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United States v. Marx

decided: April 6, 1988.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
DENNIS P. MARX A/K/A DENNIS MARTIN, BIG "D," DENNIS BURTELL, DEFENDANT. APPEAL OF: MARY ANN MARX



Appeal from the United States District Court for the Eastern District of Wisconsin, No. 85 CR 110, Thomas J. Curran, Judge.

Cummings, Cudahy and Manion, Circuit Judges.

Author: Cummings

CUMMINGS, Circuit Judge.

Petitioner Mary Ann Marx seeks to recover her asserted interest in property forfeited by her husband Dennis Marx to the federal government. Dennis pled guilty to various counts of an indictment arising out of a drug conspiracy, including a count of engaging in a continuing criminal enterprise in violation of 21 U.S.C. § 848, was sentenced to a prison term of twenty-five years and, under 21 U.S.C. § 853(a), forfeited certain property, including sixty-seven shares of Accurate Brass and Aluminum Foundry, Inc. ("Accurate"), to the United States. In addition to providing for the criminal forfeiture of certain property, Section 853 also provides that any person, other than the defendant, asserting a legal interest in the property that has been ordered forfeited may petition the court for a hearing to adjudicate the validity of her alleged interest in the property. 21 U.S.C. § 853(n)(2). Pursuant to this Section, Mary Ann petitioned the court and asserted her interests in the Accurate shares under three separate legal theories: (1) marital property, (2) a constructive trust, and (3) a resulting trust. Following a two-day hearing, the district court found that Mary Ann did not participate in or have knowledge of her husband's illegal activities, but it nevertheless concluded that she had not established her interests by a preponderance of the evidence, see 21 U.S.C. § 853(n)(6)(A), and denied the petition. We reverse and remand.

I

The forfeited property in dispute is sixty-seven shares of stock in Accurate that represent 100 per cent ownership of the corporation and at the time of the forfeiture were titled in the name of Dennis Marx. Accurate was incorporated in 1964 and initially issued fifty shares, twenty-five titled in the name of Dennis Marx and twenty-five in the name of Mary Ann's father, Steven Andracek. Although the Marx shares were titled in Dennis' name alone, both Dennis and Mary Ann testified*fn1 that they regarded the business as belonging to both of them. As Dennis stated, "she had half of the headaches and half the problems, so I assumed if there was any benefit, she had half the benefit." Asked why, if they believed the shares belonged to both of them, the shares were titled in only Dennis' name, Mary Ann and Dennis each testified that it was a convention of the times, that in 1963 lawyers drew up legal documents in the man's name.

Each of the original fifty shares cost $100. The $2,500 consideration for the shares titled in Dennis' name was paid out of the proceeds of the sale of pieces of heavy equipment owned by M & M Excavating. M & M Excavating was a small business run between 1959 and 1963 by the Marxes and a war "buddy" of Dennis. During that period Mary Ann worked both as a bookkeeper for M & M and as a registered nurse. She worked for M & M without compensation and poured part of her nursing earnings into the struggling M & M. These earnings from Mary Ann's nursing contributed to the purchase price of the M & M equipment later sold to acquire the twenty-five shares in Accurate.

In 1967, Accurate issued ten additional shares, again titled to Dennis alone. The consideration for these ten shares came from the proceeds of the sale of a home that was titled jointly in both Dennis' and Mary Ann's names. Mortgage payments on the home had been made in part with Mary Ann's outside earnings.

In 1967 or 1968, Mary Ann's father gave his wife, Mary Andracek, his twenty-five shares of Accurate stock. In 1970, Mary Andracek entered into a written agreement with Dennis to sell him the twenty-five shares at the original price of $100 per share. Under the terms of the agreement, title to the twenty-five shares transferred to Dennis immediately but was subject to return if he failed to make payments of $200 per month on the $2,500 purchase price. Dennis ultimately paid only $500, the price of only five of the shares, again selling equipment of M & M Excavating to finance the purchase.

Although Dennis still owed her $2,000 for the twenty remaining shares, Mrs. Andracek told him that he need not pay the remainder because she was giving the twenty shares to Mary Ann. She testified that she told Dennis to hold the shares for Mary Ann, and that he stated that although the stock remained in his name, he understood the shares were a gift to Mary Ann from her mother.

The preceding narrative accounts for only sixty of the sixty-seven outstanding shares of Accurate. The record does not reflect and neither the parties nor the district court mention how and with what assets Dennis acquired the last seven shares.

II

Mary Ann contends that she has a presumptive one-half interest in all property acquired during her marriage to Dennis, regardless of whether she or her husband holds title. As a result of this presumption she claims a legal interest superior to that of the government in thirty-three and one-half of the sixty-seven shares forfeited. Under the applicable Wisconsin law, the district court correctly rejected this claim.

Wisconsin's new Marital Property Act, Wis. Stat. § 766 (1986), expresses "the intent of the [Wisconsin] legislature that marital property is a form of community property," Wis. Stat. § 766.001(2), and states that all property is presumed to be marital property in which each spouse has a present undivided one-half interest. Wis. Stat. § 766.31(2) and (3). Mary Ann, however, cannot rely on this statute to support her contentions. The federal criminal forfeiture statute requires the court to determine Mary Ann's interest "at the time of the commission of the acts which gave rise to the forfeiture of the property." 21 U.S.C. § 853(n)(6)(A). All of Dennis Marx's drug activities occurred before the effective date of the ...


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