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Docket Number

Docket No. 119505.

Attorney(S)

Frank J. Kelley, Attorney General, Gay Secor Hardy, Solicitor General, Carl J. Marlinga, Prosecuting Attorney, Robert John Berlin, Chief Appellate Lawyer, and Diane M. Hathaway, Assistant Prosecuting Attorney, for the people. Lopatin, Miller, Freedman, Bluestone, Erlich, Rosen Bartnick (by Richard E. Shaw), for the claimant.

Judges

Kathleen Jansen

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Smart Summary

Case Summary: In re Forfeiture of $18,000 (Michigan Court of Appeals, May 6, 1991)

Docket: 119505. Panel: JANSEN, P.J., and WAHLS and HOOD, JJ. Opinion by: JANSEN, P.J.

Factual and Procedural Background

This appeal challenges a July 20, 1989 order granting the Macomb County Prosecutor's petition for forfeiture of $18,000 under MCL 333.7521; MSA 14.15(7521). According to the opinion, on September 22, 1989, claimant posted $18,000 cash with the Warren Police Department as bail for her future brother-in-law. Police, suspecting the cash might be related to drug activity, used a narcotics detection dog which indicated that the money had the odor of cocaine. Based on that indication, the prosecutor instituted forfeiture proceedings. At the forfeiture hearing, claimant proffered testimony that the money had recently been withdrawn from the Michigan National Bank and was part of a $40,000 recovery from a wrongful death judgment. The trial court concluded that the money had been in proximity to cocaine and was therefore presumed subject to forfeiture under MCL 333.7521(1)(f), and that claimant failed to rebut the presumption by clear and convincing evidence. Claimant appealed, contending that the trial court erred in ordering forfeiture. The Court of Appeals reversed.

Legal Issues Presented

Whether the trial court erred in ordering forfeiture of the $18,000.
Whether the statutory presumption under MCL 333.7521(1)(f) that "any money that is found in close proximity to any property that is subject to forfeiture" applies where the only evidence is that a narcotics dog detected the odor of cocaine on the bills (i.e., where the money was not actually found in close proximity to cocaine at the time of seizure).
Whether the claimant failed to rebut any applicable statutory presumption by clear and convincing evidence, as found by the trial court.

Arguments of the Parties

Claimant's Arguments

Claimant offered testimony that the $18,000 had been recently withdrawn from Michigan National Bank.
Claimant asserted that the money constituted part of a $40,000 recovery from a wrongful death judgment, implying a legitimate source for the funds.
Implicitly, claimant contested the application of forfeiture to these funds on the basis of the source evidence and lack of a demonstrated nexus to controlled-substance transactions.

Prosecutor's Position

The prosecutor sought forfeiture after police used a narcotics detection dog that indicated the bills bore the odor of cocaine; the trial court treated that evidence as supporting a presumption of forfeiture under MCL 333.7521(1)(f).
The trial court accepted that the odor evidence permitted a finding that the money had been in proximity to cocaine and therefore applied the statutory presumption.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
People v Hawkins, 181 Mich. App. 393, 396; 448 N.W.2d 858 (1989)	The primary goal of judicial interpretation is to ascertain and give effect to the intent of the Legislature; the first criterion is the specific language of the statute.	The court invoked this principle to focus its analysis on the plain language of MCL 333.7521(1)(f) when interpreting the scope of the statutory presumption of forfeiture.
Frasier v Model Coverall Service, Inc, 182 Mich. App. 741, 744; 453 N.W.2d 301 (1990)	Legislature is presumed to have intended the meaning it plainly expressed.	The court relied on this presumption to give effect to the statute's specific wording limiting the presumption to "money that is found in close proximity" to forfeitable property.
In re Forfeiture of 719 N Main, 175 Mich. App. 107, 114; 437 N.W.2d 332 (1989)	Forfeiture proceedings are in rem civil proceedings; claimant bears the burden of proving the claim by a preponderance of the evidence.	The court used this rule to state the claimant's burden in the forfeiture proceeding and to frame the standard for what claimant needed to prove.
In re Forfeiture of $5,264, 432 Mich. 242, 260; 439 N.W.2d 246 (1989)	Standards on review: findings of fact by a trial court sitting without a jury will not be set aside unless clearly erroneous; a substantial connection must be established between the property and criminal activity to justify forfeiture.	The court applied the clear-error standard to the trial court's factual findings and held that the record evidenced a mistake in finding a sufficient nexus between the money and illegal activity.
Smith v Michigan State Accident Fund, 403 Mich. 201, 204; 267 N.W.2d 909 (1978)	Definition of "clearly erroneous": where the reviewing court, on the entire evidence, is left with a definite and firm conviction that a mistake has been committed.	The court quoted this standard when concluding that the trial court's factual findings were clearly erroneous given the entire record.

Court's Reasoning and Analysis

The Court of Appeals proceeded in a stepwise statutory-interpretive and factual-review analysis:

Statutory interpretation: The court began with the principle that the primary goal of judicial interpretation is to ascertain and effectuate legislative intent, with the statute's specific language as the first criterion. The court quoted MCL 333.7521(1)(f), noting the provision that "Any money that is found in close proximity to any property that is subject to forfeiture ... shall be presumed to be subject to forfeiture ... This presumption may be rebutted by clear and convincing evidence."
Application of statutory text to facts: The court observed that, in this case, it was undisputed that the money was not found in close proximity to cocaine at the time relevant to the forfeiture proceeding, although evidence could support an inference that at some earlier time the bills might have been in close proximity to cocaine (as manifested by odor). Relying on the statute's plain language, the court held that the presumption of forfeiture applies to money "found in close proximity" and does not extend to money only shown to have had past proximity or merely to bear the odor of a controlled substance.
Legislative purpose: The court consulted a House legislative analysis summarizing the statute's aim to forfeit things of value that (1) are furnished in exchange for controlled substances, (2) are traceable to such exchanges, or (3) are used (or intended to be used) to facilitate violations. The court concluded that applying the statutory presumption solely because money bore the odor of cocaine (indicative of possible past contact) would not further the Legislature's intent.
Burden and standard of review: The court reiterated that forfeiture proceedings are in rem civil actions and that a claimant bears the burden of proving the claim by a preponderance of the evidence. It further stated the standard of appellate review: trial-court factual findings are not set aside unless clearly erroneous.
Factual sufficiency and nexus requirement: Reviewing the trial-court findings and the record, the court concluded that the only evidence linking the money to an exchange for controlled substances was the narcotics dog's detection of cocaine odor on the bills. By contrast, claimant presented evidence showing the money had been withdrawn from a bank and formed part of a wrongful-death recovery. Because a substantial connection between the property and criminal activity is required to justify forfeiture, and because no evidence established that the money had been furnished in exchange for controlled substances or was traceable to such an exchange, the appellate court held the trial court's finding of forfeiture was mistaken.

Holding and Implications

HOLDING: The Court of Appeals reversed the trial court's order forfeiting the $18,000. The court held that the statutory presumption in MCL 333.7521(1)(f) applies to money "found in close proximity" to forfeitable property and does not apply where the money was not found in close proximity to cocaine even though it bore the odor of cocaine or may have been in proximity at some earlier time. The court found that no sufficient nexus between the money and illegal drug transactions was established.

Implications: The direct effect of the decision is reversal of the forfeiture order and a finding that the record did not justify forfeiture of the $18,000. The opinion clarifies that, under the statute's plain language as interpreted by this court, the statutory presumption of forfeiture attaches only where money is actually found in close proximity to property subject to forfeiture and cannot be applied on the basis of odor alone or an inference of past proximity. The court also reaffirmed the claimant's burden in civil in rem forfeiture proceedings and the requirement of a substantial connection between property and criminal activity to support forfeiture. The opinion does not purport to announce broader principles beyond these holdings, and its practical effect as stated is the reversal of the forfeiture in this case.

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In re FORFEITURE OF $18,000

JANSEN, P.J.

Claimant appeals as of right a July 20, 1989, order granting the Macomb County Prosecutor's petition for forfeiture of $18,000 pursuant to MCL 333.7521; MSA 14.15(7521). On appeal, claimant contends that the trial court erred in ordering the forfeiture of the money. We agree and reverse.

On September 22, 1989, claimant posted $18,000 cash with the Warren Police Department for bail for her future brother-in-law. The police, suspicious that the cash bond money might be related to drug activity, retained a narcotics detection dog. The dog indicated that the money had the odor of cocaine. On the basis of this fact, the police instituted the present forfeiture proceedings. At the hearing, claimant proffered testimony substantiating her claim that the money recently had been withdrawn from the Michigan National Bank and constituted part of a $40,000 recovery from a judgment in a wrongful death action.

The trial court held that the money had been in proximity to cocaine and was presumed to be subject to forfeiture under MCL 333.7521(1)(f); MSA 14.15(7521)(1)(f). The trial court then held that, because of inconsistencies in claimant's evidence, claimant failed to rebut this presumption by clear and convincing evidence. We disagree and reverse. MCL 333.7521(1)(f); MSA 14.15(7521)(1)(f) provides:

Any thing of value that is furnished or intended to be furnished in exchange for a controlled substance or an imitation controlled substance in violation of this article, traceable to an exchange for a controlled substance or an imitation controlled substance in violation of this article, or used or intended to be used to facilitate any violation of this article including but not limited to money, negotiable instruments, or securities. To the extent of the interest of an owner, a thing of value is not subject to forfeiture under this subdivision by reason of any act or omission that is established by the owner of the item to have been committed or omitted without the owner's knowledge or consent. Any money that is found in close proximity to any property that is subject to forfeiture under subdivision (a), (b), (c), (d), or (e) shall be presumed to be subject to forfeiture under this subdivision. This presumption may be rebutted by clear and convincing evidence.

The primary goal of judicial interpretation is to ascertain and give effect to the intent of the Legislature. People v Hawkins, 181 Mich. App. 393, 396; 448 N.W.2d 858 (1989). The first criterion in determining the intent of the Legislature is the specific language of the statute. Id. The Legislature is presumed to have intended the meaning it plainly expressed. Frasier v Model Coverall Service, Inc, 182 Mich. App. 741, 744; 453 N.W.2d 301 (1990).

The statute provides for a presumption of forfeiture for "any money that is found in close proximity to any property that is subject to forfeiture." In the present case, it is undisputed that the money at issue was not found in close proximity to cocaine even though the evidence could support an inference that at some previous time the money was in close proximity to cocaine. We hold that the specific language of the statute does not create a presumption of forfeiture under these circumstances.

Furthermore, the intent of the Legislature in enacting the statute was to provide for the seizure and forfeiture of anything of value that is:

1) furnished or intended to be furnished in exchange for a controlled substance in violation of the article;

2) traceable to an exchange for a controlled substance in violation of the article; or

3) used or intended for use in facilitating a violation of the article.

[House Legislative Analysis, SB 645, September 21, 1982.]

This legislative intent would not be furthered by reading the presumption of forfeiture to apply to the money in this case merely because it bears an odor of a controlled substance and could have been in close proximity to a controlled substance at some point in time.

Since a forfeiture proceeding is an in rem civil proceeding, the claimant has the burden of proving the claim by a preponderance of the evidence. In re Forfeiture of 719 N Main, 175 Mich. App. 107, 114; 437 N.W.2d 332 (1989). The findings of fact of a trial court sitting without a jury will not be set aside on appeal unless we find that they are clearly erroneous. In re Forfeiture of $5,264, 432 Mich. 242, 260; 439 N.W.2d 246 (1989). A finding is clearly erroneous when "although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed." Id. at 260 (quoting Smith v Michigan State Accident Fund, 403 Mich. 201, 204; 267 N.W.2d 909 (1978).

A review of the trial court's findings of fact leads us to conclude that a mistake has been made. The only evidence presented that could possibly link the money to an exchange for a controlled substance is the fact that the narcotics dog smelled the odor of cocaine on the bills. However, there was evidence presented which indicated that claimant had withdrawn the money from a bank before posting the money for the bond. A substantial connection must be established between the property and the criminal activity to justify forfeiture. Id. at 262. There was no evidence that the money was furnished in exchange for controlled substances or is traceable to an exchange for controlled substances. No nexus was established between illegal activity and the money. We conclude that the trial court erred in entering the order forfeiting this money.

Reversed.

IN RE FORFEITURE OF $18,000