UNITED STATES of America, Plaintiff-Appellee, v. CURRENCY $267,961.07, et al., Defendants, Maggie Crumpton, Guardian of Lizzie Johnson; Lovy Johnson; Lizzie Johnson, Claimants-Appellants.
No. 89-2027
United States Court of Appeals, Sixth Circuit.
Submitted June 7, 1990. Decided Oct. 22, 1990.
1104
For the reasons discussed above, we AFFIRM the February 5, 1990 order of the District Court.
Gerald D. White, Gerald David White & Associates, Southfield, Mich., for appellants.
Before JONES and NELSON, Circuit Judges, and PECK, Senior Circuit Judge.
NATHANIEL R. JONES, Circuit Judge.
Lovy James Johnson and Lizzie Johnson appeal the district court‘s entry of a default decree and motion to strike in this in rem action against the Johnsons’ marital property. We remand for the following reasons.
I.
On January 14, 1987, the federal Drug Enforcement Administration (DEA) and local law enforcement agents in Saginaw, Michigan executed a search warrant on the home of Lovy James Johnson and his wife, Lizzie Johnson. Police seized from that household twenty-three firearms, $267,961.07 in United States currency and various drug paraphernalia. Lovy Johnson was arrested around the time of the search and subsequently pled guilty to conspiracy to deliver heroin. As part of a
Pursuant to
The government filed its amended complaint, and the claimants responded with a motion for partial summary judgment asserting that “no drugs were confiscated from said marital home made up of 1229 and 1233 Howard” and that “there is no evidence submitted by the U.S. Attorney that claimant [Mrs. Johnson] was involved or even aware of defendant‘s [Mr. Johnson‘s] [sic] activities.” Id. at 94.2 The district court denied the motion, holding that the government had established probable cause to support a forfeiture and that Lizzie Johnson‘s innocent ownership defense lacked support in the record. Id. at 106.
On April 21, 1989, the government deposed Maggie Crumpton. During her deposition, Crumpton revealed that she was not the legal guardian of either Lizzie or Lovy Johnson. On May 26, 1989, the government moved to strike the claim and answer of Maggie Crumpton and Lovy Johnson and for entry of a default or summary judgment. In its motion, the government asserted that Crumpton lacked an interest in the litigation because she was not the legal guardian of Lizzie Johnson and that neither Lizzie nor Lovy Johnson had filed a properly verified claim and answer as required by Supplemental Admiralty and Maritime Claims Rule C(6). At an August 23, 1989 hearing on the government‘s motion, counsel for Crumpton and Lovy Johnson requested that the claimants be granted leave to amend their claims. On June 5, 1989, the district court had entered a scheduling order setting July 31, 1989 as the deadline for claimants to respond to the government‘s motion to strike and for default. The claimants failed to file a response by this time and had not done so by the date of the hearing. For these reasons, the district court denied counsel‘s oral motion to amend. Because Maggie Crumpton possessed no interest in the litigation, and because neither Lovy nor Lizzie Johnson had filed a verified claim, the district court granted the government‘s motion to strike and for default. Id. at 140. This appeal followed.
II.
A.
We review the district court‘s decision to strike the claim of Maggie Crumpton and enter a default judgment against the Johnsons for abuse of discretion. See United States v. Beechcraft Queen Airplane, 789 F.2d 627, 629-30 (8th Cir.1986).
The Supplemental Admiralty and Maritime Claims rules govern judicial forfeiture proceedings. United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1545 (11th Cir.1987). Rule C(6) provides:
The claimant of property that is the subject of an action in rem shall file a claim within 10 days after process has been executed, or within such additional time as may be allowed by the court, and shall serve an answer within 20 days after the filing of the claim. The claim shall be verified on oath or solemn affirmation, and shall state the interest in the property by virtue of which the claimant demands its restitution and the right to defend the action. If the claim is made on behalf of the person entitled to possession by an agent, bailee, or attorney, it shall state that the agent, bailee, or attorney is duly authorized to make the claim.
A claimant must possess Article III and statutory standing pursuant to Rule C(6) in order to contest the government‘s forfeiture action. 816 F.2d at 1543; United States v. 526 Licum Dr., Dayton, Montgomery County, 866 F.2d 213, 216-17 (6th Cir.1988); United States v. One Gray Samsonite Suitcase, Model 200, 637 F.Supp. 1162, 1165 (E.D.Mich.1986). With respect to Article III standing, a claimant must demonstrate a legally cognizable interest in the defendant property. A property interest less than ownership, such as a possessory interest, is sufficient to create standing. $38,000.00 in U.S. Currency, 816 F.2d at 1544. Crumpton seeks to use the durable power of attorney to assert Lizzie Johnson‘s innocent ownership defense with respect to the Howard Street marital property.
Lizzie Johnson granted Maggie Crumpton a durable power of attorney on July 25, 1988, approximately three months after the government filed its original compalint. Although the government‘s original complaint was dismissed, its amended complaint, filed October 24, 1988, related back to the date of the original filing.
In United States v. Lots 12, 33, 14 and 15 Keeton Heights, 869 F.2d 942, 947 (6th Cir.1989), this court reversed a grant of summary judgment against a claimant asserting an innocent ownership defense where the issue had been raised in her verified claim but the government had failed to demonstrate that no evidence supported the defense. Because both the district court and the government in Lots 12, 33, 14 and 15, failed to address the claimant‘s innocent ownership defense at all,
When Crumpton filed a motion for partial summary judgment on Lizzie Johnson‘s behalf asserting the innocent ownership defense, the district court found that there was probable cause to support a forfeiture. Once probable cause for forfeiture is established, the claimant bears the burden of proving innocent ownership. United States v. One (1) Beechcraft Baron, No. N242BS, 788 F.2d 384, 387 (6th Cir.1986). The district court concluded that there was no evidence to support Lizzie Johnson‘s defense. J. App. at 106. Although Crumpton‘s motion for partial summary judgment did not require her to negate the government‘s claims, she was required to show the absence of evidence supporting the government‘s case. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986). The district court could have, upon compliance with
B.
Notwithstanding the existence of Article III standing, a claimant‘s failure to strictly adhere to Supplemental Rule C(6) precludes the requisite statutory standing to contest a government forfeiture action. $38,000.00 in U.S. Currency, 816 F.2d at 1544; One Gray Samsonite Suitcase, 637 F.Supp. at 1166. The government argues that Crumpton and Lovy Johnson failed to file a claim that was “verified on oath or solemn affirmation,” as required by Rule C(6). The purpose of this requirment is to prevent the danger of false claims in forfeiture proceedings by informing the court on oath or affirmation that the claimant is entitled to contest the forfeiture action by virtue of his interest in the defendant property. United States v. United States Currency, Etc., 754 F.2d 208, 213 (7th Cir.1985). Courts must look to the law of the forum state to determine what constitutes verification. United States v. U.S. Currency, The Amount of $103,387.27, 863 F.2d 555, 559 (7th Cir. 1988). Michigan Rule of Court 2.114(A) provides in pertinent part:
If a pleading is required or permitted to be verified, it may be verified by....
(a) oath or affirmation of the party or of someone having knowledge of the facts pleaded; or
(b) including the following signed and dated declaration: ‘I declare that the statements above are true to the best of my information, knowledge, and belief.’
The government correctly notes that the notarized signature of an attorney, which is all that is contained on the claims in the instant case, is insufficient to satisfy Rule C(6)‘s verification requirement. See United States Currency, The Amount of $103,387.27, 863 F.2d at 560. However, here again, we believe the court should have made an express determination of the propriety of granting leave to amend by asking the following: “(1) whether the claimant has advised the court and government of his interest in the defendant before the claim deadline, and (2) whether the government would be prejudiced by
III.
For the foregoing reasons, the case is REMANDED for further proceedings not inconsistent with this opinion.
DAVID A. NELSON, Circuit Judge, dissenting.
The record in this case establishes without contradiction that Lovy James Johnson ran a string of dope houses in Saginaw, and had done so for some years; that although Mr. Johnson and his wife, Lizzie Johnson, ostensibly had no reportable income, more than a quarter of a million dollars in cash was kept at their home, along with drug paraphernalia and a huge arsenal of pistols, rifles and shotguns; and that the presence within the home of the drug paraphernalia, currency and firearms was open and obvious to anyone living there.
Mrs. Johnson had repeated opportunities to file a verified claim asserting, pursuant to
Leave to amend is to be freely given, under Rule 15(a), only “when justice so requires.” Justice did not require the district court to let Mrs. Johnson further amend her claim to state, under oath, something that would have been manifestly untrue. I do not believe that the district court abused its discretion in declining to allow a further amendment, and I would therefore affirm the judgment.
John SINCLAIR, Lawrence R. Plamondon and John W. Forrest, Plaintiffs-Appellants, v. Kenneth L. SCHRIBER, James Sullivan and Charles Wagner, Defendants-Appellees.
No. 89-1875.
United States Court of Appeals, Sixth Circuit.
Argued June 7, 1990. Decided Oct. 23, 1990.
Notes
“The following shall be subject to forfeiture and no property right shall exist in them ... [a]ll real property, including any right, title, and interest (including leasehold interest)... which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, a violation of this title punishable by more than one year‘s imprisonment, except that no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.”