand, since the Court's function is to determine whether there is a "genuine issue as to any material fact" requiring resolution by a factfinder, Fed.R.Civ.P. 56(c), it may grant summary judgment if all disputed issues are susceptible of only one reasonable determination. Anderson, 477 U.S. at 250.
II. Standards for Civil Forfeiture 21 U.S.C. § 881(a)(6) provides that all "moneys . . . furnished or intended to be furnished" in exchange for narcotics are subject to forfeiture to the United States. As an initial matter, the Government must show that it has "probable cause to believe that the property is subject to civil forfeiture." 21 U.S.C. § 881(b)(4). To satisfy this burden, the Government need only demonstrate "a nexus between the seized property and illegal drug activity." United States v. Daccarett, 6 F.3d 37, 56 (2d Cir. 1993) (internal quotation marks omitted). The Government may rely on "reliable hearsay" to establish probable cause, even if such evidence would not later be admissible at trial. United States v. 228 Acres of Land and Dwelling Located On Whites Hill Rd. in Chester. Vt., 916 F.2d 808, 814 (2d Cir. 1990). Since probable cause is to be determined by the Court, 19 U.S.C. § 1615, the operative inquiry at this stage is not whether there are genuine issues of fact that must be resolved by a factfinder, but simply whether the Government has proffered sufficient evidence to satisfy its burden. 228 Acres of Land, 916 F.2d at 812.
Once the Government has shown probable cause, the burden shifts to the claimant to "demonstrate by a preponderance of the evidence that the factual predicates necessary to show probable cause have not been met"; in other words, that the money represents legitimate income rather than the proceeds of illegal activity. United States v. All Right, Title, and Interest in Real Property and Appurtenances Thereto Known As 785 So. Nicholas Ave. and 789 St. Nicholas Ave., 983 F.2d 396, 403 (2d Cir. 1993). The "ultimate burden" thus rests on the claimant, and the Government may prevail on summary judgment based on its showing of probable cause alone. United States v. Premises and Real Property at 4492 South Livonia Rd., Livonia, N.Y., 889 F.2d 1258, 1267 (2d Cir. 1989).
III. Montoya's Motion for Summary Judgment
As the above recitation of the evidence makes clear, Montoya's motion for summary judgment is frivolous. Without question, the Government has satisfied its initial burden of demonstrating probable cause to believe that the $7,300 is subject to forfeiture, as there is a clear nexus between the cash and the heroin found in Montoya's apartment. The physical proximity of the drugs and the money at the time that they were recovered, the agents' observation of Lopez delivering a large bag to Montoya's apartment, and Montoya's own statements that Lopez had delivered both the drugs and the money at the same time and that she had been told to deliver both drugs and money to a third person, more than suffice to establish a relationship between the heroin and the cash. See United States v. $70.000 in United States Currency, 840 F. Supp. 33 (S.D.N.Y. 1994) (holding that proximity of narcotics and cash, in addition to facts gleaned from the investigation of the suspected drug transactions, is sufficient to establish probable cause).
The burden therefore shifts to Montoya to demonstrate that the money represents legitimate income rather than the fruits of illegal activity. At the summary judgment stage, she can only prevail if no reasonable factfinder could conclude that the money represented drug proceeds. But Montoya's account of the origins of the money is, to say the least, disputed. She has submitted an affidavit in which she disavows her post-arrest statements to the FBI agents, and states that the cash represented the proceeds from the sale of her car, as well as the two datebook pages that purportedly contain notes pertaining to the sale of the car. Nevertheless, a reasonable factfinder could easily choose to disbelieve her self-serving testimony, and accept the accuracy of her own post-arrest statements and the logical inferences to be drawn from the circumstances surrounding the discovery of the cash. Montoya's motion for summary judgment thus must be denied.
IV. The Government's Motion for Summary Judgment
The Government's motion for summary judgment presents a closer case. As noted above, the Government has satisfied its initial burden of demonstrating probable cause, and the burden is on Montoya as claimant to establish that the money derives from legitimate sources. The Government contends that no reasonable factfinder could conclude that she has met this burden.
Montoya's "documentary evidence" is without probative force. To defeat summary judgment, a party must rely on "such facts as would be admissible in evidence." Fed.R.Civ.P. 56(e). At best, the datebook pages submitted by Montoya are hearsay documents — unsworn statements made outside the court, offered to prove the truth of the matter asserted. See Fed.R.Evid. 801(c). Even if they fell within an exception to the hearsay rule, moreover, the pages themselves do not refer to a sale of any car, or even state that Montoya owned a car. Since the pages are not dated, there is no internal evidence that these pages even date from the time period in question. While Montoya claims that the first page shows her calculations of the expenses related to the car, the page contains only a few numbers written haphazardly down the page; there is no sum of the individual figures, and the numbers are not lined up in a way that would suggest that they were meant to be added together. (Montoya Letter, end. 1.) The labels next to each figure, which were written onto the xeroxed document in ballpoint pen, do not form part of the original document. The second page contains the words "Toyota" and "parking," but does not contain any statement that Montoya owned a car, much less that she sold one. No reasonable factfinder could consider the two datebook pages, even if admissible, as probative of Montoya's claim that she sold a car and received at least $7,300.
Thus, the only evidence that supports Montoya's claim is her own affidavit. The Government argues that the claimant's testimony, unsupported by reliable evidence, is insufficient to counter the Government's showing of probable cause. The case law cited by the Government does not support this proposition.
First, the Government argues that "a Claimant cannot create a material issue of fact by submitting an affidavit disputing her own prior statement," (G. Mem. 7; emphasis added.) The cases cited in support of this proposition, however, are all examples of the familiar rule that a party cannot create a genuine issue of material fact by submitting an affidavit in opposition to summary judgment that contradicts the party's own deposition testimony, These cases are quite distinguishable from the present case. Deposition testimony, unlike Montoya's statements under post-arrest interrogation, is given under oath. Equally important, the rule that a party may not oppose summary judgment by contradicting deposition testimony is structurally necessary to support the integrity of the discovery and summary judgment procedure. Depositions are taken in order for a party to understand and respond to an opponent's case; if a party could force a trial by blithely disavowing her deposition testimony after it appears that the opposing party would otherwise prevail on summary judgment, the summary judgment procedure would be useless. Perma Research Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969).
The Government attempts to buttress its effort to expand this rule with a dubious citation, stating: "Courts have long observed that as a general matter, 'factual issues created solely by an affidavit crafted to oppose a summary judgment motion are not "genuine" issues for trial.' Haves v. New York City Dep't of Corrections, 84 F.3d 614, 619 (2d Cir. 1996) (quoting Perma Research Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969))." (G. Mem. 7.) The citation is radically ripped from its context. Far from establishing any proposition "as a general matter," Haves is essentially irrelevant; the Second Circuit there reversed a grant of summary judgment in a case involving conflicting deposition testimony. In passing, the court distinguished Perma, as a case in which the party crafted an affidavit to contradict his deposition testimony. Perma is thus an example of the familiar rule discussed in the text, and the language quoted by the Government, as is crystal clear in the context of both Hayes and Perma, establishes no rule that "as a general matter," affidavit testimony may not create a genuine issue of fact for trial.
These considerations do not apply here. A party is not bound by unsworn statements made under the pressure of police interrogation. Criminal defendants frequently testify at trial that statements they admittedly made to the police were inaccurate, and sometimes they prevail. The Government does not contend that Montoya's affidavit contradicts testimony given at a deposition; so far as appears from the Government's papers, despite an ample period for discovery, it did not depose Montoya at all. Since Montoya has apparently had no other opportunity to assert under oath her account of the source of the funds, it is unclear how the Government thinks she could put her testimony before the Court in opposition to summary judgment if not by affidavit.
Second, the Government argues that Montoya's post-arrest statements "were inculpatory and exposed her to criminal liability and, therefore, are more trustworthy tha[n] her new contradictory assertions." (G. Mem. 8.) Of course, the very form of this argument gives the game away: by asserting, plausibly enough, that a factfinder should find one piece of conflicting evidence more persuasive than another, the Government implicitly concedes that there is a conflict of credibility to be resolved.
Once again, moreover, the Government's citations do not support its proposition that unsworn statements against penal interest are conclusive against those who make them in a later civil action. The cases cited by the Government either involve the admissibility of such statements in evidence, United States v. Matthews, 20 F.3d 538, 545 (2d Cir. 1994); United States v. Bakhtiar, 994 F.2d 970, 978 (2d Cir. 1993), or involve plea allocutions, Adames v. United States, 171 F.3d 728, 732 (2d Cir. 1999); Lowery v. Stovall, 92 F.3d 219, 225 (4th Cir. 1996). That statements against penal interest are sufficiently trustworthy to be admitted into evidence under Fed.R.Evid. 803(b)(3) does not make them "conclusive" on summary judgment, in the face of sworn testimony contradicting them. Even more than deposition testimony, plea allocutions are "solemn declarations," United States v. Napolitano, 212 F. Supp. 743, 747 (S.D.N.Y. 1963) (Weinfeld, J.), that play a critical structural role in the administration of justice, and are not to be confused with unsworn out-of-court admissions under interrogation.
Finally, the Government cites United States v. One 1987 Mercedes 560 SL, 919 F.2d 327, 332 (5th Cir. 1990), as "holding that the Claimant failed to meet his evidentiary burden because he 'introduced no exculpatory evidence and instead chose to rely simply upon his own testimony.'" (G. Mem. 9 (alteration not in original).) This citation is no more to the point than the Government's other references. In One Mercedes, the Fifth Circuit reviewed a district court's factual findings after trial, and held that the district court's rejection of the claimant's testimony was not clearly erroneous, where the Government amply established probable cause and the claimant's testimony was uncorroborated by evidence that might have been expected to be available. Cf. United States v. $470.371 in United States Currency, No. 90 Civ. 5210 (RO) (LB), 1995 WL 542461, at *7 (S.D.N.Y. Sept. 13, 1995) (Bernikow, M.J.) (reaching similar conclusion after trial). Mercedes thus provides no support for summary judgment here.
The full context of the Government's quotation reveals how distorted its citation is:
After hearing testimony, the court found that Jones failed to show by a preponderance of the evidence that his assets did not flow from illegal drug transactions. This finding is protected by the clearly-erroneous standard on review. One 1986 Nissan Maxima GL, 895 F.2d [1063,] 1065 [(5th Cir. 1990)]. Because the government had introduced sufficient evidence to show probable cause to seize Jones's assets, Jones had the burden to show by a preponderance of the evidence that the assets were acquired legitimately. Id. Jones, however, did not introduce any evidence to rebut the showing of probable cause. He has not shown that the numerous deposits into the account came from non-drug-related sources. Nor has he explained adequately how someone with his income was able to purchase $75,000 in assets within an eight-month period.
It would have been simple for Jones to try to discharge his burden by, for example, introducing an accounts-receivable ledger detailing various construction jobs or by affirming at least one example of the many checks that he claimed he cashed and then deposited at his own bank. But Jones introduced no such exculpatory evidence and instead chose to rely simply upon his own testimony, Under these circumstances, Jones failed to carry his burden of showing by a preponderance of the evidence that his account and car were the fruits of his construction work. The district court thus correctly found that Jones's assets were the products of drug trafficking.919 F.2d at 332 (portion quoted by Government in italics).
In contrast to its reliance on inapposite cases, the Government fails to cite the most relevant binding authority, which provides some colorable support for its position. InUnited States v. One Parcel of Property Located at 15 Black Ledge Dr., Marlborough, Conn., 897 F.2d 97, 102 (2d Cir. 1990), the Second Circuit affirmed a grant of summary judgment in a forfeiture case, notwithstanding the claimant's submission of an affidavit in support of her innocent owner defense, which stated "that she had no knowledge of drug trafficking taking place from her home, and that her husband never spoke of, consumed or displayed drugs or related materials in her presence." Id. The Court of Appeals "agree[d] with the district court that 'more detailed factual substance in support of her claim of ignorance' was required." Id. Black Ledge Drive suggests that under some circumstances a claimant's "conclusory allegations" might be found, in light of overwhelming evidence to the contrary, "incredible as a matter of law." Id. But Black Ledge Drive, properly understood, counsels caution about summary judgment in forfeiture cases. TheBlack Ledge Drive court repeatedly characterized the claimant's affidavit as a "bare denial," a "bare claim," a "conclusory allegation." Id. Here, Montoya does not simply deny the Government's claim that the money was derived from drug trafficking; rather, she offers an alternative, albeit undetailed and uncorroborated, account of where the money came from. Moreover, in Black Ledge Drive, the claimant's affidavit contradicted adverse inferences that could be drawn from her deposition, in which she had "invoked her Fifth Amendment privilege in response to virtually every deposition question regarding drug activities alleged to have taken place in her home." Id. at 99. See United States v. United States Currency in the Amount of $19,984.00, More or Less, 304 F.3d 165, 176-77 (2d Cir. 2002) (adverse inference may be drawn from claimant's invocation of the Fifth Amendment in the context of a civil forfeiture proceeding).
Montoya provides few details. She states simply that "[t]he money I had in my house was from a recent sale of my 1996 Toyota," and refers to the datebook notes as evidence of that sale. (Montoya Aff.) She does not state how much money she received from the alleged sale, give even an approximate date of sale, or explain why she retained the cash in one large package in her apartment closet. At a trial, a continued failure to address such questions would no doubt be the subject of vigorous cross-examination, and could lead a factfinder to discredit her testimony. However, the Court is reluctant to tax a pro se incarcerated litigant for failing to answer even obvious questions in her affidavit. For present purposes, it is enough to note that the affidavit is distinctly not a "bare denial" that the money was associated with the drug trade, but rather provides an alternative explanation for her possession of the funds.
In fact, Black Ledge Drive cautions that under some circumstances, perhaps even "a claimant's flat denial of knowledge, without more, could suffice to create a genuine issue of fact precluding summary judgment." 897 F.2d at 102.
A factfinder at trial might well find Montoya's testimony at trial incredible in light of her prior statements and the Government's circumstantial case. But a factfinder presented with sworn testimony that purports to account for the origin of the funds, and that gives an account of the reasons for the prior statements to FBI agents, would be entitled to believe that testimony. After all, the testimony of a single, uncorroborated witness, if believed by the jury, can be sufficient to establish a defendant's guilt beyond a reasonable doubt, United States v. Danzey, 594 F.2d 905, 916 (2d Cir. 1979); it therefore follows that Montoya's testimony alone, if credited, would be sufficient to establish by a preponderance of the evidence that the currency represented legitimate income. Montoya's affidavit thus presents a genuine issue of material fact as to the source, and therefore, the forfeitability, of the funds. See United States v. $175,918 in United States Currency, 755 F. Supp. 630, 634-35 (S.D.N.Y. 1991) (claimant's explanation that money came from life savings and sale of a business "raises credibility issues as to a material issue of fact" precluding summary judgment).
Montoya also points out that not all of the circumstantial evidence supports the Government's theory of the case. The fact that Lopez did not mention the money in his initial statements to the FBI agents could support an inference that, contrary to Montoya's post-arrest statement, the money did not come from him. (Montoya Aff.; Montoya Opp. at 3.).
The Government's motion for summary judgment therefore must also be denied.
CONCLUSION
Montoya's and the Government's motions for summary judgment, and Montoya's motion to strike the Government's motion, are denied.
SO ORDERED.