State ex rel. Thornburg v. Lot & Buildings at 800 Waughtown St., Tax Block 741, Lot 101A

421 S.E.2d 374, 107 N.C. App. 559, 1992 N.C. App. LEXIS 757
CourtCourt of Appeals of North Carolina
DecidedOctober 6, 1992
DocketNo. 9121SC742
StatusPublished
Cited by3 cases

This text of 421 S.E.2d 374 (State ex rel. Thornburg v. Lot & Buildings at 800 Waughtown St., Tax Block 741, Lot 101A) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Thornburg v. Lot & Buildings at 800 Waughtown St., Tax Block 741, Lot 101A, 421 S.E.2d 374, 107 N.C. App. 559, 1992 N.C. App. LEXIS 757 (N.C. Ct. App. 1992).

Opinion

WELLS, Judge.

Defendant submits four assignments of error for our review. Defendant first assigns as error the trial court’s determination that it had subject matter jurisdiction over the case. Defendant’s second and third assignments of error may be consolidated into one argument. Defendant contends that North Carolina’s RICO forfeiture statute should not apply to him because the gambling charges for which he was convicted do not amount to “racketeering activity” or a “pattern of racketeering activity” as defined therein. [562]*562Defendant argues that without any proof of racketeering activity, the State failed to establish a fundamental and indispensable element of its claim for North Carolina RICO forfeiture. Therefore, defendant contends the trial court erred in refusing to grant defendant’s Rule 12(b)(6) motion and in granting partial summary judg- ■ ment for the State. Finally, defendant argues that the final order of forfeiture and disposition violates the Constitutions of the United States and the State of North Carolina because (1) the RICO statute is unconstitutionally vague, (2) its severe provisions are unreasonable and arbitrary, and (3) it imposes the penalty of forfeiture in violation of due process. Because defendant failed to preserve this issue for review, the question of the North Carolina RICO Act’s constitutionality is not properly before this Court.

Defendant contends that the superior court lacked subject matter jurisdiction because the gambling offenses, which allegedly served as predicate acts of racketeering activity subjecting defendant’s property to forfeiture, were misdemeanors within the original jurisdiction of the district court. Under North Carolina law, gambling offenses are general misdemeanors subject to the exclusive original jurisdiction of the district court. See N.C. Gen. Stat. § 7A-272. Defendant, however, has overlooked the crucial distinction between instituting a forfeiture action for violation of the RICO Act itself and prosecuting the underlying crime that is the basis of the violation.

RICO forfeiture is a statutory cause of action, requiring an examination of legislative intent to interpret its enforcement procedure. The RICO statute was enacted in 1986 to remedy the problem of increasing organized crime. While the statute’s primary purpose is to deter unlawful activity, it does not impose criminal penalties to accomplish its goals. Instead, North Carolina RICO is designed to prevent the unjust enrichment of criminal elements by the imposition of civil equitable sanctions requiring the forfeiture of certain assets used or acquired through a pattern of organized unlawful activity. See N.C. Gen. Stat. § 75D-2. The Act specifies that violation of RICO itself “constitutes a civil offense only and is not a crime.” N.C. Gen. Stat. § 75D-4(b).

Generally, RICO prohibits persons from engaging in “a pattern of racketeering activity” and requires forfeiture of any property used in such activity. N.C. Gen. Stat. §§ 75D-4,-5.,The statute sets forth various underlying crimes or so-called predicate acts which [563]*563may constitute racketeering activity. The-State may institute criminal prosecution proceedings against individuals who engage in these predicate acts in violation of criminal law. If the State, however, is seeking recovery of certain assets derived from or used in the course of that unlawful activity, it must bring a separate civil forfeiture action under RICO. N.C. Gen. Stat. § 75D-5(a). Here, the State brought a civil forfeiture action, not a criminal prosecution. Therefore, the question of whether the superior court had original jurisdiction over defendant’s misdemeanor gambling charges is irrelevant.

The question remains whether the trial court had jurisdiction to adjudicate the State’s civil forfeiture claim. Subject matter jurisdiction over civil cases is statutorily conferred on the superior court under N.C. Gen. Stat. § 7A-240. This section vests “original general jurisdiction of all justiciable matters of a civil nature” concurrently in the superior court division and the district court division of the General Court of Justice. Unless jurisdiction is specifically placed elsewhere, both trial courts have subject matter jurisdiction over all “justiciable” civil claims. Harris v. Pembaur, 84 N.C. App. 666, 353 S.E.2d 673 (1987). The civil forfeiture dispute at the trial level was a “justiciable” matter. Therefore, the superior court’s determination that it had subject matter jurisdiction was proper.

Next, defendant contends the trial court erred in finding that the misdemeanor gambling convictions constituted predicate acts of racketeering activity sufficient to subject defendant’s property to forfeiture under the Act. Defendant relies upon N.C. Gen. Stat. § 75D-3(c)(l) which defines “racketeering activity” as “acts which would be chargeable by indictment.” Under North Carolina law, indictments are criminal pleadings necessary to instigate felony charges, not misdemeanor charges. See Article. I, Section 22, Constitution of the State of North Carolina; N.C. Gen. Stat. §§ 15A-627, 7A-271. Defendant reasons that his gambling convictions are not indictable offenses because they are misdemeanors and therefore do not fall under the purview of the RICO forfeiture statute. Section 75D-3(c)(l) does exclude misdemeanors as predicate acts; however, defendant completely ignores the alternative definition of “racketeering activity” found in N.C. Gen. Stat. § 75D-3(c)(2). This section incorporates by reference offenses listed in Title 18 of the United States Code, § 1961(1), as prohibited racketeering activity. Included in this federal definition is the following:

[564]*564(A) any act or threat involving murder, kidnaping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in narcotic, or other dangerous drugs, which is chargeable under State law and punishable by imprisonment for more than one year. . . .

18 U.S.C. § 1961(1) (Emphasis added.)

The trial court found and the record reveals that defendant was convicted of two counts of gambling in houses of public entertainment in violation of N.C. Gen. Stat. § 14-293; two counts of operating or possessing gambling devices in violation of N.C. Gen. Stat. § 14-302; and one count of selling or possessing numbers tickets in violation of N.C. Gen. Stat. § 14-291.1. Each of these gambling offenses is chargeable as a general misdemeanor punishable by up to two years imprisonment, thereby satisfying the federal criteria for racketeering activity under U.S.C. § 1961(1). See N.C. Gen. Stat. § 14-3(a). Therefore, we find that the gambling offenses constitute “racketeering activity” under the alternate definition established in N.C. Gen. Stat. § 75D-3(c)(2).

Having determined that gambling is “racketeering activity” under the North Carolina RICO Act, the question becomes whether there is sufficient evidence to support a forfeiture of defendant’s property. Under the RICO Act:

All property of every kind used or intended for use in the course of, derived from, or realized through a racketeering activity or pattern of racketeering activity is subject to forfeiture to the State.

N.C. Gen. Stat. § 75D-5(a).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Avadim Health, Inc. v. Daybreak Cap. Partners, LLC
2021 NCBC 73 (North Carolina Business Court, 2021)
Friends of Queen v. Hise
735 S.E.2d 229 (Court of Appeals of North Carolina, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
421 S.E.2d 374, 107 N.C. App. 559, 1992 N.C. App. LEXIS 757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-thornburg-v-lot-buildings-at-800-waughtown-st-tax-block-ncctapp-1992.