United States v. Pierre Clifton Marshall

338 F.3d 990, 2003 Cal. Daily Op. Serv. 6479, 2003 Daily Journal DAR 8144, 2003 U.S. App. LEXIS 14668, 2003 WL 21697965
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 23, 2003
Docket01-56061
StatusPublished
Cited by21 cases

This text of 338 F.3d 990 (United States v. Pierre Clifton Marshall) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth 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. Pierre Clifton Marshall, 338 F.3d 990, 2003 Cal. Daily Op. Serv. 6479, 2003 Daily Journal DAR 8144, 2003 U.S. App. LEXIS 14668, 2003 WL 21697965 (9th Cir. 2003).

Opinion

OPINION

GRABER, Circuit Judge.

The defendant in this case was entitled to the return of a parcel of forfeited real property but, because the government had sold the property, the monetary equivalent had to be restored to him instead. We are called on to decide what date should be used for the substitute valuation. We agree with the district court that the appropriate yardstick is the property’s value when the government sold it and that, because on that date the debt attributable to the property exceeded the defendant’s equity in it, the government owes no damages.

FACTS AND PROCEDURAL HISTORY

Defendant Pierre Clifton Marshall and his wife bought a house on Arminta Street, Canoga Park, California, in 1990, with title being taken in the names of Marshall’s wife and his mother. The purchase price *992 was $287,000, of which $247,000 was financed.

Marshall was arrested in 1992 for distribution of heroin. At the time of the arrest, police searched Marshall’s house on Arminta Street and found growing marijuana plants. At the same time, three automobiles belonging to Marshall were seized.

Immediately following the arrest, the two banks holding deeds of trust on the Arminta property stopped receiving payments on their secured loans. The government entered into an agreement with the two lenders. The government agreed to pay the entire unpaid principal on the loans, plus interest, upon a final judgment of forfeiture.

The government then commenced a civil forfeiture action against the Arminta property and obtained a default judgment of forfeiture. As it had agreed to do, the government paid $242,829.54 to the bank holding the first trust deed, plus $53,004.04 to the holder of the second trust deed. Thus, the government paid a total of $295,833.63 to clear the title on the Armin-ta property.

In 1995, the government sold the Armin-ta property for $155,000. Shortly thereafter, Marshall filed a Rule 41(e) motion, 1 requesting the return of (1) the Arminta property, (2) another parcel of real estate known as the Whitestag property, and (3) the three vehicles.

In 1999, we decided United States v. Marolf, 173 F.3d 1213 (9th Cir.1999). Ma-rolf held that, when the government fails to give notice of forfeiture proceedings, and the time for commencing such proceedings has expired, the claimant is entitled to recover the seized property or, if the property has been sold, a sum equal to the value of the property wrongfully forfeited. Id. at 1220. In response to Marshall’s Rule 41(e) motion, the government conceded before the district court- that it had violated Marshall’s due process rights under Marolf and that Marshall was entitled to any equity he held in the Arminta property.

The district court held a hearing. The court denied Marshall’s motion with respect to the vehicles on the ground that the vehicles were seized by a local law enforcement authority and that the federal *993 government did not have possession or control over them. The court rejected Marshall’s claim as to the Whitestag property, because the government had not seized it.

As to the Arminta property, the district court agreed that Marshall had a valid Rule 41(e) claim and that the property should be returned. Because that was impossible, Marshall was entitled to the value of what was taken from him improperly. The district court rejected Marshall’s argument that the valuation date should be the date of seizure; using that date would be tantamount to compensating him for the depreciation of the property due to a declining market, which is not permitted under Rule 41(e). 2 The district court also rejected the government’s argument that the date of valuation should be the date of forfeiture. The court reasoned that the inquiry is focused on the return of property, not the original deprivation.

The district court concluded that the proper date of valuation is the date on which the Arminta property was sold. Next, the district court noted that the government had sold the property for $155,000, which it found was prima facie evidence of the property’s fair market value. The debt attributable to the Arminta property on the date of sale was $247,861.37, which far exceeded Marshall’s equity. Consequently, the court held that Marshall is not entitled to any compensation from the government.

Marshall timely appealed from the resulting final judgment.

STANDARDS OF REVIEW

We review de novo a district court’s denial of a motion for return of property. Marolf, 173 F.3d at 1216. The district court’s findings of fact are reviewed for clear error. Id.

DISCUSSION

A. Marshall is not entitled to damages from the government’s 'wrongful forfeiture of the Arminta property.

Marshall makes two main arguments relating to the Arminta property: (1) that the district court erred in determining the proper date of valuation; and (2) that the “just compensation” due an individual whose property is taken for public use entitles him to be “put in as good a position pecuniarily as if his property had not been taken.”

1. Date of Valuation

The district court’s factual findings that the total debt attributable to the Arminta property was $247,861.37 at the time of sale, that the sale price of $155,000 represented the extant fair market value, and that Marshall had only “negative equity” (i.e., he owed more on the property than it was worth) are supported in the record. In the face of those facts, we are left to consider the district court’s conclusion that Marshall is not entitled to damages. We agree with the court’s reasoning.

Once the government was no longer in a position to return the Arminta property itself, it was obliged to give Marshall the value of the property seized. Because Marshall owed more than the equity he held, and because the government paid Marshall’s debt attributable to the seized property, the government did not deprive him of any value. In fact, Marshall received a financial benefit (albeit unsought *994 and understandably unappreciated) by being relieved of the two mortgages.

Marshall’s argument that the date of seizure is the proper date on which to value the property is unpersuasive. Marshall retained title to his seized property until the moment of the forfeiture. After forfeiture, the vesting of title in the government can “relate back” to the commission of the act giving rise to the forfeiture. The Supreme Court has stated this general rule:

If the Government wins a judgment of forfeiture under the common-law rule— which applied to common-law forfeitures and to forfeitures under statutes without specific relation back provisions — the vesting of its title in the property relates back to the moment when the property became forfeitable.

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338 F.3d 990, 2003 Cal. Daily Op. Serv. 6479, 2003 Daily Journal DAR 8144, 2003 U.S. App. LEXIS 14668, 2003 WL 21697965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-pierre-clifton-marshall-ca9-2003.