United States v. Currency $267,961.07, Maggie Crumpton, Guardian of Lizzie Johnson Lovy Johnson Lizzie Johnson, Claimants-Appellants

916 F.2d 1104, 1990 U.S. App. LEXIS 18365, 1990 WL 156536
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 22, 1990
Docket89-2027
StatusPublished
Cited by38 cases

This text of 916 F.2d 1104 (United States v. Currency $267,961.07, Maggie Crumpton, Guardian of Lizzie Johnson Lovy Johnson Lizzie Johnson, Claimants-Appellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Currency $267,961.07, Maggie Crumpton, Guardian of Lizzie Johnson Lovy Johnson Lizzie Johnson, Claimants-Appellants, 916 F.2d 1104, 1990 U.S. App. LEXIS 18365, 1990 WL 156536 (6th Cir. 1990).

Opinions

NATHANIEL R. JONES, Circuit Judge.

Lovy James Johnson and Lizzie Johnson appeal the district court’s entry of a default decree and motion to strike in this in rem action against the Johnsons’ marital property. We remand for the following reasons.

I.

On January 14, 1987, the federal Drug Enforcement Administration (DEA) and local law enforcement agents in Saginaw, Michigan executed a search warrant on the home of Lovy James Johnson and his wife, Lizzie Johnson. Police seized from that household twenty-three firearms, $267,-961.07 in United States currency and various drug paraphernalia. Lovy Johnson was arrested around the time of the search and subsequently pled guilty to conspiracy to deliver heroin. As part of a Fed.R. Crim.P. 11 plea bargain agreement, Johnson agreed to forfeit the currency and firearms seized from his residence.

Pursuant to 21 U.S.C. § 881(a)(7), the government commenced an in rem forfei[1106]*1106ture action against the Johnsons’ home, 1229 and 1233 Howard Street, Saginaw, Michigan, by filing a verified complaint on April 14, 1988 in the United States District Court for the Eastern District of Michigan.1 Thereafter, an attorney for the Johnsons filed claims contesting the forfeiture action on behalf of Lovy Johnson and Maggie Crumpton, who purported to be the legal guardian of Lizzie Johnson. After filing an answer to the government's complaint, Maggie Crumpton moved for dismissal of the government’s forfeiture action, asserting that the government had failed to plead facts with sufficient particularity to allow the claimants to respond, as required by Supplemental Admiralty and Maritime Claims Rule E(2)(a). On September 19, 1988, the district court granted Crumpton’s motion to dismiss but allowed the government thirty days in which to file an amended complaint. J.App. at 49.

The government filed its amended complaint, and the claimants responded with a motion for partial summary judgment asserting that “no drugs were confiscated from said marital home made up of 1229 and 1233 Howard” and that “there is no evidence submitted by the U.S. Attorney that claimant [Mrs. Johnson] was involved or even aware of defendant’s [Mr. Johnson’s] [sic] activities.” Id. at 94.2 The district court denied the motion, holding that the government had established probable cause to support a forfeiture and that Lizzie Johnson’s innocent ownership defense lacked support in the record. Id. at 106.

On April 21, 1989, the government deposed Maggie Crumpton. During her deposition, Crumpton revealed that she was not the legal guardian of either Lizzie or Lovy Johnson. On May 26, 1989, the government moved to strike the claim and answer of Maggie Crumpton and Lovy Johnson and for entry of a default or summary judgment. In its motion, the government asserted that Crumpton lacked an interest in the litigation because she was not the legal guardian of Lizzie Johnson and that neither Lizzie nor Lovy Johnson had filed a properly verified claim and answer as required by Supplemental Admiralty and Maritime Claims Rule C(6). At an August 23, 1989 hearing on the government’s motion, counsel for Crumpton and Lovy Johnson requested that the claimants be granted leave to amend their claims. On June 5, 1989, the district court had entered a scheduling order setting July 31, 1989 as the deadline for claimants to respond to the government’s motion to strike and for default. The claimants failed to file a response by this time and had not done so by the date of the hearing. For these reasons, the district court denied counsel’s oral motion to amend. Because Maggie Crumpton possessed no interest in the litigation, and because neither Lovy nor Lizzie Johnson had filed a verified claim, the district court granted the government’s motion to strike and for default. Id. at 140. This appeal followed.

II.

A.

We review the district court’s decision to strike the claim of Maggie Crumpton and enter a default judgment against the John-sons for abuse of discretion. See United States v. Beechcraft Queen Airplane, 789 [1107]*1107F.2d 627, 629-30 (8th Cir.1986). The district court dismissed the claim of Maggie Crumpton because she had no legal interest in the Johnson’s marital home at Howard Street and thus lacked standing to contest its forfeiture. Although the record establishes that Crumpton possessed a durable power of attorney authorizing her “[t]o assert, defend, arbitrate, compromise, acquire, dispose of or otherwise deal with any claim relating to [Lizzie Johnson’s property],” see id. at 147, the government argues that since this power of attorney was granted after the filing of the claim on behalf of Lizzie Johnson, Crumpton lacks standing in the instant litigation.

The Supplemental Admiralty and Maritime Claims rules govern judicial forfeiture proceedings. United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1545 (11th Cir.1987). Rule C(6) provides:

The claimant of property that is the subject of an action in rem shall file a claim within 10 days after process has been executed, or within such additional time as may be allowed by the court, and shall serve an answer within 20 days after the filing of the claim. The claim shall be verified on oath or solemn affirmation, and shall state the interest in the property by virtue of which the claimant demands its restitution and the right to defend the action. If the claim is made on behalf of the person entitled to possession by an agent, bailee, or attorney, it shall state that the agent, bailee, or attorney is duly authorized to make the claim.

A claimant must possess Article III and statutory standing pursuant to Rule C(6) in order to contest the government’s forfeiture action. 816 F.2d at 1543; United States v. 526 Licum Dr., Dayton, Montgomery County, 866 F.2d 213, 216-17 (6th Cir.1988); United States v. One Gray Samsonite Suitcase, Model 200, 637 F.Supp. 1162, 1165 (E.D.Mich.1986). With respect to Article III standing, a claimant must demonstrate a legally cognizable interest in the defendant property. A property interest less than ownership, such as a possessory interest, is sufficient to create standing. $38,000.00 in U.S. Currency, 816 F.2d at 1544. Crumpton seeks to use the durable power of attorney to assert Lizzie Johnson’s innocent ownership defense with respect to the Howard Street marital property.

Lizzie Johnson granted Maggie Crumpton a durable power of attorney on July 25, 1988, approximately three months after the government filed its original compalint. Although the government’s original complaint was dismissed, its amended complaint, filed October 24, 1988, related back to the date of the original filing. Fed.R.Civ.P. 15(c). Thus, at the time Crumpton filed her claim on behalf of Lizzie Johnson, she lacked an interest in the marital property at Howard Street and had no Article III standing.

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916 F.2d 1104, 1990 U.S. App. LEXIS 18365, 1990 WL 156536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-currency-26796107-maggie-crumpton-guardian-of-lizzie-ca6-1990.