United States v. Kneeland ( 1996 )


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  • USCA1 Opinion








    March 29, 1996
    [NOT FOR PUBLICATION]

    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT

    ____________________


    No. 95-1923
    No. 95-2016

    UNITED STATES OF AMERICA,
    Plaintiff, Appellee,

    v.

    ALL FUNDS, MONIES, SECURITIES, MUTUAL FUND SHARES AND STOCKS
    HELD IN FIDELITY INVESTMENTS, ET AL.,
    Defendant, Appellee.
    __________

    THOMAS E. KNEELAND, JR.,
    Defendant, Appellant.
    ____________________

    APPEALS FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF MASSACHUSETTS

    [Hon. William G. Young, U.S. District Judge] ___________________
    ____________________

    Before

    Torruella, Chief Judge, ___________
    Stahl and Lynch, Circuit Judges. ______________
    ____________________

    Thomas E. Kneeland, Jr. on brief pro se. _______________________
    Donald K. Stern, United States Attorney, and Patrick M. Hamilton, _______________ ___________________
    Assistant United States Attorney, on brief for appellee, United States
    of America.

    ____________________


    ____________________



















    Per Curiam. These consolidated appeals have their ___________

    origin in a civil forfeiture action which was dismissed

    without prejudice, on the government's motion, pursuant to

    Fed. R. Civ. P. 41(a)(2). Claimant Thomas Kneeland

    challenges the dismissal; the denial of various pre-dismissal

    motions, including his requests for an adversarial hearing or

    entry of judgment in his favor; and the denial of various

    post-dismissal motions, including a renewed motion for

    summary judgment, a motion for return of property, a motion

    to disqualify the district judge, and a motion for judgment

    on the pleadings.1 For the following reasons, we affirm. 1

    Kneeland allegedly operated an advance fee scheme

    whereby he fraudulently promised potential borrowers that he

    could obtain funding for their projects, accepted substantial

    up-front fees, failed to arrange financing or to return the

    fees, and subsequently "laundered" the fees. On December 2,

    1993, the government received ex parte warrants authorizing __ _____

    seizure of the defendant properties after persuading a United

    States Magistrate Judge that there was probable cause to



    ____________________

    1The parties dispute the scope of our jurisdiction. 1
    Kneeland claims to have appealed eight separate orders by way
    of eight notices of appeal, whereas the government correctly
    points out that Kneeland filed only two notices of appeal.
    We need not resolve what issues are properly before us.
    Assuming without deciding that we have jurisdiction to review
    each of the challenged orders, we would affirm. See Norton ___ ______
    v. Matthews, 427 U.S. 524, 530-32 (1976) (explaining that ________
    jurisdictional inquiry may be bypassed where merits can be
    easily resolved in favor of the party challenging
    jurisdiction).













    believe that they were involved in or traceable to money

    laundering. Thereafter, the government initiated

    administrative forfeiture proceedings and Kneeland filed a

    claim of ownership. On March 30, 1994, a federal grand jury

    returned an indictment charging Kneeland with conspiracy,

    mail fraud, wire fraud, money laundering and criminal

    forfeiture. The forfeiture count specifically identified the

    defendant properties. On May 6, 1994, the government filed

    the instant civil complaint for forfeiture pursuant to 18

    U.S.C. 981(a)(1)(A).

    For a period of time, the civil and criminal cases

    progressed forward in tandem. The criminal case readied for

    trial. In the civil case, Kneeland filed an answer to the

    complaint. Back Bay, Ltd., an alleged victim, filed a late

    claim. On October 20, 1994, less than three weeks before the

    criminal trial was scheduled to take place, the government

    moved to stay discovery in the civil case pending the

    disposition of the criminal matter. Kneeland did not object

    to this request, and it was allowed. The criminal trial,

    however, was delayed, and eventually it was rescheduled to

    take place on May 22, 1995.

    On December 27, 1994, while the stay was in effect,

    Kneeland filed a motion for summary judgment in his favor on

    the alleged ground that he was the only person to "perfect a

    claim" to the defendant properties. The motion was summarily



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    denied. Thereafter, Kneeland moved to lift the stay and

    renewed his motion for summary judgment. These motions were

    denied. On April 24, 1995, Kneeland again moved to lift the

    stay, this time requesting a hearing on the merits of the

    seizure. This motion was followed by similar motions, filed

    approximately every two or three days, seeking, inter alia, _____ ____

    dismissal of the complaint, an adversarial hearing, or

    summary judgment. On June 20, 1995, the district court

    granted Kneeland's motion to lift the stay, but otherwise

    denied his various motions. By that time, the criminal trial

    had been delayed once again.

    The government immediately filed a motion to dismiss the

    civil case without prejudice. On or about the same date, the

    government moved in the criminal case for new warrants

    freezing the defendant properties. Kneeland filed an

    "omnibus" motion objecting to the dismissal and seeking entry

    of judgment in his favor. A week later, he filed a motion

    for adversarial hearing or entry of judgment. On July 18,

    1995, the district court allowed the motion to dismiss and

    denied the "omnibus" motion. On July 20, 1995, the court

    denied the motion for adversarial hearing or entry of

    judgment. Thereafter, Kneeland filed, inter alia, a renewed _____ ____

    motion for summary judgment, a motion for return of defendant

    properties, a motion to vacate the dismissal and to





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    disqualify the district judge under 28 U.S.C. 455(a), and a

    motion for judgmenton thepleadings. Thesemotions weredenied.

    A plaintiff's motion for dismissal without prejudice

    pursuant to Fed. R. Civ. P. 41(a)(2) should be allowed unless

    the court finds that the defendant will suffer plain legal

    prejudice. 9 Charles A. Wright & Arthur R. Miller, Federal _______

    Practice & Procedure 2364, at 280 (2d ed. 1994). The _____________________

    decision whether or not to grant such a dismissal is within

    the sound discretion of the district court and reviewable

    only for abuse of discretion. See Puerto Rico Maritime ___ _____________________

    Shipping Authority v. Leith, 668 F.2d 46, 49 (1st Cir. 1981). __________________ _____

    We find no such abuse of discretion here.

    As an initial matter, we reject Kneeland's suggestion

    that he was robbed of an imminent victory. See Grover v. Eli ___ ______ ___

    Lilly & Co., 33 F.3d 716, 718-19 (6th Cir. 1994) (finding ___________

    abuse of discretion where district court dismissed case at

    the point where the law clearly dictated a result for the

    defendant). Indeed, Kneeland's argument that he was entitled

    to judgment in his favor because the government is a mere

    "escrow agent" for potential claimants is utterly frivolous

    even if we assume arguendo that Kneeland was the only ________

    claimant. The government in a civil forfeiture action under

    the money laundering statutes is not an escrow agent for

    others; rather, if successful, it acquires title to the

    forfeited property. See 18 U.S.C. 981(a),(f). ___



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    We also reject Kneeland's argument that he was deprived

    of his right to an adversarial hearing. Certainly, before

    forfeiture, a claimant must be afforded an opportunity to

    rebut the government's showing of probable cause, see United ___ ______

    States v. Real Property Known & Numbered as Rural Route 1, ______ __________________________________________________

    Box 137-B, Cutler, Ohio, 24 F.3d 845, 848-49 (6th Cir. 1994), _______________________

    as well as to present evidence bearing on other potential

    defenses. However, it doesn't follow that a civil forfeiture

    action, once begun, may not be aborted. In the instant case,

    the dismissal obviated the need for a hearing.2 2

    Finally, we add that the civil case was still in the

    pre-discovery stage. Although Kneeland claims to have

    devoted many hours to the case, the record reveals that much

    of his efforts were spent on frivolous, repetitious motions.

    Kneeland had gained no ground in the civil case which he lost

    by the dismissal. Indeed, Kneeland benefited from not having

    to litigate two actions simultaneously, and from certain

    procedural advantages he had in the criminal proceeding. See ___

    David B. Smith, Prosecution & Defense of Forfeiture Cases ___________________________________________

    1.03 (1995) (discussing, by contrast, the tremendous

    procedural advantages the government enjoys in a civil


    ____________________

    2Kneeland's suggestion that he was denied due process 2
    because he was not afforded a "timely" post-seizure hearing
    also fails. Kneeland did not object to the government's
    motion for a stay; and while the stay was in effect, the
    government diligently prosecuted the related criminal
    indictment.

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    forfeiture action). The criminal case was procedurally

    advanced and the government ready for trial. Under the

    circumstances, we think the district court properly allowed

    the government's motion to dismiss the civil case.

    We have carefully considered Kneeland's remaining

    arguments and reject them as without merit. In particular,

    we find no error in the denial of his post-dismissal motion

    for return of property since the assets were then being held

    in connection with his criminal case.3 We also find no 3

    error in the denial of the motion for disqualification. The

    district court's comments in its order vacating the stay do

    not warrant an inference that it stepped outside its role to

    act as adviser to the government, and we find no evidence of

    bias in any of the court's rulings or in its handling of the

    case. See Liteky v. United States, 114 S. Ct. 1147, 1157 ___ ______ _____________

    (1994) (observing that judicial rulings alone almost never

    constitute valid basis for a bias or partiality motion).

    Affirmed. _________










    ____________________

    3Contrary to Kneeland's suggestion, there is no evidence 3
    that the district court held a "transfer hearing" or was
    otherwise involved in the decision to issue new seizure
    warrants.

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