Schmitz v. $40,703.00

572 N.W.2d 760, 1997 Minn. App. LEXIS 1382, 1997 WL 799577
CourtCourt of Appeals of Minnesota
DecidedDecember 30, 1997
DocketNo. C5-97-486
StatusPublished

This text of 572 N.W.2d 760 (Schmitz v. $40,703.00) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schmitz v. $40,703.00, 572 N.W.2d 760, 1997 Minn. App. LEXIS 1382, 1997 WL 799577 (Mich. Ct. App. 1997).

Opinion

OPINION

WILLIS, Judge.

The Olmsted County attorney challenges the district court’s dismissal of a judicial forfeiture action under Minn.Stat. § 609.5311, arguing that the statutory forfeiture scheme does not require the county attorney to have asserted all statutory claims for forfeiture in the judicial determination proceeding initiated by Lamar. We reverse and remand.

FACTS

On April 29, 1995, Michael Lamar was arrested at the Rochester Airport for sus-peeted illegal drug activities. A search resulted in the discovery of $40,703 on Lamar’s person. That same day an administrative forfeiture proceeding was initiated against the money pursuant to Minn.Stat. § 609.5314, subd. 2 (1994). On June 20, 1995, Lamar filed a demand, pursuant to Minn.Stat. § 609.5314, subd. 3 (1994), for a judicial determination of the administrative forfeiture. Upon motions by both parties for summary judgment, the district court held that because the county attorney failed to prove that the money was found in proximity to controlled substances, it was not subject to administrative forfeiture. Although the county attorney also argued for judicial forfeiture under section 609.5311, the district court did not address that claim.

After the administrative forfeiture proceeding failed, the county attorney initiated a judicial forfeiture proceeding under Minn. Stat. § 609.5311 (1994). After filing an answer, Lamar moved for summary judgment, arguing that the county attorney had been required to raise any independent claims of forfeiture in the proceedings for judicial determination of the administrative forfeiture, and when he failed to do so, the compulsory counterclaim rule of Minn. R. Civ. P. 13.01 prohibited him from initiating a separate judicial forfeiture proceeding under Minn.Stat. § 609.5311. The county attorney argued that the district court’s ruling in the prior proceeding merely determined that the property was not subject to administrative forfeiture under Minn.Stat. § 609.5314 and that the decision did not constitute a judgment on the merits of his claim under Minn.Stat. § 609.5311. The district court agreed with Lamar and dismissed the judicial action for forfeiture. The county attorney appeals.

ISSUE

Did the district court err in dismissing the judicial action for forfeiture under Minn.Stat. § 609.5311?

ANALYSIS

Review of the district court’s decision requires examination of the statutory scheme [762]*762for forfeiture. On a purely legal issue, appellate courts need not defer to the district court’s decision. Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984).

Under the forfeiture statutes, there are two separate procedures for forfeiture of property associated with controlled substances: administrative forfeiture proceedings and judicial forfeiture proceedings. Minn.Stat. §§ 609.5313, 609.5314 (1996).

In administrative forfeiture proceedings commenced under Minn.Stat. § 609.5314, money found in proximity to controlled substances is presumed to be subject to administrative forfeiture. Minn.Stat. § 609.5314, subd. l(i). When property is seized, or within a reasonable time after the seizure, all persons known to have an ownership or pos-sessory interest in seized property must be notified of the seizure and the agency’s intent to seek forfeiture of the property. Minn. Stat.' § 609.5314, subd. 2. The property owner (claimant) may contest the administrative forfeiture proceeding by filing a demand for a judicial determination of the forfeiture. Minn.Stat. § 609.5314, subd. 3(a). The demand must be in the form of a civil complaint, and no responsive pleading is required of the county attorney. Id. The complaint must be captioned in the name of the claimant as plaintiff and the seized property as defendant. Minn.Stat. § 609.5314, subd. 3(b). If the claimant makes a timely demand for judicial determination of an administrative forfeiture, the agency seeking forfeiture must conduct the proceeding under Minn. Stat. § 609.531, subd. 6a (1996). Minn.Stat. § 609.5314, subd. 3(e).

Under section 609.531, subdivision 6a, an administrative forfeiture is a civil in rem action, and the agency seeking the forfeiture has the benefit of the evidentiary presumption of section 609.5314, subdivision 1, but otherwise bears the burden of proving by clear and convincing evidence the act or omission giving rise to the forfeiture. Minn. Stat. § 609.531, subd. 6a.

Judicial forfeiture proceedings are commenced under Minn.Stat. § 609.5311 and § 609.5312 (1996). Under section 609.5311,

[a]ll property, real and personal, that has been used, or is intended for use, or has in any way facilitated, in whole or in part, the manufacturing, compounding, processing, delivering, importing, cultivating, exporting, transporting, or exchanging of contraband or a controlled substance that has not been lawfully manufactured, distributed, dispensed, and acquired is subject to forfeiture under this section, except as provided in subdivision 3.

Minn.Stat. § 609.5311, subd. 2. The procedure for judicial forfeiture is set forth in Minn.Stat. § 609.5313. To initiate a judicial action for forfeiture,

[a] separate complaint must be filed against the property stating the act, omission, or occurrence giving rise to the forfeiture and the date and place of the act or occurrence. The county attorney shall notify the owner or possessor of the property of the action, if known or readily ascertainable. The action must be captioned in the name of the county attorney or the county attorney’s designee as plaintiff and the property as defendant.

Id.

Here, following Lamar’s demand for judicial determination of the administrative forfeiture, the district court conducted a judicial review. After reviewing the evidence presented by the county attorney, the district court held that because the county attorney failed to prove the money was found in proximity to controlled substances, the money was not subject to administrative forfeiture. When the county attorney then filed an action for judicial forfeiture under section 609.5311, the district court dismissed the action, concluding that (1) the statutory scheme for forfeiture proceedings requires that, following a claimant’s demand for judicial determination, the agency seeking forfeiture must assert its claim to the property under all statutory provisions affording forfeiture, and (2) the compulsory counterclaim rule of Minn. R. Civ. P. 13.01 prohibited the county attorney from subsequently bringing an action under section 609.5311 because of his failure to seek forfeiture under that statute in the judicial determination proceeding initiated by Lamar. .

[763]*763We conclude that the district court’s decision is erroneous for several reasons:

First, the statutory forfeiture scheme provides for two separate types of proceedings for the forfeiture of property associated with controlled substances: judicial and administrative. Minn.Stat. §§ 609.5313, 609.5314. Section 609.5314 lists certain property that is presumed to be subject to administrative forfeiture. Minn.Stat. § 609.5314, subd. 1. The circumstances for administrative forfeiture are more limited than those provided for judicial forfeiture under sections 609.5311 and 609.5312. King v. One 1990 Cadillac DeVille,

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Related

Frost-Benco Electric Ass'n v. Minnesota Public Utilities Commission
358 N.W.2d 639 (Supreme Court of Minnesota, 1984)
King v. One 1990 Cadillac DeVille
567 N.W.2d 752 (Court of Appeals of Minnesota, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
572 N.W.2d 760, 1997 Minn. App. LEXIS 1382, 1997 WL 799577, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schmitz-v-4070300-minnctapp-1997.