In Re the Seizure of a 1988 Chevrolet Van ( 1991 )

IN THE SUPREME COURT OF THE STATE OF MONTANA
I N THE MATTER OF THE SEIZURE OF A 1988 CHEVROLET VAN, CALIFORNIA
LICENSE NUMBER 3M38781.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Larry W. Moran, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Marc Racicot, Attorney General, Helena, Montana;
Paul D. Johnson, Assistant Attorney General,
Helena, Montana; Mike ~ a l v a g n i , County Attorney,
Bozeman, Montana; Marty Lambert, Deputy county
Attorney, Bozeman Montana.
I:
For Respondent:
$-] Y - ! , +j:l yJ] Helene Orenstein, Attorney at Law, Bozeman, Montana.
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Submitted on briefs: July 16, 1991
Decided: December 3 0 , 1991
Filed: 2 0
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Justice R. C. McDonough delivered the Opinion of the Court.
The State of Montana appeals the order of the District Court
of the Eighteenth ~udicial District, Gallatin County, dismissing
the State's petition for forfeiture and releasing the respondent's
Chevy Van. The District Court found it within its discretionary
power to release the van to protect the interests of a lienholder
despite entering default against that lienholder. We reverse.
The dispositive issue on appeal is whether the District Court
abused its discretion by denying and dismissing the petition for
forfeiture.
Brian Soule and his wife Elizabeth Soule were arrested for
possession of dangerous drugs and paraphernalia, violations of
Title 45, Chapter 9, MCA. The circumstances surrounding their
arrest were as follows. Law enforcement authorities in Los
Angeles, upon a security check at the airport, discovered a package
containing drugs bound for Brian Soule via Gallatin Field. The
authorities in Los Angeles notified Gallatin County and a search
warrant was obtained. Upon arrival of the package at Gallatin
Field, Brian Soule claimed the package, walked to the subject Chevy
Van, which was owned by Brian Soule, and drove it across the
airport to a parking lot. The officers approached the van,
presented the warrant and the subsequent search yielded illegal
drugs and paraphernalia. Brian and Elizabeth entered a plea
agreement and pled guilty to felony possession of dangerous drugs,
misdemeanor possession of dangerous drugs and misdemeanor
possession of drug paraphernalia.
2
The instant case is a civil proceeding filed under 5 44-12-102
(1)(d), MCA, which provides in part for the forfeiture of "all
conveyances, including. . . vehicles, . . . that are used or
intended for use in any manner to facilitate the commission of a
violation of Title 45, Chapter 9." There is no dispute that
Brian's father, Peter Soule, has a security interest in the Chevy
Van. Both Peter and Brian were served with copies of the summons
and petition. The State presented an affidavit of service on Peter
Soule.
Brian Soule filed an answer to the complaint, alleging the
forfeiture of the Chevy Van was subject to his father's secured
interest because his father neither had knowledge of, nor consented
to ~rian's
violation of Title 45, Chapter 9. Peter Soule did not
respond on his own behalf and at the hearing, the court entered a
default of Peter Soule.
However, the District Court, relying on § 44-12-205(3), MCA,
found broad discretionary powers to release the vehicle to protect
the interests of Peter Soule. Section 44-12-205 (3), MCA, provides:
In making a disposition of property under this chapter,
the court may take any action to protect the rights of
innocent persons.
The District Court found:
there (was) not a scintilla of evidence that Peter W.
Soule was aware of, or had anything to do with Brian and
Elizabeth Souletspossession or use of illegal drugs, or
drug paraphernalia.
As such, the District Court determined Peter Soule to be an
innocent person within the meaning of 5 44-12-205 (3), MCA, and the
court acted to protect his interest.
3
The standard of review for discretionary trial court rulings
is whether the trial court abused its discretion. Steer, Inc. v.
Dept. of Revenue (1990), 245 Mont. 470, 803 P.2d 601. Section 4 4 -
12-205(3), MCA, makes clear that the legislature was sensitive to
the rights of innocent persons and granted broad discretion to the
courts to protect those rights. However, the legislature has also
provided specific provisions regarding the protection of the rights
of claimants with a security interest in seized property. See 5 5
44-12-204, and 205(2), MCA. Section 44-12-203, MCA, states:
There is a rebuttable presumption of forfeiture as to all
propertv listed in 44-12-102... (Emphasis supplied.)
The Chevy Van is clearly within the scope of property listed in g
44-12-102, MCA: Section 44-12-204, MCA, provides:
In order to rebut the presumption of forfeiture:
(3) a claimant of a security interest in the
property who has a verified answer on file must prove
that his security interest is bona f i d e and that it was
created after a reasonable investigation of the moral
responsibility, character, and reputation of the
purchaser and without knowledge that the property was
being or was to be used for the purpose charged. .
. .
(Emphasis supplied.)
Here, Peter Soule failed to file an answer, failed to appear and
offered no proof of anything whatsoever.
Section 44-12-205(2)(a), MCA, provides the following:
If proper proof of his claim is presented at the hearing
by the holder of a security interest, the court shall
order the property released to the holder of the security
interest. .
Brian Soule, not his father, claimed the lien, in his answer, as an
affirmative defense to the forfeiture. Brian has no standing nor
did he present any evidence to support his father's claim.
"The judicial function in construing and applying statutes is
to effect the intention of the legislature. In determining
legislative intent, the court looks first to the plain meaning of
the words used in the statute." State ex. rel. Roberts v. Public
Service Commission (1990), 242 Mont. 242, 790 P.2d 489. The
language of the forfeiture statutes cited above is clear.
Apparently, the court was apprehensive about placing an
affirmative duty on Peter Soule to prove that he was an 'innocent
person' entitled to return of the Chevy Van. The legislature had
no such apprehension. The presumption is for forfeiture and the
burden rests on the secured interest holder to rebut that
presumption. Sections 44-12-203 to 204, MCA. It has long been
held under Montana statutes that a presumption remains until
rebutted by preponderance of contrary evidence and disappears only
when the party to whom it is opposed produces sufficient evidence
to preponderate against it. N.Y. Life Insurance Company v. Gamer,
(9th Cir. 1939), 106 F.2d 375.
Peter Soule received proper notice and failed to assert his
rights and therefore default was properly entered. Peter Soule
failed to rebut the presumption as required by 5 44-12-102, MCA.
We conclude that the District Court abused its discretion by
acting in a manner inconsistent with the statutes on forfeiture.
The order of the District Court is reversed.
Justices
Justice Karla M. Gray, dissenting.
I respectfully dissent from the opinion of the majority.
Briefly stated, the majority notes the existence of § 44-12-205(3),
MCA, granting the district court broad discretionary authority, and
then goes on to ignore it altogether. The majority does not
attempt to construe the subsection either on a stand-alone basis,
as part of the statute within which it is contained, or in relation
to the other statutes comprising the Montana Forfeiture Act. This
lack of analysis results in giving g 44-12-205(3), MCA, no effect
whatsoever. I cannot agree.
Facts in addition to those set forth in the majority opinion
are important to an appropriate analysis of the case before us. A
bench trial on the forfeiture petition was held on June 25, 1990.
Brian Soule was represented by counsel, but neither he nor his
father appeared. At the outset of the proceeding, the State
requested, and the court entered, a default of Peter Soule for
failure to respond or appear; no default judgment was entered.
The proceeding continued, with Lieutenant Christie as the only
witness. Christie first testified to the circumstances surrounding
the arrest of Brian and Elizabeth Soule. He explained, on direct
examination, that he had found a receipt in the vehicle indicating
that Peter Soule was the holder of a security interest in the van.
Christie then testified in some detail about a telephone
conversation he had with Peter Soule; Peter Soule indicated during
the conversation that he had co-signed a GMAC loan with Brian in
order to help Brian purchase the van. Peter Soule later paid off
7
the loan on the understanding that Brian would pay him back, which
Brian never did. Peter Soule told Christie that he was aware of
Brian's drug problems and had attempted to help by paying for a
drug treatment program for both Brian and Elizabeth, and by sending
them to Brian's grandmother in Montana after their release from
that program in hopes of getting them away from drugs.
Briefs were submitted on July 9, 1990. The District Court
subsequently entered its judgment releasing the van to Peter Soule
and dismissing the petition for forfeiture with prejudice.
The issue is whether the District Court erred in finding Peter
Soule an innocent person and dismissingthe petition for forfeiture
pursuant to lj 44-12-205(3), MCA. The standard of review for
discretionary trial court rulings is whether the trial court abused
its discretion. Steer, Inc. v. Dept. of Revenue (1990), 245 Mont.
470, 475, 803 P.2d 601, 603-604.
The procedural requirements for forfeiture proceedings of the
type before us are set forth in 8 5 44-12-201 et seq., MCA. Section
44-12-204, MCA, provides detailed provisions by which owners and
claimants of security interests with verified answers on file can
rebut the presumption of forfeiture which arises under § 44-12-203,
MCA. subsections (1) and (2) of 5 44-12-205, MCA, provide for
mandatory dispositions of property in the event certain findings
are made by the court based on proof presented at the hearing by an
owner or a holder of a valid security interest in the property at
issue. Section 44-12-205(3), MCA, on the other hand, allows the
court to ''take any action to protect the rights of innocent
persons" in disposing of property otherwise subject to forfeiture.
This Court consistently follows the fundamental rule of
statutory construction that:
[Tjhe judicial function in construing and applying
statutes is to effect the intention of the legislature.
In determining legislative intent, the Court looks first
to the plain meaning of the words used in the statute.
If intent cannot be determined from the content of the
statute, we examine the legislative history.
State ex rel. Roberts v. Public Service Commission (1990), 242
Mont. 242, 246, 790 P.2d 489, 492.
The language of 5 44-12-204, MCA and subsections (1) and (2)
of 5 44-12-205, MCA, are clear and plain and susceptible of only
one interpretation on a stand-alone basis. Under these
subsections, the court has no discretion in how it disposes of
property subject to forfeiture. There is no doubt that Peter Soule
did not make the requisite showing to protect his interest in the
van under these sections.
The intended interplay between the sections discussed above
and subsection (3) of 5 44-12-205, MCA, as well as the intended
meaning of "innocent persons" therein, however, cannot be
ascertained from the words themselves. Therefore, it is necessary
to focus specifically on both the language and the legislative
history of 5 44-12-205(3), MCA.
Section 44-12-205(3), MCA, provides that "[iln making
disposition of property under this chapter, the court may take anv
action to protect the rights of innocent persons." (Emphasis
added.) This wording clearly grants a trial court the broadest
possible discretion in protecting the interests of innocent
9
persons. It is also clear, from the absence of any limiting
language, that such discretion can be exercised in favor of any
innocent person. In addition, nothing in the sweeping grant of
discretion suggests that an "innocent person" must have jumped
through the procedural hoops otherwise provided for lienholders.
The majority adopts the State's position that we must read
into 5 44-12-205(3), MCA, the requirements of § 44-12-204 and 5 44-
12-205 (1) and (2), MCA. Nothing contained therein suggests such
a reading. "In the construction of a statute, the office of the
judge is . . . not to insert what has been omitted. . . ." Section
1-2-101, MCA.
For the most part, the Montana Forfeiture Act is patterned
after the federal act found at 21 U.S.C. 5 881. Section 44-12-
205 (3), MCA, however, is unique to Montana and, as such, we must
assume that the legislature included it for a particular reason.
It is this Court's duty to ascertain that legislative intent and,
insofar as possible, give it meaning in interpreting and construing
the statutes involved. Palmer v. Montana Ins. Guar. Ass'n (1989),
239 Mont. 78, 779 P.2d 61. Thornock v. State (l987), 229 Mont. 67,
745 P.2d 324; Darby Spar. Ltd. v. Dept. of Revenue (1985), 217
Mont. 376, 705 P.2d 111.
The Montana legislature added 44-12-205 (3), MCA, to the
Montana Forfeiture Act in 1987. The statute must have meaning as
we presume the legislature does not pass meaningless laws. Mills
v. Commissioner of Insurance (1987), 226 Mont. 387, 736 p.2d 102;
Crist v. Segna (1981), 191 Mont. 210, 662 P.2d 1028. We also
presume that this amendment changed the law in some way or the
legislature would not have added it to the existing law. Cantwell
v. Geiger (1987), 228 Mont. 330, 742 P.2d 468.
The 1987 bill amending the Montana Forfeiture Act originally
was introduced to expand and broaden the Act and to enhance
cooperation between federal and state agencies; as introduced, it
did not contain what ultimately became 5 44-12-205(3), MCA.
Serious questions were raised by members of the Senate Judiciary
Committee during the hearing on the bill relating to jointly owned
property. The Committee was assured that the existing provisions
of 55 44-12-204 and -205, MCA, protected innocent owners and that
the district courts would determine who was an innocent owner able
to retain property under those sections. Minutes Legislative
Hearing S.B. 241, February 6, 1987, at 2. Notwithstanding those
assurances, one legislator expressed concern about how innocent
victims really would be protected; another stated that clearer
language was needed dealing with innocent parties. a.
Section 44-12-205(3), MCA, was added to S.B. 241 as a
committee amendment to address the expressed concerns. The
committee had before it, but did not adopt, alternative language
granting the district courts discretion to "take any action ...
not inconsistent with the provisions of this chapter." (Emphasis
added. )
Based on this legislative history, it is clear that the
legislature consciously chose the term llpersons,"rather than the
narrower term in enacting a provision significantly more
protective than it considered the existing statutes. Furthermore,
in doing so, it did not support alternative language limiting
subsection (3)'s application only to situations consistent with
other provisions of the Act. The legislature specifically having
rejected the "consistent with" approach as not sufficiently
protective, the majority now adopts it.
Legislative concern for the rights of innocent persons
continued even after enactment of 5 44-12-205(3), MCA. When
additional amendments to the Act were proposed in 1989, legislators
received further assurances that the forfeiture statutes would not
unnecessarily burden innocent persons. "[Tlhis entire procedure is
subject to the scrutiny and control of the District Courts of the
State of Montana," which constitute a "significant balancing
factor." Minutes, Legislative Hearing, S.B. 377, March 9, 1989, at
2. The majority simply ignores the legislative history and intent
of 5 44-12-205(3), MCA, dismissing it with a cavalier reference to
the fact that "the legislature was sensitive to the rights of
innocent persons.I
'
When the legislature uses a particular term, this Court's duty
is to construe it "according to the context and the approved usage
of the language. . . . I
' Mydlarz v. Palmer/Duncan Const. Co.
(1984), 209 Mont. 325, 336, 682 P.2d 695, 701. Therefore, I would
read "innocent personsN as a general term which includes, but is
not limited to, tlowners,"
and find that, according to the language
of § 44-12-205(3), MCA, a person is "innocent" when so determined
by the district court on the particular facts before it.
In my opinion, this close review of the legislative history
mandates a conclusion that, in enacting 5 44-12-205(3), MCA, the
legislature intended the broadest conceivable grant of discretion
to the courts in protecting the rights of innocent persons with
regard to property otherwise subject to forfeiture. I further
conclude that the "under this chaptern language in that statute is
sufficiently broad, and intended, to override the other detailed
forfeiture statutes when necessary, in the court's discretion, to
protect innocent persons and prevent unjust results. To conclude
otherwise ignores the legislature's clear intent. Finally, absent
any indication in the statute or the legislative history to the
contrary, I conclude that the only reasonable interpretation of the
legislature's failure to include any burden of proof requirement
for an innocent person, as it clearly included for lienholders
filing a verified answer, is that no such specific burden was
intended. The majority's imposition of the requirements of other
statutory provisions into 9 44-12-205(3), MCA, totally negates and
eviscerates the broad discretion granted to the district court by
that section.
It remains only to apply the conclusions set forth above
regarding § 44-12-205(3), MCA, to the facts and judgment in the
instant case. Here, Peter Soule was served with the petition for
forfeiture and summons, as an owner or claimant of the van, under
9 44-12-201, MCA. A verified answer was filed by the registered
owner of the van, Brian Soule, as required by 5 44-12-202, MCA, but
no answer was filed individually by Peter Soule. At the outset of
the forfeiture hearing and upon a motion by the State, the District
Court entered a default against Peter Soule due to his failure to
file an answer as required by 5 44-12-202, MCA. The entry of the
default was neither based on, nor related to, the question of
whether Peter Soule was an innocent person under g 44-12-205(3),
MCA. No default judgment was entered.
A "default entry is simply an interlocutory order that in
itself determines no rights or remedies. . . ." Cribb v. Matlock
Communications, Inc. (1989), 236 Mont. 27, 30, 768 P.2d 337, 339.
Thus, the District Court's entry of Peter Soule's default did not
finally determine his rights or status in the proceeding. Nor did
the entry of the default, in and of itself, foreclose the District
Court's ability to W a k e any action to protect the rights of
innocent persons" under 5 44-12-205(3), MCA.
The real question in this case is whether, subsequent to the
entry of the default, Peter Soulets status in relation to the van
was before the District Court, thus enabling the court to act under
g 44-12-205, MCA. Under the particular facts of this case, it was.
While the record is clear that Peter Soule did not appear at
the forfeiture proceeding, his status and interest were before the
court via Brian Soule's verified answer. Furthermore, the State
itself established Peter Soule's status and interest in the van
through the testimony of Lieutenant Christie. That testimony also
established that, while Peter Soule knew of Brian's drug problems,
he had paid to enroll Brian and Elizabeth in a treatment program
for those problems and then, on their release from that program,
sent them to Brian's grandmother in Montana where they would be
away from drugs. The court concluded that the record did not
support any inference of knowledge or involvement by Peter Soule in
the drug possession by Brian from which the forfeiture proceeding
arose. On the basis of the State's evidence, the court concluded
that Peter Soule was an "innocent person" under 5 44-12-205(3),
MCA, and entered judgment accordingly, releasing the van to Peter
Soule. The ~istrictCourt concluded that to do otherwise would be
grossly unfair and inequitable under the circumstances of this
case.
It is a rule of statutory construction that the legislature
does not pass meaningless legislation. The majority's
interpretation, or lack thereof, of 5 44-12-205(3), MCA, produces
precisely that result. It renders meaningless an act of the
legislature, namely, the insertion into the Act patterned on the
federal model of a subsection peculiar to Montana and clearly
intended to balance the harshness of the forfeiture laws by
protecting the rights of innocent persons without regard to other
statutory provisions regarding such forfeitures. As discussed
above, the majority's interpretation of 5 44-12-205 (3) , MCA, gives
it no effect whatsoever.
Under the particular facts of the instant case, Peter Soule's
legitimate interest in the van was properly before the court. It
was established at the hearing by the State's own witness, and was
not disputed. The record before us reflects a father's repeated
efforts to help get his son's life in order; it certainly does not
reflect any acquiescence in, or consent to, his son's drug-related
criminal offenses. Peter Soulets co-signing of Brian's loan with
GMAC and paying off that loan of approximately $ l O , O O O were further
efforts by a concerned father who had no connection whatsoever with
the criminal offense by Brian which formed the foundation for the
forfeiture proceeding.
The circumstances of this case, the record before us, and the
cited legislative history support the ~istrictCourt's conclusion
that Peter Soule was an innocent person and its action i n
protecting the rights of such an innocent person pursuant to its
broad discretion under 5 44-12-205 ( 3 ) , MCA. I would hold that the
District Court did not abuse its discretion and affirm its
dismissal of the forfeiture petition.
Justice Terry N. Trieweiler specially concurring.
I concur with the dissent of Justice Gray, but am unable to
join in her remarkable restraint.
The portions of the forfeiture statute relied upon by the
majority turn traditional notions of fairness, due process, burden
of proof, and presumption of innocence upside down. The statute
has only one redeeming provision which is found in 5 44-12-205(3),
MCA. The majority opinion gives its blessing to those provisions
of the forfeiture statute which are most offensive to the
traditions of our justice system, and totally ignores that portion
of the statute which was intended by the legislature to ameliorate
the statute's harshness.
Under our former system of justice, innocent people did not
have the burden of proving innocence. The State had the burden of
proving their guilt before punishing them or seizing their
property. Regardless of that fact, in this case Peter Soule did
not need to appear to prove his innocence because his innocence was
undisputed.
While the majority opinion does substantial harm to the
property rights of innocent citizens, it does nothing to further
I concur in the foregoing concurrence of Justice Trieweiler.
December 30, 1991
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Mike Salvagni, Gallatin County Attorney
Marty Lambert, Deputy
615 So. 16th Ave., Rm. 100
Bozeman, MT 59715
Hon. Marc Racicot, Attorney General
Pad D. Johnson, Asst. Atty. General
Justice Bldg.
Helena, MT 59620
Helene Orenstein
Attorney at Law
125 W. Mendenhall
Bozeman. MT 59715
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BY:
Deputy