United States District Court, D. Oregon
S. AMANDA MARSHALL, United States Attorney, District of Oregon KATHLEEN BICKERS, Assistant U.S. Attorney, Portland, Oregon, Attorney for Plaintiff.
WES WILLIAMS, Attorney at Law, La Grande, Oregon, Attorney for Claimant Kathy Lepper.
OPINION AND ORDER
MALCOLM F. MARSH, District Judge.
The Government brings this forfeiture proceeding pursuant to 21 U.S.C. § 881; 28 U.S.C. §§ 1345, 1355, 1356 & 1395; and 19 U.S.C. § 1610. Currently before the court is the Government's motion for summary judgment (#22). For the reasons set forth below, the motion is GRANTED.
On May 22, 2008, a Confidential Reliable Informant (CRI), working with members of the Oregon State Police (OSP) and the Union Wallowa Drug Task Force, purchased marijuana from Calvin Perry Kiesecker. Complaint (#1), Declaration of OSP Detective Sergeant Daniel D. Conner at ¶ 7; Govt.'s Reply Brief (#37), Declaration of OSP Sergeant David Aydelotte, Exh. A at 1.
Prior to the sale, the CRI ordered approximately 10 ounces of marijuana from Kiesecker. Conner Dec. at ¶ 7; Aydelotte Dec, Exh. A at 3. Shortly thereafter, Kiesecker was seen by officers entering the residence of Tom Bobbitt, located at 1309 Fourth Street in La Grande, Oregon, empty handed and leaving with a white plastic grocery bag which appeared to contain something. Govt.'s Reply (#37), Declaration of Union County Sergeant William Miller at ¶ 1; Aydelotte Dec. at ¶ 2 & Exh. A at 4. Kiesecker was later seen giving the CRI the same bag (later determined to be containing a ziplock bag of marijuana) in exchange for $2000.00. Aydelotte Dec, Exh. A at 5; Conner Dec. at ¶ 7.
As a result of the foregoing, police executed a search warrant at Tom Bobbitt's residence and seized several firearms, $11, 310.00 in U.S. currency, bank records, purported drug records,  drug packaging material, triple beam scales, masking agents, and approximately 8 3/4 pounds of marijuana. Aydelotte Dec, Exh. A at 6; Conner Dec. at ¶¶ 8-18 & 35-37. During the course of the search, officers located hidden compartments throughout the residence, as well as a locked room in the basement - where the marijuana, scales, and packaging material were found. Conner Dec. at ¶¶ 9 & 11-14. Bobbitt was placed under arrest and charged with unlawful possession and delivery of marijuana within 1, 000 feet of a school. Connor Dec. at ¶ 18; Govt.'s Motion and Memo. (#22), Exh. A at 9-10.
On May 23, 2008, Detective Aydelotte went to Bobbitt's residence to leave a receipt detailing the items seized from the property. Aydelotte Dec. at ¶ 3 & Exh. B at 2. Claimant Kathy Lepper (Bobbitt's sister) and Elysia Hudson (Bobbitt's long-term girlfriend) were at the house. Aydelotte Dec. at ¶ 3 & Exh. B at 2; Declaration of Kathy Lepper (#26) at ¶¶ 21-22; Declaration of Elysia Hudson (#38) at ¶ 4. According to Detective Aydelotte, Claimant asked if her brother's bank accounts, house, or van would be seized, and if a medical marijuana card "might help, " Aydelotte Dec. at ¶¶ 3-4 & Exh. B at 3; Hudson Dec. at ¶ 4. Claimant denies making these statements. Lepper Dec. at ¶ 23.
Also on May 23, 2008, Claimant attended Bobbitt's arraignment where he was charged with one count of manufacturing marijuana within 1, 000 feet of a school, two counts of unlawful delivery of marijuana within 1, 000 feet of a school, and one count of possession of marijuana. Lepper Dec. at ¶ 24 & Exh. 106. Claimant posted $4, 000 in bond to secure her brother's release from custody. Id. at ¶¶ 19 & 25, & Exh. 108.
On May 27, 2008, Bobbitt executed a Bargain and Sale Deed transferring the 1309 Fourth Street Property to Claimant. The consideration listed on the Bargain and Sale Deed was "love and affection." Govt.'s Motion and Memo. (#22), Exh. A at 4. On June 16, 2008, the deed was re-recorded to change the consideration to "other." Id., Exh. A at 6-7. On that same date, Claimant executed a document stating that "[t]he enclosed savings bonds valued at 80, 000 today are in exchange for 1309 Fourth Street, La'Grande, OR - previously owned by Tom Bobbitt. Lepper Dec. at ¶ 33 & Exh. 110' (emphasis added); Declaration of Annette Aschenbrenner (#30) at ¶¶ 2-3. Bobbitt continued to live on the property despite the transfer of ownership. Lepper Dec. at ¶ 36.
On July 21, 2008, Union County Deputy District Attorney Jason Larimer filed a "Notice of Intent to Forfeit, " declaring his intent to initiate forfeiture proceedings against the 1309 Fourth Street Property. Id., Exh. 113. On July 28, 2008, a Superseding Indictment was issued containing a forfeiture provision against the property, and a lis pendens was filed on the property. Id. at ¶ 38 & Exhs. 113-15. On that same date, Claimant wrote the following letter to the Deputy District Attorney:
My brother's attorney just gave me the notice of intent to forfeit 1309 4th Street, La Grande. I purchased this piece of property on 6/18/08. I checked with your local escrow office who said there was no lien on this piece & I was OK to purchase it.
My brother TOM BOBBITT needed the money to pay for his defense - his checking account has been locked as well as his inheritance money from his safe deposit box - he had to have money both to survive & defend himself.
Id. at ¶ 40 & Exh. 116 (emphasis added).
In August, 2008, the state seized the property, and police required Bobbitt to vacate the premises. Id. at ¶ 39. In October, 2008, the state court ordered that the property be restored to Claimant pending the criminal proceedings against Bobbitt. Id. at ¶ 43 & Exh. 119; see ORS 131.573 (4) (a) & 131.576(2).
Claimant began making repairs to the house, and Claimant's daughter, Dawn Norman, lived in the home until July, 2010. Lepper Dec. at ¶¶ 44-46; Declaration of Dawn Norman (#29) at ¶¶ 15-16. Bobbitt moved back into the home in February, 2012, after being diagnosed with Mesothelioma. Lepper Dec. at ¶ 47. Bobbitt died on August 10, 2012, and the state criminal charges against him were dismissed. Conner Dec. at ¶ 30.
On December 17, 2012, the Government filed the instant proceeding, seeking forfeiture of the 1309 Fourth Street Property on the basis that it was used or intended to be used to facilitate a drug offense. On March 9, 2013, Claimant filed a claim to the property asserting that she is the fee owner of the property. Claim (#6) at 2. In her answer, Claimant contends that she is an innocent owner under 18 U.S.C. § 983(d)(3), because at the time she acguired her interest in the property, she was a bona fide purchaser for value and did not know, and was reasonably without cause to believe, that the property was subject to forfeiture. Answer (#17) at 2.
Summary judgment is appropriate if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014). The moving party bears the burden of proving the absence of a genuine dispute of material fact. U.S. Auto Parts Network, Inc. v. Parts Geek, LLC, 692 F.3d 1009, 1014 (9th Cir. 2012). A genuine dispute of fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., All U.S. 242, 248-49 (1986); Scott v. Harris, 550 U.S. 372, 380 (2007).
This court reviews the evidence in the light most favorable to the non-moving party, and must draw all reasonable inferences in favor of that party. Tolan, 134 S.Ct. at 1863; Maxwell v. County of San Diego, 2012 WL 4017462 *2 (9th Cir. Sept. 13, 2012), reh'g. en banc denied, 708 F.3d 1075 (9th Cir. 2013), In the civil forfeiture context, summary judgment procedures must necessarily be construed in light of the statutory law of forfeitures, and the procedural requirements set forth therein. United States v. Currency, U.S. $42, 500.00, 283 F.3d 977, 979 (9th Cir. 2002).
I. Standing bo Challenge Forfeiture
Article III standing is a threshold question in every federal case. United States v. Real Property Located at 5208 Los Franciscos Way, Los Angeles, Cal., 385 F.3d 1187, 1191 (9th Cir. 2004). In a civil forfeiture proceeding, "this determination turns upon whether the Claimant has a sufficient interest in the property to create a case or controversy." Id. Claimant's burden is not a heavy one, she need only demonstrate a colorable interest in the property, for example, by showing actual possession, control, title, or financial stake." Id . (emphasis added); United States v. $133, 420.00 in U.S. Currency, 672 F.3d 629, 637-38 (9th Cir. 2012). To withstand a motion for summary judgment, a forfeiture claimant cannot rely on mere allegations, and instead must set forth by affidavit or other evidence specific facts to support a finding that she has an ownership or possessory interest in the property. $133, 420. 00 in U.S. Currency, 672 F.3d at 638.
The Government contends that Claimant lacks standing because she lacks a valid ownership interest in the defendant property. Specifically, the Government argues that the assignment of the defendant property from Bobbitt to Claimant was fraudulent under Oregon's Uniform Fraudulent Transfer Act (UFTA), because it was intended to "hinder, delay, or defraud" the Government's forfeiture action. In response, Claimant contends that there is a triable issue of fact as to whether she has standing. Claimant argues that she has produced evidence that Bobbitt did not intend to defraud the Government, and that she took the property in good faith and for a reasonably equivalent value. For the reasons set forth below, I conclude that there is a genuine dispute of material fact as to Claimant's standing.
Whether a claimant has an ownership interest in property is determined under the law of the state in which the interest arose. Real Prop. Located at 5208 Los Franciscos Way, 385 F.3d at 1191 & n.3; see also United States v. $100, 348.00 in U.S. Currency, 354 F.3d 1110, 1119 (9th Cir. 2004). Under Oregon law, a transfer of assets is fraudulent if it is made ...