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UNITED STATES v. ALL ASSETS & EQUIP. OF WEST SIDE

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION


November 23, 1993

UNITED STATES OF AMERICA, Plaintiff,
v.
ALL ASSETS AND EQUIPMENT OF WEST SIDE BUILDING CORPORATION, et al., Defendants. v. CLARA PENNY and WEST SIDE BUILDING CORPORATION, Claimants.

Kocoras

The opinion of the court was delivered by: CHARLES P. KOCORAS

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

 This matter is before the Court on the government's motion for summary judgment of forfeiture pursuant to 21 U.S.C. § 881(a)(4), (6), and (7). For the reasons that follow, we grant the motion.

 BACKGROUND

 This is a drug-related forfeiture action. The plaintiff is the United States Government. The government alleges that the defendant properties were acquired or improved with proceeds from illegal drug activity and/or were used to facilitate felony drug offenses. This Court (Grady, J.) found probable cause to believe that the property was subject to forfeiture and issued an order April 4, 1989 on the government's ex parte motion, allowing the government to seize the defendant property.

 Clara Penny ("Penny") was the only owner to file a verified claim to the defendant property. She filed claims as an individual and as the president of West Side Building Corporation. *fn1" Penny's husband, Jonathan Penny, did not file a claim within the allotted time and therefore, a default judgment of forfeiture of his interests in the defendant assets was entered by this Court on August 15, 1990.

 Penny stated several defenses in her answer to the verified complaint. Penny stated that two parcels of real estate and two vehicles were acquired before the effective date of the forfeiture statute; that three parcels of real estate were not purchased by Penny or West Side Building Corporation but were gifts from Penny's father; and that one vehicle was not purchased by Penny or West Side but was a gift to Penny and her husband. *fn2" Further, she stated that two vehicles were purchased with funds from Penny's credit union.

 Penny responded to interrogatories on July 26, 1990. The government deposed Penny April 7, 1992. At the deposition, Penny asserted her Fifth Amendment privilege against self-incrimination in response to all questions relevant here. Penny states that her reason for doing so was that she was told that she was the subject of a grand jury investigation, that indictments had been returned, and that her testimony could be used against her in a criminal proceeding. Penny's Response, at 5. Penny was not, in fact, indicted, but her husband was. Jonathan Penny was convicted on September 10, 1993 in a jury trial on both counts of a two-count indictment. The indictment charged violations of 21 U.S.C. §§ 841(a)(1) and 846. Jonathan Penny was found guilty of selling, distributing, or dispensing narcotics and conspiracy to do the same.

  The government now seeks summary judgment of forfeiture of Penny's interests in the defendant assets. The government's Local Rule 12(m) Statement cites its Amended Verified Complaint and the affidavit of Lawrence Evans, which was submitted with the Amended Verified Complaint.

 LEGAL STANDARD

 Summary judgment is appropriate if the pleadings, answers to interrogatories, admissions, affidavits, and other materials show that there is "no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Only those disputes over facts that might affect the outcome of the suit under the governing law properly prevent a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). A genuine issue exists if there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id. at 249.

 The party seeking summary judgment has the initial burden of showing that no such issue of material fact exists. When a properly supported motion for summary judgment has been made, the opposing party must then "set forth specific facts showing that there is a genuine issue for trial." Cooper v. Ford Motor Co., 748 F.2d 677 (Fed. Cir. 1984). The opposing party is entitled to the benefit of all favorable inferences that can reasonably be drawn from the underlying facts, but not every conceivable inference. De Valk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir. 1987). It is in consideration of these principles that we turn to the present motion for summary judgment.

 DISCUSSION

 At the outset, we wish to acknowledge the candor displayed in Penny's brief regarding unfavorable precedent. While this integrity should not be cause for comment, unfortunately, we see far too little of it.

 In support of its motion, the government states that the earlier finding of probable cause for forfeiture in this case shifts the burden of proof to Penny to prove by a preponderance of the evidence that the defendant property is not subject to forfeiture. See United States v. Certain Real Property, 943 F.2d 721, 725 (7th Cir. 1991). The government argues that we can infer that Penny is unable to meet this burden from the fact that she invoked the Fifth Amendment during her deposition.

 Penny raises several points in opposition to the government's motion for summary judgment. First, she argues that she is unable to properly respond to the motion because the relevant documents were seized by the government. Next, she urges that the government has not set forth facts establishing a nexus between the defendant properties and activities justifying forfeiture. Therefore, she requests a continuance pursuant to Rule 56(f). Penny also seeks a grant of immunity from prosecution for criminal acts for any testimony she gives regarding the defendant properties. Finally, she argues that the forfeiture of all the defendant properties is disproportionate to any crime and therefore violates the Cruel and Unusual Punishment Clause of the Eighth Amendment.

 Initially, we will consider the Rule 56(f) continuance requested by Penny. Federal Rule of Civil Procedure 56(f) authorizes the District Court to grant a continuance to allow a party against whom a summary judgment motion has been filed to take discovery to obtain information necessary to respond to the motion. To obtain such relief, the party seeking it must set forth in affidavits reasons why it cannot produce affidavits supporting its opposition of the summary judgment motion. Fed. R. Civ. P. 56(f).

 We will not grant relief to Penny under Rule 56(f) because she has not complied with the procedure for obtaining such a continuance. Penny did not file an affidavit explaining why she cannot produce evidence to oppose the motion. Penny states a plausible reason in her memorandum: that the relevant documents are in the possession of the government, and that her counsel must search through 14 boxes of documents to find the relevant ones. However, a memorandum is not an affidavit, and Penny does not indicate why this search process was not even begun yet. Further, we note that this same excuse was tendered last year when Penny did not appear for her scheduled deposition. At that time, we allowed time for those documents to be reviewed. We are not inclined to do so here, where Penny ignores the procedural steps for obtaining such relief.

 Before we can reach the substantive arguments in support of and in opposition to this motion, we must consider another procedural shortcoming by the claimant. The Local Rules of the Northern District of Illinois require the party seeking summary judgment to file a statement of material facts as to which the movant contends there is no genuine issue. Local Rule 12(m). The party opposing summary judgment must respond to the facts set forth in the 12(m) Statement, admitting them or controverting them by specific references to the record. Local Rule 12(n)(1). The party opposing summary judgment must also set forth, with references to the record, any facts that are in dispute and which require the denial of summary judgment. Local Rule 12(n)(2). If the opponent fails to respond as required by Rule 12(n), the facts set forth in the movant's 12(m) Statement are deemed admitted, and summary judgment may be entered for the movant. Here, Penny has not filed a response to the 12(m) Statement; hence, she is deemed to have admitted the facts therein. Summary judgment against her on all claims would be appropriate on these grounds. *fn3" However, we will also briefly consider the merits of the arguments raised in her Response Memorandum. That examination will show that summary judgment is also appropriate on the merits.

 Once the government has met its burden of showing that probable cause exists, the burden of proof shifts to the property owner to show that the property is not subject to forfeiture. U.S. v. Certain Real Property, 943 F.2d 721, 725 (7th Cir. 1991). The standard of persuasion for the owner is a preponderance of the evidence. Id. Here, the Court found probable cause. Equipment of West Side Building Corp., No. 89C2736, Order at 1 (N.D. Ill. Apr. 4, 1989) (Grady, J.). Penny challenged that finding of probable cause through a motion to dismiss the forfeiture complaint. We denied Penny's motion and refused to disturb Judge Grady's probable cause determination. U.S. v. All Assets & Equipment of West Side Building Corp., 1989 U.S. Dist. LEXIS 8501, No. 89 C 2736, Order at 4 (N.D. Ill. July 14, 1989) (Kocoras, J.). Thus, the government's burden being met, we now evaluate Penny's evidence to determine if she has met her burden.

 Penny raised three defenses in her Response Memorandum: lack of knowledge of narcotics activities, acquisition of certain properties before the enactment of the forfeiture statute, and acquisition with legitimate income. The first defense is known as the innocent owner" defense. Section 881(a)(7) states that an owner's interest in real property will not be forfeited if that owner establishes that the illegal conduct occurred without that owner's "knowledge or consent." *fn4" Here, Penny did not submit an affidavit claiming that she did not know of or consent to narcotics activities on the defendant properties, nor did she point out any other evidence in the record to support an innocent owner defense. Although Penny did not direct our attention to anything in the record, we examined her Verified Claim of Ownership, which did not reveal any claim that Penny was an innocent owner. For these reasons, Penny has not met her burden on summary judgment of pointing out specific evidence raising a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); compare U.S. v. Lot 9 Block 2 of Donnybrook Place, 919 F.2d 994 (5th Cir. 1990) (reversing grant of summary judgment because affidavit of owner raised a triable issue regarding innocent owner defense).

 Penny's second defense, that certain properties were acquired before the effective date of the forfeiture statute, is supported by answers to interrogatories, which indicate the year properties were bought. Penny also alleges that certain properties were purchased or improved with legitimate income. However, although the date or manner of acquisition may be a defense to a charge under section 881(a)(6) that the property was acquired with proceeds of a drug offense, the date or manner of acquisition is irrelevant to a charge under section 881(a)(7) that the properties were being used to facilitate the commission of a felony drug offense. As the government here seeks forfeiture pursuant to 881(a)(7) of the real property listed below, *fn5" Penny's second and third defenses are unavailing.

 As to the personal property sought under section 881(a)(4), we note that Penny does not introduce any evidence or point to the existence of any documents that might establish that the personal property was not used to facilitate illegal drug activities. As above, she does not provide an affidavit supporting an innocent owner defense. Accordingly, because she has not met her burden to defeat summary judgment, we grant summary judgment as to the personal property sought under section 881(a)(4) as well.

 However, as to the property sought exclusively under 881(a)(6) as proceeds of illegal drug activities, the acquisition of the property with legitimate income is a relevant defense, even though it is not relevant to the "facilitation" claims under sections 881(a)(4) and (7). Unlike her lack of response to the other claims, here Penny has submitted answers to interrogatories that could form a skeletal basis for a relevant defense that the properties sought were acquired with legitimate income. We use the word "skeletal" because those answers do not actually reflect the source of funds used to purchase the items. However, we will not consider those answers, because Penny refused to answer the government's deposition questions concerning the same topics. Penny claimed Fifth Amendment protection against self-incrimination when she was deposed as to her involvement in drug trafficking, the use of defendant properties to facilitate drug trafficking, and the use of illegal drug proceeds to acquire, maintain, and improve the defendant property. While a claimant is entitled to invoke the Fifth Amendment, doing so does not relieve her of her burden of proof. U.S. v. 15824 West 143rd Street, Lockport, Illinois, 736 F. Supp. 882, 886 (N.D. Ill. 1990).

 It is established that once a witness testifies as to certain facts, she may not invoke the Fifth Amendment to shield that testimony from scrutiny. U.S. v. Parcels of Land, 903 F.2d 36, 43 (1st Cir. 1990). "It has long been held that a defendant who takes the stand in his own behalf cannot then claim the privilege against cross-examination on matters reasonably related to the subject matter of his direct examination." McGautha v. California, 402 U.S. 183, 215, 28 L. Ed. 2d 711, 91 S. Ct. 1454 (1971); see also Brown v. United States, 356 U.S. 148, 155-56, 2 L. Ed. 2d 589, 78 S. Ct. 622 (1958). This rule is not limited to trial testimony. Parcels of Land, 903 F.2d at 43. This rule has properly been applied to strike affidavits submitted in response to a summary judgment motion. See id. Applying this rule to the instant case, we find it appropriate to strike the interrogatory answers upon which Penny relies, because she refused to answer the government's deposition questions regarding the same subjects. This leaves Penny's response to the summary judgment without any support in the record. Accordingly, we grant summary judgment with regard to the property sought to be forfeited under 881(a)(6) as well.

 Penny also seeks a grant of immunity from prosecution for criminal acts for any testimony she gives regarding the defendant properties. She claims that she is caught in a dilemma between incriminating herself and forfeiting substantial property holdings. This Scylla and Charybdis situation has been addressed in several other cases. See, e.g., U.S. v. Certain Real Property, 986 F.2d 990 (6th Cir. (1993); U.S. v. One 1985 Plymouth Colt Vista, 644 F. Supp. 1546 (N.D. Ill. 1986) and cases cited therein. In One 1985 Plymouth Colt Vista, Judge Shadur observed that granting immunity to a claimant in a civil forfeiture proceeding is "plainly unacceptable," because that would have the effect of allowing a claimant to convert the privilege against self-incrimination "from [a] shield . . . into a sword." 644 F. Supp. at 1553 (quoting U.S. v. Rylander, 460 U.S. 752, 75 L. Ed. 2d 521, 103 S. Ct. 1548 (1983)).

 Moreover, because Congress has delegated the authority to grant use immunity to the executive branch of government, U.S. v. Taylor, 728 F.2d 930, 934 (7th Cir. 1984) (citing 18 U.S.C. § 6003), district courts are without power to direct the prosecution to grant use immunity to secure testimony that the defense deems relevant. U.S. v. Smith, 542 F.2d 711, 715 (7th Cir. 1976). Where, as here, the United States has not exercised its discretion to grant immunity, the district court cannot order such an action at the defendant's request.

 Finally, we observe that the Sixth Circuit in Certain Real Property affirmed the granting of summary judgment, because the claimant did not develop his "Fifth Amendment Dilemma" argument: he did not explain how the filing of affidavits would prejudice him in a parallel criminal proceeding; he did not indicate what affidavits or depositions would have disclosed; and he did not explain why he could not use the testimony of other persons to substantiate his defense. Certain Real Property, 986 F.2d at 996. Likewise here, Penny has not explained how defending against the forfeiture would prejudice her Fifth Amendment rights. Her assertions on pages 6 and 7 of her Response Memorandum purport to do so, but fail to present any substantive reasons. Thus, for all of the above reasons, we find that immunity is not available to Penny.

 As an alternative to immunity, Penny asks us to craft some other method to accommodate her Fifth Amendment interests. The First Circuit in U.S. v. $ 250,000 in Currency, 808 F.2d 895 (1st Cir. 1987), stated that such an undertaking is appropriate. However, as just discussed, Penny does not explain how she could provide information to defeat the forfeiture action or how doing so would impinge upon her Fifth Amendment rights. Secondly, she does not suggest what accommodation might be reasonable. This Court in One Colt Vista rejected a request for accommodation where the claimant did not suggest reasonable means. 644 F. Supp. at 1553. Penny did suggest sealing the records of her testimony. However, that is tantamount to granting immunity.

 Lastly, Penny raises a defense that the forfeiture sought by the government is out of' proportion to the crimes committed. Penny properly cites Austin v. U.S., 125 L. Ed. 2d 488, 113 S. Ct. 2801 (1993) for the proposition that civil forfeitures are subject to Eighth Amendment limitations on excessive fines. First, we observe that Austin does not require a proportionality analysis for property acquired as proceeds of illegal drug transactions. If an item is a proceed of an illegal drug transaction, its forfeiture is exclusively remedial, as it cannot be considered punishment to take away something the claimant never legitimately owned. See Caplin & Drysdale, Chtd. v. U.S., 491 U.S. 617, 109 S. Ct. 2646, 2652-53, 105 L. Ed. 2d 528, 109 S. Ct. 2667 (1989). A proportionality analysis is not required unless the sanction at issue is at least in part punitive. Austin, 113 S. Ct. at 2806. Austin does apply to property used to facilitate illegal drug activities. However, if we are to perform a proportionality review, we must know the crime committed and balance that against the nature and value of the property sought to be forfeited. As Penny has not provided information as to the former, we cannot perform the proportionality review she seeks.

 The summary approval of forfeiture may seem harsh, but we find it is appropriate where, as here, the claimant has not done anything to protect her interests. As discussed above, Penny did not follow the clear rules for seeking a Rule 56(f) continuance, did not support her Response Memorandum with a Rule 12(n) Statement, and did not provide an affidavit or other evidence as required by Rule 56(e) to raise any genuine issue of fact or support her innocent ownership defense. When a party who is represented by counsel fails to take any of these steps, we are not inclined to grant the relief those avenues could have offered.

 CONCLUSION

 For the reasons stated above, we grant summary judgment to the government as to property sought to be forfeited pursuant to sections 881(a)(4), (6) and (7) of Title 21. We order forfeiture of all of the defendant property seized by the government in this action.

 Charles P. Kocoras

 United States District Judge

 Dated: November 23, 1993


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