Fergason v. LVMPD ( 2015 )

131 Nev., Advance Opinion ti
IN THE SUPREME COURT OF THE STATE OF NEVADA
BRYAN FERGASON, No. 62357
Appellant,
vs.
LAS VEGAS METROPOLITAN POLICE
DEPARTMENT,
FLED
Respondent. DEC 2 4 2015
TRACE K LINDEMAN
CLERK OF SUPREME COURT
DEPUTY CLERK
Appeal from a district court summary judgment in a forfeiture
action. Eighth Judicial District Court, Clark County; Doug Smith, Judge.
Reversed and remanded.
Bailey Kennedy and Dennis L. Kennedy and Paul C. Williams, Las Vegas,
for Appellant.
Thomas Joseph Moreo, Chief Deputy District Attorney, Clark County;
Marquis Aurbach Coffing and Micah S. Echols, Las Vegas,
for Respondent.
BEFORE SAITTA, GIBBONS and PICKERING, JJ.
OPINION
By the Court, PICKERING, J.:
Bryan Fergason appeals the district court's entry of summary
judgment in favor of the Las Vegas Metropolitan Police Department (the
State), which resulted in the forfeiture o . $125,000 from his
bank accounts. Because the State failed to present evidence showing an
absence of genuine issue of material fact regarding whether the funds
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seized from Fergason's bank accounts were subject to forfeiture as
proceeds attributable to the commission of a felony, the district court erred
by granting summary judgment; and we reverse and remand for further
proceedings.
I.
In 2010 Bryan Fergason was convicted of burglary, possession
of stolen property, conspiracy to possess stolen property and/or to commit
burglary, possession of burglary tools, and larceny. During the preceding
criminal investigation, the State had located and seized, among other
things, approximately $125,000 from bank accounts kept by Fergason at
Bank of America. The State filed a complaint against the seized money in
March 2007, pleading a single cause of action in forfeiture pursuant to
NRS 179.1164(1). The complaint alleges that the money seized represents
proceeds attributable to the commission or attempted commission of a
felony.
The State served the forfeiture complaint and summons on
Fergason, and he answered, affirming that he was a claimant to the
property. The case was then stayed pending the outcome of criminal
proceedings. Following this court's affirmance of Fergason's criminal
convictions, Fergason v. State, Docket No. 52877 (Order of Affirmance,
Aug. 4, 2010), the district court lifted the stay in the forfeiture
proceedings, and the State moved for summary judgment four days later.
After the State filed its motion, Fergason's attorney moved to withdraw
from the case, and the motion was granted. Fergason filed his opposition
to summary judgment in pro se while incarcerated. In his opposition,
Fergason argues straightforwardly: "None of the cited to allegations in the
Complaint or Motion for Summary Judgment indicate that the amounts
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seized from Fergason's account were attributable to felonies allegedly
committed by Fergason."
Following a hearing, the district court granted summary
judgment in favor of the State. In its findings of undisputed fact, the
district court recited the convictions in the criminal cases; and in its
conclusions of law, the district court said, "Mlle Judgments of Conviction
in the criminal cases have become final. The proof of the facts necessary
to sustain the conviction are, therefore, conclusive evidence in this
forfeiture action against [Fergasonl and satisfy all elements of the
forfeiture complaint." The court further stated that as to Fergason, "the
money was seized from his bank account as proceeds from illegal
activities." This appeal followed.
A.
We review a district court's grant of summary judgment "de
novo, without deference to the findings of the lower court." Wood v.
Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005) (citing GES,
Inc. v. Corbitt, 117 Nev. 265, 268, 21 P.3d 11, 13 (2001)). Summary
judgment is appropriate where "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law." NRCP 56(c).
"If the moving party will bear the burden of persuasion, that
party must present evidence that would entitle it to a judgment as a
matter of law in the absence of contrary evidence." Cuzze v. Univ. &
Cmty. Coll. Sys., 123 Nev. 598, 602, 172 P.3d 131, 134 (2007). Put more
simply: "The burden of proving the nonexistence of a genuine issue of
material fact is on the moving party." Maine v. Stewart, 109 Nev. 721,
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726-27, 857 P.2d 755, 758 (1993) (citing Shapro v. Forsythe, 103 Nev. 666,
668, 747 P.2d 241, 243 (1987)).
When the party moving for summary judgment fails to bear
his burden of production, "the opposing party has no duty to respond on
the merits and summary judgment may not be entered against him."
Maine, 109 Nev. at 727, 857 P.2d at 759 (reversing summary judgment
where burden of production never shifted) (citing Clauson v. Lloyd, 103
Nev. 432, 435, 743 P.2d 631, 633 (1987) (reversing summary judgment
where movant did not meet the test in NRCP 56)); see NRCP 56(e)
(summary judgment burden shifts to the non-movant only when the
motion is "made and supported as provided in this rule"). Because the
State was the plaintiff and the movant, it was required to show that no
genuine issue of material fact existed as to its claim for forfeiture. Cuzze,
123 Nev. at 602, 172 P.3d at 134.
The district court ruling on a motion for summary judgment
"must view the evidence presented through the prism of the substantive
evidentiary burden." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254
(1986) (applying rule to "clear and convincing" standard); Bulbman, Inc. v.
Nev. Bell, 108 Nev. 105, 110-11, 825 P.2d 588, 592 (1992) (affirming
summary judgment for defendant where plaintiff failed to show genuine
issue of material fact as to fraud by clear and convincing evidence); see
also Kaelin v. Globe Commc'ns Corp., 162 F.3d 1036, 1039 (9th Cir. 1998);
Flowers v. Carville, 310 F. Supp. 2d 1157, 1161 (D. Nev. 2004).
In this case the State's complaint consists of a single cause of
action pursuant to NRS 179.1164(1), which provides that "[ably proceeds
attributable to the commission or attempted commission of any felony" are
property "subject to seizure and forfeiture in a proceeding for forfeiture."
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NRS 179.1164(1)(a). "Proceeds' means any property, or that part of an
item of property, derived directly or indirectly from the commission or
attempted commission of a crime." NRS 179.1161.
Nevada law is clear that forfeiture of funds seized from a bank
account will not stand in the absence of evidence linking the money to
criminal activity. Schoka v. Sheriff, Washoe Cnty., 108 Nev. 89, 91, 824
P.2d 290, 291-92 (1992) (reversing forfeiture where there was "no evidence
which traced any of the funds in the account to any criminal activity"). At
the time the court decided Schoka, the State's burden of proof was by a
preponderance of the evidence, and the burden is even higher today. As
amended in 2001, NRS 179.1173(4) now requires the State to "establish
proof by clear and convincing evidence that the property is subject to
forfeiture," see 2001 Nev. Stat., ch. 176, § 1, at 874; Hearing on S.B. 36
Before the Senate Committee on the Judiciary (Statement of Sen. Mark A.
James, Chairman, S. Comm. on Judiciary) (amendment raising the State's
burden to clear and convincing evidence is designed to avoid "injustice"
where government's proof is "not so compelling"), a burden that applies to
each element of the claim. See Albert H. Wohlers & Co. v. Bartgis, 114
Nev. 1249, 1260-61, 969 P.2d 949, 957-58(1999) (citing Bulbman, 108
Nev. at 111, 825 P.2d at 592, for the proposition that each element of a
fraud claim must be proven by clear and convincing evidence). Therefore,
the State must establish by clear and convincing evidence (1) that a felony
was committed or attempted, and (2) that the funds seized from
Fergason's bank account are "attributable to" or "derived directly or
indirectly from" the commission or attempt. NRS 179.1161; NRS
179.1164(1)(a); NRS 179.1173(4).
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Clear and convincing evidence is a higher standard than proof
by the preponderance of the evidence and requires "evidence establishing
every factual element to be highly probable." In re Discipline of Drakulich,
111 Nev. 1556, 1567, 908 P.2d 709, 715 (1995) (quoting Butler v. Poulin,
500 A.2d 257,•260 n.5 (Me. 1985)). Thus, to determine whether the State's
motion was properly supported, we must assess whether the record
contains evidence from which a reasonable jury could find it highly
probable that the money seized from Fergason was attributable to the
commission of a felony. We examine each argument offered by the State
to determine whether it satisfied its burden.
1.
In Nevada, where a forfeiture plaintiff presents proof that the
claimant has been convicted of a criminal offense and that the conviction
is final, then such proof is "conclusive evidence of all facts necessary to
sustain the conviction." NRS 179.1173(6). The State argued below that
Fergason's convictions for burglary, larceny, and possession of stolen
property provide conclusive evidence sufficient to satisfy its summary
judgment burden because "Mlle cause of action set forth in this forfeiture
action mirrors the criminal charges set forth in the criminal cases" and is
"supported by the same facts." However, the State did not demonstrate
that the source of funds in Fergason's bank account was "necessary to
sustain" his convictions as required by NRS 179.1173(6), and in fact the
record indicates otherwise.
Fergason's criminal informations detail the facts on which his
burglary charge is premised, as well as catalog the tangible items on
which his larceny and possession of stolen property charges are based.
First, burglary—unlawful entering with intent to commit larceny—bears
no "proceeds" as a matter of law; it concerns the act of unlawful entry and
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does not require the acquisition of money or property. See MRS 205.060.
Possession of stolen property, without more, likewise does not establish
the funds in Fergason's bank accounts as the proceeds of those crimes but,
rather, his possession of specific items of stolen property. See NRS
205.275. 1 And while Fergason's larceny charge allegedly include some
money, in addition to property, and could have concerned property stolen
and converted to money via sale, see NRS 205.220, the State presented the
district court with no evidence even suggesting that it was. Without
evidence that the property on which Fergason's larceny conviction was
based had been converted to money, the State cannot begin to
demonstrate both (1) that such money came to rest in Fergason's seized
bank accounts and (2) that this evidence was "necessary to sustain" the
conviction, 2 which is the predicate for applying NRS 179.1173(6).
In this case MRS 179.1173(6) does not apply to satisfy the
State's summary judgment burden.
1 Fergason's conspiracy conviction was based on his agreement to
"commit burglary and/or possess stolen property," thus the same analysis
governs. See NRS 199.480. In addition, because both the conspiracy
charge and possession of burglary tools charge are gross misdemeanors,
see NRS 205.080, "proceeds attributable to" these charges could not be a
predicate for forfeiture under NRS 179.1164 because that statute requires
connection to a felony. See NRS 179.1164(1)(a).
2 Even if the State had shown that the property listed in the larceny
count of Fergason's information had been converted to proceeds and
placed in his bank account, whether those facts would be "necessary to
sustain the conviction" so as to invoke MRS 179.1173(6) is unlikely but not
evaluated here.
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2.
The State further argues that this court's opinion affirming
Fergason's criminal convictions constitutes law of the case, precluding him
from contending that no evidence connects his convictions to the seized
funds. Specifically, the State relies on the following two sentences of our
order as "dispositive": "Thefl officers who executed search warrants on
Fergason's storage units, apartment, bank accounts, and safety deposit
box also testified. These searches resulted in the discovery of evidence
that directly or inferentially linked Fergason to the crimes of burglary
and/or possession of stolen property." Fergason v. State, Docket No. 52877
(Order of Affirmance, Aug. 4, 2010).
Under the doctrine of the law of the case, "when an appellate
court decides a principle or rule of law, that decision governs the same
issues in subsequent proceedings in that case." Dictor v. Creative Mgmt.
Servs., LLC, 126 Nev. 41, 44, 223 P.3d 332, 334 (2010); Rebel Oil Co. v. Atl.
Richfield Co., 146 F.3d 1088, 1093 (9th Cir. 1998) (doctrine generally
precludes a court from "reconsidering an issue that has already been
decided by the same court, or a higher court in the identical case')
(quoting United States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997)).
Application of the doctrine requires that the appellate court
"actually address and decide the issue explicitly or by necessary
implication." Dictor, 126 Nev. at 44, 223 P.3d at 334 (citing Snow-Erlin v.
United States, 470 F.3d 804, 807 (9th Cir. 2006)); Rebel Oil Co., 146 F.3d
at 1093. "A significant corollary to the doctrine is that dicta have no
preclusive effect." Rebel Oil Co., 146 F.2d at 1093 (quoting Milgard
Tempering, Inc. v. Selas Corp., 902 F.2d 703, 715 (9th Cir. 1990), and
rejecting application of law of the case where based on dicta).
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In this case Fergason's bank account was not relevant to the
crimes with which he was charged, as discussed above. Nor did our order
in the criminal case relate them: We said, in the context of the conspiracy
charge, that (1) officers who executed search warrants on various places
including his bank testified, and (2) the totality of the searches resulted in
discovery of evidence linking Fergason to the crimes. As it concerns the
bank account, the court's order is a description, not a disposition, and
therefore does not qualify for deference pursuant to law of the case. See
Rebel Oil Co., 146 F.3d at 1094 (explaining that where a court's
statements are "better read as descriptions rather than dispositions" of
claims, law of the case does not apply).
3.
Because the State has failed to establish that its summary
judgment burden was satisfied by the fact of Fergason's convictions or by
law of the case, it was required to present evidence below sufficient to
allow a reasonable jury to find that it was highly probable the money
seized from Fergason's bank account was related to a felony.
In the district court, the State first supported its motion with
grand jury testimony by Tonya Trevarthen, the girlfriend of Fergas on's co-
defendant Daimon Monroe. According to her testimony,
• "probably the majority of everything taken [by police]" had been
stolen, but Trevarthen had not read a list of the items seized,
• Daimon Monroe considered stealing to be his job,
• Monroe came home with cash,
• Monroe kept cash at the home he shared with her,
• Monroe deposited cash into Trevarthen's bank account via ATM,
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* the cash described above came from burglaries and selling stolen
items, and
• Monroe sold property from their home almost every weekend.
None of the attached grand jury testimony refers to Fergason or his bank
account.
The State further presented testimony by Trevarthen from the
trials of Fergason and Monroe. At trial Trevarthen repeated much of her
grand jury testimony and added that
* she knew Fergason "pretty well" and saw him "pretty often,"
• Fergason and Monroe "never hid" that they committed burglaries
and returned with stolen property,
• "cash would accumulate" in the home she shared with Monroe,
• she and Monroe deposited accumulated cash into her bank accounts,
• Monroe did not always have a job,
• income from her teaching job did not pay all the bills she and
Monroe incurred,
• the home she shared with Monroe contained items of personal
property that she did not pay for,
• she either knew or believed that "those items" had been stolen, 3
• she withdrew $145,000 from her bank account and gave it to
defendant Robert Holmes, and
• she characterized the money she gave Holmes as cash that was
made by selling stolen property.
3 The transcript does not make clear whether Trevarthen knew or
believed items were stolen, or the exact items to which she refers.
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None of the trial testimony offered by the State in support of summary
judgment refers to Fergason's bank account, any possession of cash by
Fergason, or any conversion of stolen property to proceeds by Fergason. 4
In Schoka v. Sheriff, Washoe County, this court held that
where "there was no evidence which traced any of the funds in the
[claimant's] account to any criminal activity," the account was not
forfeitable as the proceeds of crime under NRS Chapter 179. 108 Nev. 89,
91, 824 P.2d 290, 291-92 (1992). In that case, the State alleged that
Schoka conducted a scheme of real estate fraud: specifically, that he would
purchase properties with assumable loans, collect rent, and then fail to
make the mortgage payments. Id. at 90-91, 824 P.2d at 291. The State
sought forfeiture of an investment account and a Mercedes Benz vehicle;
and following an evidentiary hearing, the district court ordered forfeiture.
Id. We reversed, concluding that although the State presented "several
witnesses who testified to fraudulent conduct on the part of Schoka,"
4 Inits answering brief on appeal, the State relies on pages of
additional factual statements that were never presented to the district
court below. Some statements are supported by materials in its three
volumes of supplemental appendix, which consists of trial transcripts from
the criminal cases that were never presented to the district court. Other
statements are not supported at all. This evidence may not be considered
on appeal: "Matters outside the record on appeal may not be considered by
an appellate court." Hooper v. State, 95 Nev. 924, 926, 604 P.2d 115, 116
(1979); Smith v. U.S. Customs & Border Prot., 741 F.3d 1016, 1020 n.2
(9th Cir. 2014) (refusing to consider claim that "rest[ed] on facts and
documents that were never before the district court"). "Papers not filed
with the district court or admitted into evidence by that court are not part
of the clerk's record and cannot be part of the record on appeal." Kirshner
v. Uniden Corp., 842 F.2d 1074, 1077 (9th Cir. 1988) (citing United States
v. Walker, 601 F.2d 1051, 1054-55 (9th Cir. 1979)); see NRAP 10(a) ("trial
court record consists of the papers and exhibits filed in the district court").
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forfeiture would not lie because the evidence relating to the car and
account was "very limited." Id. at 91, 584 P.2d at 291.
The forfeiture decisions of other jurisdictions are in accord. In
Dobyne v. State, an Alabama appellate court held that summary judgment
was improper where the state had failed to present evidence "indicating
that the money Dobyne carried on his person was derived from the sale of
illegal drugs, was intended to be used to purchase illegal drugs, or was
intended to be used in some way to facilitate Dobyne's illegal-drug trade."
4 So. 3d 506, 512 (Ala. Civ. App. 2008). That court announced that
"Em]oney cannot be seized and forfeited merely because the person to
whom it belongs is a convicted drug dealer. The State must prove to a
'reasonable satisfaction' an actual link between the money sought to be
forfeited and a violation of the controlled-substances laws of this State."
Id. at 512 (citing Thompson v. State, 715 So. 2d 224, 226 (Ala. Civ. App.
1997)); McHugh v. Reid, 324 P.3d 998, 1005-06 (Idaho Ct. App. 2014)
(reversing partial summary judgment where, despite claimants' guilty
pleas to manufacture and distribution of a controlled substance, state
failed to establish "essential" element of forfeiture: "the required nexus
between the vehicle [seized] and its use for the purpose of distribution or
receipt of marijuana").
In Ivy v. State, an Indiana court reversed summary judgment
due to lack of a connection between the seized money and criminal activity
under similar circumstances. 847 N.E.2d 963, 967 (Ind. Ct. App. 2006).
Ivy's money was seized from his person at the time of arrest for giving a
false name to an officer. Id. at 964. Ivy's false informing charge was
eventually dismissed, but he was convicted on separate drug charges
arising six weeks after the first arrest. Id. at 964-65. The state presented
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no evidence in the forfeiture case other than relating the circumstances of
Ivy's first arrest. Id. at 967. The court concluded,
In short, there was a complete lack of evidence
that Ivy's money was connected to drug dealing.
This is not to say that the State cannot establish
the connection . . . at a full trial, but in the context
of this summary judgment hearing, Ivy was
deprived of his day in court.
Id.; see also Bolden v. State, 127 So, 3d 1195, 1201 (Ala. Civ. App. 2012)
(following its decision in Dobyne to reverse summary judgment, concluding
that "felvidence indicating that Bolden has sold drugs at some indefinite
time in the past coupled with the discovery of $8,265 in his vehicle is
insufficient to establish that the $8,265 was due to be forfeited").
The State cites United States v. Thomas, 913 F.2d 1111 (4th
Cir. 1990), to argue that certain factors have been held "suggestive of
proceeds of criminal activity," including possession of quantities of cash
that vastly exceed income. Thomas does not guide this court's decision for
two important reasons: First, no such evidence was presented by the State
below, see supra (listing entire body of evidence presented to the district
court), and the district court made no such findings. In fact, the district
court made no findings other than recognizing the judgments of conviction;
it relied exclusively on application of NRS 179.1173(6).
Second, Thomas was governed by a statutory scheme that was
abrogated by the federal Civil Asset Forfeiture Reform Act (CAFRA) in
2000. See United States v. $80,180.00 in U.S. Currency, 303 F.3d 1182,
1184 (9th Cir. 2002) (explaining that CAFRA was enacted "Din response to
widespread criticism of [the existing proof] regime"). At the time of
Thomas, the government's only burden in forfeiture cases was to show
"probable cause" that the seized property was subject to forfeiture, then
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the burden shifted to the claimant, to prove by the preponderance of the
evidence that the property was not forfeitable. Thomas, 913 F.2d at 1114.
Under CAFRA, however, the government bears the entire burden to prove
all elements of forfeiture by a preponderance of the evidence. $80,180.00,
303 F.3d at 1184 (also noting that probable cause is a lower standard than
preponderance of the evidence). As discussed above, Nevada requires even
more than that—clear and convincing evidence of every element.
The Nevada statutory forfeiture scheme indicates that One
1979 Ford 15V v. State, 721 So. 2d 631 (Miss. 1998), provides the better
result. In that case, the trial court determined forfeiture of bank accounts
was proper where the proof showed that the claimant was convicted of
felony drug crimes and had "amounts of cash in excess of what would
normally be expected from the operation of a store or working at a
factory," despite no evidence of "any drug sale or transaction that
contributed proceeds to" the accounts. Id. at 636-37. The supreme court
found the trial court's decision clearly erroneous, concluding there was "no
nexus between the bank and the crime committed" by the claimant. Id. at
637.
Finally, the State suggests that Fergason's conspiracy
conviction "raises the notion" that he was jointly and severally liable for
forfeited proceeds of the conspiracy, relying on United States v. Corrado,
227 F.3d 543 (6th Cir. 2000), and United States v. Simmons, 154 F.3d 765(8th Cir. 1998). These two decisions were expressly rejected by the D.C.
Circuit in a lengthy, detailed discussion. United States v. Cano-Flores,
796 F.3d 83, 91 (D.C. Cir. 2015).
We need not evaluate an inter-circuit disagreement, however,
because the State offered no evidence that Fergason's bank account
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contained proceeds of anyone's criminal activity, which is required under
its own cited authority. See Corrado, 227 F.3d at 552 (prior to assigning
joint and several liability to RICO coconspirators, district court must
determine whether "the facts support a finding of a sufficient nexus
between the property to be forfeited and the RICO violation"); Simmons,
154 F.3d at 771 (finding forfeiture proper as to amount district court
determined was "achieved through these specific wrongful acts,' but not
the total income of the codefendants' public relations firms); cf. United
States v. $814,254.76 in U.S. Currency, 51 F.3d 207, 209 (9th Cir. 1995)
(discussing federal provision allowing money in a bank account to be
forfeited when not directly traceable to laundered funds so long as account
previously contained funds traceable to illegal activity).
Had the State presented clear and convincing evidence that
Fergason's bank account contained proceeds of Monroe's crimes, for
example, the court could begin to determine whether joint and several
liability should apply to cause forfeiture as to Fergason. However, it did
not, speculating without record support that "Monroe had the ability to
transfer funds to and from Trevarthen's Bank of America account, which
would presumably include Fergason's accounts." For this and foregoing
reasons, the State failed to establish it was entitled to judgment as a
matter of law, and the burden to produce evidence never shifted to
Fergason.
B.
The State argues that Fergason lacks standing in this case
because he failed to describe in his answer the interest he asserts in the
seized bank funds. The State presented this argument for the first time
on appeal, but we briefly address it because Fergason's standing is clear
under Nevada law.
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The primary authority cited by the State, United States v.
$133,420.00 in U.S. Currency, 672 F.3d 629 (9th Cir. 2012), concerns
federal, Article III constitutional standing. Id. at 637-38. Under federal
forfeiture law, a party asserting standing must fulfill both statutory and
constitutional standing requirements. United States v. 17 Coon Creek Rd.,
787 F.3d 968, 973-74 (9th Cir. 2015). Nevada, however, does not require
constitutional standing where the Legislature has provided a statutory
right to sue. Stockmeier v. Nev. Dep't of Corr., 122 Nev. 385, 393-94, 135
P.3d 220, 226 (2006), disavowed in part on other grounds by Buzz Stew,
LLC v. City of N. Las Vegas, 124 Nev. 224, 228 n.6, 181 P.3d 670, 672 n.6
(2008); accord Heller v. Nev. State Leg., 120 Nev. 456, 461 n.3, 93 P.2d
746, 749 n.3 (2004) ("State courts are not bound by federal standing
principles, which derive from the 'case or controversy' component of the
United States Constitution."). In particular, we have adopted the view
that
"lsltanding is a self-imposed rule of restraint
State courts need not become enmeshed in the
federal complexities and technicalities involving
standing and are free to reject procedural
frustrations in favor of just and expeditious
determination on the ultimate merits."
Stockmeier, 122 Nev. at 393, 135 P.3d at 225 (quoting 59 Am. Jur. 2d
Parties § 30 (2002)).
Instead, this court looks to "the language of the statute itself'
to determine a party's qualification. Id. (reversing dismissal for failure to
state a claim where open meeting law provided that "[alny person denied a
right conferred by this chapter may sue"). Nevada has a "long-standing
history of recognizing statutory rights that are broader than those
afforded to citizens by constitutional standing." Citizens for Cold Springs
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v. City of Reno, 125 Nev. 625, 633, 218 P.3d 847, 852 (2009) (following
Hantges v. City of Henderson, 121 Nev. 319, 322-23, 113 P.3d 848, 850
(2005), to apply "the principle of statutory standing").
In Cold Springs, the plaintiff challenged an annexation
decision by Reno pursuant to NRS 268.668, which confers standing on
"any person. . . claiming to be adversely affected by" an annexation
proceeding. 125 Nev. at 628-30, 218 P.3d at 849-50. There we held that
under the statute, "only a claim of adverse effect is necessary for standing
purposes"—whether the plaintiff could actually demonstrate an adverse
effect did not relate to standing but rather to the merits. Id. at 633-34,
218 P.3d at 852-53; see also id. at 628, 218 P.3d at 849 (finding standing
despite district court's characterization of claims of injury as
"speculative").
Following our holding in Cold Springs, in this case only a
claim to any right, title, or interest of record is necessary to establish
standing under Nevada's forfeiture law. NRS 179.1171(7) provides that
the proper parties to a Nevada civil forfeiture case are "the plaintiff and
any claimant." A claimant is "any person who claims to have. . . any
right, title or interest of record in the property or proceeds subject to
forfeiture." NRS 179.1158(1).
Fergason alleged in the district court that the State
impermissibly seized funds from a bank account registered in his name,
therefore he is a person claiming to have a right, title, or interest of record
in the property subject to forfeiture. Moreover, the State conceded
Fergason's title to the bank account in its complaint, when it pleaded that
officers "seized U.S. CURRENCY $124,216.36 from the account of BRYAN
FERGASON . . . at Bank of America," thus it conceded Fergason's
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standing under NRS 179.1158(1) and the "statutory standing" principle
recognized by Hantges and confirmed in Cold Springs.
The State nevertheless contends that Fergason lacks standing
because he did not comply with NRS 179.1171, which provides that "[ti he
claimant . . . shall, in short and plain terms, describe the interest which
the claimant asserts in the property." NRS 179.1171(6). The State cites
no Nevada law holding or suggesting that the failure to strictly comply
with NRS 179.1171(6) vitiates standing to contest a forfeiture, and we see
nothing to suggest that Fergason's minor omission is fatal to his case.
First, as we said in Stockmeier, state courts are 'free to reject
procedural [standing] frustrations in favor of just and expeditious
determination on the ultimate merits." Stockmeier, 122 Nev. at 393, 135
P.3d at 225 (quoting 59 Am Jur. 2d Parties § 30 (2002)). Second, MRS
179.1171(6) mirrors the "short and plain statement of the claim" language
found in NRCP 8(a), 5 which courts, including this one, have long construed
liberally, requiring only that the adverse party have notice of the claims
being pleaded. See Chavez v. Robberson Steel Co., 94 Nev. 597, 599, 584
P.2d 159, 160 (1978).
In this case, the State was on notice that Fergason claimed an
interest in the money at issue because it seized the money from his bank
account. In addition, the State recognized Fergason as a claimant when it
named him as such in the complaint and caused him to be served with the
forfeiture complaint pursuant to MRS 179.1171(5), which requires
5 "A pleading which sets forth a claim for relief. . . shall contain. .. a
short and plain statement of the claim showing that the pleader is entitled
to relief . ." NRCP 8(a).
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plaintiffs to serve "each claimant whose identity is known to the plaintiff
• or who can be identified through the exercise of reasonable diligence."
Ninth Circuit law also supports this conclusion: In 17 Coon
Creek Road, the court noted that courts may "overlook" the failure to
comply with similar pleading requirements in federal forfeiture law. 787
F.3d at 974 (quoting United States v. $11,500 in U.S. Currency, 710 F.3d
1006, 1012 (9th Cir. 2013), and citing United States v. 4492 S. Livonia Rd.,
889 F.2d 1258, 1262 (2d Cir. 1989), for the proposition that courts may
"excus[e] technical noncompliance with procedural rules governing filing
of claims on ground that claimant made sufficient showing of interest in
property.")
The government argued in 17 Coon Creek Road that the
claimant lacked standing because he failed to respond to special
interrogatories requesting him to describe his interest in the property. Id.
at 971. The Ninth Circuit concluded,
[B] ecause it cannot reasonably be disputed that
Pickle's interest in the defendant property was
sufficient to establish his statutory standing at the
inception of the proceedings—recall that both
parties alleged that Pickle was the "recorded
owner" of the defendant property, and the
government further alleged that Pickle and his
son both resided on the property—Pickle's failure
to respond to the government's special
interrogatories did not alone vitiate his ability to
maintain his claim.
Id. at 977; see also id. (citing United States v. $154,853 in U.S. Currency,
744 F.3d 559, 564 (8th Cir. 2014) (reversing district court's striking of
claim for noncompliance with same procedural requirements where
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claimant "had adequately claimed to have earned the defendant funds
through legitimate employment")).
In this case, where the State was unquestionably on notice
that Fergason claimed an interest in the funds, to characterize his answer
as defective for failing to further describe his interest would be nothing
more than a "procedural frustration" hindering the just determination of
the merits in this case. See Stockmeier, 122 Nev. at 393, 135 P.3d at 225.
Because the State failed to present evidence sufficient to
satisfy its burden, the burden of production did not shift to Fergason, and
the district court improperly granted summary judgment. Accordingly, we
reverse and remand to the district court for further proceedings.
J.
We concur:
Gibbons
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