United States v. 2004 Ferrari 360 Modeno

902 F.Supp.2d 944

UNITED STATES of America, Plaintiffs,

v.2004 FERRARI 360 MODENO, Defendants.

Civil Action No. 4:10–4474.

United States District Court,

S.D. Texas,

Houston Division.

Nov. 6, 2012.

Albert T. Ratliff, U.S. Attorneys Office, Houston, TX, for Plaintiffs.

ORDER

VANESSA D. GILMORE, District Judge.

Pending before the Court is the claimant Josette Claude's (“Claimant” or “Claude”) Claim for Seized Property (Instrument No. 9), Plaintiff the United States of America's (“the Government” or “Plaintiff”) Motion to Strike Claim for Seized Property (Instrument No. 13), and Evens Claude's Claim for Seized Property (Instrument No. 5). After a careful review of the pleadings; the motion, responses, and replies; the record; and the applicable law, the Court DENIES Claimant's Claim for Seized Property (Instrument No. 9), GRANTS Plaintiff's Motion to Strike (Instrument No. 13), and DENIES Evens Claude's Claim for Seized Property.

I.

A.

This is a forfeiture action wherein the Government attempted to seize a 2004 Ferrari 360 Modeno with vehicle identification number ZFFYU51A240137976 (the “Defendant in rem ” or “2004 Ferrari”) that was used in connection with a conspiracy to counterfeit money. The claimant, Josette Claude, challenges the forfeiture on the grounds that she has an ownership interest in the 2004 Ferrari and that her ownership interest would be extinguished if the forfeiture were allowed. The Government, however, argues that Claimant does not have standing to challenge the forfeiture of the 2004 Ferrari because she is not the actual owner of the 2004 Ferrari nor does she have any interest in the 2004 Ferrari sufficient to confer standing. Claimant counters that she has standing to challenge the forfeiture because the statute that authorizes the forfeiture provides innocent owners of property subject to forfeiture, like herself, standing to challenge the forfeiture. Additionally, Claimant's son, Mr. Evens Claude claims that the forfeiture is improper because, at the time the 2004 Ferrari was initially seized, he had not been convicted of any crime.

B.

On June 18, 2010, Steve Montrose and Evens Claude were arrested for possession of 107 counterfeit United States $100 bills in the Galleria shopping mall in Houston, Texas. Both individuals were subsequently charged by a federal grand jury in the Southern District of Texas with conspiracy to utter counterfeit obligations and securities (count one) and uttering counterfeit obligations and securities (counts two and three). See United States v. Claude, Cause No. 4:10–cr–00481. Mr. Claude told Secret Service Agents that he flew to Houston on June 18, 2010, from Philadelphia, PA. (Instrument No. 1, at 1).

When he arrived in Houston, he purchased the 2004 Ferrari. Claimant alleges that all of the funds used to purchase the vehicle were obtained from the sale of a house owned by Josette Claude in Pennsylvania. (Instrument No. 16, at 1). According to Claimant, before Evens Claude left Pennsylvania en route to Houston, she and Mr. Claude agreed that: (1) Evens Claude would purchase the 2004 Ferrari on her behalf and (2) after the purchase, Claimant would retain ownership of the vehicle. (Instrument No. 16, at 1–2).

After buying this car, Mr. Claude drove the car to the Galleria shopping mall, where he was later arrested. At all times he was in possession of the counterfeit $100 bills that were found on him. After Mr. Claude and Mr. Montrose were arrested at the Galleria shopping mall, law enforcement officers found the 2004 Ferrari 360 parked in the shopping mall parking garage. (Instrument No. 1, at 1, 3).

C.

On November 10, 2010, Plaintiff filed suit, in the United States District Court for the Southern District of Texas, seeking forfeiture against the 2004 Ferrari. In the Complaint, the Government claims that Defendant in rem is subject to forfeiture, pursuant to 49 U.S.C. § 80303. Under section 80303, a person may not transport contraband in a vehicle. See49 U.S.C. § 80303. According to the Government, Mr. Claude transported contraband, namely counterfeit money, in the 2004 Ferrari. (Instrument No. 1, at 1–2). Plaintiff seeks a judgment of forfeiture and costs and all other relief to which it may be entitled. See (Instrument No. 1, at 5).

On December 13, 2010, Claude filed an Answer wherein she challenged the attempted forfeiture on the basis that the attempted seizure was generally unlawful. See (Instrument No. 4, 1–2). On December 21, 2010, Claimant filed a Claim for Seized Property wherein she elaborated on the allegations of impropriety articulated in her Answer. See (Instrument No. 9). In the Claim for Seized Property, Claimant contends that she has an ownership interest in the property and is a co-owner, along with Mr. Evens Claude, of the property because she was the co-owner of the proceeds used to purchase the property. (Instrument No. 9, at 1–2).

On December 13, 2010, Mr. Claude also filed a Claim for Seized Property wherein he claims that the Government's forfeiture is premature and untimely given that at the time Mr. Claude filed the Claim he had not been convicted of any violation of law. See (Instrument No. 5). On October 4, 2011, Mr. Claude pleaded guilty to conspiracy to utter counterfeit obligations and securities (count one of the indictment) and uttering counterfeit obligations and securities (count three of the indictment). See (E.D. Pa., 2: 11–cr–90–JD, Instrument No. 36). On January 31, 2012, Mr. Claude was sentenced to a term of imprisonment of eighteen months; a three-year term of supervised release; a special assessment of $200.00; and a fine of $5,000. (USDC E.D. Pa., 2: 11–cr–90–JD, Instrument No. 47).

On June 14, 2012, the Government moved to strike Ms. Claude's Answer (Instrument No. 4) and Claim (Instrument No. 9) on the basis that Claude does not have standing to challenge the forfeiture action. See (Instrument No. 13, at 1). According to the Government, only innocent owners may contest the seizure of property used in connection with illicit activity. (Instrument No. 13, at 4). The Government argues that Claimant is not an innocent owner because she is not the owner of the 2004 Ferrari. According to the Government, Claimant is nothing more than an unsecured general creditor and therefore cannot qualify as an innocent owner. Accordingly, the Government contends that Claude lacks standing to challenge the seizure. See (Instrument No. 13, at 4–5).

On July 25, 2012, Claimant filed a Response to the Government's Motion to Strike. (Instrument No. 16). In the Response, Claimant argues that Mr. Claude negotiated the purchase of the car for Claimant. According to Claimant, both she and Mr. Claude always intended that Claimant would retain ownership of the car. See (Instrument No. 16, at 2, 4). As such, Claimant contends that she has standing to challenge the seizure of the car because she is the actual owner. Id. She further contends that she has standing to challenge the seizure because she is an innocent owner.

Claimant argues that she is an innocent owner because she was not involved with the illegal activities giving rise to the initial seizure of the car and she is the owner. First, she claims that she is the owner of the car because the vehicle was purchased as part of a joint-venture between her and Mr. Claude. According to claimant, she and Mr. Claude had an implied agreement to share profits of this purchase (Instrument No. 16, at 6–7). Second, she claims that even if she is merely an unsecured creditor, as the Government contends, she attained that status because she financed Mr. Claude's purchase of the car. According to Claimant, if an unsecured creditor possesses an interest in the specific property subject to forfeiture then she becomes a third-party claimant. Claimant contends that third-party claimants have an ownership interest in the property sufficient to confer standing (Instrument No. 16, at 3–4). Third, she claims she is an owner because she is a bailee with a colorable legitimate interest in the vehicle seized and therefore has an ownership interest in the 2004 Ferrari. According to Claimant, she and Mr. Claude had an implied bailment contract. Under that implied contract, Claimant was the bailee because she delivered funds to Mr. Claude to purchase the 2004 Ferrari and Mr. Claude was the bailor because he accepted the delivery of those funds. Thus, claimant contends that she is a bailee with an ownership interest in the property sufficient to confer standing, See (Instrument No. 16, at 4–7).

On August 18, 2012, the Government filed a Reply Claimant's Response to the Government's Motion to Strike. (InstrumentNo. 17). In the Reply, the Government argues that Claimant is not an innocent owner because she is not an owner and therefore she lacks standing to challenge the forfeiture. First, the Government argues that Claimant is not owner because she is not the actual owner of the property. According to the Government, claimant predicates her claim of actual ownership on the existence of a joint venture between her and Mr. Claude to purchase the car. One of the essential elements of a joint venture, however, is a “joint proprietary interest and right of mutual control.” The Government contends that claimant cannot establish this element and therefore she and Mr. Claude did not have a legally valid joint venture. Accordingly, the Government argues that she is not the actual owner of the seized 2004 Ferrari. See (Instrument No. 6–8). Second, the Government argues that Claimant is an unsecured general creditor and she is not a third-party claimant because the rule of law upon which Claimant relies is only applicable to criminal forfeiture statutes. This case, however, involves a civil forfeiture statute thus the Government contends that the rule is inapplicable to the facts at hand. See (Instrument No. 17, at 1–4). Third, the Government argues that Claimant is not an innocent owner because she is not a...