USA v. Portions of $3,300,333.02 06-CV-329-JD 01/17/08 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
United States of America
v. Civil No. 06-CV-329-JD Opinion No. 2008 DNH 010
Portions of $3.300.333.02 More or Less In Proceeds from the Sale of The Lakes Region Greyhound Park
O R D E R
Denise Hart, a claimant to a portion of proceeds from a sale
of property seized by the United States, brings a motion to
dismiss the claims of Kenneth and Lisa Hart. Kenneth and Lisa
Hart have filed an objection.
Background
On September 6, 2006, the United States filed a verified
complaint, pursuant to 18 U.S.C. § 981(a)(1)(A), the Civil Asset
Forfeiture Reform Act (CAFRA), for forfeiture in rem of
$3,300,333.02, in proceeds from the sale of The Lakes Region
Greyhound Park ("proceeds"), property seized because of illegal
acts committed by Richard Hart. On December 26, 2006, the
government served the complaint on various parties. As a result,
pursuant to Rule C(6) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Claims, several parties
filed claims related to this property.1
On January 17, 2007, Denise Hart, Richard's wife, filed a
claim for 16.666% of the distribution proceeds from the sale of
the seized property. On January 18, 2007, Joan Hart, Richard's
mother, filed a claim for 33.33% of the proceeds and on the same
day, Allan Hart, Richard's uncle and Joan Hart's business
partner, filed a claim for 10% of the proceeds. On January 19,
2007, Vincent DiCesare, a business partner of Allan Hart and Joan
Hart, filed a claim for 40% of the proceeds. On January 26,
2007, Kenneth Hart, Richard's brother, and Lisa Hart, Kenneth's
wife, filed a claim for 29.834% of the proceeds. Kenneth and
Lisa Hart claim the 29.834% interest as assignees of Joan Hart
and beneficiaries of a constructive trust held by Joan Hart.
Kenneth and Lisa Hart's claim competes directly with Joan Hart's
1Because civil forfeiture is an in rem proceeding, the property subject to forfeiture is the defendant and the plaintiff is the United States. United States v. One-Sixth Share of James J. Bulger. 326 F.3d 36, 40 (1st Cir. 2003). "Defenses against the forfeiture can be brought only by third parties, who must intervene" by filing a claim to the property. Id. The Supplemental Rules, effective December 2006, govern this type of action. See 18 U.S.C. § 981(b)(2). The Supplemental Rules provide that the general rules of the Federal Rules of Civil Procedure apply to actions in rem except to the extent that they are inconsistent with the Supplemental Rules. Supplemental Rule A.
2 claim to the 33.33% of the proceeds but does not overlap with
Denise Hart's claim to 16.666% of the proceeds.
Standard of Review
In considering a motion to dismiss, the court "take[s] as
true all well-pleaded allegations and draw[s] all reasonable
inferences in the plaintiff's favor."2 Ezra Charitable Trust v.
Tyco Int'1, Ltd., 466 F.3d 1, 5-6 (1st Cir. 2006). The claimant,
however, "must allege 'a plausible entitlement to relief.1"
Rodriquez-Ortiz v. Margo Caribe. Inc.. 490 F.3d 92, 95 (1st Cir.
2007) (quoting Bell Atl. Corp. v. Twomblv, 127 S. Ct 1955, 1967
(2007)). The court need not accept a claimant's assertion that a
factual allegation satisfies an element of a claim, however, "nor
must a court infer from the assertion of a legal conclusion that
factual allegations could be made that would justify drawing such
2Third party claimants "are akin to intervenor-defendants whose claims constitute defenses to the forfeiture actions." United States v. 74.05 Acres of Land. 428 F. Supp. 2d 57, 60 n.2 (D.Conn. 2006). Therefore, Federal Rule of Civil Procedure 12(f), which provides that a court "may order stricken from any pleading any insufficient defense," may be the proper basis to challenge a defense to a forfeiture. See id.; see also United States v. $598.826. 2007 WL 2713367, at *5 (E.D.N.Y. September 13, 2007). "The standard of review for a 12(f) motion is identical to that of a 12(b)(6) motion," and for this reason, whichever standard is used, the court will reach the same result. Id.
3 a conclusion." See Cordero-Hernandez v. Hernandez-Ballesteros,
449 F .3d 240, 244 n.3 (1st Cir. 2006).
Discussion
On June 19, 2007, claimant Denise Hart filed a motion to
dismiss the claims of Kenneth and Lisa Hart, based on Federal
Rule of Civil Procedure 12(b)(6), for failure to state a claim.
In her motion, Denise Hart also argues that Kenneth and Lisa Hart
do not have standing to proceed in this case and that res
judicata bars their claims. Joan Hart, Alan Hart, and Vincent
DiCesare assented to Denise Hart's motion to dismiss, but they
did not join. The United States did not object to the motion and
did not join.3 Kenneth and Lisa Hart object to Denise Hart's
motion to dismiss on the merits, and they also argue that Denise
Hart does not have standing to dismiss their claim because
Denise's claim is unaffected by and does not overlap with their
claim.4
3Pursuant to Supplemental Rule G(8)(c)(i)(B), "[a]t any time before trial, the government may move to strike a claim or answer because the claimant lacks standing." The Supplemental Rules do not contemplate a claimant's motion to dismiss another claim to the seized property.
4Kenneth and Lisa also argue that Denise Hart's motion is brought in bad faith, and for this reason, in their objection, they have requested sanctions pursuant to Federal Rule of Civil Procedure 11. "A motion for sanctions must be made separately
4 "Standing is a threshold consideration in all cases,
including civil forfeiture cases." United States v. One-Sixth
Share of James J. Bulger. 326 F.3d 36, 40 (1st Cir. 2003).
Standing in such cases has constitutional, prudential, and
statutory aspects. See United States v. Union Bank for Sav. &
Inv. (Jordan), 487 F.3d 8, 22 (1st Cir. 2007). As to
constitutional standing, "[i]t is well established that a party
seeking to challenge a forfeiture of property must first
demonstrate an ownership or possessory interest in the seized
property in order to have standing to contest the forfeiture."
United States v. 116 Emerson St..
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USA v. Portions of $3,300,333.02 06-CV-329-JD 01/17/08 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
United States of America
v. Civil No. 06-CV-329-JD Opinion No. 2008 DNH 010
Portions of $3.300.333.02 More or Less In Proceeds from the Sale of The Lakes Region Greyhound Park
O R D E R
Denise Hart, a claimant to a portion of proceeds from a sale
of property seized by the United States, brings a motion to
dismiss the claims of Kenneth and Lisa Hart. Kenneth and Lisa
Hart have filed an objection.
Background
On September 6, 2006, the United States filed a verified
complaint, pursuant to 18 U.S.C. § 981(a)(1)(A), the Civil Asset
Forfeiture Reform Act (CAFRA), for forfeiture in rem of
$3,300,333.02, in proceeds from the sale of The Lakes Region
Greyhound Park ("proceeds"), property seized because of illegal
acts committed by Richard Hart. On December 26, 2006, the
government served the complaint on various parties. As a result,
pursuant to Rule C(6) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Claims, several parties
filed claims related to this property.1
On January 17, 2007, Denise Hart, Richard's wife, filed a
claim for 16.666% of the distribution proceeds from the sale of
the seized property. On January 18, 2007, Joan Hart, Richard's
mother, filed a claim for 33.33% of the proceeds and on the same
day, Allan Hart, Richard's uncle and Joan Hart's business
partner, filed a claim for 10% of the proceeds. On January 19,
2007, Vincent DiCesare, a business partner of Allan Hart and Joan
Hart, filed a claim for 40% of the proceeds. On January 26,
2007, Kenneth Hart, Richard's brother, and Lisa Hart, Kenneth's
wife, filed a claim for 29.834% of the proceeds. Kenneth and
Lisa Hart claim the 29.834% interest as assignees of Joan Hart
and beneficiaries of a constructive trust held by Joan Hart.
Kenneth and Lisa Hart's claim competes directly with Joan Hart's
1Because civil forfeiture is an in rem proceeding, the property subject to forfeiture is the defendant and the plaintiff is the United States. United States v. One-Sixth Share of James J. Bulger. 326 F.3d 36, 40 (1st Cir. 2003). "Defenses against the forfeiture can be brought only by third parties, who must intervene" by filing a claim to the property. Id. The Supplemental Rules, effective December 2006, govern this type of action. See 18 U.S.C. § 981(b)(2). The Supplemental Rules provide that the general rules of the Federal Rules of Civil Procedure apply to actions in rem except to the extent that they are inconsistent with the Supplemental Rules. Supplemental Rule A.
2 claim to the 33.33% of the proceeds but does not overlap with
Denise Hart's claim to 16.666% of the proceeds.
Standard of Review
In considering a motion to dismiss, the court "take[s] as
true all well-pleaded allegations and draw[s] all reasonable
inferences in the plaintiff's favor."2 Ezra Charitable Trust v.
Tyco Int'1, Ltd., 466 F.3d 1, 5-6 (1st Cir. 2006). The claimant,
however, "must allege 'a plausible entitlement to relief.1"
Rodriquez-Ortiz v. Margo Caribe. Inc.. 490 F.3d 92, 95 (1st Cir.
2007) (quoting Bell Atl. Corp. v. Twomblv, 127 S. Ct 1955, 1967
(2007)). The court need not accept a claimant's assertion that a
factual allegation satisfies an element of a claim, however, "nor
must a court infer from the assertion of a legal conclusion that
factual allegations could be made that would justify drawing such
2Third party claimants "are akin to intervenor-defendants whose claims constitute defenses to the forfeiture actions." United States v. 74.05 Acres of Land. 428 F. Supp. 2d 57, 60 n.2 (D.Conn. 2006). Therefore, Federal Rule of Civil Procedure 12(f), which provides that a court "may order stricken from any pleading any insufficient defense," may be the proper basis to challenge a defense to a forfeiture. See id.; see also United States v. $598.826. 2007 WL 2713367, at *5 (E.D.N.Y. September 13, 2007). "The standard of review for a 12(f) motion is identical to that of a 12(b)(6) motion," and for this reason, whichever standard is used, the court will reach the same result. Id.
3 a conclusion." See Cordero-Hernandez v. Hernandez-Ballesteros,
449 F .3d 240, 244 n.3 (1st Cir. 2006).
Discussion
On June 19, 2007, claimant Denise Hart filed a motion to
dismiss the claims of Kenneth and Lisa Hart, based on Federal
Rule of Civil Procedure 12(b)(6), for failure to state a claim.
In her motion, Denise Hart also argues that Kenneth and Lisa Hart
do not have standing to proceed in this case and that res
judicata bars their claims. Joan Hart, Alan Hart, and Vincent
DiCesare assented to Denise Hart's motion to dismiss, but they
did not join. The United States did not object to the motion and
did not join.3 Kenneth and Lisa Hart object to Denise Hart's
motion to dismiss on the merits, and they also argue that Denise
Hart does not have standing to dismiss their claim because
Denise's claim is unaffected by and does not overlap with their
claim.4
3Pursuant to Supplemental Rule G(8)(c)(i)(B), "[a]t any time before trial, the government may move to strike a claim or answer because the claimant lacks standing." The Supplemental Rules do not contemplate a claimant's motion to dismiss another claim to the seized property.
4Kenneth and Lisa also argue that Denise Hart's motion is brought in bad faith, and for this reason, in their objection, they have requested sanctions pursuant to Federal Rule of Civil Procedure 11. "A motion for sanctions must be made separately
4 "Standing is a threshold consideration in all cases,
including civil forfeiture cases." United States v. One-Sixth
Share of James J. Bulger. 326 F.3d 36, 40 (1st Cir. 2003).
Standing in such cases has constitutional, prudential, and
statutory aspects. See United States v. Union Bank for Sav. &
Inv. (Jordan), 487 F.3d 8, 22 (1st Cir. 2007). As to
constitutional standing, "[i]t is well established that a party
seeking to challenge a forfeiture of property must first
demonstrate an ownership or possessory interest in the seized
property in order to have standing to contest the forfeiture."
United States v. 116 Emerson St.. 942 F.2d 74, 78 (1st Cir.
1991). Constitutional standing is "very forgiving," as claimants
need only show that they have a "colorable" ownership interest in
the property. One-Sixth Share. 326 F.3d at 41.
In addition to these Article III prerequisites, the
"prudential standing doctrine encompasses . . . /the general
prohibition on a litigant's raising another person's legal
rights.'" Union Bank. 487 F.3d at 22 (quoting Allen v. Wright.
from any other motion and must describe the specific conduct that allegedly violates Rule 11(b)." Fed. R. Civ. P. 11(c)(2). In this case, Kenneth and Lisa Hart have not filed a separate motion. Therefore, the request for sanctions in their opposition to the motion to dismiss is not appropriate. Pioneer Capital Corp. v. Environamics Corp.. 2003 WL 345349, at *1, n.l (D.Me. February 14, 2003).
5 468 U.S. 737, 751 (1984)). Accordingly, in the context of civil
forfeiture, "prudential concerns limit [a claimant's] ability to
. . . challenge . . . the forfeiture of funds of which it is not
a statutory owner." Id.; see also 1 D.B. Smith, Prosecution and
Defense of Forfeiture Cases §9.04(2)(a)(2004)("[i]f a claimant
avers a right to only a portion of the arrested property, his or
her claim must be limited to that interest. The claimant may not
defend against allegations in the complaint that do not affect
the claimed interest."); compare United States v. One Parcel of
Real Prop. & Improvements. Located at 1100 Peeler Ave., 200 7 WL
4289692, at *4 (M.D.Ga. December 3, 2007) (where claimant
attempted to assert an affirmative defense on behalf of another
claimant in the proceeding, court would not address the defense
because claimant could not "raise this defense on behalf of
another party"); with United States v. 392 Lexington Parkway S..
386 F. Supp. 2d 1062, 1071-1072 (D. Minn. 2005)(where two
mortgagees to seized property had adverse interests because of a
dispute as to which mortgage was recorded first, each had
standing to file cross motions for summary judgment against the
other).
Here, Denise Hart has filed a claim for 16.666% of the
proceeds from the sale of the seized property, and she may only
defend against or challenge those claims to the seized property
6 that affect her claimed interest. In her motion to dismiss,
however, Denise Hart does not argue that her 16.666% claim is
affected by Kenneth's and Lisa's claim to 29.834% of the
proceeds. Instead, Denise Hart makes several arguments as to why
Kenneth and Lisa Hart should not be able to assert a claim that
is adverse to Joan Hart's interest, contending that Joan Hart has
a claim to the "full extent of her percentage ownership." Denise
Hart Mot. to Dis. at 6. Prudential concerns limit Denise Hart's
ability to challenge Kenneth's and Lisa's claim by raising
another personfs legal rights. Therefore, Denise Hart has no
standing to challenge Kenneth's and Lisa Hart's claim and the
court will not consider the merits of Denise Hart's motion to
dismiss.
Conclusion
For the foregoing reasons, Denise Hart's motion to dismiss
(document no. 39) is denied.
SO ORDERED.
& JVt(jglyCu?.jk. v*Jjos*eph A. DiClerico, Jr. United States District Judge
January 17, 2008
cc: Peter A. Brown, Esquire Joseph Caulfield, Esquire Ronald E. Cook, Esquire Gerry D fAmbrosio, Esquire Richard J. Joyal, Esquire Marc D. Kornitsky, Esquire Michael a. Kostiew, Esquire Todd Harold Prevett, Esquire Robert J. Rabuck, Esquire R. James Steiner, Esquire