Com. v. The Real Property And Improvements Known As 12534 Chilton Road, Philadelphia, PA 19154 ~ Appeal of: P. Schwartz

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania :
:
v. : No. 1254 C.D. 2014
: Submitted: October 6, 2015
The Real Property And Improvements :
Known As 12534 Chilton Road :
Philadelphia, PA 19154 :
:
Appeal of: Patricia Schwartz :
BEFORE: HONORABLE DAN PELLEGRINI, President Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE SIMPSON FILED: November 2, 2015
In this statutory appeal, Patricia Schwartz (Wife) asks whether the
Court of Common Pleas of Philadelphia County (trial court) erred in granting the
forfeiture petition of the Commonwealth of Pennsylvania (Commonwealth)
seeking the forfeiture of the real property and improvements known as 12534
Chilton Road, Philadelphia (subject property) under the act commonly known as
the Controlled Substances Forfeiture Act1 (Forfeiture Act). Wife argues the trial
court erred in: (1) failing to find she was an innocent owner of the subject property
pursuant to 42 Pa. C.S. §6802(j); and, (2) concluding the forfeiture of the subject
property would not constitute an excessive fine in violation of Article I, Section 13
of the Pennsylvania Constitution and the Eighth Amendment to the U.S.
1
42 Pa. C.S. §§6801-6802.
Constitution. Upon review, we vacate and remand on Wife’s innocent owner
defense.
I. Background
In February 2004, the Commonwealth filed a petition for forfeiture of
the subject property requesting that it be forfeited and transferred to the custody of
the Philadelphia District Attorney’s Office pursuant to the Forfeiture Act. The
Commonwealth amended its forfeiture petition in December 2008.
In December 2013,2 the trial court held a hearing on the forfeiture
petition. At the hearing, the Commonwealth presented the testimony of three
police officers. Wife, represented by counsel, testified on her own behalf. At the
conclusion of the hearing, the trial court granted the Commonwealth’s forfeiture
petition from the bench.
Shortly thereafter, Wife filed a motion for post-trial relief. After a
hearing on Wife’s post-trial motions, during which Wife presented an expert
appraisal report for the subject property, the trial court issued an order confirming
its grant of the forfeiture petition. The trial court’s order included footnotes
explaining its rationale for rejecting Wife’s innocent owner defense as well as
Wife’s assertions that the forfeiture of the subject property constituted an excessive
fine under Article I, Section 13 of the Pennsylvania Constitution and the Eighth
Amendment to the U.S. Constitution. The trial court further stated the
2
The parties’ briefs do not explain the five-year delay between the filing of the amended
forfeiture petition and the hearing. A review of the trial court’s docket shows the hearing was
“moved” or “continued” numerous times during that period. Reproduced Record at 2a.
2
Commonwealth met its burden of proving a nexus existed between the subject
property and the unlawful activity. Wife filed a notice of appeal to this Court.
The trial court directed Wife to file a concise statement of the errors
complained of on appeal pursuant to Pa. R.A.P. 1925(b), which she did. The trial
court subsequently issued an opinion pursuant to Pa. R.A.P. 1925(a). Based on the
evidence presented and its credibility determinations, the trial court made the
following findings.
On November 11, 2008, at approximately 10:20 a.m., Officer Thomas
Rola was working as a Philadelphia police officer. His tour of duty took him to the
12000 block of Chilton Road. Certified Record (C.R.), Tr. Ct. Forfeiture Hr’g,
Notes of Testimony (N.T.), 12/2/13, at 6-7. Officer Rola and his partner, Officer
Myers, went to 12534 Chilton Road, and set up surveillance. N.T. at 7. Officer
Myers approached the subject property and knocked on the door. Id. A white
male later identified as Charles Schwartz (Husband) answered the door. Id. They
engaged in a conversation, and Officer Myers handed $20.00 to Husband. N.T. at
7-8. Husband entered the subject property, exited a short time later and handed
four pills to Officer Myers. N.T. at 8.
At that time, Officer Rola obtained a search warrant. Id. Officer Rola
and members of Squad 11 in the Narcotics Field Unit executed the warrant on the
subject property. Id. There, they observed Husband lying on a couch in the
basement. Id. He was taken into custody and was positively identified. Id.
Recovered from the property were hundreds of prescription drugs and narcotics
3
pills, including Diazepam pills, Percocet pills, OxyContin pills and Endocet pills.
N.T. at 9-11. The majority of the recovered contraband was found in the basement
on a coffee table. N.T. at 11. On that table, police observed numerous pill bottles
and what they believed to be controlled substances. Id. Further, there were pills in
almost every room in the house searched. N.T. at 11-12. There were pills found in
the front bedroom, in one of the other bedrooms and the basement. Id. All the
prescription bottles were in Husband’s name. N.T. at 12. The recovered alleged
narcotics were submitted to the chemical lab for testing and determined to be
controlled substances. N.T. at 17.
On October 27, 2003, Officer Jeffrey Galazka was working as a
Philadelphia police officer. N.T. at 25. His tour of duty took him to the 12000
block of Chilton Road. Id. There, based on information he received, Officer
Galazka and fellow Narcotics Officers Hayes and Betts met with a confidential
informant (CI). N.T. at 26. The CI dialed the cell phone number 215-300-####.
Id. Officer Galazka was with the CI during the conversation; the CI had a brief
drug related conversation with a male. Id. They were advised to go to a
predetermined location. Id. Surveillance was set up at the subject property, at
which time Husband was observed exiting the house. Id. Husband was followed
to the predetermined location. Id. There, Officer Galazka and the CI approached
Husband. Id. The CI handed $120.00 in prerecorded buy money to Husband in
exchange for three green pills, marked 80 on one side, and OC on the other,
alleged OxyContin. N.T. at 26-27. The CI immediately turned over the pills to
Officer Galazka. N.T. at 27.
4
Later that day, Officer Galazka and his fellow narcotics teammates
observed Husband exiting the subject property and entering a vehicle. Id. He was
stopped by two other police officers. Id. Husband was arrested and the officers
recovered from his person a large pill bottle containing the following items: 4
Percocets, 336 OxyContin, 146 Valiums, 76 Xanax, 33 Lomotil pills, 7 grams of
marijuana, and 64 grams of powder Cocaine. N.T. at 22-23. Also recovered was
$8,929.00, including the prerecorded buy money of $120.00. N.T. at 23.
The officers then executed a search warrant on the subject property.
Id.; N.T. at 27. The officers recovered 154 Valium pills, 841 Lomitil pills, 120
Lonox pills, and 40 Butalbital pills from the subject property. N.T. at 27.
Recovered from the second floor front bedroom was a Bell Atlantic bill in
Husband’s name with the Chilton Road address, along with three pieces of mail
with the same name and address, a driver’s license in Husband’s name with that
address, new and unused clear zip-lock packets, a black scale, and a silver cell
phone, later verified as the phone the CI called earlier that day. N.T. at 28.
Recovered from the first floor were a .357 Magnum handgun and various rounds of
ammunition. Id. Two vehicles were also confiscated. Id. All the narcotics, drugs,
currency and paraphernalia were found inside the subject property. Id. Officer
Galazka explained the officers found pills in almost every room. N.T. at 32. The
house was filled with pills “everywhere.” Id. Some pills were out in the open,
while some were stored in various locations in the house. N.T. at 33.
Husband has two separate certified convictions for illegal drug
dealing. N.T. at 35. Husband was charged with felony possession with intent to
5
deliver (PWID) violations on two different occasions. Id. In 2003, he was charged
with felony PWID. See C.R., Ex. A, Criminal Docket, CP-51-CR-0000964-2008.
He pled guilty to that PWID charge. Id. The maximum allowable penalty for
PWID of Schedule I/II narcotics is $250,000. For a second or subsequent offense,
however, the maximum allowable penalty is doubled. See Section 15 of the
Controlled Substance, Drug, Device and Cosmetic Act (Drug Act).3 In 2008,
Husband was charged with a felony PWID and was found guilty. See C.R., Ex. A,
Criminal Docket, CP-51-CR-0001573-2008.
The trial court did not credit Wife’s testimony based on “blatant
inconsistencies,” and it “did not find Wife credible at all.” Tr. Ct., Slip Op.,
9/25/14, Finding of Fact No. 21; N.T. at 80. Further, the trial court found that, by
her own admission, Wife was present in her home when the officers executed the
search warrant in 2003. Id.; N.T. at 58-59. The trial court also found the police
officers personally informed Wife that Husband was arrested for illegal drug
dealing. Id.; N.T. at 48, 50. Additionally, the trial court found that Wife admitted
she did not take any steps to prevent Husband from engaging in any further illegal
drug dealing activity after his 2003 conviction. F.F. No. 22; N.T. at 57, 68, 79.
The trial court explained that in her concise statement of the errors
complained of on appeal, Wife asserted the trial court erred in: (1) failing to find
Wife was an innocent owner pursuant to 42 Pa. C.S. §6802(j); (2) finding the
Commonwealth presented sufficient evidence to meet its burden of establishing a
nexus between Husband’s criminal activity and the subject property such that
3
Act of April 14, 1972, P.L. 233, as amended, 35 P.S. §780-115.
6
forfeiture was legally proper; and, (3) failing to find the forfeiture of the subject
property constituted an excessive fine in violation of Article I, Section 13 of the
Pennsylvania Constitution and the Eighth Amendment to the U.S. Constitution.
Responding to these issues, the trial court explained that, to sustain its
initial burden of proof, the Commonwealth was required to establish that a nexus
existed between the property and the alleged illegal activity. Commonwealth v.
Fidelity Bank Accounts, 631 A.2d 710 (Pa. Cmwlth. 1993). In order to sustain its
burden, the Commonwealth need not produce evidence directly linking the seized
property to illegal activity; it must, however, produce more than a mere suspicion
of a possible nexus. Commonwealth v. Marshall, 698 A.2d 576 (Pa. 1997).
Because a civil forfeiture hearing for real property is an in rem proceeding, the
Commonwealth must show that the property itself has offended the law. Id.
The trial court further explained that the Commonwealth need not
prove the forfeiture claimant or anyone involved with the property was guilty of
any crime beyond a reasonable doubt. Commonwealth v. 542 Ontario Street, 989
A.2d 411 (Pa. Cmwlth. 2010) (en banc). Rather, the Commonwealth need only
prove, by a preponderance of the evidence, a nexus existed between the unlawful
activity and the property subject to forfeiture. Commonwealth v. $1,920.00 US.
Currency, 612 A.2d 614 (Pa. Cmwlth. 1992).
When the Commonwealth petitions for forfeiture of a house as the
result of illegal drug activity, the question becomes whether the evidence shows
the dwelling was used to facilitate illegal drug activities. Commonwealth v. Schill,
7
643 A.2d 1143 (Pa. Cmwlth. 1994). Further, in deciding whether to grant a
forfeiture petition, courts may consider the amount of illegal narcotics found as a
result of a search of the property, as well as the existence of drug paraphernalia and
instruments of distribution, such as vials, present at the property. Id.
The trial court stated, in determining whether a nexus exists,
Pennsylvania courts grant forfeiture of property where the Commonwealth shows
the property owner facilitated drug sales or stored drugs and paraphernalia at his
property. 542 Ontario Street (forfeiture granted where police observed numerous
controlled purchases at the property and two search warrants yielded drugs and
paraphernalia in the property); Commonwealth v. Smothers, 920 A.2d 922 (Pa.
Cmwlth. 2007) (forfeiture granted where confidential informant and police officers
purchased drugs from the property). Further, in a forfeiture proceeding, the
Commonwealth may use circumstantial evidence to prove a nexus. See, e.g.,
Commonwealth v. McJett, 811 A.2d 104 (Pa. Cmwlth. 2002).
Here, the trial court explained, the Commonwealth established there
was a nexus between the subject property and the illegal drug activity by a
preponderance of the evidence. The subject property was clearly used to facilitate
the sale of illegal drugs. Similar to 542 Ontario Street, where the Commonwealth
proved the property owner facilitated drug sales or stored drugs and controlled
substances at his property, the narcotics officers here observed drug transactions
take place near and around the subject property on more than one occasion. In
addition, police recovered hundreds of prescription and other pills from inside the
8
subject property. Further, Husband has two certified convictions in connection
with this matter for illegal drug dealing.
Evaluating the totality of the circumstances, the trial court stated, the
evidence presented by the Commonwealth clearly shows illegal drug sales were
facilitated through the use of the subject property. The record reflects Husband
sold illegal drugs from the subject property and stored massive quantities of illegal
drugs and controlled substances in the property. Thus, the trial court found
Husband used the subject property to facilitate the commission of illegal drug
transactions. As a result, the trial court found the Commonwealth met its burden
of establishing a nexus between the subject property and the illegal activities.
Next, the trial court explained, once the Commonwealth sustains its
burden of establishing a nexus between the property forfeited and the alleged
illegal activity, it becomes the property owner’s burden to establish an affirmative
defense, such as the innocent owner defense. To prove an innocent owner defense,
a forfeiture claimant must show: (1) she is the owner of the property; (2) she
lawfully acquired the property; and, (3) it was not unlawfully used or possessed by
her or the unlawful use was without her knowledge or consent. 42 Pa. C.S.
§6802(j). Further, the absence of such knowledge or consent must be reasonable
under the circumstances. Id.
Here, the trial court determined, Wife did not establish an innocent
owner defense by a preponderance of the evidence. The basic thrust of her
argument was that she had no knowledge of the drug transactions taking place
9
inside her residence. But, the trial court stated, the record in no way supported that
contention. First, Husband was previously arrested and convicted of felony PWID
in 2003, providing Wife with effective notice of the unlawful activities taking
place on her property.
Further, even after police executed a search warrant at her residence
and in her presence in 2003, and Husband was subsequently convicted of illegal
drug dealing, the record lacked any evidence that Wife took any proactive
measures or steps to show her lack of consent to the illegal activity. Wife did not
leave or vacate the subject property, and she did not restrict or otherwise limit
Husband’s access to the property. As such, the trial court stated, the record did not
support Wife’s contention that she was unaware of (or otherwise did not consent
to) the drug activity taking place on her property.
In addition, after hearing her testimony, the trial court found Wife not
credible. The trial court stated it was Wife’s burden to show she did not know of
or otherwise consent to Husband’s presence (and the alleged unlawful activities)
on the property. She did not sustain that burden. The trial court explained the
record lacked evidence suggesting Wife called police to have Husband removed
from the property. Further, there was no record evidence suggesting Wife even
sent Husband a certified letter requesting that he vacate the subject property. The
record does, however, reflect Wife did absolutely nothing to stop the unlawful drug
activity that she clearly knew of, from occurring on her property. For all these
reasons, the trial court stated, Wife did not establish she was unaware that Husband
conducted illegal drug sales on or through the use of the subject property. Rather,
10
the trial court stated the record showed, at best, Wife turned a blind eye to
Husband’s illegal conduct on the subject property and allowed it to continue.
Moreover, the trial court observed Wife’s demeanor and behavior
during her testimony, and it stated it simply did not believe her testimony because
of blatant inconsistencies. Thus, the trial court found Wife’s arguments meritless
and unsupported by the record. As such, it concluded that Wife did not establish
an innocent owner defense under 42 Pa. C.S. §6802(j).
As to Wife’s claim that the forfeiture constituted an excessive fine, the
trial court stated, under the Excessive Fines Clause of the Eighth Amendment and
Article I, Section 13 of the Pennsylvania Constitution, forfeiture of property cannot
be grossly disproportionate to the gravity of the offense. United States v.
Bajakajian, 524 U.S. 321 (1998); see also 542 Ontario Street. The trial court stated
that in Commonwealth v. 5444 Spruce Street, 832 A.2d 396 (Pa. 2003), the
Pennsylvania Supreme Court explored Bajakajian and enumerated factors by
which to assess the “gravity of the offense,” each of which is limited to the conduct
of the defendant. The factors are: (1) the penalty imposed as compared to the
maximum penalty allowed; (2) whether the violation was isolated or part of a
pattern of unlawful behavior; and, (3) the harm resulting from the crime charged.
Here, the trial court explained, based on an application of these
factors, forfeiture of the subject property would not violate Wife’s constitutional
rights. To that end, the fair market value of the subject property was
approximately $150,000. Over 1,000 prescription pills, drugs and other
11
barbiturate/narcotics were recovered from the subject property. Given the large
quantity of drugs and other controlled substances recovered, as well as the fact that
Husband was charged with drug-related felonies on multiple occasions, the trial
court found the underlying violation was not an isolated event or incident. Rather,
the underlying violation formed a part of a pattern of systemic unlawful behavior
on Husband’s part in the form of continuous illegal drug dealing in the surrounding
community through use of the subject property.
The trial court stated Husband was charged with felony PWID on two
occasions. In 2003, he was charged with felony PWID. He was found to be in
possession of Schedule I/II narcotics. He pled guilty to that PWID charge. The
maximum allowable penalty for PWID such narcotics is $250,000. For a second or
subsequent offense, however, the maximum allowable penalty is double that
amount. See 35 P.S. §780-115. In 2008, Husband was charged with a felony
PWID and was found to be in possession of such narcotics. The trial court stated
the maximum allowable fines/penalties involved here well exceeded the purported
fair market value of the subject property.
Moreover, the trial court stated, the damage and harm to the
community resulting from the underlying violation was quite considerable. This
type of illicit behavior puts not only Husband’s neighbors in harm’s way, but also
the officers investigating his unlawful activity and serving warrants in connection
with that illegal conduct. For all these reasons, the trial court determined the real
property forfeited was not grossly disproportionate to the gravity of the offense.
12
Finally, the trial court explained, forfeiture of the property did not
violate the Excessive Fines Clause because Wife did not sustain her burden of
establishing an innocent owner defense. The trial court stated that the fact that
Wife was not charged with or otherwise convicted of a Drug Act violation was
irrelevant to its excessive fines analysis. The trial court stated the Commonwealth
established by a preponderance of the evidence that Wife either knew of or
consented to Husband’s illegal activities. Thus, she failed to prove an innocent
owner defense. Moreover, the record clearly showed, at best, Wife turned a blind
eye to Husband’s illegal conduct on the subject property and allowed it to
continue. Thus, forfeiture of the subject property was not tantamount to an
excessive fine and thus did not run afoul of the Excessive Fines Clause.
For all these reasons, the trial court recommended that this Court
affirm its decision granting the Commonwealth’s forfeiture petition.
II. Issues
On appeal,4 Wife argues the trial court erred in: (1) failing to find she
was an innocent owner of the subject property pursuant to 42 Pa. C.S. §6802(j);
and, (2) concluding the forfeiture of the subject property would not constitute an
excessive fine in violation of Article I, Section 13 of the Pennsylvania Constitution
and the Eighth Amendment to the U.S. Constitution.
4
Our review of a forfeiture appeal is limited to determining whether the trial court’s
findings of fact were supported by substantial evidence and whether it abused its discretion or
committed an error of law. Commonwealth v. 1997 Chevrolet, 106 A.3d 836 (Pa. Cmwlth.
2014) (en banc), appeal granted, 120 A.3d 993 (Pa. 2015).
13
III. Discussion
A. Innocent Owner Defense
1. Contentions
Wife first asserts the trial court erred in failing to find she was an
innocent owner under 42 Pa. C.S. § 6802(j). She argues that, even if a nexus
between the alleged drug sales and the subject property is established, Wife had no
knowledge of this problem. See R.R. at 78a-114a. Moreover, Wife contends the
she never explicitly or implicitly consented to such illegal activities at her property.
She argues there is simply no evidence that might indicate she ever had any
knowledge concerning the alleged drug sales. Thus, Wife never consented to any
drug sales at the subject property.
Wife argues that here, as in Commonwealth v. 1997 Chevrolet, 106
A.3d 836 (Pa. Cmwlth. 2014) (en banc), appeal granted, 120 A.3d 993 (Pa. 2015),
the trial court did not adhere to the instructions of our Supreme Court in
Commonwealth v. $2,523.48 U.S. Currency, 649 A.2d 658 (Pa. 1994), when it
ignored evidence of all the circumstances surrounding Wife’s actions, or lack of
actions, in determining if she acted reasonably. Wife asserts the record shows
there are no circumstances that would have made it reasonable for the trial court to
conclude Wife had actual knowledge of Husband’s illegal activity, and that she
consented to the violations of the Drug Act. Thus, Wife maintains, her lack of
consent to the drug sales at issue was certainly reasonable under the facts and
circumstances here. Wife contends forfeiture of the subject property is simply not
warranted because she is, as a matter of law, an innocent owner.
14
Wife contends that in $2,523.48 U.S. Currency, the Pennsylvania
Supreme Court stated, “evidence which establishes knowledge of illegal drug
activity does not automatically establish consent to that activity.” Id. at 661.
Further, an individual need not take any affirmative steps to stop the illegal use of
her premises in order to establish an innocent owner defense. “Property owners
are not required to perform heroic, vigilante or police actions in order to stop drug
activity on their property.” Id. Thus, Wife argues, even if an owner knows of
illegal activity, that fact does not automatically establish consent to the conduct.
Id.
Wife asserts she was not required to take any affirmative steps to
prohibit the illegal conduct here. Wife argues she took the only reasonable course
of action she could under the circumstances. The perpetrator of the offenses was
her husband. Wife worked during the day and was not home when he engaged in
criminal activity on the occasions at issue here. See R.R. at 79a. Nevertheless,
Wife did what she could to ensure drug activity was not taking place in her home.
See R.R. at 88a-89a; 90a; 92a; 112a-14a. Wife argues it would be unreasonable
under the circumstances to expect the property owner to take any affirmative
action to stop the alleged drug sales at her property. This is not a case where Wife
observed illegal activities at the location. Nor did the alleged illegal conduct
continue for an extended period. See R.R. at 87a-88a; 90a; 100a; 104a-06a.
Wife maintains this Court recently addressed this issue in 1997
Chevrolet, stating: “An owner does not have to become an ad hoc law enforcement
officer to demonstrate lack of consent.” Id. at 868 (citing $2,523.48 U.S.
15
Currency, 649 A.2d at 660). Here, Wife contends, there is simply no evidence to
establish that she consented to any of Husband’s criminal activity.
Wife further asserts that, while the trial court found she lacked
credibility in her assertions that she knew nothing of the criminal activity Husband
engaged in, that does not end the inquiry. As this Court recently held, “a negative
credibility finding does not constitute positive evidence that can support a finding
of fact.” 1997 Chevrolet, 106 A.3d at 868-69 (citations omitted). “It is
problematic that a person can be deprived of her home because she is unable to
prove a negative. This is why the Forfeiture Act requires the owner’s lack of
consent to be ‘reasonable under the circumstances presented.’” Id. at 869 (quoting
42 Pa. C.S. §6802(j)). “It is not enough simply to disbelieve the property owner;
the trial court must identify the circumstances that make it reasonable to infer that
the property owner had actual knowledge and did consent to the violation of the
Drug Act.” Id. at 870.
The Commonwealth responds that the trial court correctly found that
Wife was not an innocent owner. It argues that Wife bore the burden of proving
her innocent owner affirmative defense, and she did not carry this burden. The
Commonwealth contends Wife was present when a search revealed thousands of
pills all over her house in 2003 and when her husband pled guilty to PWID in
connection with his 2003 arrest. Yet, she did nothing to stop him from selling
schedule II narcotics from their home. Husband was arrested again in 2008 and
convicted of PWID because he was still selling drugs from the home.
16
The Commonwealth maintains the record supports the trial court’s
findings that Wife knew of the illegal drug sales on the subject property that she
and Husband owned and did nothing to stop them. Therefore, the trial court’s legal
conclusion was appropriate. No relief is due.
Here, the Commonwealth notes, Wife does not contest there was a
nexus between the subject property and Husband’s illegal drug sales, and the
record shows the Commonwealth established the requisite nexus. In both 2003 and
2008, police found thousands of pills inside the home, and pills were in almost
every room. N.T. at 11, 30, 32. In addition, in the 2008 sale, Husband sold drugs
directly from the house. N.T. at 7-8. Thus, the burden shifted to Wife to prove she
was an innocent owner. It was her sole burden to convince the fact finder that she
either did not know of, or did not consent to, the illegal drug activity on her
property, and her lack of knowledge or consent was reasonable under the
circumstances. 42 Pa. C.S. §6802(j). Here, Wife testified she had no knowledge
of Husband’s drug dealing, but the trial court did not find her credible. Thus, she
failed to carry her burden.
In a footnote, the Commonwealth recognizes that a majority of this
Court recently stated that disbelief of a forfeiture claimant who testified she had no
knowledge of drug activity is insufficient to allow a fact-finder to conclude she did
have knowledge. 1997 Chevrolet. However, the Commonwealth respectfully
disagrees with this statement, noting that it filed a petition for allowance of appeal
to the Supreme Court (which was granted in July), and it reserves its right to seek
further review of this issue. 1997 Chevrolet, 106 A.3d at 891 (Simpson, J.,
17
dissenting) (“I also struggle to understand the Majority’s pronouncement that a
negative credibility finding does not constitute positive evidence of Ms. Young’s
knowledge. Because Ms. Young had the statutory burden of proof on this issue,
the Majority pronouncement makes no sense. Once the trial court rejected her
testimony, Ms. Young could not carry her burden.”). In any event, the
Commonwealth contends, there was additional, affirmative evidence here that
Wife knew about Husband’s drug dealing.
Moreover, the Commonwealth asserts, the evidence established there
were thousands of pills inside the house, the pills were in almost every room of the
house, Wife lived in and cleaned the house, and she was present during the 2003
search of the house and when Husband pled guilty to PWID in connection with the
2003 arrest. N.T. at 11, 30, 32, 45, 62, 72, 73. In addition, when the trial judge
asked Wife, “And so that was 2003 I would imagine when you found out [that
Husband was selling drugs],” to which Wife responded “yes.” N.T. at 53. Thus,
the Commonwealth argues, there was ample evidence that Wife knew of the drug
activity.
Despite this knowledge, the Commonwealth maintains, Wife did
nothing to stop Husband from dealing drugs out of their house. She did not tell
Husband to stop after he was arrested in 2003 or pled guilty to PWID. N.T. at 79.
She did not even question Husband about his drug dealing in the house in 2003 or
2008. N.T. at 54 -55, 68. In light of the quantity of drugs in the house and the fact
that they were spread throughout almost every room, the Commonwealth argues,
Wife’s inaction was unreasonable. See $2,523.48 U.S. Currency, 649 A.2d at 661
18
(“[W]e hold that for a property owner to establish that he did not consent to illegal
activity taking place on his property, the actions he took to discourage that activity
must have been reasonable in light of the surrounding circumstances.”).
2. Analysis
Section 6802(j) of the Forfeiture Act contains the so-called “innocent
owner” defense. It states:
(j) Owner’s burden of proof.--At the time of the hearing, if
the Commonwealth produces evidence that the property in
question was unlawfully used, possessed or otherwise subject to
forfeiture under section 6801(a) or 6801.1(a), the burden shall
be upon the claimant to show:
(1) That the claimant is the owner of the property or the
holder of a chattel mortgage or contract of conditional
sale thereon.
(2) That the claimant lawfully acquired the property.
(3) That it was not unlawfully used or possessed by him.
In the event that it shall appear that the property was
unlawfully used or possessed by a person other than the
claimant, then the claimant shall show that the unlawful
use or possession was without his knowledge or consent.
Such absence of knowledge or consent must be
reasonable under the circumstances presented.
42 Pa. C.S. §6802(j).
Recently, in 1997 Chevrolet, an en banc panel of this Court
considered the same trial judge’s rejection of a forfeiture claimant’s innocent
owner defense in a case where the Commonwealth sought forfeiture of real
property in Philadelphia based on drug sales occurring in and around the property.
19
There, the property owner was a woman whose adult son sold marijuana from the
property. The trial court rejected the owner’s claims that the use of her property to
sell drugs was without her knowledge or consent. In so doing, it expressly rejected
the owner’s testimony as not credible, opting instead to credit testimony from
police officers. Specifically, the trial court credited the police officers’ testimony
that the owner was present when they executed a search warrant, explained they
were there because her son was selling drugs, provided her with a copy of the
search warrant, called her son and asked that he turn himself in, and showed her
drug paraphernalia and drugs collected during their search of her home.
Despite the trial court’s finding, on appeal, a majority of this Court
reversed and remanded on the trial court’s rejection of the property owner’s
asserted innocent owner defense. More particularly, this Court stated, while the
trial court rejected the owner’s testimony that she did not know of her son’s
unlawful conduct, a “negative credibility finding does not constitute positive
evidence that can support a finding of fact. Stated otherwise, the factfinder’s
disbelief of [the owner’s] statement that she had no knowledge of her son’s activity
does not allow the factfinder to draw the contrary conclusion, i.e., that she did have
knowledge.” 1997 Chevrolet, 106 A.3d at 868-69 (citations omitted).
Additionally, as to the owner’s alleged consent, this Court held the trial court
did not follow our Supreme Court’s specific instruction in
$2,523.48 U.S. Currency, 649 A.2d at 662, that ‘[a]ll of the
circumstances surrounding the property owner’s actions, or lack
of action, must be considered in determining if they were
reasonable.’ Instead, the trial court held that the single way for
[the owner] to demonstrate a lack of consent was by ejecting
her son from the house.
20
Id. at 869.
This Court also rejected the Commonwealth’s argument that the
owner had to invite police to her home to prove her lack of consent, citing our
Supreme Court’s observation that, “the statute does not require on its face that a
landowner take any affirmative steps to stop the illegal use of his premises.” Id. at
870 (quoting $2,523.48 U.S. Currency, 649 A.2d at 660) (emphasis in original).
Additionally, this Court stated:
The Forfeiture Act places the burden on the property owner to
prove a negative, i.e., lack of knowledge or lack of consent.
The legislature eases this impossible burden somewhat by
adding that a lack of knowledge or consent must be
‘reasonable’ under the circumstances. It is not enough simply
to disbelieve the property owner; the trial court must identify
the circumstances that make it reasonable to infer that the
property owner had actual knowledge and did consent to the
violation of the Drug Act.
Id.
In addition, this Court stated that where the trial court rejected the
owner’s testimony based on what it deemed “blatant inconsistencies,” the trial
court was required to identify those inconsistencies in its opinion. Id.
Here, in rejecting Wife’s innocent owner defense, the trial court
stated:
[Wife] has failed to establish an innocent owner defense
by a preponderance of the evidence. The basic thrust of her
argument is that she had no knowledge of the drug transactions
taking place inside her residence. But the record in no way
supports that contention. First, [H]usband was previously
21
arrested and convicted on felony PWID charges in 2003,
providing her with effective notice of the unlawful activities
taking place on her property. By the same token, even after the
police executed a search warrant at her residence and in her
presence in 2003 and [H]usband was convicted subsequently
for illegal drug dealing, the record is devoid of any evidence
that [Wife] had taken any proactive measures or steps to
demonstrate her lack of consent to this illegal activity. [Wife]
did not leave or vacate the [subject] property thereafter, and she
did not restrict or otherwise limit [H]usband’s access to the
property. As such, the record does not in any way support
[Wife’s] contention that she was unaware of (or otherwise did
not consent to) the drug activity taking place on her property.
Second, after hearing her testimony, the Court found her not
credible.
The burden is on [Wife] to demonstrate that she did not
know of or otherwise consent to [Husband’s] presence (and the
alleged unlawful activities) on the [subject] property. Here, she
has not sustained that burden. There is no evidence contained
in the record suggesting that [Wife] called the police to have
[H]usband removed from the [subject] property. There is no
evidence contained in the record suggesting that [Wife] even
sent him a certified letter requesting that he vacate the [subject]
property. The record does, however, reflect that [Wife] did
absolutely nothing to stop the unlawful drug activity that she
clearly knew of, from occurring on her property. For all the
foregoing reasons, she failed to establish that she was unaware
that he was conducting illegal drug sales on or through the use
of their property. The record shows, at best, that [Wife] turned
a blind eye to [H]usband’s illegal conduct on the property and
allowed it to continue. Moreover, this Court observed [Wife’s]
demeanor and behavior during her testimony. This Court
simply did not believe her testimony due to blatant
inconsistencies.
Tr. Ct., Slip Op. at 11-12.
Because the trial court here lacked the benefit of this Court’s recent
articulation of the principles discussed in detail above concerning application of
22
the innocent owner defense, 1997 Chevrolet, a remand is appropriate in order to
allow the trial court an opportunity to reevaluate the evidence presented in
accordance with these principles. To that end, based on 1997 Chevrolet, the trial
court cannot base its decision that Wife did not know of or consent to the unlawful
activities on the subject property on a negative credibility finding.
In 1997 Chevrolet, this Court rejected the trial court’s finding that the
sole way for a property owner to show lack of consent was to eject a drug-dealing
family member from the home. Thus, the trial court’s statement here that Wife’s
failure to exclude Husband from the subject property or to leave the subject
property herself demonstrated her consent to the unlawful activities is not viable in
light of 1997 Chevrolet. Further, the trial court’s statements regarding Wife’s
failure to take steps to limit Husband’s access to the subject property are
problematic in light of the fact that, unlike in 1997 Chevrolet, Wife was not the
sole owner of the subject property; rather, Husband and Wife owned the subject
property as tenants by the entireties. R.R. at 32a.
In von Hofe v. United States, 492 F.3d 175 (2d Cir. 2007), a case this
Court discussed with approval in 1997 Chevrolet, the forfeiture claimants, a
husband and wife, challenged a federal trial court’s decision that ordered forfeiture
of their home. There, police executed a search warrant for the home, which
yielded, among other things, 65 marijuana plants. The husband and wife were
convicted of various criminal offenses under state law. The federal government
then brought an in rem forfeiture action against the home. The only crime to
which the wife pled guilty was possession of a controlled substance, while her
23
husband pled guilty to manufacturing and distributing such substances.
Ultimately, the Second Circuit agreed with the federal trial court that the forfeiture
of the husband’s interest in the home did not violate the Excessive Fines Clause,
but it reversed the forfeiture judgment as to his wife. As to the couple’s joint
ownership of the property, the Second Circuit stated: “Saying [the wife] allowed
her husband to engage in illegal activity on the property … must be taken in the
context of [the couples’] joint tenancy. [The husband] did not need his wife’s
permission to use the property; joint ownership of [the home] entitled [the
husband] to use the property as if he were the sole owner.” 492 F.3d at 189.
Here, similar to von Hofe, Husband and Wife owned the subject
property as tenants by the entireties. Based on our review of the trial court’s
opinion, it does not appear the trial court properly considered the type of
ownership at issue here in its analysis of whether Wife consented to the unlawful
activities on the subject property, which further warrants a remand.
Based on the foregoing, we vacate the trial court’s decision to the
extent it rejected Wife’s innocent owner defense and remand for reevaluation of
Wife’s claimed innocent owner defense in light of the principles set forth in 1997
Chevrolet and von Hofe.
B. Excessive Fine Challenge
1. Contentions
Wife also maintains the forfeiture of her real property constitutes an
excessive fine in violation of Article I, Section 13 of the Pennsylvania Constitution
and the Eighth Amendment to the U.S. Constitution. Here, she argues, the
24
Commonwealth obtained forfeiture of her real property based on evidence of two
separate drug transactions that Husband engaged in five years apart at times when
she was not present. This evidence simply fails to establish, by clear and
convincing proof, any pattern of conduct existed involving the sale of drugs from
the subject property, let alone the existence of a “significant relationship” between
the property sought and the drug offenses. Wife argues that taking her property
under these circumstances is, as a matter of law, an excessive fine.
Wife contends she is facing eviction from her home and the loss of
her 50 percent share of a $150,000 house based on criminal conduct engaged in
solely by Husband. Thus, she argues forfeiture of the subject property is an
excessive fine, as a matter of law, under the facts here.
The Commonwealth counters that the trial court’s finding that the
forfeiture was not an excessive fine was proper. The offenses at issue were
serious: Husband was convicted twice of PWID, he was selling schedule II
narcotics, and he had thousands of pills in the home. While Wife did not sell drugs
herself, she was culpable because she allowed Husband to continue selling drugs
from the house even after she knew that he was doing so.
2. Analysis
In 1997 Chevrolet, which was decided after the trial court’s decision
here, an en banc majority articulated several new principles for an excessive fine
analysis, which will be reviewed by the Supreme Court in the near future. To the
extent these new principles are controlling law, vacation and remand on Wife’s
excessive fines claim is also necessary.
25
IV. Conclusion
For all the foregoing reasons, the trial court’s order is vacated. This
matter is remanded to the trial court for proceedings consistent with the foregoing
opinion. We leave to the thoughtful discretion of the trial court whether to accept
or refuse additional evidence and argument.
ROBERT SIMPSON, Judge
26
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania :
:
v. : No. 1254 C.D. 2014
:
The Real Property And Improvements :
Known As 12534 Chilton Road :
Philadelphia, PA 19154 :
:
Appeal of: Patricia Schwartz :
ORDER
AND NOW, this 2nd day of November, 2015, the order of the Court of
Common Pleas of Philadelphia County is VACATED and this matter is
REMANDED in accordance with the foregoing opinion.
Jurisdiction is relinquished.
ROBERT SIMPSON, Judge