In Re Property Seized From Wagner

482 N.W.2d 160, 1992 Iowa Sup. LEXIS 65, 1992 WL 53457
CourtSupreme Court of Iowa
DecidedMarch 18, 1992
Docket91-17
StatusPublished
Cited by14 cases

This text of 482 N.W.2d 160 (In Re Property Seized From Wagner) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Property Seized From Wagner, 482 N.W.2d 160, 1992 Iowa Sup. LEXIS 65, 1992 WL 53457 (iowa 1992).

Opinions

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, [162]*162the State commenced forfeiture proceedings on the currency. Keith and Rachael have made no claim to the currency.

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. Iowa R.App.P. 4. As an initial matter, the State and Stacy agree that the seizure of the currency was lawful; the State is entitled to present possession of the currency; the currency is forfeitable property as defined in Iowa Code chapter 809 (1989); and Stacy was not involved in the criminal proceedings against Keith and Rachael. The parties’ dispute is over the legal effect of the State’s seizure of the currency.

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 Iowa Code chapter 809 governing forfeitable property.

Although the forfeiture statutes in chapter 8091 are not criminal statutes, they are penal in nature and must be strictly construed. In re Raster, 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 Iowa Code section 809.6 which provides as follows:

Title to and responsibility for forfeita-ble 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.” Iowa Code § 809.6. The legislature certainly never intended to allow the transfer of contraband per se, or property that is illegal to possess such as controlled substances. Therefore, the inclusion of this exception in section 809.6 which allows transfer of seized forfeitable property can only apply to forfeitable property that is not contraband per se, or derivative contraband. Consequently, we conclude that section 809.6 applies to all seized forfeitable property, which includes both derivative contraband and contraband per se.

[163]*163In this case, the seized currency is not contraband per se; rather it is derivative contraband. In re Property Seized on January 31, 1983, 362 N.W.2d 565, 568 (Iowa 1985) (stating that United States currency is derivative contraband). We have defined derivative contraband as property that is “innocent in itself and generally lawful to possess but which may become contraband by its illegal use.” Ludtke, 446 N.W.2d at 800.

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. Iowa Code § 809.8. A failure to give timely notice terminates the State’s right of forfeiture. Id. § 809.8(2); Ludtke, 446 N.W.2d at 800. Except in cases of a joint tenant, property cannot be forfeited as against the property’s owner who had no part in the commission of the crime. Iowa Code § 809.14(1). Holders of valid recorded liens have the right to purchase their property interest which was forfeited or to be reimbursed to the extent of their property interest. Id. § 809.14(2)-(3).

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.” Id. § 809.6.

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In Re Property Seized From Wagner
482 N.W.2d 160 (Supreme Court of Iowa, 1992)

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482 N.W.2d 160, 1992 Iowa Sup. LEXIS 65, 1992 WL 53457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-property-seized-from-wagner-iowa-1992.