In the Matter of Property Seized from Keith Joseph WAGNER and Rachael A. Wagner, Stacy Wagner, Appellee, State of Iowa, Appellant.
No. 91-17.
Supreme Court of Iowa.
March 18, 1992.
If the court of appeals had not addressed the abuse of discretion issue, on remand the commission could have argued that Feller was barred from contesting this issue under count I because it had been decided against him on appeal under count II. We think the court of appeals realized this too and decided it had to address the abuse of discretion issue either under count I or under count II. The court did not reach the merits in count II, so for this additional reason we think its language on the abuse of discretion issue was necessary to its decision.
The commission‘s application for further review in Feller I shows that it too believed the court of appeals had decided the abuse of discretion issue on the merits. In its application the commission said this:
The Iowa appellate court held that [the commission and its members] had violated section 21.5(1)(i) and abused their discretion by failing to close the hearing on the civil service appeal, and reversed and remanded.
. . . .
Moreover, the appellate court held that [the] mere statement of applicant that his reputation may be damaged was a sufficient showing, and the failure to honor such request constitutes an abuse of discretion. [The commission and its members] have problems with such concept, especially since no authority has been cited in support of such ruling and the dictates of the legislature would appear to be contrary.
(Emphasis added.)
IV. Disposition.
Feller I held that the commission abused its discretion when it denied Feller a closed hearing and that under Iowa‘s open meeting law Feller‘s remedy was a closed hearing. Right or wrong, this holding became the law of the case. The holding was binding on remand and in any subsequent appeal.
Accordingly, we reverse the actions of the district court and remand to the district court for an order directing the commission to give Feller a closed hearing as he requested. In addition, the district court shall, following a hearing, determine what attorney fees and costs Feller should have.
REVERSED AND REMANDED WITH DIRECTIONS.
Bonnie J. Campbell, Atty. Gen., Thomas G. Fisher, Jr., Mark Joel Zbieroski, and Patrick J. Reinert, Asst. Attys. Gen., and Philip Tabor, County Atty., for appellant.
Considered by McGIVERIN, C.J., and HARRIS, SCHULTZ, CARTER and SNELL, JJ.
SCHULTZ, Justice.
The issue in this appeal concerns the ownership of currency seized by police from a drug dealer. The police department was garnished by a judgment creditor of the drug dealer after seizure of the currency but before the State gave notice of forfeiture. The trial court ruled that title to derivative contraband does not vest in the State by virtue of seizure alone, and that the creditor acquired a superior lien on the currency by garnishing the police department before the State filed notice of forfeiture. We disagree and reverse.
The facts were stipulated to by the parties. In 1988 in a dissolution decree, Stacy Wagner (Stacy) obtained a judgment for child support. This judgment against Keith Joseph Wagner (Keith) was in arrears on January 7, 1990, when Keith was arrested for drug dealing and the currency in question was seized from him and his present wife, Rachael A. Wagner (Rachael). On January 31, Stacy caused execution and garnishment to be served on the police department which was holding the seized currency, to garnish the funds belonging to Keith. The execution and garnishment were returned unsatisfied. On March 9,
Stacy appeared in the forfeiture proceeding, claiming that she had perfected a lien on the currency by her garnishment which occurred prior to the State‘s initiation of forfeiture proceedings. The trial court agreed with Stacy and ordered that the currency be delivered to Stacy in accordance with her January 31 execution and garnishment. The State appeals.
Our review of the trial court‘s ruling is for correction of errors at law.
The State maintains that its ownership interest in the seized currency vested on January 7, 1990, the date of seizure. Stacy urges that ownership of the currency could not vest in the State until March 9, 1990, when the State sent notice of forfeiture. Resolution of these conflicting claims depends upon interpretation of various code provisions in
Although the forfeiture statutes in chapter 8091 are not criminal statutes, they are penal in nature and must be strictly construed. In re Kaster, 454 N.W.2d 876, 877 (Iowa 1990). However, we must construe forfeiture statutes with a goal of promoting and giving effect to the intention of the legislature. Id.; see also State v. Ludtke, 446 N.W.2d 797, 798 (Iowa 1989); Kohrt v. Yetter, 344 N.W.2d 245, 246 (Iowa 1984). In light of these principles of statutory interpretation, we examine the relevant statutory provisions.
The statutory provision most relevant to resolution of this case is
Title to and responsibility for forfeitable property vests in the state at the time of seizure. Once forfeitable property is seized, no right to the property may be transferred by anyone other than the state unless the seizure and forfeiture is declared by the court to be a nullity. Property which may not legally be possessed is forfeited to the state by its seizure without further filing of a notice of forfeiture.
The phrase “[p]roperty which may not legally be possessed” contained in the last sentence of this section is a codified definition of contraband per se. Ludtke, 446 N.W.2d at 799-800. This sentence can be construed as automatically vesting title in contraband per se in the State at the time of seizure because no “further filing of a notice of forfeiture” is required. See id. at 800. Thus, the State need not perfect its ownership of contraband per se because no person can claim an ownership right in illegal property. Id.
In this case, the trial court concluded that section 809.6 deals solely with contraband per se. We cannot agree. Section 809.6 uses the term “forfeitable property” rather than contraband per se. A further indication of the legislature‘s intention that section 809.6 governs forfeitable property in addition to contraband per se is the section‘s provision that no person other than the State has the right to transfer seized forfeitable property except when “the seizure and forfeiture is declared by the court to be a nullity.”
Even though the plain language in section 809.6 indicates that the State has title to forfeitable property at the time of seizure, owners and lienholders claiming an interest in the property may assert their rights. The State is required to give notice of forfeiture to persons claiming rights to the property.
To assert ownership rights in seized property, owners and lienholders must show that their rights vested before the date of the State‘s seizure. The legislature provided that “no right to the property may be transferred by anyone other than the State unless the seizure and forfeiture is declared by the court to be a nullity.”
In this case, Stacy does not contend that she possessed a legal or equitable ownership right to the currency that existed prior to her January 31, 1990, garnishment action. The trial court concluded that Stacy acquired a lien on the currency at the time she initiated garnishment proceedings on January 31, 1990, which was after the State‘s January 7 seizure of the currency. Even if we assume that Stacy acquired a lien by her January 31 garnishment action, the lien was too late. The lien was not acquired prior to the State‘s January 7 seizure of the currency; therefore, it did not give her any preseizure ownership claim to the currency.
The doctrine of relation back provides further support and justification for our conclusion that Stacy‘s claim to the currency was made too late. Recently, the Eighth Circuit explained the relation back doctrine as follows:
[W]henever a statute enacts that upon the commission of a certain act specific property used in or connected with that act shall be forfeited, the forfeiture takes effect immediately upon the commission of the act; the right to the property then vests in the United States, although their title is not perfected until judicial condemnation; the forfeiture constitutes a statutory transfer of the right to the United States at the time the offense is committed; and the condemnation, when obtained, relates back to that time, and avoids all intermediate sales and alienations, even to purchasers in good faith.
United States v. Thirteen Thousand Dollars in United States Currency, 733 F.2d 581, 583-84 (8th Cir.1984) (quoting United States v. Stowell, 133 U.S. 1, 16-17, 10 S.Ct. 244, 247, 33 L.Ed. 555, 559 (1890)). The validity of the relation back rule has been reaffirmed in many Supreme Court decisions. See cases cited David B. Smith, Prosecution and Defense of Forfeiture Cases § 3.05[2] n. 3 (1985). The practical effect of the relation back doctrine cuts off the after-acquired rights of innocent third parties, such as assignees, bona fide purchasers, secured creditors, competing state or federal tax authorities, finders of abandoned property, and tort victims in property subject to forfeiture. Id. § 3.05[5][a]. As we reasoned previously, if Stacy did
In sum, for the reasons discussed previously, we believe that legislative intent and the plain language of
In conclusion, our legislature has indicated that title to derivative contraband relates back and vests in the State at the time of seizure. Subject to perfection, title vested in the State on the date of seizure, January 7, 1990, prior to Stacy‘s January 31, 1990, garnishment of the seized property. Stacy cannot show a legal or equitable ownership interest in the seized currency that existed at or before the time of seizure. Consequently, the State‘s ownership right is superior to Stacy‘s garnishment action and the State is entitled to perfect that ownership right pursuant to the statutory forfeiture proceedings in
For these reasons, the trial court‘s order transferring the seized currency in the amount of $2,632 to Stacy should be reversed and the currency forfeited to the State of Iowa.
REVERSED.
All justices concur except SNELL, J., who dissents.
SNELL, Justice (dissenting).
I respectfully dissent. The majority has broadly construed our forfeiture law elevating the state‘s claim to ownership of derivative contraband above the rights of innocent third persons who have no connection with a violation of the controlled substance laws. In this case, a divorced wife of the defendant is deprived of her right to collect past due child support under a valid judgment by the state‘s claim to cash seized from defendant in a drug raid. The reason approved by the majority is that the police took possession of defendant‘s cash before she could garnish it to pay the money owed for child support.
The majority makes reference to our principles that forfeiture statutes are not penal in nature and must be strictly construed. Its analysis, however, proceeds without any reasoning based on strict construction but instead rests on a perceived legislative intent to give the state ownership rights above all other persons from the moment it seizes defendant‘s cash. The embracing of the doctrine of “relation back” for support is a startling example of losing track of these guiding principles.
Forfeiture proceedings are commenced when a notice of forfeiture is filed by the county attorney or attorney general.
A hearing must be held to decide the priority of other claims to the property and for return of the property, if demanded.
Section 809.10(3) provides: “Upon a finding by the court that the property is forfeitable, the court may as a matter of equity enter an order transferring title in the property to the state.” The legislature recognizes by this statute that equitable prin
Section 809.14 sets out rights of lienholders. Subsection three of 809.14 states: “The validity of a lien or property interest is determined as of the date upon which property becomes forfeitable.” I believe a proper construction of section 809.14 is that the property “becomes forfeitable” when the county attorney or attorney general claims it by filing a notice of forfeiture.
The majority‘s construction of section 809.6 rivets attention on the words “rests in the state at the time of seizure” but fails to consider the words “forfeitable property” in the same sentence. “Forfeitable property” is such when a notice of forfeiture is filed; until then it has not been legally declared forfeitable by any authority; it has merely been seized and lawfully possessed by the state subject to a decision by the county attorney or attorney general to petition the court for its forfeiture. The majority‘s construction changes the statutory language in section 809.6 from “forfeitable property” to “forfeited property.”
Section 809.6 has a readily discernible purpose that promotes the destruction of illegal drug trafficking that has been a scourge on our society. That purpose is to prevent the alleged seller of illegal drugs from transferring title to the seized property and thereby defeating the state‘s claim. Clearly, section 809.6 is designed to insure that neither convicted criminals nor their would-be donees profit from ill-gotten wealth. The statute prevents a transfer “by anyone” not “to anyone” other than the state. This laudable policy does not, however, apply to the wrongdoer‘s legitimate, preseizure creditors. No reference is made in section 809.6 to innocent third persons, nor were their rights intended to be scuttled. As against these individuals, the state‘s claim to the confiscated wealth is clearly subordinate.
Not incognizant of these equities, the legislature has vested title to forfeitable property as against the defendant in the state as of the time of physical seizure. However, the statute also provides that this title may thereafter be transferred by the state. One such mode of transfer would necessarily include garnishment. These state transfers effected by the judiciary would deny criminals the fruits of their misdeeds, while at the same time allow worthy creditors to satisfy their judgments.
In the case at bar, Stacy attempted to collect her child support by execution and garnishment of the cash held by the police on January 31, 1990. The state did not commence forfeiture proceedings until March 9, 1990. Not until March 9, 1990, did the state declare the cash “forfeitable property.” Stacy‘s claim and legal right to the cash was clearly superior to that of the state‘s, which is supported only by its right of possession.
The trial court was correct in its careful analysis of our forfeiture law and should be affirmed.
STATE of Iowa, Plaintiff-Appellee, v. Clayton VESEY, Jr., Defendant-Appellant. No. 90-1827. Court of Appeals of Iowa. Dec. 31, 1991.