Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_03-cv-06198/USCOURTS-caed-1_03-cv-06198-2/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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1

 UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

vs. )

)

$14,448.00 Currency, et al., )

)

Defendants. )

 )

1:03-cv-6198-OWW-SMS

FINDINGS AND RECOMMENDATION RE:

PLAINTIFF’S MOTION FOR DEFAULT

JUDGMENT (Doc. 73)

Plaintiff is proceeding with a civil action in this Court.

Plaintiff’s motion for default judgment is before the Court and

is proceeding before a Magistrate Judge pursuant to 28 U.S.C.

§ 636(b) and Local Rule 72-302(c)(19).

I. Background

In the complaint filed on September 4, 2003, and the first

amended complaint filed on January 11, 2007, it is alleged that

this Court has jurisdiction over this action to forfeit currency

and vehicles pursuant to 21 U.S.C. § 881(a)(4), which authorizes

forfeiture of vehicles used or intended to be used to transport

controlled substances or to facilitate the transportation, sale,

receipt, possession, or concealment of controlled substances, and

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§ 881(a)(6), which authorizes forfeiture of money or things of

value furnished or intended to be furnished in exchange for a

controlled substance or listed chemical, or all proceeds

traceable to such an exchange, or money used or intended to be

used to facilitate any violation concerning controlled

substances. (Cmplt./FAC p. 2.) The complaint and first amended

complaint also cite 18 U.S.C. § 981(a)(1), which categorizes as

subject to forfeiture any property involved in a transaction or

attempted transaction in violation of § 1956 or § 1957, or any

property traceable to such property. (Id.)

It is alleged that the Defendant properties, consisting of

currency and vehicles, were involved in or used to facilitate, or

were the proceeds of or are traceable to the proceeds of,

violations of 21 U.S.C. §§ 841(a)(1) [knowing and intentional

possession, manufacture, or distribution of a controlled

substance] and 846 [attempt or conspiracy to commit a controlled

substances offense], and 18 U.S.C. §§ 1956 [knowingly laundering

the proceeds of unlawful activity] and 1957 [knowingly engaging

in monetary transactions with the proceeds of criminal offenses].

It is alleged that all the properties were seized within the

Eastern District of California. The complaint and first amended

complaint detail a large-scale family-type methamphetamine

manufacture and distribution scheme, referred to as the Felix

Drug Organization, involving the persons from whom the Defendant

properties were seized. (Cmplt. pp. 3-6.; FAC pp. 3-5) They

allege specific overt acts of methamphetamine and cocaine sales

from the members of the organization and associated persons in

large quantities (often a pound or more) from 1998-2002. (Id. pp.

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6-10; pp. 5-8.) They also detail financial records seized from

various locations tending to show that Jose Felix, his father,

Prajedes Felix, and his mother, Fidelia Felix, engaged in

financial transactions without a checking account, instead using

money orders and cash and cashier’s checks and making large

expenditures, many over a thousand dollars, that exceeded the

legitimate income reported for tax purposes for the pertinent

periods (1999-2002), and did not include regular living expenses.

(Cmplt. pp. 12-20; FAC pp. 10-15.)

Plaintiff filed an ex parte application for default judgment and

memorandum of points and authorities on October 27, 2006 (Doc. 73).

Plaintiff’s motion came on regularly for hearing on December

8, 2006, at 9:30 a.m. in Courtroom No. 7 before the Honorable

Sandra M. Snyder, United States Magistrate Judge. Assistant

United States Attorney Kristi C. Kapetan appeared on behalf of

Plaintiff. There was no appearance on behalf of any defendant or

claimant. After the hearing, Plaintiff filed additional

stipulations and plea agreements on December 20, 2006 (Docs. 77-

86), and filed a supplemental brief on January 5, 2007 (Doc. 87).

Plaintiff also filed an amended complaint on January 11, 2007

(Doc. 88). The matter now stands submitted to the Court. 

II. Default Judgment

A court has the discretion to enter a default judgment

against one who is not an infant, incompetent, or member of the

armed services where the claim is for an amount that is not

certain on the face of the claim and where (1) the defendant has

been served with the claim; (2) the defendant’s default has been

entered for failure to appear; (3) if the defendant has appeared

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in the action, the defendant has been served with written notice

of the application for judgment at least three days before the

hearing on the application; and, (4) the court has undertaken any

necessary and proper investigation or hearing in order to enter

judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan

Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th

Cir. 1988). Factors that may be considered by courts in

exercising discretion as to the entry of a default judgment and

as to setting aside a default include the nature and extent of

the delay, Draper v. Coombs, 792 F.2d 915, 924-925 (9 Cir. th

1986); the possibility of prejudice to the plaintiff, Eitel v.

McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986); the merits of

plaintiff's substantive claim, id.; the sufficiency of the

allegations in the complaint to support judgment, Alan Neuman

Productions, Inc., 862 F.2d at 1392; the amount in controversy,

Eitel v. McCool, 782 F.2d at 1471-1472; the possibility of a

dispute concerning material facts, id.; whether the default was

due to excusable neglect, id.; and, the strong policy underlying

the Federal Rules of Civil Procedure that favors decisions on the

merits, id.

With respect to default judgments in proceedings that are in

rem actions for forfeiture, both the general Federal Rules of

Civil Procedure and the Supplemental Rules for Certain Admiralty

and Maritime Claims (Supp. R.) apply, but the latter rules

prevail if there is an inconsistency. Supp. R. A(1). Supp. R.

G(1) provides that the rule governs a forfeiture action in rem

arising from a federal statute; to the extent that Rule G does

not address an issue, Supp. Rules C and E also apply.

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A. Notice

The provisions of Rule G(4) with respect to notice are as follows:

(4) Notice.

(a) Notice by Publication.

(i) When Publication Is Required. A judgment of

forfeiture may be entered only if the government has

published notice of the action within a reasonable time

after filing the complaint or at a time the court orders.

But notice need not be published if:

(A) the defendant property is worth less than $1,000

and direct notice is sent under Rule G(4)(b) to every

person the government can reasonably identify as a

potential claimant; or

(B) the court finds that the cost of publication

exceeds the property's value and that other means of

notice would satisfy due process.

(ii) Content of the Notice. Unless the court orders

otherwise, the notice must:

(A) describe the property with reasonable

particularity;

(B) state the times under Rule G(5) to file a

claim and to answer; and

(C) name the government attorney to be served

with the claim and answer.

(iii) Frequency of Publication. Published notice

must appear:

(A) once a week for three consecutive weeks; or

(B) only once if, before the action was filed,

notice of nonjudicial forfeiture of the same property

was published on an official internet government

forfeiture site for at least 30 consecutive days,

or in a newspaper of general circulation for three

consecutive weeks in a district where publication is

authorized under Rule G(4)(a)(iv).

(iv) Means of Publication. The government should select

from the following options a means of publication

reasonably calculated to notify potential claimants

of the action:

(A) if the property is in the United States,

publication in a newspaper generally circulated in the

district where the action is filed, where the property

was seized, or where property that was not seized is

located;

(B) if the property is outside the United States,

publication in a newspaper generally circulated in a

district where the action is filed, in a newspaper

generally circulated in the country where the property

is located, or in legal notices published and generally

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circulated in the country where the property is located;

or

(C) instead of (A) or (B), posting a notice on an

official internet government forfeiture site for at

least 30 consecutive days.

(b) Notice to Known Potential Claimants.

(i) Direct Notice Required. The government must send

notice of the action and a copy of the complaint to any 

person who reasonably appears to be a potential claimant

on the facts known to the government before the end of

the time for filing a claim under Rule G(5)(a)(ii)(B).

(ii) Content of the Notice. The notice must state:

(A) the date when the notice is sent;

(B) a deadline for filing a claim, at least 35

days after the notice is sent;

(C) that an answer or a motion under Rule 12

must be filed no later than 20 days after filing

the claim; and

(D) the name of the government attorney to be

served with the claim and answer.

(iii) Sending Notice.

(A) The notice must be sent by means reasonably

calculated to reach the potential claimant.

(B) Notice may be sent to the potential claimant

or to the attorney representing the potential claimant

with respect to the seizure of the property or

in a related investigation, administrative forfeiture

proceeding, or criminal case.

(C) Notice sent to a potential claimant who is

incarcerated must be sent to the place of incarceration.

(D) Notice to a person arrested in connection with

an offense giving rise to the forfeiture who is not

incarcerated when notice is sent may be sent to

the address that person last gave to the agency

that arrested or released the person.

(E) Notice to a person from whom the property

was seized who is not incarcerated when notice is sent

may be sent to the last address that person gave to

the agency that seized the property.

(iv) When Notice Is Sent. Notice by the following means

is sent on the date when it is placed in the mail,

delivered to a commercial carrier, or sent by

electronic mail.

(v) Actual Notice. A potential claimant who had

actual notice of a forfeiture action may not oppose

or seek relief from forfeiture because of the government's

failure to send the required notice.

Supp. R. G(4).

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Plaintiff mentioned Supplemental Rule G, which took effect

in December 2006, for the first time in the supplemental brief

filed on January 5, 2007 (Doc. 87). Plaintiff points to the order

of April 12, 2006, in which the Supreme Court of the United

States adopted the amendment to the Supplemental Rules and stated

in pertinent part:

3. That the foregoing amendments to the Federal Rules

of Civil Procedure and the Supplemental Rules for

Admiralty or Maritime Claims and Asset Forfeiture

Actions shall take effect on December 1, 2006, and

shall govern in all proceedings thereafter commenced

and, insofar as just and practicable, all proceedings

then pending.

(See, www.uscourts.gov/rules/Letters-Orders.pdf, Transmittal

Letters to Congress and Supreme Court Orders, Order of April 12,

2006.)

 Thus, it appears that the Court intended that the new rules

apply to presently pending cases if just and practicable.

Although it is generally presumed that a change in a substantive

statute will not apply retroactively, a procedural rule changed

after the commencement of a suit may generally be applied to the

suit without raising concerns about retroactivity because of

diminished reliance interests in matters of procedure and because

rules of procedure generally regulate secondary rather than

primary conduct. The application of a new rule of procedure

ordinarily depends upon the posture of the particular case.

Landgraf v. USI Film Products, 511 U.S. 244, 275 (1994).

Here, although the government’s giving of notice preceded

the effective date of Supplemental Rule G, it does not appear

that applying those rules, which the comment reveals incorporate

a commonsense approach to notice grounded in defined and

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recognized principles of due process of law, would affect any

substantive right or obligation relating to the merits of the

case. Supp. Rule G, Adv. Comm. Note on 2006 Adoption. The

Advisory Committee Note indicates that the rule was added to

bring together the central procedures governing civil forfeiture

actions; it also states that the rule generally applies to

actions governed by the Civil Asset Forfeiture Reform Act of 2000

(CAFRA) as well as those excluded from it; thus, the intended

scope of application is very broad. The rule permits flexibility

as to the time of service of any warrant and supplemental

process. Id. The provisions for notice incorporate the

traditional means of publication and adopt the general principle

that notice should be effectuated by means reasonably calculated

to reach potential claimants at a cost reasonable in the

circumstances, and actual notice precludes a challenge to the

government’s failure to comply with the specific requirements of

the rule set forth in Rule G (4)(b). Id. 

Accordingly, the Court will apply Supplemental Rule G unless

injustice or impracticality would result. 

The provisions of Supp. R. G(4) have been set forth. Rule C

previously required publication, as does Local Rule A-530.

Local Rule A-540(a) requires that a party seeking a default

judgment in an action in rem shall show to the satisfaction of

the Court that due notice of the action and arrest of the

property has been given by publication pursuant to Local Rule

A-530, and by personal service on the person having custody of

the property or on the person having custody prior to its

possession by a law enforcement agency or officer, and by

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personal service or by certified mail, return receipt requested,

to every other person who has not appeared in the action and is

known to have an interest in the property; provided that failure

to give actual notice to such other person may be excused upon a

satisfactory showing of diligent efforts to give such notice

without success.

The Due Process Clause of the Fifth Amendment, which confers

a right to notice and an opportunity to be heard, requires that

with respect to known owners of the property whose whereabouts

are known, the government must employ such notice as is

reasonably calculated under all of the circumstances to apprise

the person of the pendency of the forfeiture. United States v.

Real Property, 135 F.3d 1312, 1315 (9 Cir. 1998); Dusenbery v. th

United States, 534 U.S. 161, 168 (2002) (holding that sending

certified mail to the custodial institution where the party was

being held as well as to the residence where the arrest occurred,

and the address in the town where his mother lived, satisfied due

process even though it did not result in actual notice to the

person).

Here, returns of service reveal that the Defendant

currencies were arrested on or about February 26, 2004. (Docs.

10-16.) Returns reveal that the vehicles were arrested on or

about March 8, 2004. (Docs. 19-22.) 

The publication (a single instance of publishing the notice)

ordered by the Court on March 9, 2004 (Doc. 18), was effected in

compliance with Supp. Rule C(4) and Local Rules A-530 and 83-171,

and proof thereof was filed by Plaintiff on April 19, 2004 (Doc.

27). On October 10, 2006 (Doc. 72), Plaintiff filed an additional

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proof of service by publication, which had not been ordered by

the Court, indicating that notice of the arrest and action and

other required information was published on four dates,

commencing August 28, 2006, and ending September 18, 2006. The

Court notes that this publication was effected after the entry of

defaults against the potential claimants involved in this action.

 1. $14,448.00

a. Bryan Barrera

According to the complaint and first amended complaint,

Bryan Barrera had custody of this property before it was

possessed by law enforcement; he had been in the company of Jose

Felix and Eladio Felix. 

Personal service of the complaint, publication documents,

warrant of arrest, and court notices on Barrera was attempted on

July 2, 2004, at 16311 Citrus in La Puente and at 4040 Rosemead

Boulevard No. 48, Pico Rivera; on July 7, 2004, personal service

was again attempted at the Rosemead address. Sending copies via

certified mail on July 19, 2004, to the Rosemead address resulted

in return of documents unclaimed on or about August 5, 2004. On

February 15, 2005, the documents were sent by certified mail to

the Citrus address in La Puente; a return receipt was signed by

Bryan Barrera on or about February 22, 2005. (Teglia Dec., Doc. 68).

Although there is no evidence that there was personal

service upon Barrera, a person with custody of the property prior

to its possession by law enforcement, as required by Local Rule

A-540(a), the Court notes that Barrerra received actual notice by

certified mail. This notice was clearly sent by means reasonably

calculated to reach the potential claimant. See, United States v.

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Real Property...Lido Motel, 135 F.3d 1312, 1315-16 (service on an

incarcerated party by certified mail at the institution of

incarceration held sufficient); Gonzalez-Gonzalez v. United

States, 257 F.3d 31, 38 (1 Cir. 2001) (actual knowledge of the st

forfeiture proceedings might excuse what would otherwise

constitute a due process violation); Nunley v. Department of

Justice, 425 F.3d 1132, 1139 (8 Cir. 2005) (one who had timely th

actual knowledge of an administrative forfeiture could not

complain about the constitutionality of the method used to

provide notice ); Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306, 319-20 (1950) (noting that the mails are recognized

as an efficient and inexpensive means of communication that are

generally reasonably calculated to reach addressees). Further,

because Barrera failed to file a claim or response, he lacks the

standing or authority to challenge the forfeiture. United States

v. Real Property...Lido Motel, 135 F.3d at 1316-17; Supp. R.

G(4)(b)(v).

Accordingly, the Court concludes that notice to Barrera was

sufficient.

b. Alberto Felix

Plaintiff states that potential claimant Alberto Felix

agreed to forfeit his right to the currency, citing to the

stipulation lodged on June 23, 2004. (Applic. p. 6.) Reference to

the stipulation for final judgment of forfeiture of $14,448.00

and $6,124.00 in U.S. Currency, lodged on June 23, 2004, reveals

that potential claimant Alberto Felix agreed to forfeit his

right, title, and interest in the currency to Plaintiff. Thus,

there is no defect in notice with respect to Alberto Felix.

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c. Jose Felix

On June 23, 2004, a stipulation for final judgment of

forfeiture as to the Defendant $14,448.00 currency and other

property was lodged wherein the potential claimant Jose Felix

agreed to forfeit his interest in the currency. Thus, there is no

defect in notice with respect to Jose Felix.

2. $6,124.00 in United States Currency

 It is alleged in the complaint and first amended complaint

that on March 27, 2003, when law enforcement officers questioned

Bryan Barrera and Eladio Felix after having received an item from

Jose Felix, it was discovered that Eladio Felix had $6,124.00 in

cash in his possession. While conversing in a police vehicle,

Eladio Felix and Barrera were taped trying to come up with a

legitimate-sounding story to explain the large amounts of cash

they possessed. (Cmplt. p. 10; FAC pp. 7-8.)

a. Eladio Felix

Plaintiff argues that it has provided substitute service

under Rule 4 on Eladio Felix by personally serving his spouse,

Taryn Felix, at their residence, by certified mail, and by

publication for four consecutive weeks. The required notice

pursuant to Rule 4(e)(2) appears via the proof of service filed

on July 23, 2004 (Doc. 45), reflecting service of the requisite

documents on Eladio Felix’s wife, apparently a person of suitable

age and discretion residing at the usual place of abode. Default

was entered as to Eladio Felix on September 17, 2004 (Doc. 55).

///

//

/ 

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b. Alberto and Jose Felix

Again, the stipulations for final judgment of forfeiture as

to this currency from these two potential claimants were lodged

on June 23, 2004. Thus, there are no problems with notice. 

3. $18,565.00 in United States Currency

It is alleged in the complaint and first amended complaint

that a vehicle and $18,265.00 in United States currency were

seized from Jose Felix’s residence during the execution of a

federal search warrant. (Cmplt. pp. 10-11; FAC p. 8.) On January

27, 1997, Jose Felix was arrested for possession of a small

quantity of methamphetamine, and a car was seized for having a

hidden compartment. (Cmplt. p. 8; FAC p. 6.) It is alleged that

Jose Felix was the eldest son of Prajedes Felix, Sr., and was the

head of the methamphetamine manufacture and distribution ring,

producing hundreds of pounds of methamphetamine monthly. (Cmplt.

p. 4; FAC p. 3.)

a. Jose Felix

In the stipulation lodged June 23, 2004, Jose Felix agreed

to forfeit his rights in the Defendant currency.

b. Gricelda Martinez

The declaration of Tammy Teglia in support of request for

entry of default, filed on March 15, 2005 (Doc. 61), reflects

that Martinez was personally served with copies of the complaint

and other required documents on January 6, 2005. Adequate notice

was given.

///

//

/

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c. Serapia Zepeda

Plaintiff asserts, without reference to any evidence, that

along with Martinez, Zepeda, a person with a known interest in

the Defendant property, filed a claim in June 2003 with respect

to this currency during the FBI’s administrative forfeiture

proceeding. (Applic. p. 8.) The declaration of Tammy Teglia in

support of the request for entry of default, filed on March 15,

2005 (Doc. 61), reflects that an effort of the marshal to effect

service in June 2004 at 196 E. Gibbons in Porterville was

unsuccessful; it was remarked that Zepeda had moved to Alaska.

The proof of service filed on September 9, 2004 (Doc. 49), by the

marshal, confirms this. Teglia further declared that the daughter

had told the marshal that Zepeda had moved to Alaska and was not

expected to return until November 2004. The marshal’s proof of

service does not reflect this, but Teglia, the paralegal

specialist assigned to this forfeiture action, states that she

had personal knowledge of the matters that she stated. 

The other effort made to serve Zepeda with the relevant

documents was by certified mail in December 2004 at the Gibbons

address again; Gustavo Felix signed the return receipt card on

December 28, 2004. It is unclear whether this in itself would

constitute actual notice to Zepeda, such as is contemplated by

Local Rule A-540(a), but it arguably constitutes sending notice

to her via certified mail, return receipt requested. Further, the

second attempt to serve her at an address to which it may be

inferred that Zepeda’s daughter indicated that Zepeda would

return in the month during which the certified mail was sent,

coupled with someone’s signing the receipt apparently on behalf

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of Zepeda, a resident, appears to constitute sending notice by

means reasonably calculated to reach the potential claimant

within the meaning of Supp. R. G(b)(iii)(A). Finally, it warrants

an inference of actual notice ultimately being received. 

Accordingly, it appears that adequate notice was given to

Serapia.

4. $9,206.00 in United States Currency

It is alleged that when a federal search warrant was

executed, this sum was seized from Prajedes Felix, Sr. Plaintiff

asserts without reference to evidence that Prajedes Felix Sr.,

filed a claim in the administrative forfeiture proceeding. He

answered the complaint in the instant action and filed a claim to

the Defendant currency. Thereafter, on July 14, 2004, he entered

into a stipulation forfeiting his right, title, and interest in

the currency and a Ford vehicle and agreeing to a final judgment

of forfeiture of the currency and Ford to the United States.

(Doc. 44.)

Accordingly, with respect to notice, a final judgment of

forfeiture of this currency is appropriate with respect to

Prajedes Felix.

5. $5,088.00 in United States Currency

It is alleged in the complaint and first amended complaint

that during the execution of a federal search warrant at the

residence of Pedro Lopez, this sum was seized from Pedro Herrera

Lopez at the residence. Also located in the residence were

several bags of methamphetamine in the freezer, totaling close to

two pounds; a large bucket of methamphetamine residue as well as

residue on the porch; and, a plastic bag containing Pro-MSM, a

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common cutting agent. Pedro Herrera Lopez was arrested and

charged with state drug charges. After service of the complaint

upon the attorney of Pedro Lopez, Sr., and Estelle Lopez, the

Lopezes filed a claim and an answer (Docs. 2, 4). On May 18,

2005, they executed a stipulation (Doc. 71) which was signed and

filed on May 20, 2005, and which acknowledged that Pedro Herrera

Lopez was the sole owner of defendant $5,088.00, and Estelle

Lopez the sole owner of defendant $5,637.00; they further

forfeited their right, title, and interest in defendants

$5,088.00 and $5,637.00 to the United States with the exception

of $1,000.00 from each defendant and interest thereon that were

to be returned to each claimant upon the filing of the

stipulation.

Accordingly, a final judgment of forfeiture is appropriate

with respect to this defendant and these claimants.

6. $5,637.00 in United States Currency

It is alleged in the complaint and first amended complaint

that this sum was seized from Pedro Lopez during execution of a

federal search warrant at his residence in Porterville. Other

paraphernalia and almost two pounds of methamphetamine were found

at the residence. Pedro Lopez was arrested on federal drug

charges. An additional $5,088.00 was seized from Pedro Herrera

Lopez at the same residence. (Cmplt. p. 12; FAC p. 11.)

As previously noted, a stipulation for final judgment of

forfeiture was entered that acknowledged that Estelle Lopez was

the sole owner of this sum and that she forfeited all right,

title, and interest in it upon the filing of the stipulation.

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Thus, adequate notice was given, and entry of a final

judgment of forfeiture with respect to this defendant is

appropriate. 

7. $3,649.00 in United States Currency

It is alleged that this sum was seized during the arrest of

James Nelms, who was a close associate of the Felix Drug

Organization and an admitted drug dealer who was supplied by the

Felix Drug Organization in exchange for guns; law enforcement

discovered him hiding out in a motel in Porterville to avoid

arrest. 

The declaration of Tammy Teglia filed on September 10, 2004

(Doc. 51), and attached proof of service establish that on July

29, 2004, James L. Nelms was personally served with the complaint

and other required documents.

Accordingly, adequate notice was given.

8. 2000 Cadillac Escalade

Plaintiff does not seek forfeiture of this vehicle because

pursuant to stipulation and order filed August 17, 2004 (Doc. 48),

this asset has been dismissed from the civil forfeiture action.

Accordingly, Plaintiff is not entitled to a judgment of

forfeiture with respect to this asset.

9. 2000 GMC Yukon Denali

It is alleged in the complaint and first amended complaint

that the GMC Yukon was seized by law enforcement during the

search of a storage unit rented by Pedro Lopez. The vehicle was

registered to Lyle Williams, Lopez’s brother-in-law, but bore

license plates that had been changed from “NORMALW” to “BAD P.”

The vehicle, purchased in January 2002, was paid in full by July

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2002, with the final payment being made by a cashier’s check of

$2,648.00. (Cmplt. p. 12; FAC pp. 10-11.) Pedro Lopez was

arrested on federal drug charges after being found with over

$5,000, a cutting agent, and about two pounds of methamphetamine

at his residence. (Cmplt. p. 12; FAC p. 11.)

On June 28, 2004, a stipulation for final judgment of

forfeiture was lodged in which potential claimant Pedro Lopez

agreed to forfeit his right, title, and interest in the defendant

vehicle.

As to potential claimant Williams, the registered owner, the

docket reflects a stipulation for final judgment of forfeiture

filed on February 22, 2005, in which Williams forfeited any of

his interest in the vehicle to the United States. (Doc. 60.)

Accordingly, appropriate notice was given to Lopez and

Williams with respect to the vehicle. 

10. 1997 Ford F-150 Truck

Plaintiff seeks a judgment based on a stipulation, filed on

July 14, 2004 (Doc. 44), for a final judgment of forfeiture in

which Prajedes Lopez Felix, Sr., agreed to forfeit his right,

title, and interest in a 1997 Ford F-150 as well as $9,206.00 in

currency.

This vehicle was not mentioned in the complaint except in

the caption (Cmplt. p. 1) and the list of defendants (id. p. 3).

Plaintiff conceded that the complaint is not legally sufficient

as to this defendant vehicle. (Tr. Dec. 8, 2006 p. 47.) The Court

granted Plaintiff’s request to file an amended complaint that

would amplify the substantive allegations as to the named

defendant vehicle. (Id. at 47-48.) See, Peitzman v. City of

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 The Court has thus had to expend the resources of its staff in reviewing the 23-page initial complaint, as 1

well as the proposed amended complaint, for the purpose of comparing the allegations. The font in the two

documents is not the same, there was renumbering, and changes were made throughout the document; thus, detailed

review(s) of both documents was necessary to attempt to discern the changes. This loss of resources would have been

unnecessary had Plaintiff’s counsel proceeded properly to identify the changes made in the amended complaint.

19

Illmo, 141 F.2d 956, 962 (8 Cir. 1944). On January 11, 2007, th

Plaintiff filed an amended complaint in connection with

supplemental briefing (Doc. 88). Plaintiff did not afford the

Court the courtesy of informing the Court of the precise

amendments in the amended complaint’s language. Plaintiff states 1

simply that once the complaint is amended, Plaintiff believes

that the Court can enter default judgment against the vehicle

without further proceedings. (Supp. Br. pp. 7-8.)

The Court notes that new language in the proposed first

amended complaint states that the truck was seized from Prajedes

Felix, Sr., who purchased the truck in March 2003; the truck had

a value of about $9,000 at the time of seizure; and law

enforcement officials believe that Felix purchased the truck with

drug proceeds in light of Felix’s income and known expenditures

as detailed later in the amended complaint. (FAC p. 9.)

The original complaint gave notice that the truck was sought

to be forfeited and that the truck was a defendant. Further, in

light of the fact that Prajedes Felix, Sr., signed the

stipulation, filed July 14, 2004 (Doc. 44), for a final judgment

of forfeiture in which he agreed to forfeit his right, title, and

interest in a 1997 Ford F-150, it appears that notice to Mr.

Felix was sufficient.

//

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11. 2002 Chevrolet Tahoe

Documents from the Merle Stone Chevrolet-Cadillac revealed

that a 2002 Chevrolet Tahoe, California license plate number

GRICLDA, was purchased on August 30, 2002, by Jose Felix, who

obtained a loan for part of the $42,764 purchase price, and who a

credit application reflected was employed by J&J Car Wash as a

manager for four years with an annual gross income of $35,000.

(Cmplt. p. 10; FAC p. 8.) The vehicle was seized from Jose

Felix’s residence along with $18,565.00 in United States currency

during the execution of a federal search warrant. (Cmplt. p. 10-

11; FAC p. 8.)

Lienholder Tulare County Federal Credit Union filed an

answer to the complaint as to the defendant vehicle; on September

16, 2004, a stipulation and order for interlocutory sale and full

payment to the lienholder was signed by Jose Felix and filed

(Doc. 54); it provided for the net proceeds to be deposited into

a holding account as a substitute res. It therefore appears that

there is not any problem with notice to Jose Felix. 

Plaintiff states without offering any evidence thereof

that Gricelda Martinez filed a claim to the Tahoe with the FBI

during the administrative proceeding. The declaration of Tammy

Teglia and associated proof of service filed on March 15, 2005

(Doc. 61), in support of request to enter default establishes

that Martinez was personally served with the complaint and other

required documents on January 6, 2005. Thus, there is no problem

with notice as to potential claimant Gricelda Martinez.

//

/

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C. Sufficiency of the Complaint

Title 21 U.S.C. § 881(a)(4) and (6) provide for the

forfeiture of vehicles that are used or intended for use to

transport or facilitate the transportation, sale, possession, or

concealment of controlled substances; and, the forfeiture of

money or things of value furnished or intended to be furnished in

exchange for a controlled substance or listed chemical, or all

proceeds traceable to such an exchange, or money used or intended

to be used to facilitate any violation concerning controlled

substances.

Title 21 U.S.C. § 881(b) provides that any such property may

be seized by the Attorney General in the manner set forth in 18

U.S.C. § 981(b).

As previously detailed, the allegations of the complaint and

first amended complaint describe the organization of the Felix

Family Drug Organization and numerous overt acts of drug sales to

undercover officers in 1998-2002. Facts concerning the purchase

of the vehicles and the reported income of some of the members of

the family are fully set forth and reveal that there was no

legitimate source of income to cover the expenditures and explain

the presence of unusually large amounts of cash in possession of

the various members of the organization. It is expressly alleged

that the defendant properties, consisting of currency and

vehicles, were involved in or used to facilitate, or were the

proceeds of or are traceable to the proceeds of, violations of 21

U.S.C. § 841(a)(1) [knowing and intentional possession,

manufacture, or distribution of a controlled substance] and 846

[attempt or conspiracy to commit a controlled substances

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offense], and 18 U.S.C. §§ 1956 [knowingly laundering the

proceeds of unlawful activity] and 1957 [knowingly engaging in

monetary transactions with the proceeds of criminal offenses].

(Cmplt. pp. 20-22; FAC pp. 15-17.)

Accordingly, with respect to the defendants currency and

vehicles, the operative complaint reflects probable cause for the

seizures, and it is legally sufficient to state claims for

forfeiture of each of the defendants.

D. Propriety of Default Judgment

The declarations submitted by Tammy Teglia establish that

none of the persons with an interest in the defendant properties

or potential claimants is an infant, incompetent, or member of

the armed services. 

In the supplemental briefing, Plaintiff provided the Court

with a status report on the overall action. Plaintiff represents

that there are no claims that remain outstanding; all claimants

have been dealt within stipulations for final judgments of

forfeiture and/or with stipulations and orders; further, plea

agreements (Docs. 83-86) in the parallel criminal actions of

Alberto Felix, Jose Felix, Pedro Lopez, and Prajedes Felix, Sr.,

provide that defendants will plead to at least one drug violation

and agree to the forfeiture of various assets in this action.

Plaintiff states that Bryan Barrera, Eladio Felix, Serapia

Zepeda, James Nelms, and Gricelda Martinez represent the

remaining potential claimants who are the subject of this motion

for default judgment. The Court notes that defaults were entered

against Eladio Felix with respect to the $6,124.00 currency on

September 17, 2004 (Doc. 55); against James Nelms as to $3,649.00

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on September 17, 2004 (Doc. 56); against Gricelda Martinez (Doc.

63)and Serapia Zepeda (Doc. 64) on March 17, 2005; and, against

Bryan Barrera on April 11, 2005, as to $14,448.00 (Doc. 69).

No one other than the claimants who have previously entered

into a stipulation for judgment has claimed an interest in the

property or otherwise responded to the complaint despite adequate

notice. It does not appear that there is any risk of mistake or

excusable neglect on the part of anyone with a potential interest

in the property or of a dispute as to a material fact essential

to the government’s case. No just cause for delay appears. It is

apparent from the declarations submitted to the Court that none

of the potential claimants is an infant, incompetent, or member

of the armed services. There does not appear to be any reason why

the general policy in favor of a decision on the merits would

warrant refusing to enter the requested default judgment. 

Accordingly, the Court finds that Plaintiff has shown its

entitlement to a default judgment of forfeiture with respect to

all Defendants except the 2000 Cadillac Escalade that has been

dismissed from this action; further, with respect to Defendant

2002 Chevrolet Tahoe, the forfeiture should proceed with respect

to the substitute res of the net proceeds from the sale thereof. 

III. Form of the Judgment

With respect to the form of the judgment, Plaintiff has

established that it is entitled to a judgment against the

property, Waterloo Distilling Corp. v. U.S., 282 U.S. 577, 581

(1931), affecting the interests of all persons in the property,

Hanson v. Denkla, 357 U.S. 235, 246 n.12 (1958).

//

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RECOMMENDATION

Accordingly, it is hereby RECOMMENDED that:

1. Plaintiff’s motion for default judgment be GRANTED;

2. Plaintiff is entitled to, and the Clerk be directed to 

enter, a judgment that:

(a) The interest/s of Bryan Barrera, Eladio Felix,

Serapia Zepeda, James Nelms, and Gricelda Martinez in all the

Defendant properties, excluding the 2000 Cadillac Escalade, are

CONDEMNED and FORFEITED to the United States of America; 

(b) The right, title, and interest of all potential

claimants in the Defendant properties, excluding the 2000

Cadillac Escalade, including but not limited to Jose Felix, Pedro

Herrera Lopez, Estelle Lopez, Alberto Felix, Prajedes Felix, Sr.,

Lyle Williams, and Pedro Lopez, Jr., are FORFEITED to the United

States of America pursuant to 21 U.S.C. § 881(a)(4), and are

VESTED in the United States; and,

(c) All persons claiming any right, title, or interest

in or to the Defendant property, excluding the 2000 Cadillac

Escalade, have DEFAULTED and no longer have any right, title, or

interest in the Defendant property whatsoever; and,

3. The Clerk of Court ENTER final judgment of forfeiture for

Plaintiff United States of America. 

These findings and recommendation are submitted to the

United States District Judge assigned to the case, pursuant to

the provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 72-304 of

the Local Rules of Practice for the United States District Court,

Eastern District of California. Within thirty (30) days after

being served with a copy, any party may file written objections

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with the court and serve a copy on all parties. Such a document

should be captioned “Objections to Magistrate Judge’s Findings

and Recommendation.” Replies to the objections shall be served

and filed within ten (10) court days (plus three days if served

by mail) after service of the objections. The Court will then

review the Magistrate Judge’s ruling pursuant to 28 U.S.C. § 636

(b)(1)(C). The parties are advised that failure to file

objections within the specified time may waive the right to

appeal the District Court’s order. Martinez v. Ylst, 951 F.2d

1153 (9th Cir. 1991).

IT IS SO ORDERED.

Dated: August 22, 2007 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

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