Opinion
No. 5:90-cv-544 (EBB), No. 5:90-cv-546(EBB), No. 5:90-cv-546(EBB)
July 31, 2000
Ruling on Claimant's Post-trial Motions
Following an adverse jury verdict rejecting his claim of innocent ownership of properties forfeited under 21 U.S.C. § 881 (a)(7), claimant Francisco Aguilar renews his motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b), and moves in the alternative for a new trial under Fed.R.Civ.P. 59. Claimant also moves for an award of rents, which he alleges are due because the government seized the defendant properties without a predeprivation hearing, and moves the court to conduct another proportionality analysis under the Eighth Amendment Excessive Fines Clause. Claimant further moves pursuant to D. Conn. L. Civ. R. 9(e) for reconsideration of the court's April 3, 2000, determination of probable cause. The motions are, for the most part, denied.
No more ink need be spilled reiterating the protracted lineage of these decade-old cases, the background of which is amply addressed in prior rulings. See United States v. One Parcel of Property, Nos. 5:90-cv-544, 545, 546 (EBB), 2000 WL 620424 (D. Conn. April 3, 2000) (hereinafter "Probable Cause Ruling"); Id., Nos. 5:90-cv-545, 546 (EBB), 2000 WL 194668 (D. Conn. Feb. 9, 2000) (hereinafter "Summary Judgment Ruling") After briefly highlighting the applicable legal standards, each of claimant's motions is considered.
I. Post-trial Motions
The standard for granting judgment as a matter of law differs from the standard for ordering a new trial: the burden on a movant seeking a Rule 50(b) judgment is more stringent than one seeking a new trial under Rule 59. See, e.g.,United States v. Landau, 155 F.3d 93, 104 (2d Cir. 1998). A renewed motion for judgment as a matter of law under Rule 50(b) can be granted only if the evidence viewed in the light most favorable to the non-movants, without considering credibility or weight, reasonably permits only a conclusion in the movant's favor.'" Doctor's Assocs. Inc. v. Weible, 92 F.3d 108, 111-12 (2d Cir. 1996) (quoting Sirota v. Solitron Devices, Inc., 673 F.2d 566, 573 (2d Cir. 1982)). "In other words, there must be either an utter lack of evidence supporting the verdict, so that the jury's findings could only have resulted from pure guess-work, or the evidence must be "so overwhelming that reasonable and fair-minded persons could only have reached the opposite result.'" Id. at 112 (quoting Baskin v. Hawley, 807 F.2d 1120, 1129 (2d Cir. 1986)). In deciding a Rule 50(b) motion, the court may not "assess the weight of conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of the jury." Weldy v. Piedmont Airlines, Inc., 985 F.2d 57, 60 (2d Cir. 1995).
In evaluating a Rule 59 motion for new trial, by contrast, the court "is free to weigh the evidence [it]self and need not view it in the light most favorable to the verdict winner."Bevevino v. Saydjari, 574 F.2d 676, 684 (2d Cir. 1978)); accord Song v. Ives Laboratories, Inc., 957 F.2d 1041, 1047 (2d Cir. 1992) (recognizing that trial courts are in a "unique position to assess the credibility of the witnesses and to determine the weight which should be accorded their testimony"). Unlike a motion for judgment as a matter of law, a motion for a new trial may be granted even if there is substantial evidence to support the jury's verdict. See Song, 957 F.2d at 1047 (citing Bevevino, 574 F.2d at 683); see also 11 Charles Alan Wriqht, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure, § 2806, at 65 (2d ed. 1995). Therefore, the decision whether to grant a Rule 59 motion for new trial is committed to the sound discretion of the trial court.See Metromedia Co. v. Fugazy, 983 F.2d 350, 363 (2d Cir. 1992).
The motions fail under both standards.
A. Judgment as a Matter of Law
In his Rule 50(b) motion, claimant argues for judgment as a matter of law, asserting three reasons the verdict was against the weight of the evidence. First, in support of his claim as an innocent owner, claimant cites testimony from witness Alberto Boero, the "bookkeeper" of claimant's drug business, who detailed the efforts made to keep the drugs, money and transactions away from the defendant properties. Contrary testimony was heard from Ingrid Pernett Aguilar, the bookkeeper for the legitimate businesses and claimant's wife at the time. She testified to seeing large sums of unaccounted for cash at the defendant properties that was laundered through the two stores operated on the premises. Like the court, the jury apparently credited the testimony of Ms. Aguilar over Boero. See Probable Cause Ruling, 2000 WL 620424, at *4 This court may not reweigh such credibility determinations and does not find Boero's testimony so overwhelming as to warrant reversing the verdict.
Second, in addition to claimant's ex-wife, two other witnesses, David Wheeler and Crucita Sanchez, linked the defendant properties to claimant's drug trafficking. Claimant argues that the testimony of these witnesses was incredible because all were convicted felons who agreed to cooperate with the government. Again, it is beyond the court's province to second guess the jurors' credibility determinations, with which, incidentally, the court concurs. See id. ("the court found their testimony [at the probable cause hearing] credible and uninfluenced by any deals with the government").
Third, claimant also contests the weight of the physical evidence — a money counter, tap detector and a cache of firearms — found on the defendant properties. He claims that because there were no drugs or even recorded drug deals or controlled buys done on the premises, the jury should have ignored the other evidence offered by the government. The jury's verdict indicates their disagreement with this position. The court in its probable cause determination also found the items seized from the defendant properties to be inconsistent with a claim of innocent ownership. See id., at *5 ("Though no drugs were actually found on the premises, the court finds the evidence seized . . . sufficiently indicative of illegal drug trafficking to warrant its [probable cause] finding that these properties were used to facilitate Aguilar's narcotics operation.")
In any event, this was a facilitation forfeiture brought under 21 U.S.C. § 881 (a) 7), not a subsection (a)(6) traceability case. In a facilitation case under subsection (a)(7), the nexus between the defendant property and the alleged illegality need not be as direct as that in a traceability action under subsection (a)(6), which subjects to forfeiture property purchased with proceeds traceable to illegal drug transactions. See 21 U.S.C. § 881 (Supp. 1994). However careful claimant might have been to keep his legitimate businesses separate from his illicit one, the evidence clearly supports the jury's finding that these properties were used to facilitate illegal narcotics sales.
B. New Trial
Even under the more lenient Rule 59 new trial standard, claimant's motions fail. In support of his motion for a new trial, claimant decries the government's introduction of evidence at trial that was not produced in discovery, and claims the unfair surprise merits a new trial. Claimant had ten years during which to conduct discovery. Ably represented by appointed counsel, claimant moved unsuccessfully to compel responses to interrogatories just prior to trial. Even if the motion to compel had been granted, none of these interrogatories would have elicited new information not already known to claimant.
The government's responses would not have revealed anything new because claimant had ample notice of the purportedly "new" evidence that might have been disclosed. For example, the Lombardi kidnaping is recounted at some length in the initial affidavit filed in 1990 with the verified complaints. See Summary Judgment Ruling, 2000 WL 194668, at *1. In addition, the details of the fire at 8 Drumlin Road in Westport were known by claimant in 1990 when he filed a claim with the insurer. Even though the court found the circumstances of the fire at the Westport property "dubious," no testimony was allowed to be introduced at trial to suggest arson. Probable Cause Ruling, 2000 WL 620424, at *5 n. 7.
Claimant was well aware of the only previously undisclosed evidence admitted at trial, a wrap-around mortgage, since 1987. The loan documents signed by claimant that year disclose that nearly all the collateral pledged to secure the $220,000 loan came from equity in the defendant properties. See id, at *6. Further testimony from claimant's ex-wife revealed that at least a third of these borrowed funds was used to purchase narcotics. See id. The court has already credited Ms. Aguilar's testimony on this point, the linchpin in its determination of probable cause to forfeit that property. See id. The jury also apparently found claimant's conduct — stashing the borrowed money in a false gas tank of the car he drove to Florida to buy cocaine — to be inconsistent with his asserted innocent ownership. The introduction of the thirteen-year-old loan documents signed by claimant himself was neither surprising nor cause for a new trial.
II. Constitutional Claims
A. Award of Rents
Even if the defendant properties were properly forfeited, claimant contends they were not properly seized and moves to recoup the rental income due since their seizure, arguing that those seizures were made without notice or an opportunity to be heard in violation of the Fifth Amendment Due Process Clause.See United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993). Several circuits have awarded lost rents to civil forfeiture claimants as a remedy for Good due process violations where property was seized without a predeprivation hearing. See United States v. Real Property Located at 1184 Drycreek Road, Granville, OH, 174 F.3d 720, 728 (6th Cir. 1999) (collecting cases from the 4th, 7th, 9th, 10th and 11th circuits)
The Second Circuit has not yet had occasion to decide whether to follow the other circuits, but has held that "the unlawfulness of the seizure . . . would only preclude the government from introducing any evidence gained by its improper seizure of the premises." United States v. Premises and Real Property at 4492 South Livonia Rd., Livonia, NY, 889 F.2d 1258, 1266 (2d Cir. 1989). Even assuming the Second Circuit would adopt the same remedy as the other circuits for a seizure that predatesGood, cf. United States v. 47 West 644 Route 38, Maple Park, Illinois, 190 F.3d 781, 782 (7th Cir. 1999), cert. denied sub nom.Accardi v. United States, No. 99-l286, 2000 WL 177316 (March 6, 2000) (holding that Good "principle applies to all cases, like this one, that were not final on the date that Good was decided"), claimant is due no rents on the properties. See Summary Judgment Ruling, 2000 WL 194668, at *2 n. 3 (recognizing that the approximately $1300 in post-seizure rental income collected was properly disbursed to pay city taxes). A thorough review of the marshal's accounting records shows that the rental income actually collected after the seizure on the defendant properties was offset by the tax bill. See id. at *l — 2 nn. 3-5.
To the extent claimant is seeking potential rental income since the date of the seizure, the only case he cites forecloses the relief he seeks. See United States v. Real Property Located at Incline Village, 976 F. Supp. 1327, 1347 (D. Nev. 1997) ("This court understands Good and its progeny to require disgorgement only of rents actually earned on the unlawfully seized property, and not the fair rental value of that property."). The court agrees with the disgorgement rationale articulated in Incline Village:
The purpose of the return-of-rents remedy is to return the forfeiture claimant to the financial position he or she would otherwise occupy absent the seizure. Such a position, necessitates the deduction from the gross rents received on the seized assets any necessary expenses which are the normal incidents of owning real estate. . Because the purpose of the James Daniel Good Real Property return-of-rents remedy is to restore a claimant whose realty was unconstitutionally seized to the position he or she would have otherwise occupied, it appears to the court eminently reasonable to permit the government to subtract from the rents due Claimant the money lost through maintenance of unprofitable properties. Any landlord who earns rent from some property while other property remains vacant must continue to pay for the vacant property's upkeep.976 F. Supp. at 1348.
B. Proportionality Analysis
Apparently unsatisfied with the court's initial proportionality finding, see Probable Cause Ruling, 2000 WL 620424, at *10, claimant requests a second look. In Austin v. United States, 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), the Court held that civil forfeitures could, in some instances, be so disproportionate to the unlawful conduct as to violate the Excessive Fines Clause of the Eighth Amendment. Where a civil forfeiture claimant is also the perpetrator of the underlying criminal offense, the Second Circuit holds that civil forfeitures will not be presumed punitive" — once presumed valid — for purposes of the Austin Proportionality analysis, unless "the seized property is not itself an instrumentality of crime, and its total value is overwhelmingly disproportionate to the value of the controlled substances involved in the statutory violation." Whaler's Cove Drive, Babylon, NY, 954 F.2d 29, 36 (2d Cir. 1992). Here, even if claimant's use of his properties to facilitate narcotics trafficking did not make them instrumentalities of crime, the aggregate value of those properties at the time they were seized is by no means overwhelmingly disproportionate to the value of the illegal narcotics sold by claimant.
The best approximation of the value of the defendant properties prior to seizure comes from the equity loan made in 1987, which pledged two of those properties as collateral. According to loan documents introduced at trial, those two properties held $386,000 in equity at that time, $190,000 in 2030-32 Main St., Bridgeport, and $196,000 in 8 Drumlin Rd., Westport. See Probable Cause Ruling, 2000 WL 620424, at *6. Though not pledged in the 1987 loan, the other Bridgeport property, 2034 — 38 Main St., netted about $102,000. See Summary Judgment Ruling, 2000 WL 194668, at *2. A favorable estimate of the combined value of the defendant properties at the time of the seizure is less than $500,000 in aggregate equity.
The Westport property netted some $188,000 when the marshal liquidated it after the fire in 1991.
The drugs sold by claimant, however, were worth far more than the properties forfeited. A conservative estimate of the value of the narcotics distributed by claimant yields a figure at least three times the value of the defendant properties. See United States v. Tracy, 12 F.3d 1186, 1191 (1993) (affirming claimant's conviction and sentence of 480 months' imprisonment for conspiring to distribute 50-150 kilograms of cocaine). On at least two occasions before his arrest in 1990, claimant agreed to sell his cocaine for approximately $30,000 per kilogram. See id. at 1199 ("In July 1990, DEA Special Agent Grayling Williams posed as [a customer]. Aguilar agreed to sell him one kilogram of cocaine for $31,000. The sale was made on July 16. On October 24, 1990, . . . Williams telephoned Aguilar, who agreed to sell Williams one kilogram of cocaine for $30,000 the following day."). Using the low end of the drug quantity range attributable to Aguilar, 50 kilograms, multiplied by his own price quote, $30,000 per kilogram, the value of claimant's narcotics distribution was at least $1.5 million, or thrice the value of the defendant properties. Based on these calculations, the government would have been justified in seizing perhaps another million dollars of claimant's property. The forfeitures were not at all disproportionate, much less overwhelmingly so.
III. Reconsideration of Probable Cause Determination
Acting pro se, claimant also moves for reconsideration of the court's Determination of Probable Cause to Forfeit Properties. After a careful review, the court adheres to that ruling, with one modification.
In the discussion of probable cause for seizure at section III. B., the court found that exigent circumstances warranted the interlocutory sale of the properties. See 2000 WL 620424, at *6... 7; see also Aguilar v. United States, Nos. 3:99mc304, 408(EBB), 1999 WL 1067841, at *4-6 (D. Conn. Nov. 8, 1999). But this fact, standing alone, does not excuse the failure to afford claimant notice and a hearing prior to seizing the property, if such procedural protections were constitutionally required at the time. The seizures do not appear to have been effected in order to facilitate the sale of the properties four months hence.See id. at *7 (noting marshal's certification four months after seizure that two properties were vacant and the mortgage on the third was in arrears). As such, the exigencies necessitating the sale in February 1991 would not seem to justify the antecedent seizure in October 1990. See Livonia Rd., 889 F.2d at 1265 ("As a general matter, a showing of exigent circumstances seems unlikely when a person's home is at stake, since, unlike other forms of property, a home cannot be readily moved or dissipated.")
Although the Supreme Court did not recognize this constitutional privilege until Good in 1993, a few years after the seizures in the case, the Second Circuit had already presagedGood in 1989 before the seizures took place. See Livonia Rd., 889 F.2d at 1264 (holding under § 881(a)(7) that "notice and an opportunity for hearing must generally precede the taking of an individual's property")
Even assuming claimant's procedural due process rights were violated, the result here would not be different. The only remedy recognized in this circuit for failing to afford civil forfeiturure hearing is the suppression of evidence seized, other than the property itself. See id. (adopting rule from other circuits that "the illegal seizure will not immunize that property from forfeiture, so long as impermissibly obtained evidence is not used in the forfeiture proceeding");see also United States v. Daccarret, 6 F.3d 37, 46 (2d Cir. 1993) (recognizing suppression remedy where property was seized without probable cause because the "[a]bsence of probable cause at the time of the seizure may result in the suppression of evidence in later proceedings, but the defendant property itself cannot be suppressed from the forfeiture action")
Even under the Livonia/Good rule, the physical evidence seized from these properties was not subject to suppression here criminal search warrants, probable cause for which was because the properties were searched not only incident to the warrants of arrest in rem, but also pursuant to independent established by a magistrate judge prior to their execution. See Tracy, 12 F.3d at 1199 ("On October 24, 1990, arrest and search warrants for the Aguilar group were authorized."). Thus, the firearms, tap detector and money counter seized pursuant to those search warrants were properly considered at the forfeiture stage even without the benefit of a preseizure hearing.
Notwithstanding the possible lack of exigent circumstances to warrant an ex parte seizure, the evidence seized was admissible in the subsequent forfeiture proceeding because an independent search warrant established probable cause to search the property. Nevertheless, the court's finding of probable cause to forfeit the Bridgeport properties, where those items were found, did not hinge on this evidence. See Probable Cause Ruling, 2000 WL 620424, at *4-5 In reviewing the other testimonial evidence adduced in support of probable cause, the court finds that even without the physical evidence seized, there was probable cause to forfeit the two Bridgeport properties. With this one minor addendum — that even if the exigencies attendant to their sale do not apply to the properties' seizure, the physical evidence was properly considered because probable cause to seize those items had been independently authorized by search warrants — the court adheres to its prior probable cause determination.
IV. Conclusion
For the foregoing reasons, claimant's Rule 50(b) and 59 post- trial motions and motions for an award of rents and proportionality analysis, [Doc. No. 189] in No. 5:90-cv-544 (EBB), [Doc. No. 201] in No. 5:90-cv-545 (EBB), and [Doc. No. 180] in No. 5:90-cv-546, are hereby DENIED, except in so far as they sought enlargement of time to file briefs, which are granted nunc pro tunc. Claimant's motions for reconsideration, [Doc. No. 192] in No. 5:90-cv-544 (EBB), [Doc. No. 202] in No. 5:90-cv-545 (EBB), and [Doc. No. 181] in No. 5:90-cv-546, are hereby GRANTED upon further review and subject to the aforementioned modification, the court adheres to its prior ruling.