United States v. Nextgear Capital, Inc. ( 2017 )

FILED
NOT FOR PUBLICATION
FEB 16 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 15-56280
Plaintiff-Appellee, D.C. No.
8:13-cv-00907-DOC-JPR
ONE 2006 LAMBORGHINI
MURCIELAGO,
MEMORANDUM*
Defendant.
v.
NEXTGEAR CAPITAL, INC.,
Claimant-Appellant,
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Submitted February 13, 2017**
Pasadena, California
Before: D.W. NELSON, TALLMAN, and N.R. SMITH, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
NextGear Capital, Inc., (“NextGear”) appeals the district court’s judgment,
following a bench trial, in favor of the United States. The district court held that
NCA International Services, Inc., d/b/a Remate del Monte (“Remate”) did not own
a 2006 Lamborghini Murcielago that was subject to civil forfeiture under 31
U.S.C. § 5317(c)(2) and later seized by federal authorities. Given Remate’s lack of
ownership, the district court held that NextGear did not have a security interest in
the vehicle and, therefore, could not be an “innocent owner” as defined by 18
U.S.C. § 983(d)(3). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we
affirm.
While NextGear’s innocent owner defense may fail given the likelihood it
was on notice that the vehicle was subject to forfeiture at the time it received title,
see 18 U.S.C. § 983(d)(3)(A)(ii) (“[T]he term ‘innocent owner’ means a person
who . . . did not know and was reasonably without cause to believe that the
property was subject to forfeiture.”); United States v. An Interest in the Real Prop.
Located at 2101 Lincoln Blvd., Los Angeles, Cal., 729 F. Supp. 2d 1150, 1155–58
(C.D. Cal. 2010), the defense more clearly fails because NextGear did not establish
that the vehicle was an asset of Remate and, therefore, that NextGear was a bona
fide purchaser for value, see 18 U.S.C. § 983(d)(3)(A)(i).
2
NextGear had a perfected security interest—a floating lien—in all of
Remate’s assets, including later-acquired collateral, pursuant to a written
Promissory Note and Security Agreement and filed UCC Financing Statements.
However, NextGear’s security interest did not attach to the collateral—and make it
a bona fide purchaser of the collateral—unless Remate had rights in the vehicle,
i.e., ownership of the vehicle. See Cal. Com. Code § 9203(b)(2); Cal. Veh. Code
§ 460 (“An ‘owner’ is a person having all the incidents of ownership.”). On this
record, we cannot say the district court clearly erred in finding that Remate was
never the owner of the vehicle. See Freeman v. Allstate Life Ins. Co., 253 F.3d
533, 536 (9th Cir. 2001).
Although Remate eventually acquired the Certificate of Title to the vehicle,
the record makes clear that Remate otherwise had very few incidents of ownership:
the vehicle was not purchased in the ordinary course of Remate’s business, the
vehicle was never delivered to Remate, and Remate never held the vehicle on the
lot for resale. See In re Stinson, 443 B.R. 438, 443 (B.A.P. 9th Cir. 2010); Savnik
v. Hall, 74 Cal. App. 4th 733, 740 (1999). Put differently, the evidence indicated
that Eduardo Escobedo, through Luis Perez, purchased the vehicle using Remate’s
dealer’s license to avoid sales taxes, and that he, not Remate, owned the vehicle.
See In re Stinson, 443 B.R. at 443.
3
As such, the district court properly concluded that Remate never owned the
vehicle and, therefore, that NextGear’s security interest never attached. Without a
security interest in the collateral, NextGear cannot be a bona fide purchaser for
value under the innocent owner defense.
AFFIRMED.
4