UNITED STATES of America, Plaintiff-Appellee, v. ONE PARCEL OF PROPERTY LOCATED AT 414 KINGS HIGHWAY, FAIRFIELD, CONNECTICUT, Defendant, People‘s Bank, Claimant-Appellant, Francisco L. Aguilar, Claimant-Appellee.
No. 96-6292.
United States Court of Appeals, Second Circuit.
Argued Oct. 22, 1997. Decided Nov. 10, 1997.
128 F.3d 125
Before: NEWMAN, ALTIMARI, and CALABRESI, Circuit Judges.
Carl J. Schuman, Asst. U.S. Atty., Hartford, CT (Christopher F. Droney, U.S. Atty., John B. Hughes, Asst. U.S. Atty., Hartford, CT, on the brief), for Plaintiff-Appellee.
Robert Sullivan, Westport, CT, for Claimant-Appellee.
OPINION
JON O. NEWMAN, Circuit Judge:
This forfeiture case requires interpretаtion of a stipulation entered into between the Government and the mortgagee of the seized res. People‘s Bank (the “Bank“) appeals from the October 25, 1996, judgment of the District Court for the District of Connecticut (Ellen Bree Burns, Judge), awarding claimant-appellee Francisco Aguilar the proceeds of the interlocutory sale of the seized prоperty. We reverse.
Background
In 1991, the Government seized various properties owned by Aguilar in connection with his arrest for drug trafficking offenses.1 Separate forfeiture actions were brоught against each property pursuant to
The Bank filed a Notice of Claim, pursuant to the “innocent owner” рrovision of
Thereafter, while the Government‘s motion for summary judgment to extinguish Aguilar‘s interest was pending, the Bank and the Government еntered into a Stipulation, which included the following provisions:
2. That the Claimant, People‘s Bank, consents to the entry of a Decree of Forfeiture, forfeiting all interests in [the Property] and the proceeds of the interlocutory sale thereof, to the United States of America to be disposed of according to law.
3. That the Claimant, People‘s Bank, agrees to accept in full satisfaction of its claim in the instant case, ... and its claims in [two other actions seeking forfeiture of Aguilar‘s properties in which the Bank held mortgagеs] ..., the total sum of $125,000 to be paid from the net proceeds of the interlocutory sales of the above-named properties. Such sum shall be paid upon the final resolution of the above-referenced cases.
See July 3, 1996, Ruling of District Court at 2. The Stipulation was “so ordered” by the District Court.
Thereafter, the Government, apparently doubting its ability to prevail in the forfeiture action respecting the Property, moved for voluntary dismissal. See
The District Court denied the Bank‘s motion for disbursal, ruling that the Bank, in the Stipulation with the Government, had “forfeitеd ‘all interests in [the Property], and the proceeds of the interlocutory sale thereof.’ ” July 3, 1996, Ruling of District Court at 3 (emphasis in original). Thereafter, the Court determined that Aguilar was entitled tо the proceeds on deposit in the Fund and entered judgment in his favor.
Discussion
Though the forfeiture action has been dismissed, the Court retained authority to make an appropriate disposition of the proceeds from the sale of the Property. See
The construction of the text of a contract is reviewed de novo. See, e.g., Bellefonte Reinsurance Co. v. Aetna Casualty and Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.“) (citations omitted). The District Court construed paragraph 2 of the Stipulation to be a fоrfeiture of the Bank‘s right to the Property and the proceeds and construed paragraph 3 to mean that the Bank would receive $125,000 only if the Government had prevailed in the forfeiture action, which was dismissed. The Court assumed for the argument that paragraph 3 could be interpreted to permit the Bank to receive the sale proceeds despite dismissal of the forfeiture action, but rejected such an interpretation, invoking the principle that ambiguities in documents are construed against the drafter.
We conclude that paragraphs 2 and 3 must be read together, and that both contemplate a relinquishment of the Bank‘s claim and substitution of a payment of $125,000 from the sale of all three properties only in the event that a decree of forfeiture was entered. That is the interpretation urged by both of the parties to the Stipulation--the Bank and the Government. In paragraph 2, the Bank did not forfeit its interest but only consented to “the entry of a Decree of Forfeiture,” an event that never occurred because the forfeiture action was dismissеd. In essence, a decree of forfeiture was a condition precedent to the substitution of a $125,000 payment for the Bank‘s interest in the three properties. Absent fulfillment of that сondition, the Bank retained its claim to the sale proceeds, a claim it obtained when the Court ordered it to release its mortgage in exchange for the right to collect from the sale proceeds. The canon of construing ambiguous documents against the drafter is inapplicable, both because the document is sufficiently clear and beсause that doctrine is normally invoked for the benefit of the other party to the document, which in this case agrees with the Bank‘s construction. We need not consider what effect the canon might have if third parties had acted in reasonable reliance on ambiguous language in the Stipulation.
Aguilar contends that even if the Bank‘s relinquishment of its claim was cоnditioned upon the entry of a decree of forfeiture, that condition was satisfied when the Court “so ordered” the Stipulation. We disagree. A “decree of forfeiture” is a deсlaration made by the Court upon the Government‘s successful completion of a forfeiture action, vesting the Government‘s title to the seized res. See United States v. 92 Buena Vista Avenue, 507 U.S. 111, 125, 129, 113 S.Ct. 1126, 1135, 1137-38, 122 L.Ed.2d 469 (1993) (plurality opinion). Until the Government succeeds, the Court has no power to issue a decree of forfeiture. See id. at 129, 113 S.Ct. at 1137-38. Because this forfeiture action was dismissed prior to a determination on the merits, the Court neither did--nor could have--issued a decree of forfeiture.
Conclusion
We reverse the judgment of the District Court, and remand for a determination of an appropriate dispоsition of the proceeds, consistent with this opinion. Though it appears that the Bank is entitled to the entire current amount of the sale proceeds, plus accrued interest, in the Fund, we leave it to the District Court to consider any issues that might remain concerning the Bank‘s entitlement to the sale proceeds.