Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-00004/USCOURTS-azd-2_10-cv-00004-1/pdf.json

Nature of Suit Code: 625
Nature of Suit: Drug Related Seizure of Property
Cause of Action: 21:881 Forfeiture Property-Drugs

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America, 

Plaintiff, 

vs.

2007 Custom Motorcycle; VIN:

1R9SM29627I423003, 

Defendant. 

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No. CV-10-00004-PHX-FJM

ORDER

The court has before it the United States’ motion to strike (doc. 23), claimant Indy

Route 66 Cycles, Inc.’s response (doc. 24), and the government’s reply (doc. 25). We also

have before us the government’s motion to stay discovery (doc. 27), claimant’s response

(doc. 28), and the government’s reply (doc. 29).

I

Claimant is a motorcycle company based in Indianapolis, Indiana. In April 2007, it

apparently finished building a custom motorcycle commissioned by Timothy Allen.

Claimant asserts that it kept the motorcycle in storage because Allen failed to complete

payment for it. The government asserts that claimant delivered the motorcycle to Allen in

April 2007. In April 2009, the government arrested Allen on drug charges, and, the

following month, it seized the motorcycle from the garage of an Indiana home owned by

Case 2:10-cv-00004-FJM Document 30 Filed 01/24/11 Page 1 of 4
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Allen’s sister.

The government alleges that the motorcycle is subject to civil forfeiture because it

constitutes proceeds of drug trafficking under 21 U.S.C. § 881(a)(6) and property involved

in a money laundering transaction under 18 U.S.C. § 981(a)(1)(A). Civil in rem forfeiture

actions arising from a federal statute are governed by the Supplemental Rules for Admiralty

or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure.

Rule G(1), Fed. R. Civ. P. Supp. R. The government moves under Rule G(8)(c)(i)(B), Fed.

R. Civ. P. Supp. R., which allows the government to move to strike a claim or answer

because the claimant lacks standing. To contest a forfeiture action, a claimant must be able

to demonstrate that he has a sufficient interest in the seized property. United States v.

$133,420.00 in U.S. Currency, No. CV-09-8096-PCT-NVW, 2010 WL 2594304, at *4 (D.

Ariz. June 23, 2010).

In this case, the government moves to strike claimant’s claim and answer at the

summary judgment stage. At this stage, a claimant need not prove the existence of an interest

in the property, but he must be able to show “by a preponderance of the evidence that he has

a facially colorable interest” in the property. United States v. $148,840.00 in U.S. Currency,

521 F.3d 1268, 1273 (10th Cir. 2008). “In the event disputed issues of material fact preclude

summary judgment, the Court may evaluate standing by a preponderance of the evidence at

an evidentiary hearing without a jury.” $133,420.00, 2010 WL 2594304, at *7; see Rule

G(8)(c)(ii), Fed. R. Civ. P. Supp. R. advisory committee’s note.

II

At the pleading stage, claimant asserted two interests in the motorcycle. It maintained

that it owned the motorcycle as evidenced by a Certificate of Origin issued on April 30,

2007. Claimant’s Response, ex. B at 5. It also claimed an interest through a purported

private mechanic’s lien noticed and published in June 2009. Id., ex. B at 7-11. The lien was

allegedly based on an invoice balance and a $5 daily storage fee beginning on April 30, 2007,

and running through a proposed auction date of July 10, 2009. As the government points out,

however, claimant clearly did not store the motorcycle after it was seized from Allen’s

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sister’s garage in May 2009. In any case, claimant abandons its reliance on the purported

lien in its response. Thus, the only remaining question is whether claimant can show a

facially colorable ownership interest based on the Certificate of Origin.

Under Indiana law, the question of motor vehicle ownership is governed by the sales

provisions of Indiana’s Uniform Commercial Code (“UCC”). Madrid v. Bloomington Auto

Co., 782 N.E.2d 386, 395 (Ind. Ct. App. 2003). Although the government challenges the

current significance of the Certificate of Origin, it does not dispute that claimant owned the

motorcycle before selling it to Allen. With respect to the alleged sale, the government relies

on the following UCC provision, “Unless otherwise explicitly agreed, title passes to the

buyer at the time and place at which the seller completes his performance with reference to

the physical delivery of the goods.” I.C. § 26-1-2-401(2). Claimant does not dispute that this

provision applies, and it does not contend that it agreed to different terms with Allen.

Therefore, claimant’s standing turns on whether it delivered the motorcycle to Allen.

On this point, the government first offers an affidavit by claimant’s former vice

president, Vince Ballard, stating that the motorcycle was “built and delivered on or about

4/30/2007.” Government’s Motion to Strike, ex. A at 1. Ballard also referred to the

Certificate of Origin, which purported to transfer the motorcycle from “Route Sixty Six

Motorcycle Co.” to the company’s retail division as a “distributor or dealer,” on April 30,

2007. Id., ex. D at 14. He went on to state that Allen did not pay for the motorcycle and

referred to the purported lien based, in part, on claimant storing the motorcycle starting on

April 30, 2007. Id., ex. A at 1. The affidavit is inconclusive. It implies that claimant

delivered the motorcycle to Allen, and it asserts that claimant kept the motorcycle in storage.

Nevertheless, it is undisputed that the motorcycle was found in Allen’s sister’s garage

two years later, which strongly indicates that claimant delivered it to Allen. Claimant offers

no explanation for how the motorcycle ended up with Allen’s sister when it was allegedly

in storage. Moreover, claimant’s position that the motorcycle remained in storage past the

date it was seized by the government is plainly spurious. Claimant contends that, at worst,

the government presents a question of fact. If we were to hold an evidentiary hearing on the

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issue of whether claimant delivered the motorcycle to Allen, however, there is no indication

that claimant could meet its burden to show a facially colorable interest in the motorcycle

with admissible evidence. Under the circumstances, we grant the government’s motion to

strike the claim and answer for lack of standing.

IT IS THEREFORE ORDERED GRANTING the United States’ motion to strike

claimant’s claim and answer (doc. 23).

IT IS FURTHER ORDERED DENYING the United States’ motion to stay

discovery as moot (doc. 27).

The clerk shall enter final judgment in favor of the United States and against claimant.

DATED this 21st day of January, 2011.

Case 2:10-cv-00004-FJM Document 30 Filed 01/24/11 Page 4 of 4