State of New Jersey v. Two Thousand Two Hundred Ninety-Three Dollars ($2,293) in United States Currency

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4929-11T3
STATE OF NEW JERSEY,
Plaintiff-Respondent, APPROVED FOR PUBLICATION
v.
July 17, 2014
TWO THOUSAND TWO HUNDRED
APPELLATE DIVISION
NINETY-THREE DOLLARS ($2,293)
IN UNITED STATES CURRENCY,
Defendant.
_______________________________________________________
Argued March 4, 2014 – Decided April 24, 2014
Before Judges Messano, Hayden and Rothstadt.
On appeal from the Superior Court of New
Jersey, Law Division, Special Civil Part,
Union County, Docket No. DC-6978-09.
Rachel E. King argued the cause for
appellant James Baker (Appellate Litigation
Clinic Earle Mack School of Law at Drexel
University, attorneys; Amy Montemarano, on
the brief).
Thomas Haluszczak, Jr., Special Deputy
Attorney General/Acting Assistant Prosecutor,
argued the cause for respondent State of New
Jersey (Grace H. Park, Acting Union County
Prosecutor, attorney; Mr. Haluszczak, of
counsel and on the brief).
The opinion of the court was delivered by
MESSANO, P.J.A.D.
James Baker appeals from the Law Division's order of April
18, 2012, that denied his motion for the return of certain
property, specifically $2293 (the monies) seized by the State of
New Jersey (the State). We set forth the procedural history.
On April 16, 2009, the State filed a complaint in the Law
Division, Special Civil Part, seeking forfeiture of the monies.
See N.J.S.A. 2C:64-3(a). The complaint alleged that the monies,
along with eighty-five glassine envelopes of suspected heroin
and other drug paraphernalia, were seized on January 22, 2009,
during the execution of a search warrant by the Elizabeth Police
Department. The complaint demanded a jury trial. Attached to
the complaint was a lab report and supporting documentation
demonstrating the substance seized was heroin.
Baker filed an answer pro se. He alleged that the State
actually seized "approximately $2,800," which was money "he
receive[d] from side work with his friend[s]," and he further
denied that drugs were ever sold from his house or car, the
locations for which the search warrant had been issued. Baker
attached two documents that allegedly supported his claim to the
monies. A trial was scheduled for June 8, but the State sought
and was granted a stay of the proceedings pending resolution of
the criminal charges. See N.J.S.A. 2C:64-3(f).
2 A-4929-11T3
Baker was subsequently indicted and charged with third-
degree possession of heroin, N.J.S.A. 2C:35-10a(1); third-degree
possession of heroin with intent to distribute, N.J.S.A. 2C:35-
5b(3); and third-degree possession heroin within 500 feet of a
public housing facility, N.J.S.A. 2C:35-7.1. A jury found Baker
guilty of all charges, and on January 6, 2012, the judge
sentenced him to a five-year term of incarceration with a
thirty-month parole disqualifier.
The record does not disclose if the stay of trial was ever
vacated. Nevertheless, on April 18, 2012, Baker filed a pro se
motion seeking the return of the monies; he requested oral
argument. The certification supporting the motion essentially
reasserted the claims in the answer Baker originally filed in
2009.
The State opposed the motion, relying upon N.J.S.A. 2C:64-
3(j).1 The prosecutor asserted that the monies were "on
[Baker's] person [when] he was arrested and charged with the
crimes for which he has been duly found guilty, monies which
1
That section provides: "Evidence of a conviction of a criminal
offense in which seized property was either used or provided an
integral part of the State's proofs in the prosecution shall be
considered in the forfeiture proceeding as creating a rebuttable
presumption that the property was utilized in furtherance of an
unlawful activity." N.J.S.A. 2C:64-3(j).
3 A-4929-11T3
were found in close proximity to significant quantities of
heroin." The assistant prosecutor also stated:
[T]he State respectfully . . . asserts . . .
that it has no burden to proceed with at
this time. The State is entitled to a
rebuttable presumption that . . . [the]
monies are tainted by criminal activity. It
is up to . . . Baker to come forward and
affirmatively prove that such funds are
legitimate. His alleged bank statements
only show random deposits of cash from no
verifiable legitimate source of funds and/or
employment for the year 2009.
The clerk of the court mailed notices to both parties on
May 2, 2012, informing them that the hearing on Baker's motion
was scheduled for May 16, 2012. The notice to Baker was sent to
"N-S-P P.O. BOX 2300, NEWARK, NJ 07114," the address Baker used
when he filed his motion. On May 7, the prosecutor wrote to the
assistant civil division manager, advising of defendant's
incarceration. He asked "whether you will still proceed or
adjourn the matter upon . . . Baker's release from prison." The
record does not reveal whether the court responded.
On the same day, the notice to Baker was returned to the
court with the markings, "RETURN TO SENDER[;] INSUFFICIENT
ADDRESS[;] UNABLE TO FORWARD." There is no indication in the
record that the court took any further action.
On May 16, in appellant's absence, the prosecutor appeared
before the judge, and the following colloquy occurred:
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COURT: Unfortunately, [Baker is] not here
and the reason he's not here is because he
is in jail.
. . . .
So we have to deal without him.
PROSECUTOR: Well, yes, Judge,
unfortunately.
COURT: [Baker] gives me no proof . . . that
the $[2293] is other [sic] than anything to
do with his private life.
PROSECUTOR: Well, he hasn't provided any
proof, Judge.
COURT: There's no proof at all.
. . . .
And there's a presumption that if
you're arrested and you've got money on you,
that that money comes from a drug deal, I
would imagine.
. . . .
PROSECUTOR: [Baker] failed his burden of
proof and I stand on the evidence admitted
in the criminal case. And, accordingly,
would ask [y]our [h]onor to dismiss his
motion.
COURT: That's what I’m going to do.
. . . .
The motion is denied.
. . . .
For the reasons that you have stated
and I have stated.
5 A-4929-11T3
The prosecutor then marked three exhibits, which included an
expert witness report from Detective Martin Lynch, Lynch's
curriculum vitae and a currency seizure report. The judge
examined the documents, entered them into evidence, and
concluded they showed "clearly that the drugs and the money were
related to each other." The judge entered the order under
review.2
Baker's essential argument is that he was denied due
process because he failed to receive any, much less adequate,
notice of the motion hearing. He also contends that the judge
erred in applying the presumption contained in N.J.S.A. 2C:64-
3(j), and that a remand is necessary for a trial on the State's
complaint. In large part, we agree that Baker was denied the
opportunity to contest the essential allegations contained in
2
The order is clearly interlocutory because it only denied
Baker's motion and did not enter final judgment in favor of the
State. See R. 2:2-3(a)(1) (providing for appeal as of right
only "from final judgments of the Superior Court trial
divisions"). At oral argument before us, both parties agreed
that, although final judgment was not entered, they viewed the
order denying Baker's motions as dispositive of all claims in
the case, and the State acknowledged that it was proceeding on
the assumption that the order effectively granted it a judgment
of forfeiture regarding the monies. Under these unique
circumstances, we exercise our discretion and consider Baker's
notice of appeal as a timely-filed motion for leave to appeal,
which we grant nunc pro tunc. See Pressler & Verniero, Current
N.J. Court Rules, comment on R. 2:2-4 (2014).
6 A-4929-11T3
the complaint. Therefore, we reverse and remand the matter for
trial.
We digress briefly to explain the statutory scheme that
permits the State to seek forfeiture of the monies. A
forfeiture action is brought not against the owner of a res, but
instead against the res itself. State v. Seven Thousand
Dollars, 136 N.J. 223, 232-33 (1994). However, our courts have
recognized that certain constitutional protections attach to the
owner. See id. at 239 ("[T]he legal fiction of in rem
proceedings against the property cannot obscure the fact that
forfeiture really sanctions the owner of the property."). The
Forfeiture Statute, N.J.S.A. 2C:64-1 to -9, must be strictly
construed against the State "in a manner as favorable to the
person whose property is to be seized as is consistent with the
fair principles of interpretation." Seven Thousand Dollars,
supra, 136 N.J. at 238 (citations omitted). The Court has
recognized "the criminal character of forfeiture proceedings
despite its adoption of the civil burden of proof, and has
impressed on civil forfeiture proceedings certain protections
normally associated with criminal trials." Id. at 239(citations omitted); see also State v. One 1990 Honda Accord,
154 N.J. 373, 393 (1998) (holding that the right to a jury trial
applies to forfeiture cases).
7 A-4929-11T3
"In New Jersey, as elsewhere, [t]he essential components of
due process are notice and an opportunity to be heard." First
Resolution Inv. Corp. v. Seker, 171 N.J. 502, 513-14 (2002)
(alteration in original) (internal quotation marks and citation
omitted). We have held "[d]ue process requires that deprivation
of property by state action be preceded by notice and an
opportunity to be heard." Twp. of Jefferson v. Block 447A, Lot
10, 228 N.J. Super. 1, 4 (App. Div. 1988) (citation omitted).
In other settings involving the deprivation of property rights,
the United States Supreme Court has held "the government's
knowledge that notice pursuant to the normal procedure was
ineffective trigger[s] an obligation on the government's part to
take additional steps to effect notice." Jones v. Flowers, 547
U.S. 220, 230, 126 S. Ct. 1708, 1716, 164 L. Ed. 2d 415, 428
(2006); see also Twp. of Brick v. Block 48-7, Lots 34, 35, 36,
202 N.J. Super. 246, 254 (App. Div. 1985) (remanding to
determine whether, based in part upon the return of mailed
notice, government officials had actual knowledge that notice of
impending foreclosure suit would likely not be delivered).
Our research has not revealed, nor have the parties cited,
any New Jersey case that specifically deals with the issue of
inadequate notice and its effect thereupon forfeiture
proceedings arising from a criminal prosecution. However, other
8 A-4929-11T3
jurisdictions have considered the issue directly, some in
circumstances where, as here, the government knew that the
notice provided was actually not received. In United States v.
One Toshiba Color Television, 213 F.3d 147, 149-50 (3d Cir.
2000), the court set aside a forfeiture judgment, finding that
mailed notice to the inmate was inadequate absent demonstration
that the procedures at the facility were "reasonably calculated
to deliver the notice to the intended recipient." In another
federal forfeiture case, Rodriguez v. Drug Enforcement Admin.,
219 Fed. Appx. 22 (1st Cir. 2007), the court held that "if the
government knew or had reason to know that the notice would not
reach the appellant then notice was inadequate." Id. at 23
(citing Flowers, supra, 547 U.S. at 230, 126 S. Ct. at 1716, 164
L. Ed. 2d at 428); see also Volpe v. United States, 543 F. Supp.
2d 113, 119-20 (D.Mass. 2008) (setting aside forfeiture because
the written notice of seizure was returned with the marking
"addressee unknown," and government failed to make reasonable
efforts to ascertain the claimant's current address); State v.
Twenty-Eight Thousand Six Hundred Eighteen Dollars, 212 P.3d
502, 506 (Okla. Civ. App. 2009) ("In a civil forfeiture
proceeding, when certified mail is returned unclaimed, a
reasonable effort must be made to determine if another address
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for the claimant may be found before the prosecuting agency may
conclude that the claimant's address is 'unknown.'").
The State argues that Baker's presence at the motion was
not mandatory, because he had only a qualified right to be
present at any trial on the forfeiture complaint. We do not
necessarily disagree.
However, Rule 6:3-3(c)(1) provides that "[n]o oral argument
of a motion shall be permitted unless specifically demanded by a
party or directed by the court." In this case, Baker
specifically sought an opportunity to orally argue the motion.
In the Special Civil Part, "[o]ral argument is required to be
granted as of right on timely request, the date and time to be
set by the court, which will then advise the parties." Pressler
& Verniero, Current N.J. Court Rules, comment on R. 6:3-3
(2014).
More importantly, as noted, the State and the judge
apparently viewed the motion hearing as the equivalent of a
trial on the merits of the State's complaint. In this regard,
the court was required at a minimum to provide adequate notice
of the proceeding and accord Baker, who had filed an answer to
the complaint, an opportunity to appear and present a defense.
In Beneficial of New Jersey v. Bullock, 293 N.J. Super.
109, 110 (App. Div. 1996), we considered an inmate's challenge
10 A-4929-11T3
to a default judgment entered against him while incarcerated.
On the trial date, the defendant failed to appear, and he
asserted that the default judgment was improperly entered
because he was unable to secure transportation from the prison.
Ibid. We held that "if [an] inmate asserts the right to defend,
or a meritorious defense, the trial court must determine how to
proceed after considering the totality of circumstances and
balancing the equities." Id. at 112. Those considerations
include
the position of the parties with respect to
the needs for a speedy disposition, the
. . . efforts of the parties to secure
defendant's presence, including the
defendant's ability and plaintiff's
willingness to pay, the nature and
complexity of the action and the expected
length of incarceration, 'whether the
prisoner's claims are substantial;' 'whether
a determination of the matter can reasonably
be delayed until the prisoner is released;'
'whether the prisoner can and will offer
admissible, noncumulative testimony which
cannot be offered effectively by
deposition, telephone or otherwise;'
'whether the prisoner's presence is
important in judging his demeanor and
credibility compared with that of other
witnesses;' 'whether the trial is to the
court or to a jury' and 'the prisoner's
probability of success on the merits.'
[Id. a 112-13 (citation omitted); see also
United Jersey Bank v. Siegmeister, 163 N.J.
392, (2000) (where the Court remanded for
consideration utilizing the factors cited in
Bullock).]
11 A-4929-11T3
Here, it is undisputed that Baker intended to contest the
merits of the State's complaint. He filed an answer setting
forth his defense, attached exhibits that he claimed
demonstrated the monies were not the proceeds of illegal
activity and affirmatively moved for the return of the monies.
Additionally, there is a regulatory scheme in place that
governs the costs of transporting an inmate to court for
appearance in certain "civil action[s]." N.J.A.C. 10A:3-9.13.
When the inmate "is a defendant and the plaintiff is a
governmental entity," those costs are borne by the Department of
Corrections. N.J.A.C. 10A:3-9.13(a)(3). While Baker was not
technically a "defendant" in this litigation, for the reasons
cited, he was effectively the party in interest defending
against the State's forfeiture case and entitled to certain due
process safeguards. Thus, the regulations anticipated and
authorized the judge to have ordered Baker's presence for the
ultimate hearing on the merits of the State's forfeiture
complaint.
Therefore, to the extent the court and the State viewed the
disposition of the motion as the equivalent of final judgment on
the forfeiture complaint, we reverse the order under review and
remand the matter to the Law Division for trial on the State's
12 A-4929-11T3
complaint. Baker shall be provided with notice of trial and the
court shall order his production.3
Baker also argues that the judge misapplied the presumption
contained in N.J.S.A. 2C:64-3(j). We address that point to
provide guidance in the event there are future proceedings.
Under the Forfeiture Act, property may be categorized as
either prima facie contraband or derivative contraband. Seven
Thousand Dollars, supra, 136 N.J. at 233. Prima facie
contraband includes items such as "controlled dangerous
substances; firearms unlawfully possessed, carried, acquired or
used; illegally-possessed gambling devices; untaxed cigarettes;
and untaxed special fuel." Ibid. (citing N.J.S.A. 2C:64-1a(1)).
Derivative contraband, on the other hand, is itself innocent in
nature but subject to forfeiture because it either has been used
or is intended to be used in furtherance of an unlawful activity
or represents proceeds of illegal activities. N.J.S.A. 2C:64-
1(a)(2)-(4).
3
We hasten to add that it is unclear from the record what might
have happened had Baker never made the motion and the complaint
remained subject to the stay previously entered. We note that
the prosecutor specifically inquired whether the court intended
to adjourn the motion until Baker was released. We do not,
therefore, foreclose consideration of whether the forfeiture
complaint should remain subject to the stay pending Baker's
completion of his sentence.
13 A-4929-11T3
N.J.S.A. 2C:64-3 governs forfeiture actions involving
derivative contraband. To forfeit derivative contraband, the
State must bring a civil action within ninety days of its
seizure. N.J.S.A. 2C:64-3(a). The State must then prove by a
preponderance of the evidence that there is a "proximate and
substantial" causal connection between the property and an
indictable offense. Seven Thousand Dollars, supra, 136 N.J. at
234-35. N.J.S.A. 2C:64-3(j) provides the State with an
evidentiary presumption if two prerequisites are satisfied: the
State must demonstrate (1) evidence of a conviction; and (2)
that the seized property "was either used or provided an
integral part of the State's proofs in the prosecution."
Undoubtedly, the thrust of the prosecutor's argument at the
motion hearing was that the State had proven these two
prerequisites. Based upon the record before us, we conclude
that the State demonstrated Baker had been convicted, since it
attached a copy of the judgment of conviction to its opposition
to Baker's motion. Whether the State satisfied the second
prerequisite is unclear. Lynch's report was based upon his
examination of the prosecutor's file. He concluded Baker
possessed the CDS "with the intent to distribute" based on five
factors, including $2000 "seized in denominations . . . commonly
seen from street level drug proceeds." The judge never
14 A-4929-11T3
determined whether this was sufficient to establish that the
monies were "used [in] or provided an integral part of the
State's proofs in the prosecution." N.J.S.A. 2C:64-3(j).
Instead, when he considered the issue, the judge simply
stated that the presumption applied because, "if you're arrested
and you've got money on you, . . . that money comes from a drug
deal . . . ." (Emphasis added). That was a misstatement of the
law.
At trial, the State is required to prove the prerequisites
that permit the presumption to be found in the first instance.
Moreover, like any other presumption, it may be rebutted by
other evidence adduced from whatever source, be it proof adduced
by the State or by Baker himself.
Reversed and remanded for further proceedings consistent
with this opinion.
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