United States v. Snodgrass

23 F.3d 395

NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished opinions may be cited only in related cases.
UNITED STATES of America, Plaintiff, Appellee,
v.
CERTAIN REAL PROPERTY LOCATED AT RIVER ROAD, ELIOT, YORK
COUNTY, MAINE, Defendant, Appellee, Dana B.
Snodgrass, Jr. Claimant, Appellant.

No. 94-1002

United States Court of Appeals,
First Circuit.

May 23, 1994.

Appeal from the United States District Court for the District of Maine [Hon. Gene Carter, U.S. District Judge ]

Thomas Van Houten on brief for appellant.

Jay P. McCloskey, United States Attorney, and Michael M. DuBose, Assistant United States Attorney, on brief for appellee.

D.Me.

AFFIRMED.

Before Torruella, Selya and Stahl, Circuit Judges.

Per Curiam.

1

Dana B. Snodgrass, Jr. appeals from the district court's order dismissing his claim to the defendant property for lack of standing and from the judgment of forfeiture for the United States. We affirm.

BACKGROUND

2

On January 26, 1993, plaintiff United States filed a complaint of forfeiture in rem against defendant property, a Maine residence, pursuant to 21 U.S.C. Sec. 881(7). Approximately two months later, Dana B. Snodgrass, Jr. filed a claim to the property stating that he is its "legal titled owner." In his answer to the complaint, claimant asserted an "innocent owner" defense to the forfeiture.

3

On November 9, 1993, with the consent of both counsel, the district court held a preliminary evidentiary hearing on the issue of claimant's standing to challenge the forfeiture. On November 10, 1993, the district court issued a memorandum of decision and order concluding that claimant is without standing to assert his claim of ownership. United States v. Certain Real Property Located at River Rd., 839 F. Supp. 1 (D. Me. 1993). The district court ordered that Snodgrass, Jr.'s claim be dismissed and that judgment enter for the plaintiff. A final decree of forfeiture entered on November 15, 1993.

4

The district court's factual findings are set forth fully in its memorandum and are not challenged. In brief, the district court found that claimant's father, Dana B. Snodgrass, Sr., had conveyed defendant property to claimant after learning that he, Snodgrass, Sr., was being investigated for drug trafficking.1 Although not reflected in the deed of conveyance, Snodgrass, Sr. retained all rights to the occupancy and use of the property and the obligation to tend to and fund its upkeep and maintenance. At the time of the transfer, Snodgrass, Sr. had had no relationship of substance for seventeen years with claimant, who resided in Seattle, Washington. The court found that the transaction of conveyance was intended solely by Snodgrass, Sr. to shield the property from forfeiture and was not intended to convey any right of dominion or control over, or even any beneficial interest in, the defendant property.

DISCUSSION

5

In a civil forfeiture action, once the government has met its burden of showing probable cause to believe that a substantial connection exists between the property to be forfeited and the illegal exchange of a controlled substance, the burden shifts to the claimant to show that the property is not subject to forfeiture. United States v. 116 Emerson St., 942 F.2d 74, 79 (1st Cir. 1991). As an element of this burden, a claimant must prove an interest in the property sufficient to establish standing to contest the forfeiture. United States v. 526 Liscum Drive, 866 F.2d 213, 216 (6th Cir. 1989). "[C]ourts have uniformly rejected standing claims put forward by nominal or straw owners." United States v. Contents of Accounts Nos. 3034504504 & 144- 07143, 971 F.2d 974, 985 (3d Cir. 1992) (quoting David B. Smith, Defense and Prosecution of Forfeiture Cases, p 9.04, at 9-58.6 (1985 & Supp. 1991)), cert. denied, 113 S. Ct. 1580 (1993). Thus, possession of mere legal title by one who does not exercise dominion and control over the property may be insufficient to establish standing to challenge a forfeiture. Id.; see also United States v. Vacant Land Located at 10th St. & Challenger Way, 15 F.3d 128, 130 (9th Cir. 1993); United States v. 5000 Palmetto Drive, 928 F.2d 373, 375 (11th Cir. 1991); 526 Liscum Drive, 866 F.2d at 217; United States v. One 1945 Douglas C-54 (DC- 4) Aircraft, 604 F.2d 27, 28-29 (8th Cir. 1979); United States v. New Silver Palace Restaurant, Inc., 810 F. Supp. 440, 444 (E.D.N.Y. 1992).

6

In the instant case, the evidence amply supported the district court's conclusion that the transaction of conveyance was a facially transparent sham. After the conveyance, Snodgrass, Sr. continued to live on the property. With the exception of one visit to Maine, during which he stayed in a hotel, claimant remained in Seattle, Washington. Snodgrass, Sr. paid the mortgage and taxes on the property. Claimant did not know the amount of the mortgage or the identity of the mortgage holder. Snodgrass, Sr. also made improvements to the property without consulting claimant. In sum, there was no evidence whatsoever that claimant exercised any dominion or control over the property. Indeed, the evidence pointed inexorably to the conclusion that claimant was nothing more than a nominal or straw owner. Accordingly, the district court properly concluded that claimant lacked standing to contest the forfeiture.

7

Claimant argues that a rule requiring him to show more than legal title to establish standing to challenge a forfeiture is inconsistent with Article III standing jurisprudence. We disagree. The rationale for the rule is that things are often not what they appear to be, especially in the world of drug trafficking. See United States v. 900 Rio Vista Blvd., 803 F.2d 625, 630 (11th Cir. 1986); United States v. One 1977 36 Foot Cigarette Ocean Racer, 624 F. Supp. 290, 294-95 (S.D. Fla. 1985). People engaged in illegal activites often try to disguise their interest in property by placing title in someone else's name. 900 Rio Vista Blvd., 803 F.2d at 630. Article III standing requires that a claimant suffer an injury in fact. Adams v. Watson, 10 F.3d 915, 918 (1st Cir. 1993). A straw owner has no real interest in the seized property and, accordingly, suffers no genuine injury.

8

Claimant also suggests that the district court erred in not allowing him to prove ownership to a jury as an element of his claim. We deem this argument waived. Having consented to an evidentiary hearing to determine his standing to assert a claim of ownership, claimant cannot now complain of the manner of proceeding below. See United States v. Palmer, 956 F.2d 3, 6 (1st Cir. 1992) (an issue not presented to the trial court cannot be raised for the first time on appeal).

9

Affirmed. See 1st Cir. R. 27.1.

1

The parties stipulated that probable cause exists to find that the defendant property was used to facilitate a violation of 21 U.S.C. Sec. 841(a)(1)