Forefeiture reversed
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
$4194.00 IN U.S. CURRENCY,
Defendant.
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
______________________________________________________
Argued May 28, 2014 – Decided July 31, 2014
Before Judges Messano and Hayden.
On appeal from Superior Court of New Jersey, Law Division, Special
Civil Part, Mercer County, Docket No. DC-5568-11.
Keith D. Sklar argued the cause for appellant Dontae Barnes
(Law Offices of Sklar Smith-Sklar, attorneys; Mr. Sklar, on the brief).
Sean D. McMurtry, Assistant Prosecutor, argued the cause
for respondent State of New Jersey (Joseph
L. Bocchini, Jr., Mercer County Prosecutor, attorney; Mr. McMurtry, of counsel
and on the brief).
PER CURIAM
In
this civil forfeiture action, Dontae Barnes appeals from the March 19, 2012 Law
Division - Special Civil Part order, which extinguished Barnes' right to his
property, $4194 in currency, and vested title to that property with Mercer
County. On appeal, Barnes contends that
the State failed to prove by a preponderance of the evidence a proximate and
substantial connection between the $4194 and an indictable activity. We reverse the order and remand to the trial
court for entry of an order returning the currency to Barnes.
We
discern the following facts from the record.
On March 20, 2011, Trenton Police Detective Pedro Perez and Officer William
Salhanick pulled over a minivan late at night in a high crime area after noticing
the driver was not wearing a seat belt.
Barnes was the driver, and his friend Tyquasia Scott was in the passenger
seat. When Salhanick approached the
passenger side, he observed a large amount of cash strewn over the front seat
and floorboard area of the minivan.
Perez asked Barnes to step outside the vehicle while Salhanick collected
the loose money.
According to
Salhanick, when questioned about the source of the money, Barnes responded that
he had just been released from prison and was not working, but he got the money
from "just doing my thing, running the streets." Based on his years of experience as a police
officer with over 500 narcotics investigations, Salhanick understood the phrase
"running the streets" to mean "selling drugs." Neither Barnes nor Scott attempted to elude
police when stopped, the police did not see or smell any controlled dangerous
substances (CDS), and the police had not witnessed any activity resembling the
sale or purchase of CDS. The money was
not tested for CDS residue and was not associated with any contraband in the
minivan.
When the officers
discovered that Barnes had an outstanding warrant, they took him into
custody. They also confiscated the
currency, as they were suspicious of the funds being related to past or future
drug activity, but released the minivan to Scott, because they did not suspect
drug activity was "in progress."
At police headquarters, the officers counted the currency from the
minivan, finding it totaled $4194. A record
check of Barnes' criminal history revealed "numerous convictions for
narcotics distribution related offenses."
Based upon all the circumstances, the police decided to permanently seize
the funds. As police did not observe any
indication of criminal activity in progress, no criminal charges were filed.
On June 13, 2011,
the State filed a verified complaint seeking forfeiture of the $4194 pursuant
to N.J.S.A. 2C:64-1. The
complaint alleged that the currency was the proceeds of illegal activity, and
the concealment and transportation of the currency violated the State's
prohibition against money laundering, N.J.S.A. 2C:21-25. Barnes subsequently filed an answer denying
the complaint's allegations.
At the March 15,
2012 trial, Salhanick was the sole witness for the State. At the close of the State's evidence, Barnes
moved for a directed verdict, arguing that the State's evidence did not "by
any stretch of the imagination, connect the money found with any nexus of
criminal activity." The trial judge
denied Barnes' motion.
Next, Barnes, his
brother, and Scott testified that the $4194 was derived from gambling earnings
from a recent trip to Atlantic City.
Barnes' brother testified that prior to their trip, their cousin gave Barnes
$900, and Barnes won approximately $3100 in profit from the casino. Scott testified that she was counting the
money for Barnes when they were pulled over, and the police also confiscated
$1500 from her pocket, which she had received as a gift from her mother. On cross-examination, neither witness could
remember many details of their trip to Atlantic City.
Barnes testified
that the confiscated money comprised of his winnings from Atlantic City, which amounted
to $2600, and $1500 that Scott was in the process of handing him when the car
was pulled over. Barnes also testified
that he had thrown out the receipt he received for his winnings in Atlantic
City and had made no attempt to contact the casino to obtain a record of his
winnings.
In rebuttal, the
State presented Charles Kimmel, a Deputy Attorney General with the New Jersey
Division of Gaming Enforcement. Kimmel testified
that people only receive receipts for their winnings if they established an
account at the casino and were leaving the money on deposit. In addition, Kimmel testified that the federal
tax law required casinos to report winnings over $1200.
At the conclusion
of the trial, the trial judge found the witnesses' accounts regarding the trip
to Atlantic City to be "incredible" and replete with "many
little inconsistencies." Moreover,
the judge found the circumstances around the currency to be suspect, such as the
time of night, the manner in which the money was loose on the floorboards, the
high crime area, and Barnes' criminal record.
The judge concluded, "[I]t's just my overall feeling in this
particular case after seeing all the testimony and the witnesses . . . and the
little inconsistencies here that the State has proven by a preponderance of the
evidence that they're entitled to forfeiture[.]" The judge issued an order memorializing his
findings on March 19, 2012. This appeal
followed.
On
appeal, Barnes argues the trial judge erred because the State failed to carry
its burden to show a "substantial connection" between the currency
and criminal activity. We agree.
We
begin by restating the basic principle that forfeitures are not favored in the
law. State v. Pontiac Trans Am,
98 N.J. 474, 481 (1985); State v. One 1985 Ford Bronco, 261 N.J.
Super. 643, 646 (App. Div. 1993). Forfeiture
of property seized by the State must be done pursuant to New Jersey's forfeiture
statute, N.J.S.A. 2C:64-1 to -9.
Further, forfeiture statutes must be strictly construed against the
State and "in a manner as favorable to the person whose property is to be
seized as is consistent with the fair principles of interpretation." State v. Seven Thousand Dollars, 136 N.J.
223, 238 (1994) (internal quotation marks and citations omitted).
Forfeiture
proceedings are in rem proceedings "brought not against the owner or
possessor of the property but . . . against the property." Id. at 232-33. The action is brought against the property
because "[t]he theory of forfeiture is 'based on the misuse of the
property rather than resulting from the commission of an offense by its owner
or user.'" Id. at 233
(quoting State v. One 1986 Subaru, 230 N.J. Super. 451, 455 (App.
Div. 1989), aff'd in part, rev'd in part, 120 N.J. 310 (1990)).
A
forfeiture may be brought against two types of property: prima facie contraband
and derivative contraband. Ibid. Prima facie contraband is defined as:
Controlled dangerous substances,
firearms which are unlawfully possessed, carried, acquired or used, illegally
possessed gambling devices, untaxed or otherwise contraband cigarettes or
tobacco products, untaxed special fuel, unlawful sound records and audiovisual
works and items bearing a counterfeit mark.
[N.J.S.A. 2C:64-1(a)(1).]
In contrast, derivative contraband "is
itself innocent in nature but has been used or is intended to be used in
furtherance of an unlawful activity or is the proceeds of illegal
activities." Seven Thousand
Dollars, supra, 136 N.J. at 233 (citing N.J.S.A.
2C:64-1(a)(2)-(4)). It is undisputed
that the State is seeking the currency at issue based on a claim that it is
derivative contraband.
Unlike prima facie
contraband, derivative contraband is not automatically forfeited to the
State. N.J.S.A. 2C:64-3. Rather, to obtain a forfeiture of derivative
contraband, the State must bring a civil action within ninety days of its
seizure. N.J.S.A. 2C:64-3(a). For a successful forfeiture of derivative
contraband, there must exist "a direct causal relationship between the use
of the property and the unlawful activity." State v. One 1986 Subaru, 120 N.J.
310, 320 (1990) (internal quotation marks and citation omitted). The State must prove by a preponderance of
evidence that the property is connected to an indictable offense. Seven Thousand Dollars, supra,
136 N.J. at 233. As a mere causal
relationship is not sufficient, the State carries the burden to "prove
that the connection is proximate and substantial." Id. at 235. Even so, the statute does not require that anyone
actually be charged with the indictable activity. See State v. One 1988 Honda Prelude,
252 N.J. Super. 312, 315 (App. Div. 1991) (noting that even when charges
are dismissed by the State, courts still permit forfeiture); State v. Rose,
173 N.J. Super. 478, 483-84 (App. Div. 1980) (finding that seized money
could be detained for forfeiture proceedings, even if the defendant was not
indicted or was acquitted).
Establishing
the proximate and substantial connection requires the court to make a
case-by-case determination based on the individual facts. Seven Thousand Dollars, supra,
136 N.J. at 238. Only after the
State has satisfied its burden does the burden shift to the "owner"
of the money to provide evidence of its legitimacy. Ibid.
In
Seven Thousand Dollars, a seminal case concerning derivative forfeiture,
the police seized $7000 from under the passenger seat during a traffic stop
where drug paraphernalia was also present, as well as a cell phone and two
beepers. Id. at 227-28. A certified drug dog reacted to the money and
the scale, indicating the presence of drug residue. Id. at 228. The owner of the money claimed the funds were proceeds
from the sale of property and he intended to use those funds to buy a car. Id. at 228-29. In the forfeiture proceeding, the trial court
concluded that it was "more likely than not" that the money "was
being used illegally in connection with a drug operation" and ordered it
forfeited. Id. at 231.
The Supreme Court
found that the link between the money and the alleged criminal offense,
possession with intent to distribute CDS, was too "weak" to carry the
State's burden, noting that the only concrete evidence was the presence of the
money and the drug paraphernalia in the car. Id. at 240. The State did not produce records of drug
transactions attributable to the owner, or demonstrate he had been involved in
or suspected of illegal drug activity prior to the stop, or planned such
activity for the future. Ibid. The Court found that while the State had a
general suspicion that an illegal drug deal had or was going to take place, "[t]he
record contain[ed] no indication of when any drug deal was to take place and
why the State believed that [the owner] would use this specific $7000 in that
deal." Ibid. The Court concluded that the State failed to
meet its burden as "[a]lthough the State's evidence raise[d] a suspicion
that a crime may have been or would have been committed at some time, it [did] not
show that [the owner] was going to use the seized $7000 to finance a drug
transaction." Id. at 241.
Applying the above
principles, we find that the State's evidence failed to demonstrate with the
necessary specificity that Barnes' currency had a direct causal relationship to
criminal activity. See One
1986 Subaru, supra, 120 N.J. at 320. The police did not see or smell any CDS, find
any drug paraphernalia, observe any illegal transactions, test the money for CDS
residue, or discover any contraband in the minivan. Indeed, they released the minivan because
they did not think any drug activity was then occurring. The manner in which the money was scattered on
the floor of the vehicle, the ambiguous statement attributed to Barnes that he
acquired the money by "running the streets," the time of night, and the
area of the stop, do no more than create mere suspicion of criminal activity,
which is simply not enough. See Seven
Thousand Dollars, supra, 136 N.J. at 234-35.
As the State did
not establish the necessary causal relationship to indictable criminal activity
in its case-in-chief, the trial judge should have granted Barnes' motion for
directed verdict when the State rested. See
id. at 238 (noting that only when the State has demonstrated a "direct
causal connection to unlawful activity" does the burden shift to the
person challenging the forfeiture to show a legitimate use).
A defendant may make "[a] motion for judgment . . .
either at the close of all the evidence or at the close of the evidence offered
by an opponent." R.
4:40-1. In determining a directed
verdict motion under Rule 4:40-1, the court uses the standard "for
a motion for involuntary dismissal under Rule 4:37-2(b)." Alves v. Rosenberg, 400 N.J. Super.
553, 565 (App. Div. 2008) (citing Dolson v. Anastasia, 55 N.J. 2,
5 (1969)). That is, the motion must be denied
if reasonable minds could differ regarding "whether 'the evidence,
together with the legitimate inferences therefrom, could sustain a judgment in .
. . favor' of the party opposing the motion[.]" Dolson, supra, 55 N.J. at
5 (quoting R. 4:37-2(b)). We
"employ[] the same standard on review as the trial court did in deciding
the defendant's motion for a directed verdict." Luczak v. Twp. of Evesham, 311 N.J.
Super. 103, 108 (App. Div.), certif. denied, 156 N.J. 407
(1998).
We find that the
evidence at the close of the State's case-in-chief, giving all reasonable
inferences in favor of the State, failed to establish the requisite connection
between the money and criminal activity, thereby making a directed verdict
appropriate. See Dolson, supra,
55 N.J. at 5. Since the directed
verdict motion should have been granted, the evidence Barnes presented
regarding his trip to Atlantic City should never have been considered by the
judge. Thus, the trial judge's
credibility determination regarding the proffered legitimate origin of the
money is not relevant to our determination.
In sum, the State
did not meet its burden of proving that the seized money was proximately and
substantially connected to criminal activity.
Thus, Barnes had no burden to prove a legitimate source.
Reversed and
remanded to the Law Division for entry of an order vacating the order for
forfeiture of the $4194 and returning the currency to Barnes.
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