CONSUELO MARSHALL, Chief Judge, District
The matters before the Court are Claimant's Motion for Summary Judgment and Plaintiff's Cross-Motion for Summary Judgment or, in the Alternative, for Summary Adjudication. On September 13, 2004, counsel appeared before the Court, the Honorable Consuelo B. Marshall, Chief United States District Judge presiding. Upon consideration of the papers and arguments submitted, the Court hereby DENIES Plaintiff's Motion for Summary Judgment or Adjudication and GRANTS Claimant's Motion for Summary Judgment.
JURISDICTION
This Court has jurisdiction pursuant to 28 U.S.C. § 1331.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Claimant Lisa Norsworthy ("Claimant") lived in the ground floor unit of a duplex at 1428 Ellsmere with her husband William Norsworthy ("Norsworthy") and their two children (the "Norsworthy Residence"). On April 26, 2001, the Pomona Police Department ("PPD") officers were conducting surveillance at 1432 Ellsmere in Los Angeles. The officers saw three men (Norsworthy, Stefan Rosado and Chi Bang) exit the Norsworthy Residence. Rosado was using a cellular telephone and Bang was carrying a black bag. After about five minutes, they returned to the Norsworthy Residence.
About 40 minutes later, Rosado and Norsworthy re-emerged and walked to a green Chevrolet Silverado, from which Rosado retrieved another black bag. Norsworthy left in the Silverado and Rosado returned to the Norsworthy Residence. The focus of PPD officers' surveillance turned to the Norsworthy Residence.
About ten minutes later, Rosado returned to the front of the building. A woman in a Toyota drove up, and the male passenger handed Rosado a cardboard box approximately the size of a VCR box. The three then walked down the driveway to the rear of the building. A few minutes later, Rosado walked to the front of the building and talked on his cell phone while looking up and down the street. Five minutes later, he walked back to the building.
Five minutes after that, Norsworthy returned, parked in the driveway of the Norsworthy residence, and carried what appeared to be bags of fast food inside. A few minutes later the couple from the Toyota went to their car and left.
Fifteen minutes later, Jacob Pulido arrived at the scene on a motorcycle and approached Rosado, who was again standing in front of the Norsworthy Residence. Rosado directed Pulido to the driver's side of the Silverado and peered inside before ushering Pulido into the Norsworthy Residence. Rosado and Pulido walked back to the motorcycle a few minutes later, and Pulido got back on the motorcycle and left the scene.
A short time later, Rosado and Bang left the scene in the Silverado and were followed by PPD officers Berger and Carmargo, who conducted a traffic stop of the Silverado. Officer Betancourt responded to the scene of the traffic stop. He interviewed Rosado, who stated that he had just come from his mother's house. Officer Betancourt formed the opinion that narcotics activity was occurring at the Norsworthy Residence based on Rosado's responses to his questions and the events that took place at the Norsworthy Residence prior to the traffic stop.
Rosado and Bang were transported back to the Norsworthy Residence. There, Detective Perez and other officers were approaching Claimant, who had just arrived at the residence with two small children, and Norsworthy, who had emerged from the residence. Norsworthy admitted to the officers that he was on parole for cocaine trafficking. The Norsworthy consented to a search of their residence and Claimant signed a written consent.
This prior felony conviction, and his status as a parolee, was confirmed by Claimant at her deposition.
During the search, police discovered two black bags containing the defendant currency. One of the bags also contained a wallet with a California identification card and driver's license bearing the name and photo of Rosado. Officer Betancourt asked Rosado if the money in the bag on the couch belonged to him, and Rosado replied "No, the money's not mine. I do not know how it got into my backpack." He signed a written Disclaimer of Ownership of Currency which provided that with respect to the currency seized: (1) he was not the owner; (2) he did not know who the owner of the currency was; and (3) he "was not involved" with the currency. Each of the other adults present (Norsworthy, Claimant, Reese and Bang) also signed written Disclaimers. Claimant submitted the only claim to the defendant currency. Default against Norsworthy, Rosado, Bang, Reese and all other potential claimants was entered by the clerk on January 26, 2004.
Claimant argues that the default was defective because the application reveals that the notice letters and complaint were addressed to Mr. Rosado (misspelling his first name) and to Mr. Bang, and also to William Norsworthy and Mario Reese, at their supposed "last known address" of 1432 Ellsmere. 1432 Ellsmere is the residence of Claimant's neighbors, and neither Rosado nor Bang have lived there. The government sent the letters and complaint to the wrong address despite the fact that it had verified the identities of both Rosado and Bang at the time of the seizure and even had seized documents from Rosado showing his address to be 8566 Kelvin Avenue, Winnetka, CA 91306. Claimant cannot bring a due process challenge to the notice provided to Rosado and Bang. See Valley Forge Christian College v. Americans United for Separation of Church State, Inc., 454 U.S. 464, 472-74 (1982).
I. Legal Standard
Federal Rule of Civil Procedure 56(c) provides for summary judgment against a party when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." FED.R. CIV. P. 56(c). Upon a showing that there is no genuine issue of material fact as to a particular claim(s) or defense(s), the court may grant summary judgment in the party's favor "upon all or any part thereof." FED.R. CIV. P. 56(a), (b).
A party seeking summary judgment bears the initial burden of informing the Court of the basis for its motion and of identifying those portions of the pleadings and discovery responses which demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets its initial burden, the nonmoving party must then set forth, by affidavit or as otherwise provided in Rule 56, "specific facts showing that there is a genuine issue for trial." FED.R. CIV. P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
In viewing the evidence at the summary judgment stage, the Court does not make credibility determinations or weigh conflicting evidence and draws all inferences in the light most favorable to the nonmoving party. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). The nonmoving party's version of any disputed issue of fact is presumed correct, and its evidence is to be believed. Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451, 456 (1992); Anderson, 477 U.S. at 255. The evidence presented by the parties must be admissible. FED.R. CIV. P. 56(e).
II. Government's Intent to Rely Upon Evidence Pursuant to Fed.R.Evid. 807
The government offers evidence of (1) negotiations between Pulido and Rosado concerning Rosado's agreement to purchase cocaine from Pulido on April 26, 2001, which negotiations were allegedly directed and monitored on Pulido's end by Detective Perez and (2) a telephone conversation between Pulido and Perez concerning the events of the meeting between Pulido, Rosado and others in the Norsworthy Residence. The government offers a declaration from Detective Perez describing the negotiations and conversation. It is unable to offer testimony or a declaration from Pulido because he refused to testify at his noticed deposition on June 22, 2004. Pulido stated that he would testify if he could be represented by counsel. He stated that he may not have an opportunity to hire such counsel until his release from prison in approximately 2008. A review of Pulido's deposition transcript indicates that Pulido did not know what the forfeiture case was about, and thought the deposition notice related to a claim for child support.
Rule 807 of the Federal Rules of Evidence provides that a hearsay statement not covered by any exception but having "equivalent circumstantial guarantees of trustworthiness" is admissible:
if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purpose of these rules and the interests of justice will best be served by admission of the statement into evidence.
The government argues first that Detective Perez' testimony is offered as evidence of a material fact, i.e., the intended use of the defendant currency. It is thus material both to the issue of forfeitability and to Claimant's innocent owner defense.
Second, the government argues that Detective Perez' testimony has "equivalent circumstantial guarantees of trustworthiness" because (1) he was personally involved in directing Pulido in connection with the negotiations with Rosado, and instructed Pulido on how to respond to Rosado's request to meet on Ellsmere, (2) he was one of the participants in the conversation with Pulido immediately after the meeting with Rosado in the Norsworthy Residence and (3) his testimony in both categories was corroborated by subsequent events, including the seizure of and the bags in which the defendant currency was found. However, it is the trustworthiness of Pulido's statements, not of Perez's statements, which the Court must consider under Rule 807. Pulido's statements were not made under oath. Moreover, Pulido's statements could be tainted by self-interest, depending on the circumstances of his alleged agreement to cooperate with the officers. Furthermore, Pulido is an incarcerated convicted felon, whose credibility has not been established.
Third, the government argues that the testimony is more probative than any other evidence which can be procured through reasonable efforts because Pulido refused to testify at his deposition and "there is no reason to believe that he would agree to testify even if ordered to do so by the court." The government argues further that, as for the negotiations between Rosado and Pulido, the government is unaware of Rosado's current whereabouts and it would be unreasonable to believe that Rosado would testify truthfully about his conversations with Pulido in any event. However, it is not clear that Pulido's testimony cannot be procured through reasonable efforts. His refusal to testify at the June 22, 2004 deposition was based solely on his lack of representation. The government has made no effort to seek an order compelling his testimony.
The government concludes that the general purposes of the rules of evidence and the interests of justice will best be served by admitting the testimony because it would allow into evidence pertinent information regarding the use of the intended use of the money and its ownership. See Fed.R.Evid. 102 ("These rules shall be construed to secure fairness in administration, elimination of unjustifiable expense and delay, and promotion of growth and development of the law of evidence to the end that the truth may be ascertained and the proceedings justly determined.").
The Court SUSTAINS Claimant's objection to the hearsay statements contained in the declaration of Officer Perez.
III. Forfeiture
Seized currency is subject to forfeiture if it was furnished or intended to be furnished in exchange for a controlled substance, is traceable to such an exchange, or was used or intended to be used to facilitate any violation of subchapter 21 of the United State Code. 21 U.S.C. § 881(a)(6); U.S. v. U.S. Currency $30,060.00, 39 F.3d 1039, 1041 (9th Cir. 1994). In a civil forfeiture proceeding, the burden of proof is on the government to establish, by a preponderance of evidence, that the property is subject to forfeiture. 18 U.S.C. § 983(c)(1). Moreover, if the government's theory is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the government "shall establish that there was a substantial connection between the property and the offense." 18 U.S.C. § 983(c)(3).
Having excluded the hearsay statements of Jacob Pulido, the Court finds that the government can offer only the following undisputed facts in support of the forfeitability of the defendant currency:
(1) the PPD officers were conducting surveillance of the Norsworthy Residence because they believed a drug transaction was going to take place there;
(2) the officers observed certain conduct during their surveillance and during the traffic stop of Rosado and Bang ( see supra at pages 2-3);
(3) Claimant and her husband, who was on parole in connection with a federal cocaine trafficking conviction, gave the police consent to search their residence, resulting in the recovery of the defendant currency; and
(4) at the time of the seizure, every adult present signed written disclaimers of ownership of the defendant currency.
The presence of a large sum of cash, standing alone, is not sufficient to establish forfeitability. See U.S. v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1072 (9th Cir. 1994) ("Nor have we ever concluded that probable cause existed under 21 U.S.C. § 881(a)(6) absent evidence tending to establish that the money was drug-related."); U.S. v. $67,220.00 in U.S. Currency, 957 F.2d 280, 285 (6th Cir. 1992). In this case, there is little more than a "large sum of cash." Therefore, the government has not established forfeitability by a preponderance of the evidence. Claimant's innocent owner defense is therefore moot.
CONCLUSION
The Court DENIES Plaintiff's Motion for Summary Judgment or Adjudication and GRANTS Claimant's Motion for Summary Judgment.
IT IS SO ORDERED.