United States v. Tracts 31A, Lots 31 & 32, Lafitte's Landing Phase Two Port Arthur, Jefferson County Texas
852 F.3d 385
| 5th Cir. | 2017Background
- Calvin Walker was indicted for fraud and the Government sought forfeiture of two annuities (listed in his name) purchased with community funds; Stacy Walker was named beneficiary.
- Calvin pleaded guilty to a misdemeanor tax charge pursuant to a plea agreement that included a forfeiture clause: Calvin agreed to forfeit his interest in the annuities and to an agreed civil forfeiture judgment.
- The Government filed a civil in rem forfeiture action; Calvin and Stacy filed a joint verified claim asserting the annuities were community property.
- Stacy later objected to entry of judgment, arguing she never consented and that as community property her one-half interest could not be forfeited without her participation.
- The Government moved for summary judgment, relying on Texas Fam. Code § 3.104, which presumptively allows a third party to rely on the authority of the named spouse to deal with property held in that spouse’s name unless there is notice the spouse lacks authority.
- The district court granted summary judgment for the Government; the Fifth Circuit affirmed, holding the Government was entitled to rely on the presumption that Calvin had authority to forfeit the annuities and Stacy had not shown the Government had notice Calvin lacked such authority.
Issues
| Issue | Plaintiff's Argument (Stacy) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Whether the annuities were subject to joint management community property so Calvin could not forfeit Stacy’s one-half interest | The annuities were community property and thus required spousal joinder under Tex. Fam. Code § 3.102 | Property held in one spouse’s name is presumptively sole-management under Tex. Fam. Code § 3.104, so Calvin could dispose of them alone | Held for Government: § 3.104’s presumption applied; Calvin’s control prevailed over § 3.102 claim |
| Whether the Government had actual or constructive notice that Calvin lacked authority such that it could not rely on § 3.104 | The joint claim and answer put the Government on notice the annuities were community property and that Stacy opposed forfeiture | The joint claim did not indicate Calvin lacked sole-management authority; facts (same counsel, Stacy present at plea hearing, no notice to Government) supported reliance on Calvin’s authority | Held for Government: mere notice of community ownership is insufficient to show notice of lack of authority |
| Whether the Government was required by statute or internal policy to obtain Stacy’s express consent before accepting Calvin’s forfeiture agreement | Government policies and statutes require protecting spousal interests and thus consent | No statute or binding regulation required spousal consent where state law presumes the named spouse can deal with the property; internal DOJ guidance is nonbinding and does not mandate consent here | Held for Government: no legal requirement to obtain Stacy’s consent under the circumstances |
| Whether the plea agreement ambiguity (forfeit “his interest” v. all annuities) precluded summary judgment | The agreement might be ambiguous about whether Calvin contracted away only his half-interest | Argument waived by failing to develop in brief; no extrinsic evidence raised a factual dispute | Held for Government: ambiguity argument waived; no genuine factual dispute presented |
Key Cases Cited
- Jean v. Tyson–Jean, 118 S.W.3d 1 (Tex. App.—Houston [14th Dist.] 2003) (state-law rule that § 3.104 presumption controls over joint-management rule in certain circumstances)
- Lemaster v. Top Level Printing Ink, Inc., 136 S.W.3d 745 (Tex. App.—Dallas 2004) (spouse may act alone with respect to sole-management community property)
- In re McCloy, 296 F.3d 370 (5th Cir. 2002) (mere notice that property held in one spouse’s name is community property is insufficient to show notice that the named spouse lacks authority to deal with it)
- Williams v. Portland State Bank, 514 S.W.2d 124 (Tex. Civ. App.—Beaumont 1974) (bank’s knowledge that wife refused to join creates constructive notice that husband lacked sole authority)