Robert R. Coulter, III and Kerri E. Coulter v. Philip J. Caviness, Rush County Prosecutor, on behalf of State of Indiana

FILED
Jul 11 2019, 8:08 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Ross G. Thomas Curtis T. Hill, Jr.
Indianapolis, Indiana Attorney General of Indiana
Justin F. Roebel
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Robert R. Coulter, III and Kerri July 11, 2019
E. Coulter,, Court of Appeals Case No.
Appellants-Respondents, 18A-MI-957
Appeal from the Rush Superior
v. Court
The Honorable Brian Hill, Judge
Philip J. Caviness, Rush County Trial Court Cause No.
Prosecutor, on behalf of State of 70D01-1611-MI-358
Indiana,
Appellee-Petitioner.
Riley, Judge.
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STATEMENT OF THE CASE
[1] Appellants-Respondents, Robert Coulter III (Coulter) and Kerri Coulter (Kerri)
(collectively, the Coulters), appeal from the trial court’s grant of summary
judgment in favor of Appellee-Petitioner, Rush County Prosecutor Philip
Caviness (Caviness), on his Complaint for civil forfeiture.
[2] We affirm in part, reverse in part, remand for further proceedings, and remand
for entry of summary judgment.
ISSUE
[3] The Coulters present us with three issues on appeal, which we consolidate and
restate as: Whether the trial court properly granted summary judgment in favor
of Caviness on his Complaint for civil forfeiture of the Coulters’ property.
FACTS AND PROCEDURAL HISTORY
[4] On October 3, 2016, Detective Alex Shaver (Detective Shaver) of the Rushville
Police Department was contacted by an employee of the Rushville branch of
Wells Fargo Bank on a report that Coulter had come to the bank that morning
and exchanged $9,000 in $20 bills for $100 bills. The currency Coulter
exchanged emitted a strong odor that Detective Shaver recognized as that of
raw marijuana. Detective Shaver was also aware through his training and
experience as a narcotics investigator that $20 bills are the most common unit
of currency used in narcotics transactions. Detective Shaver retrieved
surveillance camera footage from the bank showing Coulter arriving at the bank
that morning in his black Chevrolet pickup truck.
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[5] On October 4, 2016, Detective Shaver retrieved the Coulters’ trash after they
had set it outside of their home for collection. A search of the trash netted mail
belonging to Kerri, marijuana stems, leaves and seeds, and a large pair of
scissors with marijuana plant and residue on it. Detective Shaver applied for
and was granted a search warrant for the Coulters’ home. On October 4, 2016,
the warrant was executed. Officers found Coulter and Kerri at home with their
minor children. After having been provided with his Miranda advisements,
Coulter was asked if there was anything illegal in the home and was asked to
show them where the marijuana was. Coulter replied, “Everything is in the
safe.” (Appellants’ App. Vol. II, p. 35).
[6] Coulter directed the officers to the first-floor master bedroom closet, where a
safe was located. In the safe, the officers found a gym bag containing three and
one-half pounds of marijuana, some of which was packaged in smaller bags,
two digital scales, two boxes of Ziplock baggies, six cell phones, and a pill bottle
containing marijuana seeds. Also found in the safe was $22,907 in cash, a Dell
laptop computer, and a Nikon camera. Further search of the master bedroom
yielded a handwritten ledger and a Toshiba laptop computer that were both
located on top of a desk. In an upstairs bedroom which was being used by
Kerri’s brother, the officers found in a dresser a box with the brother’s name on
it, drug use paraphernalia, and a bag of marijuana. In the upstairs bedroom the
officers also located a Ruger rifle. Evidence of a marijuana growing operation
was located in the Coulters’ garage, including starter trays, potting soil,
fertilizer, a tarp with trimmed marijuana leaves on it, and a large drum
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containing marijuana clippings. Coulter’s black Chevrolet truck, the $22,907 in
cash, the two laptops, the Nikon camera, and the rifle found in the upstairs
bedroom were seized as part of the criminal investigation.
[7] Coulter was transported to the Rush County jail, where he was interviewed by
Detective Shaver. Coulter admitted that he had been growing marijuana for
eighteen years and that he had recently harvested a crop that he had grown in
an open field close to his home. Coulter also admitted that he went to
Indianapolis once every two weeks to purchase one-to-two pounds of
marijuana. Coulter had approximately 130 customers and estimated that he
generated an income of $800 per week dealing marijuana.
[8] On October 7, 2016, the State filed an Information, charging Coulter with
corrupt business influence, a Level 5 felony; dealing in marijuana, a Level 6
felony; maintaining a common nuisance, a Level 6 felony; and possession of
marijuana, a Class B misdemeanor. On October 18, 2017, Coulter pleaded
guilty to dealing in marijuana as a Level 6 felony. In exchange, the plea
agreement provided that Coulter would receive a two-year sentence, all
suspended to probation. In addition, all other charges pending against Coulter
and Kerri were dismissed. On the same day, the trial court accepted Coulter’s
plea and sentenced him according to the terms of the plea agreement.
[9] On November 15, 2016, Caviness filed a Complaint seeking civil forfeiture of
the property seized after the search of the Coulters’ home, alleging in relevant
part as follows:
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5. Over a period of time, [Coulter] has participated in,
constructed and continued to operate a “corrupt enterprise”
through a pattern of racketeering activity, as defined by statute,
in that he, along with other unknown and unnamed co-conspirators,
has engaged in conduct in the furtherance of an enterprise in which he
cultivated illegal narcotics/drugs, possessed illegal
narcotics/drugs, and/or transported illegal narcotics/drugs
and/or sold the illegal narcotics/drugs.
6. [Coulter] and other unnamed persons have continued to engage in
said pattern of racketeering activity, deriving therefrom, profits,
property, and income, obtained with the funds and with the
profits from the enterprise, and said income, profits, and
property, are subject to forfeiture pursuant to the Indiana
Racketeer Influence Corrupt Organization Statute, Indiana Code
Sec. § 34-24-2-1 et seq. The Defendant should be ordered by the
Court to immediately list and identify all of their assets of
whatever kind, and the location and holder of all such assets, and
report said information to the Court at once, serving a copy
thereof on the Plaintiff.
7. [Coulter] acquired and/or utilized certain property including
the property listed in Paragraph 1 of this Complaint to further his
criminal actions. Said property, seized by the Plaintiff’s agents on
or about October 4, 2016 is subject to seizure and forfeiture
pursuant to [I.C. §] 34-24-2 et seq.
(Appellants’ App. Vol. II, p. 7) (emphasis added).
[10] On January 17, 2018, Caviness filed a motion for summary judgment in which
he alleged the property was subject to forfeiture “under both Indiana’s forfeiture
and RICO statutes.” (Appellants’ App. Vol. II, p. 18). Caviness argued that a
“person commits the crime of corrupt business influence if he, ‘through a
pattern of racketeering activity, knowingly or intentionally acquires or
maintains, either directly or indirectly, an interest in or control of property or an
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enterprise.’ Indiana Code § 35-45-6-2.” (Appellants’ App. Vol. II, p. 20).
Caviness further asserted that Coulter
unquestionably engaged in a pattern of racketeering activity
through his growing, purchasing, and selling of marijuana over a
period of eighteen (18) year[s]. The items seized by law
enforcement were either used in the course of, intended for use in
the course of, derived from, or realized through his illegal
conduct.
(Appellants’ App. Vol. II, p. 21). Caviness designated in support of his motion
the pleadings from Coulter’s criminal case, the sworn affidavits filed in support
of the search warrant for the Coulters’ home, sworn incident reports detailing
the search, and photographs taken from the bank surveillance footage showing
Coulter’s use of his truck on October 3, 2016.
[11] In their response in opposition to summary judgment, the Coulters designated,
among other evidence, the deposition testimony of Detective Shaver. The
Coulters argued that a genuine issue of material fact existed regarding whether
Coulter had used his truck in the furtherance of any crime because Detective
Shaver testified at his deposition that he had no “specific direct knowledge” that
the currency Coulter brought to the bank on October 3, 2016, was “proceeds of
drug activity.” (Appellants’ App. Vol. II, pp. 85-86). The Coulters also
designated statements from their Wells Fargo bank account which they argued
showed that the couple had income from legitimate business ventures around
the same time period as the October 3, 2016, currency exchange. Regarding the
other property seized, apart from the currency, the Coulters argued that
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Caviness had failed to make his prima facie case that no issues of fact were left to
be resolved because he had failed to specifically show how the laptops, camera,
and rifle had been used to facilitate the crime of dealing marijuana. Regarding
the seized currency, the Coulters argued that Caviness did not make a prima
facie case for summary judgment because there was nothing linking the currency
to Coulter’s drug dealing, such as an admission by Coulter that the money was
the proceeds from sales, no evidence of any controlled buys using the seized
currency, and no evidence that he had actually sold marijuana to the people
listed on the ledger found in his bedroom. On March 27, 2018, the trial court
granted Caviness’ motion for summary judgment without a hearing and
without entering any findings of fact or conclusions of law.
[12] The Coulters now appeal. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
[13] Summary judgment is appropriate if the designated evidence “shows that there
is no genuine issue as to any material fact and that the moving party is entitled
to judgment as a matter of law.” Ind. Trial Rule 56(C). We review both the
grant or denial of summary judgment de novo and apply the same standard as
the trial court. Kerr v. City of South Bend, 48 N.E.3d 348, 352 (Ind. Ct. App.
2015). The party moving for summary judgment bears the initial burden of
making a prima facie showing that there are no genuine issues of material fact
and that it is entitled to judgment as a matter of law. Sargent v. State, 27 N.E.3d
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729, 731 (Ind. 2015). “Summary judgment is improper if the movant fails to
carry its burden, but if it succeeds, then the nonmoving party must come
forward with evidence establishing the existence of a genuine issue of material
fact.” Id. at 731-32. “All disputed facts and doubts as to the existence of
material facts must be resolved in favor of the non-moving party.” Kerr, 48
N.E.3d at 352. The non-moving party has the burden on appeal to persuade us
that the trial court’s grant of summary judgment was erroneous, but we will
carefully assess the trial court’s decision to ensure that the non-moving party
was not improperly denied his day in court. Id.
[14] In addition, we note that the trial court did not enter findings of fact and
conclusions of law in support of its judgment. Special findings are not required
in summary judgment proceedings and are not binding on appeal.
AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 (Ind. Ct.
App. 2004). However, such findings offer this court valuable insight into the
trial court’s rationale for its review and facilitate appellate review. Id.
II. Indiana’s RICO Statute
[15] In his Complaint, Caviness alleged that the Coulter’s property was subject to
forfeiture under both the civil forfeiture statute, I.C. § 34-24-2-1 et seq and
Indiana’s Racketeer Influenced and Corrupt Organizations (RICO) statute, I.C.
§ 34-24-2-2 et seq; I.C. § 35-45-6-2. However, the trial court granted summary
judgment based solely on the state RICO statute, and, thus, our analysis will
entail that statute only. Indiana Code section 34-24-2-2(a) provides, in relevant
part, that
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[t]he prosecuting attorney in a county in which any of the
property is located may bring an action for the forfeiture of any
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 [I.C. §] 35-45-6-2.
Indiana Code section 35-45-6-2, in turn, criminalizes the engagement in corrupt
business influence. A ‘corrupt business influence’ is defined, in relevant part, as
a person “who through a pattern of racketeering activity, knowingly or
intentionally acquires or maintains, either directly or indirectly, an interest in or
control of property or an enterprise[.]” I.C. § 35-45-6-2(2). Thus, this section of
the RICO statute criminalizes acquiring or maintaining an interest or control in
property through a pattern of racketeering, without necessarily being engaged in
or associated with an enterprise. Id. A ‘pattern of racketeering activity’ is
defined as “engaging in at least two (2) incidences of racketeering activity that
have the same or similar intent, result, accomplice, victim, or method of
commission, or that are otherwise interrelated by distinguishing characteristics
that are not isolated incidents.” I.C. § 35-45-6-1(d). Finally, ‘racketeering
activity’ means “to commit, to attempt to commit, to conspire to commit a
violation of, or aiding and abetting a violation of any of the following . . .
dealing in marijuana, hashish oil or salvia.” I.C. § 35-45-6-1(e)(34).
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II. Prima Facie Showing and Genuine Issues of Material Fact
[16] We begin our analysis regarding Caviness’ prima facie showing by noting that he
proceeded under different RICO theories in his Complaint than he did in his
motion for summary judgment. In his Complaint, Caviness alleged that
Coulter had acted in concert with “other unknown and unnamed co-
conspirators” and “engaged in conduct in furtherance of an enterprise” of
dealing drugs. (Appellants’ App. Vol. II, p. 7). This allegation of operating a
criminal enterprise is referred to as “said pattern of racketeering” and “his
criminal actions” in subsequent paragraphs of the Complaint. (Appellants’
App. Vol. II, p. 7). An ‘enterprise’ is defined in the RICO statute in relevant
part as “a union, an association, or a group, whether a legal entity or merely
associated in fact.” I.C. § 35-45-6-1(c)(2). Thus, a RICO enterprise is “a group
of persons associated together for a common purpose of engaging in a course of
conduct.” Miller v. State, 992 N.E.2d 791, 794 (Ind. Ct. App. 2013) (quotation
omitted), trans. denied.
[17] Caviness did not assert in his motion for summary judgment that Coulter had
engaged in racketeering as part of a group of persons. Rather, he alleged that
no genuine issue of material fact existed that Coulter had “unquestionably
engaged in a pattern of racketeering activity through his growing, purchasing,
and selling of marijuana over a period of eighteen (18) year[s].” (Appellants’
App. Vol. II, p. 21). This being noted, the Coulters do not argue that the RICO
statute does not apply to a one-man drug dealing operation, nor do they claim
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in their responsive summary judgment pleadings that Caviness had improperly
varied his claims for purposes of his summary judgment motion.
[18] We also observe that Caviness argued on summary judgment that, because the
trial court had found that probable cause existed for a charge of corrupt
business influence and Coulter had pleaded guilty to dealing marijuana, Coulter
was collaterally estopped by Indiana Code section 34-24-2-7 1 from relitigating
those issues on summary judgment. However, the charge for which probable
cause was found was an allegation that Coulter used proceeds from his
marijuana dealing to establish an “enterprise,” a theory that Caviness did not
pursue in his summary judgment motion. (Appellants’ App. Vol. II, p. 23).
Regardless, for collateral estoppel to apply, a final judgment on the merits in a
court of competent jurisdiction had to have been rendered on the fact or issue.
Nat’l Wine & Spirits, Inc. v. Ernst & Young, LLP, 976 N.E.2d 699, 704 (Ind. 2012).
A finding of probable cause determination is not a final judgment of an issue or
fact. In addition, the fact that Coulter pleaded guilty to dealing marijuana did
not relieve the State from making a prima facie showing for summary judgment
that an interest in, or control of, the property at issue was acquired or
maintained by Coulter through that dealing activity, as required by the RICO
statute. See I.C. § 35-45-6-2(2); see also Flinn v. State, 563 N.E.2d 536, 541 (Ind.
1990) (“[O]nce a pattern of racketeering activity has been established, it must be
1
I.C. § 34-24-2-7 provides as follows: “In any action brought under this chapter . . ., the principle of
collateral estoppel operates to bar relitigation of the issues previously determined in a criminal proceeding
under IC 35-45-6-2.”
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connected to an interest in or control of . . . property or an enterprise, to
constitute the offense of corrupt business influence.”).
A. Truck 2
[19] The evidence designated by Caviness showed that Coulter engaged in
marijuana growing and dealing for approximately eighteen years, had 130
active clients, and made approximately $800 per week from his marijuana
dealing activities. On October 3, 2016, he drove his black Chevrolet truck to
the bank and presented $9,000 in $20 bills to be exchanged for $100 bills.
Caviness designated evidence that $20 bills are the most common unit of
currency used in the narcotics trade. Although Caviness’ designated evidence
showed that Coulter claimed to be engaged in some legitimate business activity
also, Kerri told investigators that Coulter had not been working a great deal
prior to his arrest. Coulter’s control of his truck had to be maintained with
insurance and fuel, costs which required him to expend money on an ongoing
basis. Thus, we conclude that the designated evidence established a prima facie
showing that Coulter knowingly maintained control, at least indirectly, of his
2
In his Complaint, Caviness alleged that the truck was also subject to seizure under Indiana Code section
34-24-1-1(a)(1). That portion of Indiana’s civil forfeiture statute pertaining to the forfeiture of vehicles was
deemed unconstitutional in litigation in the Southern District of Indiana. See Washington v. Marion Cty.
Prosecutor, 264 F. Supp. 3d 957, 979-80 (S.D. Ind. 2017). The matter is now on remand from the Seventh
Circuit for consideration of recent amendments to the statute. See Washington v. Marion Cty. Prosecutor, 916
F.3d 676, 679-80 (7th Cir. 2019). This litigation does not impact the present case because the trial court did
not grant summary judgment under the civil forfeiture statute.
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truck through his drug dealing activities and that he used his truck in the course
of his drug dealing when he drove it to the bank on October 3, 2016.
[20] The Coulters, in response to this prima facie showing, designated evidence in
the form of Detective Shaver’s deposition testimony that the State did not have
“any specific direct knowledge” that the cash Coulter sought to exchange on
October 3, 2016, was derived from drug dealing. (Appellants’ App. Vol. II, p.
85). Caviness does not address this evidence on appeal. As Coulter’s act of
driving his truck to exchange the currency was the only use of the truck
supported by the evidence, 3 we conclude that a genuine issue of material fact
existed regarding whether Coulter acquired or maintained control of his truck
through his drug dealing activity and that this issue precluded summary
judgment as to Coulter’s truck. Accordingly, we reverse the trial court’s grant
of summary judgment as to the truck and remand for further proceedings on
that property. See Feitler v. Springfield Enters., Inc., 978 N.E.2d 1160, 1170 (Ind.
Ct. App. 2012) (remanding where summary judgment grant was inappropriate
due to existence of genuine issues of material fact), trans. denied.
B. Property Found in the Safe
[21] When his home was searched by law enforcement on October 4, 2016, and after
receiving his Miranda advisements, Coulter was asked if there was anything
illegal in the home and to show the officers where the marijuana was. Coulter
3
Coulter told investigators that he went to Indianapolis approximately twice a month to purchase
marijuana, but the evidence is silent as to his mode of transportation for these trips.
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replied, “Everything is in the safe.” (Appellants’ App. Vol. II, p. 35). In the
safe Officers found marijuana, $22,907 in cash, the Dell laptop computer, and a
Nikon camera. Contrary to the Coulters’ assertions on appeal, Coulter’s
statement to the officers established a link between the property in the safe and
his drug dealing activity and, thus, made a prima facie showing that the cash,
laptop, and camera found there were acquired or maintained by Coulter
through his drug activity. Once Caviness made this showing, the burden shifted
to the Coulters to show the existence of a genuine issue of material fact. See
Sargent, 27 N.E.3d 731-32. The Coulters did not designate any evidence which
created a genuine issue of material fact regarding this property, such as an
affidavit on his part refuting that the property was related to his drug dealing
activities. The Coulters’ designation of bank account records showing money
flowing through their bank account, without more, does not create a link
between any cash withdrawn from the bank and the cash found in the safe. As
such, we conclude that the trial court properly granted summary judgment to
Caviness on the property found in the safe.
C. Property Found Outside the Safe
[22] Caviness also sought summary judgment on the forfeiture of the Toshiba laptop
found on a desk in the master bedroom and a rifle found in an upstairs
bedroom. In support of his case for forfeiture of the laptop, Caviness
designated evidence that the laptop was found next to a handwritten drug client
ledger on the desk. However, without more, we conclude that the simple fact
that the laptop was found in close proximity to the client ledger did not
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establish a prima facie showing that the laptop was acquired or maintained
through Coulter’s drug dealing activity. 4 Regarding the rifle, Caviness
designated no evidence affirmatively showing that it was linked in any way to
Coulter’s drug dealing, let alone acquired or maintained through those
activities. Rather, undisputed evidence designated by Caviness showed that the
bedroom where the rifle was located was being used by someone else. Because
Caviness did not pursue any theory of group drug dealing activity in his
summary judgment pleadings, we conclude that the trial court erred when it
granted summary judgment to Caviness on the Toshiba laptop and the rifle, and
we remand for entry of summary judgment on that property in favor of the
Coulters. See Sargent v. State, 27 N.E.3d 729, 733 (Ind. 2015) (reversing and
remanding for entry of summary judgment in favor of property owner in civil
forfeiture case where the State failed to make prima facie showing and material
facts were not in dispute).
CONCLUSION
[23] Based on the foregoing, we conclude that no genuine issues of material fact
existed regarding the $22,907, Dell laptop, and Nikon camera found in the safe
and that summary judgment in favor of Caviness was appropriately granted as
to that property. We conclude that a genuine issue of fact was left to be
4
The civil forfeiture statute provides for the admission into evidence of property found near or on a person
committing an enumerated offense as prima facie evidence the property was used to facilitate a violation of, or
was proceeds of, the violation of a criminal statute for purposes of proving forfeiture is merited. See I.C. § 34-
24-1-1(d). Indiana’s RICO statute has no such evidentiary presumption.
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resolved regarding the truck and reverse and remand for further proceedings.
We also conclude that Caviness failed to make a prima facie case regarding the
Toshiba laptop and the rifle, and, therefore, we remand for entry of summary
judgment in favor of the Coulters as to those two items.
[24] Affirmed in part, reversed in part, and remanded for further proceedings as to
the truck and with instruction for entry of summary judgment in favor of the
Coulters as to the Toshiba laptop and the rifle.
[25] Bailey, J. and Pyle, J. concur
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