Shelden v. United States

19 Cl. Ct. 247, 1990 U.S. Claims LEXIS 6, 1990 WL 2397
CourtUnited States Court of Claims
DecidedJanuary 12, 1990
DocketNo. 164-88L
StatusPublished
Cited by11 cases

This text of 19 Cl. Ct. 247 (Shelden v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shelden v. United States, 19 Cl. Ct. 247, 1990 U.S. Claims LEXIS 6, 1990 WL 2397 (cc 1990).

Opinion

OPINION

SMITH, Chief Judge.

This case comes before the court on plaintiffs’ motion for summary judgment as to liability, and defendant’s cross-motion for summary judgment, or in the alternative, to dismiss. Plaintiffs were innocent mortgagees of real property under a deed of trust. This property was ordered forfeited when the mortgagor was convicted of violating federal anti-racketeering statutes. Although the order of forfeiture was eventually vacated, plaintiffs were prevented from foreclosing their lien for over two years, during which time the property sustained severe, preventable, and apparently permanent damage. Plaintiffs allege that the government’s actions amounted to a taking of their property without just compensation, in violation of the fifth amendment to the United States Constitution. For the reasons set forth below, plaintiffs’ motion for summary judgment as to liability is granted.

FACTS

The parties’ proposed findings of uncontroverted fact accompanying their motions and the representations of counsel at oral argument reveal agreement on virtually all of the relevant facts.1 The only dispute is whether, under the facts, plaintiffs have a remedy at law.

Plaintiffs Carl and Mary Shelden owned real property at 1065 Wickham Drive, Moraga, California (the Moraga property), as joint tenants. On May 23, 1979, they sold the property to Ralph and Freddie Jean Washington for $289,000, taking back a promissory note in the amount of $160,-[249]*249435.65, secured by a deed of trust.2 Under the terms of the note, the Washingtons were to make monthly payments of $1602.41 until June 1, 1986, at which time the balance on the note was to become due. The note also gave the signatories the option to renegotiate at the end of the initial seven-year period, continuing the note for an additional five years.

On February 15, 1983, the Washingtons were indicted for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962. The indictment alleged that the Moraga property was subject to forfeiture under RICO. On March 7, 1983, the Washingtons conveyed the Moraga property to the Clerk of the United States District Court for the Northern District of California by deed of trust with power of sale, to secure payment of their bail bonds.

On October 7,1983, the Sheldens’ trustee filed a notice of default and election to sell the Moraga property. At that time, payments on the note held by the Sheldens were $6264.88 in arrears. The United States attorney was notified that the Moraga property was to be sold at a foreclosure sale to be held in January, 1984, when the three-month redemption period required by California law would have expired.

Ralph Washington was found guilty on 12 counts of the indictment on December 1, 1983. The jury which rendered the verdict declared the Moraga property forfeited under 18 U.S.C. § 1963. On December 9, 1983, the United States filed a notice of lis pendens on the Moraga property, reciting the jury verdict and declaration of forfeiture.

On January 31, 1984, the United States District Court for the Northern District of California entered an “Order Re Forfeiture of Properties and Disposition Thereof Pending Appeal.” The order effectively suspended the Sheldens’ foreclosure rights. Although the order was signed by the district judge and entered by the clerk of the district court, it was for all intents and purposes a stipulation between the United States Attorney and Mr. Washington. Because the order of forfeiture is central to the dispute, it is necessary to set out pertinent portions at length here:

[Pjlaintiff United States of America and defendant Ralph Huey Washington having stipulated to the entry of the following order with respect to the property declared forfeitable, it is hereby ordered as follows:
1. This order applies to the following parcels of real property:
******
(j) 1065 Wickham Drive, Moraga, CA.3 ******
3. Any and all interest of the defendant Ralph Huey Washington in and to the aforesaid real properties is hereby deemed transferred to plaintiff United States of America effective January 20, 1984, although for the convenience of the parties and to put into effect the terms of this order record title shall remain (where applicable) in the name of Ralph Huey Washington____
******
5. (A) Defendant Ralph Huey Washington, or his designated representative, shall be entitled to remain in physical possession of, and to have management and control of[:J
******
(b) 1065 Wickham Drive, Moraga, CA;4
******
(B) Defendant, so long as he is not in custody, shall be entitled to reside in the property known as 1065 Wickham Drive, Moraga, CA;----
******
(D) Defendant Ralph Huey Washington, or Freddie Washington, or such oth[250]*250er person as Ralph Washington may designate ... shall manage the foregoing properties, and all rents obtained therefrom shall be deposited into an account maintained jointly by plaintiff United States of America and defendant Ralph Huey Washington, and the proceeds thereof shall be used for the purpose of maintaining mortgage payments, utilities, repairs, and other such expenses which are ordinarily and customarily those of a landlord of real property. ******
10____ [Pjlaintiff [the United States] shall not be prohibited from recording in the appropriate state or county offices notices of liens as permitted by law.
11. Upon final disposition of [Ralph Huey Washington’s] appeal [from his criminal conviction], the property declared forfeitable shall forthwith be irrevocably vested in plaintiff United States of America, or released to defendant Ralph Huey Washington, as the result of said appeal shall indicate.
12. This court retains continuing jurisdiction over the subject real property to make such further supplementary orders as may be necessary or appropriate to effectuate the intent and purpose of this order and to determine, to the extent permitted by law, the claims, if any, of third parties in and to the aforesaid property.
DATED: 31 JAN 1984

/s/

[Judge] Robert H. Schnacke

SO STIPULATED:

Joseph P. Russoniello

United States Attorney

By: /s/ Robert L. Dondero

Assistant United States Attorney

/s/ Ralph Huey Washington

While the Moraga property was under the control of the government and Mr. Washington, the hill upon which the house was built eroded severely. As a consequence, the market value of the property declined significantly.5

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Cite This Page — Counsel Stack

Bluebook (online)
19 Cl. Ct. 247, 1990 U.S. Claims LEXIS 6, 1990 WL 2397, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shelden-v-united-states-cc-1990.