State of Ind., Consolidated City of Indianapolis/Marion Co. v. El Rodeo 11, Llc.

ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Gregory F. Zoeller Karen Huelskamp
Attorney General of Indiana Indianapolis, Indiana
Andrew A. Kobe
Deputy Attorney General
Kyle Hunter
Deputy Attorney General Jan 29 2015, 9:58 am
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
State of Indiana, Consolidated January 29, 2015
City of Indianapolis/Marion Court of Appeals Cause No.
County, the Metropolitan Law 49A05-1406-MI-257
Enforcement Agency, the Appeal from the Marion Superior
Indiana State Police, the Marion Court, The Honorable David. A.
Shaheed, Judge
County Prosecutor, and the
Cause No. 49D01-1311-MI-0432384
Indiana Department of Revenue,
Appellants,
v.
El Rodeo #11, LLC,
Appellee.
Mathias, Judge.
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[1] The State of Indiana, the Consolidated City of Indianapolis/Marion County,
the Metropolitan Law Enforcement Agency, the Indiana State Police, the
Marion County Prosecutor, and the Indiana Department of Revenue
(collectively “Marion County”) appeal the Marion Superior Court’s order
granting El Rodeo #11’s motion to return improperly seized funds. Specifically,
Marion County argues that the trial court erred when it ordered Marion County
to return El Rodeo’s funds because the funds were seized by and are being held
in the Tippecanoe County Prosecutor’s Office.
[2] We reverse and remand for proceedings consistent with this opinion.
Facts and Procedural History
[3] On November 10, 2012, El Rodeo #11, which is located in Greenfield, Indiana,
was completely destroyed by a fire. Appellant’s App. p. 58. El Rodeo #11
submitted a claim for property losses to its insurance company, and the claim
was settled for $1,152,570.73. El Rodeo #11 deposited the insurance proceeds
into an account at Chase Bank, which was opened specifically to receive those
funds. The funds were eventually withdrawn from the Chase account and
transferred to an account at PNC Bank, which also held only the insurance
proceeds. El Rodeo #11 paid certain construction costs from those funds, and
in November 2013, the PNC account had a balance of $967,840,81.
[4] Prior to November 18, 2013, the Tippecanoe County Prosecutor’s Office served
a warrant for seizure of El Rodeo #11’s funds in the PNC Bank account. The
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bank issued a cashier’s check in the amount of $967,840.81 and gave the check
to the Tippecanoe County Prosecutor’s Office.
[5] On November 18, 2013, the Marion Superior Court, at the request of the
Marion County Prosecutor’s Office, issued an order to freeze El Rodeo #11’s
PNC bank account. The order froze the PNC Bank account’s assets, but the
account balance was zero.
[6] Shortly thereafter, Marion County filed a Complaint for Forfeiture demanding
judgment against numerous defendants for forfeiture of certain funds held by
the defendants at various banks. El Rodeo #11 was named as a defendant in the
complaint. The complaint alleged that the funds “had been furnished or w[ere]
intended to be furnished in exchange for a violation of a criminal statute, or
[are] traceable as proceeds of a violation of a criminal statute, in violation of
Indiana law, as provided in I.C. 34-24-1-1.” Id. at 32.
[7] The forfeiture complaint was amended on December 3, 2013, and specifically
named El Rodeo #11’s “$967,840.81 in U.S. Currency Located in PNC Bank,
Acct. ending in 2997” as a defendant. Id. at 37. Marion County also added a
second count to the complaint and alleged that the named defendants “have
participated in, constructed, and continued to operate a corrupt enterprise,
through a pattern of racketeering activity, as defined in I.C. 34-24-2-1.” Id. at
38.
[8] El Rodeo #11 filed an answer and affirmative defenses but also filed a “Motion
to Return Insurance Proceeds Improperly Seized.” In response, Marion County
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filed a motion to dismiss El Rodeo #11 from its forfeiture complaint because
the Tippecanoe County Prosecutor’s Office has possession of El Rodeo #11’s
funds and has also filed a forfeiture complaint against El Rodeo #11.
[9] On May 7, 2014, the trial court held a hearing on El Rodeo #11’s motion for
return of insurance proceeds and Marion County’s motion to dismiss. A
representative of the Tippecanoe County Prosecutor’s Office was also present at
the hearing. Marion County argued that El Rodeo #11’s motion should be
denied because Marion County had “nothing to give back to [El Rodeo #11]
because the funds are physically in Tippecanoe County.” Tr. p. 22. Marion
County also argued that because identical forfeiture proceedings were pending
in both Marion and Tippecanoe Counties, pursuant to Trial Rule 12(B)(8), the
Marion County proceedings should be dismissed. Marion County conceded
that the funds at issue were insurance proceeds but would not agree that the
funds were not subject to forfeiture.1 Tr. p. 35.
[10] However, Marion County implied that the funds could be released to El Rodeo
#11 if it would agree that Marion County could “add El Rodeo #11 the actual
property and business to its forfeiture complaint.” Tr. p. 37. Marion County
proposed that the funds would be released in installments “as long as [El Rodeo
#11] provide[s] proper accounting for what” the funds are spent. Tr. p. 38.
Marion County also stated that it could not “compel [Tippecanoe County] to
give that money over. We had talked about the offer, I believe that can be done
1
Marion County argued that proceeds of insurance are forfeitable if they were the proceeds of wrongdoing,
i.e. if the policy was purchased with illegally obtained funds. Tr. p. 42.
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through mutual cooperation, if everyone is agreeable to that solution.” Id. El
Rodeo #11 responded that the funds should have never been seized and Marion
County was “in no position to demand any kind of terms and conditions for the
release of the money.” Tr. p. 39.
[11] The trial court denied Marion County’s motion to dismiss. The court granted
El Rodeo #11’s motion for return of its insurance proceeds and ordered Marion
County to “return, or cause to be returned, the $967,840.81 seized improperly
from the account of El Rodeo #11 within five (5) business days from the date”
of its May 7, 2014 order. Marion County requested a stay of the trial court’s
order and requested that the trial court clarify whether the court “has granted
summary judgment to Defendants on the claim of forfeiture to the disputed
funds” or whether the court’s order only affects possession of the funds
“without deciding the merits of Plaintiff’s complaint.” Appellant’s App. p. 152.
[12] On May 16, 2014, El Rodeo #11 filed a petition requesting that the trial court
hold Marion County in contempt of court for failing to return its seized funds.
On May 22, the trial court issued a show cause order and directed Marion
County to “bring with them to the [June 18, 2014] hearing a check either
endorsed by the appropriate party, or made directly payable to El Rodeo #11,
in the amount of $967,840.81.” Id. at 158. On June 6, 2014, Marion County
filed an interlocutory appeal of right pursuant to Indiana Appellate Rule 14(A).
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Discussion and Decision
[13] Marion County argues that the trial court erred when it was ordered to return
funds to El Rodeo #11, which were never seized by the Marion County
Prosecutor’s Office and are “being legally held pursuant to a different case now
pending in Tippecanoe County.” Appellant’s Br. at 6. Marion County
contends that El Rodeo #11 needs to seek relief in Tippecanoe County, which
is holding the funds “under the authority of a court in that county.” Id. at 6.
Finally, Marion County argues that the trial court “had no jurisdiction to order
payment of funds being held under the authority and order of” the Tippecanoe
Superior Court. Id. at 7.
[14] In response, El Rodeo #11 contends that the Tippecanoe County Prosecutor is
an agent of the State of Indiana, as is the Marion County Prosecutor. Therefore,
it does not matter which prosecutor’s office is holding El Rodeo’s funds because
the “agency holds it by and under the laws of the State of Indiana.” Appellee’s
Br. at 6. El Rodeo #11 claims that the trial court’s order does not infringe on
the authority of the Tippecanoe Superior Court because the trial court
effectively ordered the State of Indiana to return El Rodeo #11’s funds.
Specifically, El Rodeo #11 argues that the plaintiff “is the State of Indiana not
the Marion County Prosecutor. The Marion County Prosecutor represents the
State of Indiana as its attorney. . . . The money is being held by a subdivision of
the State of Indiana not a different government agency.” Id. at 7.
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[15] Our General Assembly has authorized county prosecutors to represent the State
and the State Police in certain civil forfeiture actions. See State v. Combs, 921
N.E.2d 846, 852 (Ind. Ct. App. 2010); see also Ind. Code § 34-24-1-3
(authorizing the “prosecuting attorney for the county in which the seizure
occurs” to bring a civil forfeiture action “in the name of . . . the state and the
unit that employed the law enforcement officers who made the seizure”). In this
case, the Marion County Prosecutor’s Office initiated the forfeiture action on its
own behalf, the State, the State Police, the City of Indianapolis, the
Metropolitan Law Enforcement Agency, and the Indiana Department of
Revenue.
[16] However, while Marion County was able to freeze El Rodeo #11’s PNC Bank
account, the Tippecanoe County Prosecutor’s Office had already seized the
funds in that account under the authority of the Tippecanoe Superior Court. It
is undisputed that the Marion County Prosecutor’s Office is not in possession of
El Rodeo #11’s funds. On the date of the hearing in this case, the Tippecanoe
County Prosecutor’s Office retained possession and control over the seized
funds. The seized funds have not been turned over to the State.
[17] The “prosecuting attorney for the county in which the seizure occurs may, . . .
cause an action for reimbursement of law enforcement costs and forfeiture to be
brought by filing a complaint in the circuit or superior court in the jurisdiction
where the seizure occurred.” I.C. § 34-24-1-3 (emphasis added). Also, Indiana
Code section 34-24-2-2 allows “[t]he prosecuting attorney in a county in which
any of the property is located [to] bring an action for the forfeiture of any
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property: (1) used in the course of; (2) intended for use in the course of; (3)
derived from; or (4) realized through; conduct in violation of IC 35-45-6-2,”
which statute defines corrupt business influence. (Emphasis added).
[18] El Rodeo #11’s property was seized by and located in Tippecanoe County
when the Marion County Prosecutor’s Office filed its November 21, 2013,
complaint for forfeiture. Therefore, the Marion County Prosecutor’s Office
could not meet the statutory requirements for filing a forfeiture complaint under
either Indiana Code section 34-24-1-3 or Indiana Code section 34-24-2-2.
[19] Marion County filed a motion to dismiss its forfeiture complaint against El
Rodeo #11 because the Tippecanoe County Prosecutor’s Office possesses El
Rodeo #11’s funds. Appellant’s App. pp. 160-62. Because El Rodeo #11’s
funds were not located in Marion County, the trial court should have granted
Marion County’s motion to dismiss.
[20] The trial court also improperly granted El Rodeo #11’s motion to return
insurance proceeds improperly seized. First, we observe that El Rodeo #11
inexplicably filed this motion in the Marion Superior Court forfeiture action
even though its funds were seized and are in the custody of the Tippecanoe
County Prosecutor’s Office. The record does not disclose whether El Rodeo
#11 has filed a similar motion in Tippecanoe County.
[21] None of the named plaintiffs, including the State and the State Police, are in
possession of the seized funds; therefore, Marion County is unable to provide
the relief ordered by the trial court. “A case is deemed moot ‘when no effective
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relief can be rendered to the parties before the court.’” State v. Downey, 14
N.E.3d 812, 816 (Ind. Ct. App. 2014) (quoting Samm v. State, 893 N.E.2d 761,
765 (Ind. Ct. App. 2008)), trans. pending. El Rodeo #11’s request for the seized
funds is moot because Marion County cannot produce funds that it does not
(and never) possessed. See Downey, 14 N.E.3d at 816 (concluding that
Downey’s request for funds was moot because the State turned his seized funds
over to the federal government pursuant to court order).
[22] Moreover, the Tippecanoe County Prosecutor’s Office is not a named party in
this case,2 and we disagree with El Rodeo #11’s assertion that it does not matter
which prosecutor’s office is holding El Rodeo #11’s funds because the “agency
holds it by and under the laws of the State of Indiana.” Appellee’s Br. at 6.
County prosecutors are part of the executive branch of government, and the
office “represents the executive in the enforcement of the criminal laws of the
state.” Schweitzer v. State, 700 N.E.2d 488, 493 (Ind. Ct. App. 1998) (Sullivan,
J., concurring in result), trans. denied. However, county prosecutors represent
“the state of Indiana in all criminal matters arising within his [or her]
jurisdiction” unless he or she is disqualified “for some reason.” State ex re.
Powers v. Vigo Circuit Court, 236 Ind. 408, 412, 140 N.E.2d 497, 499 (1957).
[23] El Rodeo #11 would have us hold that a judgment against the State may be
enforced against any political subdivision within the State. Such a conclusion is
illogical and untenable. El Rodeo #11 does not cite, and our research does not
2
However, a representative from the Tippecanoe Prosecutor’s Office was present at the hearing held on May
7, 2014.
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reveal, any authority for its proposition that the trial court’s judgment against
Marion County can be used to compel Tippecanoe County to return the seized
funds in its possession to El Rodeo #11. For all of these reasons, we conclude
that the trial court erred when it granted El Rodeo #11’s “Motion to Return
Insurance Proceeds Improperly Seized.”
Conclusion
[24] We reverse and remand this case to the trial court with instructions to grant
Marion County’s motion to dismiss its forfeiture complaint against El Rodeo
#11, and we vacate the trial court’s order granting El Rodeo #11’s motion to
return insurance proceeds.
[25] Reversed and remanded for proceedings consistent with this opinion.
Najam, J., and Bradford, J., concur.
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