State of New Jersey v. Two Thousand Two Hundred Ninety-Three Dollars ($2,293) in United States Currency

• Court: New Jersey Superior Court Appellate Division
• Decided: July 17, 2014
• Docket: A-4929-11T3
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4929-11T3

STATE OF NEW JERSEY,

Plaintiff-Respondent, APPROVED FOR PUBLICATION v. July 17, 2014 TWO THOUSAND TWO HUNDRED APPELLATE DIVISION NINETY-THREE DOLLARS ($2,293) IN UNITED STATES CURRENCY,

Defendant. _______________________________________________________

Argued March 4, 2014 – Decided April 24, 2014

Before Judges Messano, Hayden and Rothstadt.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Union County, Docket No. DC-6978-09.

Rachel E. King argued the cause for appellant James Baker (Appellate Litigation Clinic Earle Mack School of Law at Drexel University, attorneys; Amy Montemarano, on the brief).

Thomas Haluszczak, Jr., Special Deputy Attorney General/Acting Assistant Prosecutor, argued the cause for respondent State of New Jersey (Grace H. Park, Acting Union County Prosecutor, attorney; Mr. Haluszczak, of counsel and on the brief).

The opinion of the court was delivered by

MESSANO, P.J.A.D. James Baker appeals from the Law Division's order of April

18, 2012, that denied his motion for the return of certain

property, specifically $2293 (the monies) seized by the State of

New Jersey (the State). We set forth the procedural history.

On April 16, 2009, the State filed a complaint in the Law

Division, Special Civil Part, seeking forfeiture of the monies.

See N.J.S.A. 2C:64-3(a). The complaint alleged that the monies,

along with eighty-five glassine envelopes of suspected heroin

and other drug paraphernalia, were seized on January 22, 2009,

during the execution of a search warrant by the Elizabeth Police

Department. The complaint demanded a jury trial. Attached to

the complaint was a lab report and supporting documentation

demonstrating the substance seized was heroin.

Baker filed an answer pro se. He alleged that the State

actually seized "approximately $2,800," which was money "he

receive[d] from side work with his friend[s]," and he further

denied that drugs were ever sold from his house or car, the

locations for which the search warrant had been issued. Baker

attached two documents that allegedly supported his claim to the

monies. A trial was scheduled for June 8, but the State sought

and was granted a stay of the proceedings pending resolution of

the criminal charges. See N.J.S.A. 2C:64-3(f).

2 A-4929-11T3 Baker was subsequently indicted and charged with third-

degree possession of heroin, N.J.S.A. 2C:35-10a(1); third-degree

possession of heroin with intent to distribute, N.J.S.A. 2C:35-

5b(3); and third-degree possession heroin within 500 feet of a

public housing facility, N.J.S.A. 2C:35-7.1. A jury found Baker

guilty of all charges, and on January 6, 2012, the judge

sentenced him to a five-year term of incarceration with a

thirty-month parole disqualifier.

The record does not disclose if the stay of trial was ever

vacated. Nevertheless, on April 18, 2012, Baker filed a pro se

motion seeking the return of the monies; he requested oral

argument. The certification supporting the motion essentially

reasserted the claims in the answer Baker originally filed in

2009.

The State opposed the motion, relying upon N.J.S.A. 2C:64-

3(j).1 The prosecutor asserted that the monies were "on

[Baker's] person [when] he was arrested and charged with the

crimes for which he has been duly found guilty, monies which

1 That section provides: "Evidence of a conviction of a criminal offense in which seized property was either used or provided an integral part of the State's proofs in the prosecution shall be considered in the forfeiture proceeding as creating a rebuttable presumption that the property was utilized in furtherance of an unlawful activity." N.J.S.A. 2C:64-3(j).

3 A-4929-11T3 were found in close proximity to significant quantities of

heroin." The assistant prosecutor also stated:

[T]he State respectfully . . . asserts . . . that it has no burden to proceed with at this time. The State is entitled to a rebuttable presumption that . . . [the] monies are tainted by criminal activity. It is up to . . . Baker to come forward and affirmatively prove that such funds are legitimate. His alleged bank statements only show random deposits of cash from no verifiable legitimate source of funds and/or employment for the year 2009.

The clerk of the court mailed notices to both parties on

May 2, 2012, informing them that the hearing on Baker's motion

was scheduled for May 16, 2012. The notice to Baker was sent to

"N-S-P P.O. BOX 2300, NEWARK, NJ 07114," the address Baker used

when he filed his motion. On May 7, the prosecutor wrote to the

assistant civil division manager, advising of defendant's

incarceration. He asked "whether you will still proceed or

adjourn the matter upon . . . Baker's release from prison." The

record does not reveal whether the court responded.

On the same day, the notice to Baker was returned to the

court with the markings, "RETURN TO SENDER[;] INSUFFICIENT

ADDRESS[;] UNABLE TO FORWARD." There is no indication in the

record that the court took any further action.

On May 16, in appellant's absence, the prosecutor appeared

before the judge, and the following colloquy occurred:

4 A-4929-11T3 COURT: Unfortunately, [Baker is] not here and the reason he's not here is because he is in jail.

. . . .

So we have to deal without him.

PROSECUTOR: Well, yes, Judge, unfortunately.

COURT: [Baker] gives me no proof . . . that the $[2293] is other [sic] than anything to do with his private life.

PROSECUTOR: Well, he hasn't provided any proof, Judge.

COURT: There's no proof at all.

And there's a presumption that if you're arrested and you've got money on you, that that money comes from a drug deal, I would imagine.

PROSECUTOR: [Baker] failed his burden of proof and I stand on the evidence admitted in the criminal case. And, accordingly, would ask [y]our [h]onor to dismiss his motion.

COURT: That's what I’m going to do.

The motion is denied.

For the reasons that you have stated and I have stated.

5 A-4929-11T3 The prosecutor then marked three exhibits, which included an

expert witness report from Detective Martin Lynch, Lynch's

curriculum vitae and a currency seizure report. The judge

examined the documents, entered them into evidence, and

concluded they showed "clearly that the drugs and the money were

related to each other." The judge entered the order under

review.2

Baker's essential argument is that he was denied due

process because he failed to receive any, much less adequate,

notice of the motion hearing. He also contends that the judge

erred in applying the presumption contained in N.J.S.A. 2C:64-

3(j), and that a remand is necessary for a trial on the State's

complaint. In large part, we agree that Baker was denied the

opportunity to contest the essential allegations contained in

2 The order is clearly interlocutory because it only denied Baker's motion and did not enter final judgment in favor of the State. See R. 2:2-3(a)(1) (providing for appeal as of right only "from final judgments of the Superior Court trial divisions"). At oral argument before us, both parties agreed that, although final judgment was not entered, they viewed the order denying Baker's motions as dispositive of all claims in the case, and the State acknowledged that it was proceeding on the assumption that the order effectively granted it a judgment of forfeiture regarding the monies. Under these unique circumstances, we exercise our discretion and consider Baker's notice of appeal as a timely-filed motion for leave to appeal, which we grant nunc pro tunc. See Pressler & Verniero, Current N.J. Court Rules, comment on R. 2:2-4 (2014).

6 A-4929-11T3 the complaint. Therefore, we reverse and remand the matter for

trial.

We digress briefly to explain the statutory scheme that

permits the State to seek forfeiture of the monies. A

forfeiture action is brought not against the owner of a res, but

instead against the res itself. State v. Seven Thousand

Dollars, 136 N.J. 223, 232-33 (1994). However, our courts have

recognized that certain constitutional protections attach to the

owner. See id. at 239 ("[T]he legal fiction of in rem

proceedings against the property cannot obscure the fact that

forfeiture really sanctions the owner of the property."). The

Forfeiture Statute, N.J.S.A. 2C:64-1 to -9, must be strictly

construed against the State "in a manner as favorable to the

person whose property is to be seized as is consistent with the

fair principles of interpretation." Seven Thousand Dollars,

supra, 136 N.J. at 238 (citations omitted). The Court has

recognized "the criminal character of forfeiture proceedings

despite its adoption of the civil burden of proof, and has

impressed on civil forfeiture proceedings certain protections

normally associated with criminal trials." Id. at 239

(citations omitted); see also State v. One 1990 Honda Accord,

154 N.J. 373, 393 (1998) (holding that the right to a jury trial

applies to forfeiture cases).

7 A-4929-11T3 "In New Jersey, as elsewhere, [t]he essential components of

due process are notice and an opportunity to be heard." First

Resolution Inv. Corp. v. Seker, 171 N.J. 502, 513-14 (2002)

(alteration in original) (internal quotation marks and citation

omitted). We have held "[d]ue process requires that deprivation

of property by state action be preceded by notice and an

opportunity to be heard." Twp. of Jefferson v. Block 447A, Lot

10, 228 N.J. Super. 1, 4 (App. Div. 1988) (citation omitted).

In other settings involving the deprivation of property rights,

the United States Supreme Court has held "the government's

knowledge that notice pursuant to the normal procedure was

ineffective trigger[s] an obligation on the government's part to

take additional steps to effect notice." Jones v. Flowers, 547

U.S. 220, 230, 126 S. Ct. 1708, 1716, 164 L. Ed. 2d 415, 428

(2006); see also Twp. of Brick v. Block 48-7, Lots 34, 35, 36,

202 N.J. Super. 246, 254 (App. Div. 1985) (remanding to

determine whether, based in part upon the return of mailed

notice, government officials had actual knowledge that notice of

impending foreclosure suit would likely not be delivered).

Our research has not revealed, nor have the parties cited,

any New Jersey case that specifically deals with the issue of

inadequate notice and its effect thereupon forfeiture

proceedings arising from a criminal prosecution. However, other

8 A-4929-11T3 jurisdictions have considered the issue directly, some in

circumstances where, as here, the government knew that the

notice provided was actually not received. In United States v.

One Toshiba Color Television, 213 F.3d 147, 149-50 (3d Cir.

2000), the court set aside a forfeiture judgment, finding that

mailed notice to the inmate was inadequate absent demonstration

that the procedures at the facility were "reasonably calculated

to deliver the notice to the intended recipient." In another

federal forfeiture case, Rodriguez v. Drug Enforcement Admin.,

219 Fed. Appx. 22 (1st Cir. 2007), the court held that "if the

government knew or had reason to know that the notice would not

reach the appellant then notice was inadequate." Id. at 23

(citing Flowers, supra, 547 U.S. at 230, 126 S. Ct. at 1716, 164

L. Ed. 2d at 428); see also Volpe v. United States, 543 F. Supp.

2d 113, 119-20 (D.Mass. 2008) (setting aside forfeiture because

the written notice of seizure was returned with the marking

"addressee unknown," and government failed to make reasonable

efforts to ascertain the claimant's current address); State v.

Twenty-Eight Thousand Six Hundred Eighteen Dollars, 212 P.3d

502, 506 (Okla. Civ. App. 2009) ("In a civil forfeiture

proceeding, when certified mail is returned unclaimed, a

reasonable effort must be made to determine if another address

9 A-4929-11T3 for the claimant may be found before the prosecuting agency may

conclude that the claimant's address is 'unknown.'").

The State argues that Baker's presence at the motion was

not mandatory, because he had only a qualified right to be

present at any trial on the forfeiture complaint. We do not

necessarily disagree.

However, Rule 6:3-3(c)(1) provides that "[n]o oral argument

of a motion shall be permitted unless specifically demanded by a

party or directed by the court." In this case, Baker

specifically sought an opportunity to orally argue the motion.

In the Special Civil Part, "[o]ral argument is required to be

granted as of right on timely request, the date and time to be

set by the court, which will then advise the parties." Pressler

& Verniero, Current N.J. Court Rules, comment on R. 6:3-3

(2014).

More importantly, as noted, the State and the judge

apparently viewed the motion hearing as the equivalent of a

trial on the merits of the State's complaint. In this regard,

the court was required at a minimum to provide adequate notice

of the proceeding and accord Baker, who had filed an answer to

the complaint, an opportunity to appear and present a defense.

In Beneficial of New Jersey v. Bullock, 293 N.J. Super.

109, 110 (App. Div. 1996), we considered an inmate's challenge

10 A-4929-11T3 to a default judgment entered against him while incarcerated.

On the trial date, the defendant failed to appear, and he

asserted that the default judgment was improperly entered

because he was unable to secure transportation from the prison.

Ibid. We held that "if [an] inmate asserts the right to defend,

or a meritorious defense, the trial court must determine how to

proceed after considering the totality of circumstances and

balancing the equities." Id. at 112. Those considerations

include

the position of the parties with respect to the needs for a speedy disposition, the . . . efforts of the parties to secure defendant's presence, including the defendant's ability and plaintiff's willingness to pay, the nature and complexity of the action and the expected length of incarceration, 'whether the prisoner's claims are substantial;' 'whether a determination of the matter can reasonably be delayed until the prisoner is released;' 'whether the prisoner can and will offer admissible, noncumulative testimony which cannot be offered effectively by deposition, telephone or otherwise;' 'whether the prisoner's presence is important in judging his demeanor and credibility compared with that of other witnesses;' 'whether the trial is to the court or to a jury' and 'the prisoner's probability of success on the merits.'

[Id. a 112-13 (citation omitted); see also United Jersey Bank v. Siegmeister, 163 N.J. 392, (2000) (where the Court remanded for consideration utilizing the factors cited in Bullock).]

11 A-4929-11T3 Here, it is undisputed that Baker intended to contest the

merits of the State's complaint. He filed an answer setting

forth his defense, attached exhibits that he claimed

demonstrated the monies were not the proceeds of illegal

activity and affirmatively moved for the return of the monies.

Additionally, there is a regulatory scheme in place that

governs the costs of transporting an inmate to court for

appearance in certain "civil action[s]." N.J.A.C. 10A:3-9.13.

When the inmate "is a defendant and the plaintiff is a

governmental entity," those costs are borne by the Department of

Corrections. N.J.A.C. 10A:3-9.13(a)(3). While Baker was not

technically a "defendant" in this litigation, for the reasons

cited, he was effectively the party in interest defending

against the State's forfeiture case and entitled to certain due

process safeguards. Thus, the regulations anticipated and

authorized the judge to have ordered Baker's presence for the

ultimate hearing on the merits of the State's forfeiture

complaint.

Therefore, to the extent the court and the State viewed the

disposition of the motion as the equivalent of final judgment on

the forfeiture complaint, we reverse the order under review and

remand the matter to the Law Division for trial on the State's

12 A-4929-11T3 complaint. Baker shall be provided with notice of trial and the

court shall order his production.3

Baker also argues that the judge misapplied the presumption

contained in N.J.S.A. 2C:64-3(j). We address that point to

provide guidance in the event there are future proceedings.

Under the Forfeiture Act, property may be categorized as

either prima facie contraband or derivative contraband. Seven

Thousand Dollars, supra, 136 N.J. at 233. Prima facie

contraband includes items such as "controlled dangerous

substances; firearms unlawfully possessed, carried, acquired or

used; illegally-possessed gambling devices; untaxed cigarettes;

and untaxed special fuel." Ibid. (citing N.J.S.A. 2C:64-1a(1)).

Derivative contraband, on the other hand, is itself innocent in

nature but subject to forfeiture because it either has been used

or is intended to be used in furtherance of an unlawful activity

or represents proceeds of illegal activities. N.J.S.A. 2C:64-

1(a)(2)-(4).

3 We hasten to add that it is unclear from the record what might have happened had Baker never made the motion and the complaint remained subject to the stay previously entered. We note that the prosecutor specifically inquired whether the court intended to adjourn the motion until Baker was released. We do not, therefore, foreclose consideration of whether the forfeiture complaint should remain subject to the stay pending Baker's completion of his sentence.

13 A-4929-11T3 N.J.S.A. 2C:64-3 governs forfeiture actions involving

derivative contraband. To forfeit derivative contraband, the

State must bring a civil action within ninety days of its

seizure. N.J.S.A. 2C:64-3(a). The State must then prove by a

preponderance of the evidence that there is a "proximate and

substantial" causal connection between the property and an

indictable offense. Seven Thousand Dollars, supra, 136 N.J. at

234-35. N.J.S.A. 2C:64-3(j) provides the State with an

evidentiary presumption if two prerequisites are satisfied: the

State must demonstrate (1) evidence of a conviction; and (2)

that the seized property "was either used or provided an

integral part of the State's proofs in the prosecution."

Undoubtedly, the thrust of the prosecutor's argument at the

motion hearing was that the State had proven these two

prerequisites. Based upon the record before us, we conclude

that the State demonstrated Baker had been convicted, since it

attached a copy of the judgment of conviction to its opposition

to Baker's motion. Whether the State satisfied the second

prerequisite is unclear. Lynch's report was based upon his

examination of the prosecutor's file. He concluded Baker

possessed the CDS "with the intent to distribute" based on five

factors, including $2000 "seized in denominations . . . commonly

seen from street level drug proceeds." The judge never

14 A-4929-11T3 determined whether this was sufficient to establish that the

monies were "used [in] or provided an integral part of the

State's proofs in the prosecution." N.J.S.A. 2C:64-3(j).

Instead, when he considered the issue, the judge simply

stated that the presumption applied because, "if you're arrested

and you've got money on you, . . . that money comes from a drug

deal . . . ." (Emphasis added). That was a misstatement of the

law.

At trial, the State is required to prove the prerequisites

that permit the presumption to be found in the first instance.

Moreover, like any other presumption, it may be rebutted by

other evidence adduced from whatever source, be it proof adduced

by the State or by Baker himself.

Reversed and remanded for further proceedings consistent

with this opinion.

15 A-4929-11T3