IN RE SEARCH SEIZURE WARRANT FOR 111, (May 1, 2006)

JOSEPH M. SHORTALL, JUDGE.

"Title washing" is a practice by which certain used car dealers conceal the fact that a motor vehicle offered for sale has been declared a total loss by an insurance company because of severe damage to the vehicle from a collision, fire or other similar event. Such vehicles are considered "salvage" vehicles and unsafe to operate and have a diminished market value; their title documents are stamped "salvage" to inform a potential buyer of their damaged status and to prevent registration until repairs are made and a safety inspection is performed. To conceal a vehicle's "salvage" status and enhance its value some dealers engage in various stratagems to "wash" the title so that both the buyer and the department of motor vehicles will be unaware of its "salvage" status and issue a new, "clean" registration for it.

For example, by registering a motor vehicle in another state which is unaware of its "salvage" status and obtaining a "clean," out-of-state title, which can then be submitted to the department of motor vehicles to obtain a "clean" Connecticut title.

In early 2005 the New Britain police department was investigating three used car dealers in that city who were suspected of this practice. In aid of that investigation a search and seizure warrant was obtained for their business premises. That warrant was executed on June 21, 2005, and a large quantity of records and equipment was seized. That material was retained at the police department for several months and examined not only by police officers engaged in that investigation but also by agents of the state department of revenue services, apparently for violations of state tax laws. As of September 2005 no charges had been brought and no arrests made as a result of either investigation.

Meanwhile, in July 2005 attorneys representing the three dealers filed motions to suppress and for the return of the seized property. Those motions came on for a hearing before this court on September 16, 2005. At the outset of that hearing the court was informed that the police department had returned the records seized from one of the dealers, Town and Country Auto CT Page 7870 Center, rendering its motion moot. As a result of discussions with the court in chambers it was agreed between the police department and the other two dealers, Diamond I Industries, L.L.C. (Diamond) and Prestige Automotive (Prestige), that all of the seized material would be returned, with the exception of some documents which would be retained by the police department; copies of those documents would be given to the dealers. The court entered the following order on that date:

That the New Britain Police Department will return to Diamond and to Prestige all of the material that were (sic) seized pursuant to these warrants with the exception of the items which the police department feels may be evidence of questionable or criminal activity. As to those items, the police department will provide copies to Prestige and Diamond of the items which they retained in their possession. That return will be accomplished by one week from today, that's Friday, the 23rd by the delivery of those items by the New Britain Police Department to the premises of Diamond and Prestige from which they were originally seized.

Transcript of proceedings, September 16, 2005.

No material was returned on Friday, September 23, 2005. On the following Tuesday, September 27, seized material was delivered to both premises by the police department. Simultaneously, however, agents of the department of revenue services seized some of the returned material from the premises of Diamond, and an agent of the department of motor vehicles seized some of the returned material from the premises of Prestige.

Diamond and Prestige were both located on premises on Christian Lane in New Britain, Diamond at 111C and Prestige at 111.

Motions for contempt were promptly filed by both dealers, alleging that the police department had wilfully failed to comply with the court's order of September 16, 2005.

I

"The interests of orderly government demand that respect and compliance be given to orders issued by courts possessed of jurisdiction of persons and subject matter." United States v. United Mine Workers, 330 U.S. 258, 303 (1947), cited with approval in Cologne v. Westfarms Associates, 197 Conn. 141, 147 (1985). Indirect civil contempt involves the wilful violation of CT Page 7871 an applicable court order occurring outside the presence of the court. Such a claim, as in this case, must be established by competent evidence, including testimony under oath, at a trial-like evidentiary hearing. Id., 151-52. To establish that the police department's conduct violated an applicable court order, the dealers must first show that the order in question was in force and effect against the police department at the time of the challenged conduct. If it was, then the dealers must further prove that the conduct in question did not comply with the clear requirements of that order. Blaydes v. Blaydes, 187 Conn. 464, 467 (1982).

Moreover, "(t)o constitute contempt, a party's conduct must be wilful . . . Noncompliance alone will not support a judgment of contempt . . ." (Citation and internal quotation marks omitted.) Keeney v. Buccino, 92 Conn.App. 496, 513 (2005). "To establish that the violation of an applicable court order was wilful, the claimant [here, the dealers] must prove that the violation was committed intentionally, with actual or constructive knowledge of the order and its contents." Keeney v. Buccino, Superior Court, judicial district of Hartford (Docket No. CV 93-0530766, Aug. 31, 2004).

Wilful is defined in Black's Law Dictionary as meaning "voluntary and intentional, but not necessarily malicious." Black's Law Dictionary (7th Ed. 1999). See also Dubay v. Irish, 207 Conn. 518, 533 (1988) ("Wilful misconduct has been defined as intentional conduct designed to injure for which there is no just cause or excuse").

II

This court heard evidence and argument on the motions for contempt on September 29 and October 13, 2005 and on March 21, 2006. The court has considered the evidence given by the eight witnesses who testified and the exhibits introduced by the police department and the dealers. This memorandum represents the court's findings of facts and conclusions of law based upon its consideration and evaluation of that evidence and its assessment of the credibility of the witnesses who testified and the weight to be given their testimony.

There is no question that the court's order of September 16 was still in force on September 23 and on September 27, 2005. In addition, the testimony of the chief of police and other officers involved in compliance with the order demonstrated that the police department was aware of the order and its contents. So, the questions here are whether the department's conduct violated the order and, if it did, whether its failure to comply was wilful.

The two motions for contempt are quite different in their CT Page 7872 claims of non-compliance. Prestige's motion alleges that, upon the return of property on September 27, (1) police officers removed from the boxes of records "all of the registrations of all of the motor vehicles in [Prestige's] sales lot" and took them back to the police department, (2) that the officers had not returned purely personal property and records which had been seized, including materials relating to a home equity loan, and (3) that, when the owner of Prestige tried to reconnect its computer equipment, he discovered that important parts had been withheld by the police department.

No evidence whatever was offered in support of the first two claims. The owner of Prestige testified that he was unable to reconnect his computer upon its return, but the court did not find that testimony credible or probative of the allegation that this was due to police misconduct. Therefore, since the claims of non-compliance have not been established by the evidence, the motion for contempt filed on behalf of Prestige will be denied.

Although the owner, Anthony Reyes, was given an opportunity to examine the property returned by the police department on September 27, he declined to do so. Nevertheless, he signed a "Record of Release or Loan" form, acknowledging receipt of the property described therein, which included several pieces of computer equipment.

The motion recites that Prestige's seized property was to be returned "on or before September 23, 2005" and notes that it was September 27 when it was, in fact, returned. To the extent that this can be interpreted as a claim of non-compliance because of the police department's delay in returning the property, it is rejected for the same reasons as cited in connection with Diamond's motion for contempt. See p. 8, infra.

Diamond's motion, on the other hand, alleged that the police department was in contempt of the court order because (1) none of the seized property was returned on September 23, the date ordered by the court, and (2) when the property was returned on September 27, it was done "in concert" with the state tax agents "under fully pre-arranged scheme, the intent and effect of which was to try to nullify the September 16th Court order . . ."

It is undeniably true that the police department did not comply with the court order on September 23. But, "(t)he inability of a party to obey an order of the court, without fault on his part, is a good defense to the charge of contempt." Mallory v. Mallory, 207 Conn. 48, 57 (1988). "The contemnor must establish that he cannot comply, or was unable to do so." Bunche v. Bunche, 36 Conn.App. 322, 325 (1994).

The court finds that the police department has met its burden of proving that it was unable to comply with the order on September 23 because the room in which the seized property was being held, for approximately ten days before that date, had been ordered closed by the city's property director because of repeated complaints that persons using the room had experienced certain health problems, and the room was being tested for the presence of dangerous environmental conditions. A "Do Not Enter" sign was placed on the room, and an air monitoring device was CT Page 7873 installed from September 16 through and including September 23 by an environmental testing company engaged by the city.

Prior to learning that the room was still quarantined on September 23, the officer in charge of the return of the property had made arrangements to obtain a truck for transporting the seized material to the dealers' premises on that day and for an allocation of personnel to carry out the return.

Diamond introduced no evidence in support of its allegation that these environmental concerns were "improper and pretextual." The court finds, to the contrary, that there were genuine health issues surrounding the use of this room which arose even before the court issued its order on September 16.

By Tuesday, September 27, however, the city had received a written report from its environmental consultant that carbon monoxide levels in the room were within normal limits. Although the cause of the discomfort previously experienced by police personnel had still not been determined, certain officers did enter the room voluntarily on that day to effect the return of seized property ordered by the court.

There can be no question from the evidence that, before September 27, the police department did alert the state tax department that it was returning the seized material to Diamond. Agents of the department, acting on this "heads up," obtained a search and seizure warrant from a Superior Court judge on September 22 for certain of Diamond's business records. On September 27 they arrived at Diamond at the same time as the New Britain police officers, served the warrant on Diamond's proprietor and, without assistance from New Britain police officers, seized some of the same material that was being returned by the police department.

Obviously, the New Britain police department cannot be held in contempt for the actions of the state tax department. Does its action in tipping off the tax department so that it could take steps to gain possession of material of interest to it constitute a wilful violation of the court's order? The court concludes that it does not.

First, there is nothing in the order that prohibits communication between the police department and other law enforcement agencies. There is a provision that the order shall take precedence over any subpoenas served on the police department for material it had seized from Diamond, and the department complied with that provision and informed the revenue agents that it could not honor any subpoenas served on it. The officer in charge of the return testified that he didn't think anything in the order prohibited the police department from CT Page 7874 assisting other law enforcement agencies in their investigation, and he had no intention to violate the order in doing so.

Second, there was no evidence introduced at the hearing that the police department intended to or did take advantage of the tax department's seizure of materials to advance its criminal investigation. For example, there was no evidence that, after the revenue agents took some of the seized material into their possession on September 27, police officers from New Britain sought or obtained access to any of that material.

"To constitute contempt a party's conduct must be wilful . . . The contempt remedy is particularly harsh . . . and may be founded solely upon some clear and express direction of the court . . . One cannot be placed in contempt for failure to read the court's mind . . . A good faith dispute or legitimate misunderstanding of the terms of [a court order] may prevent a finding that the [non-complying party's conduct] was wilful." (Internal quotation marks and citations omitted.) Jenks v. Jenks, 39 Conn.App. 139, 142 (1995).

Here the police department complied with the letter of the court's order. Its communication with other law enforcement agencies was, at worst, a "legitimate misunderstanding" of the spirit of the order and not an intentional failure to comply, if it was a failure to comply at all.

Moreover, "(i)t is within the sound discretion of the court to deny a claim for contempt when there is an adequate factual basis to explain the failure to honor the court's order." Marcil v. Marcil, 4 Conn.App. 403, 405 (1985). Even were the court to consider that there was a failure to comply, the police department's intent to alert another law enforcement agency investigating Diamond of its intention to return books and records that might be evidence of criminal conduct would constitute "an adequate factual basis to explain the failure to honor the court's order."

It seems unlikely that a divorced husband would be held in contempt for alerting the Internal Revenue Service to the fact that he has turned over property to his former wife, pursuant to the divorce decree, when the IRS has a tax lien on all of the former wife's property.

III

Because the allegations of the motion for contempt filed by Prestige are unsupported by the evidence, that motion is DENIED. Because the conduct of the New Britain police department does not amount to a wilful violation of the court's order of September 16, 2005, the motion for contempt filed by Diamond is also CT Page 7875 DENIED.

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