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United States v. U.S. Currency

decided: December 21, 1988.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
U.S. CURRENCY, IN THE AMOUNT OF $103,387.27, DEFENDANT, V. WALTER HARRY STAMP, TONYA STAMP AND LATONYA STAMP, A MINOR BY HER PARENTS AND NEXT FRIEND, WALTER HARRY STAMP AND TONYA STAMP, INTERVENORS/CLAIMANTS COUNTER PLAINTIFFS-APPELLANTS, V. UNITED STATES MARSHALL SERVICE, COUNTER DEFENDANT-APPELLEE



Appeal from United States District Court for the Southern District of Indiana, Indianapolis Division. No. 86-C-1450 -- William E. Steckler, Judge.

Posner, Flaum, and Manion, Circuit Judges.

Author: Manion

MANION, Circuit Judge.

This appeal grows out of a forfeiture action against $103,387.27*fn1 in United States Currency. The district court granted the government's motion to strike the claimants' "Answer, Defenses and Counterclaim" for failing to file a properly verified claim. The court also declined to extend the time for filing a verified claim which would have enabled claimants to amend their claim. We reverse the district court's judgment insofar as it denied the claimants an extention of time to file an amended claim.

I.

The Drug Enforcement Agency ("DEA") seized $103,387.27 in United States Currency from Harry and Tonya Stamp's residence in Anderson, Indiana, pursuant to a seizure warrant issued under 21 U.S.C.A. § 881(a)(6)*fn2 (West 1981) on April 14, 1986. The seizure followed a search of the Stamps' residence conducted pursuant to a warrant. The DEA seized the currency, alleging it had been furnished or was intended to be furnished in exchange for a controlled substance, that it constituted the proceeds of such an exchange, and that it had been used to facilitate violations of Subchapter I of Title 21. 21 U.S.C.A. §§ 801-904 best 1982). The United States Marshal took custody of the currency by order of the district court.

On December 15, 1986, the U.S. Attorney filed a complaint for forfeiture in the United States District Court for the Southern District of Indiana. A copy of the complaint was served on claimants' attorney, Larry G. Whitney,*fn3 on the same day. The district court issued orders for publication of notice and for warrant of arrest of property pursuant to Rules C(3) and (4) of the Supplemental Rules of Civil Procedure for Certain Admiralty and Maritime Claims*fn4 on January 8 and 15, 1987, respectively. On January 19, Whitney filed a "Claim of Owner" which stated:

CLAIM OF OWNER

And now W. Harry Stamp, Tonya Stamp, and an [sic] minor child of the Stamps, by counsel, Larry G. Whitney, authorized agent for this matter, owners of the U.S. CURRENCY in the amount of $103,387.27, etc., attached by the marshal, under process of this Court at the instance of United States Attorney for the Southern District of Indiana on January 15, 1987, and the persons above named, W. Harry Stamp, Tonya Stamp, and an [sic] minor child of the Stamps, declare they are the true and bona fide owners of the currency and negotiable instruments, and that no other person is the owner thereof.

WHEREFORE, owners pray to defend accordingly.

The claim was signed by Attorney Whitney as "Attorney and Agent for W. Harry Stamp, Tonya Stamp and minor child of Stamps."

On March 16, the district court permitted Harry Stamp, Tonya Stamp and LaTonya Stamp, the minor child of Harry and Tonya, to intervene. After two extensions of time were granted, the Stamps ("claimants") filed an answer to the complaint for forfeiture. The government filed a motion to strike the answer on May 27,*fn5 alleging that claimants had failed to file a proper claim of ownership.

The district court granted the government's motion to strike, reasoning that claimants had failed to file a properly verified claim. The court also refused to extend the time for filing a claim, entered judgment for the United States and ordered the currency paid into the United States Treasury. The district court denied the Stamps' subsequent motion to set aside the order.

On appeal, the Stamps argue that their ownership claim was properly verified, but, if it was not, that the claim was in substantial compliance with the rules so that it should be permitted to stand as filed. Finally, the Stamps contend that the district court should have granted ...


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