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Parties Involved:
County of Los Alamos
Appellee
William J. Ferrell
Appellant
Phyllis Hedges
Appellee
Kenneth Horton
Appellee
Robert Lawson
Appellee
Brint Perera
Appellee

Document Text:

F !LED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

United Scaces Court of AppeaJs 

Tenth Cir~it 

M.~Y 2 1990 

WILLIAM J. FERRELL, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

COUNTY OF LOS ALAMOS, PHYLLIS HEDGES, ) 

KENNETH HORTON, BRINT PERERA, and ) 

ROBERT LAWSON, ) 

) 

Defendants-Appellees. ) 

ORDER AND JUDGMENT* 

.ROBERT L. HOECKER 

Clerk 

No. 89-2153 

(D.C. No. 87-1463 JP) 

(D. New Mexico) 

Before McKAY, BARRETT, Circuit Judges, and KANE,** District Judge. 

**Honorable John L. Kane, Senior District 

District Court for the District of 

designation. 

Judge, United States 

Colorado, sitting by 

This case presents a question concerning the required 

procedure after seizure of property under the New Mexico 

Controlled Substances Act. More specifically, does the New Mexico 

Controlled Substances Act require a hearing on the issue of 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 1 
permanent forfeiture of the res to the government to be held 

within thirty days of seizure of property? We agree with the 

district court that it does not. 

This case arises out of an incident on December 19, 1986, 

when William Ferrell's automobile was seized by Kenneth Horton, 

Brint Perera, and Robert Lawson, all Los Alamos County, New Mexico 

police officers, pursuant to the New Mexico Controlled Substances 

Act, N.M. Stat. Ann. §§ 30-31-1 through -41 (1978)(Repl. Pamph. 

1989)(the Act), after a search conducted under warrant revealed 

twelve quarter-ounce bags of marijuana and drug paraphernalia in 

the car. On January 2, 1987, Phyllis Hedges, an assistant county 

district attorney, filed a complaint for forfeiture of the car in 

state district court (the state court complaint), which was served 

on Ferrell on January 8, 1987. On February 2, 1987, Ferrell filed 

three documents in reply to the state court complaint: an answer; 

a third party complaint against the county and the police officers 

claiming that they conducted an illegal search and seizure without 

due process; and a motion for return of the car. Ferrell's motion 

for return of the car was based upon his contention that the 

county was required by S 30-31-35(C) 1 to provide a hearing with 

1 Section 30-31-35(C) provides: 

In the event of seizure pursuant to Subsection A 

[seizure under court order] or Subsection B of this 

section [seizure without court order, e.g. incident to 

arrest or search under warrant], proceedings under 

Subsection D of this section and the Rules of Civil 

Procedure for the District Courts of New Mexico shall be 

instituted promptly and not later than thirty days after 

seizure. 

(emphasis added). Subsection D provides, in pertinent part: 

(continued on next page) 

2 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 2 
regard to its seizure within thirty days. On March 16, 1987, the 

court held a hearing on Ferrell's motion for return of the car, 

after which it denied the motion, finding S 30-31-35(C) to be 

constitutional as written, and finding that the county had 

complied with its requirements when it initiated civil proceedings 

by filing a complaint and serving Ferrell with the complaint 

within thirty days of seizure. The district court did, however, 

certify its approval of the following interlocutory issue to the 

state appellate court: Does S 30-31-35(C) require that a person 

whose property is seized pursuant to the New Mexico Controlled 

Substances Act be afforded a hearing within thirty days of the 

seizure? Ferrell's application for interlocutory appeal was 

denied by the state appeals court without opinion on May 11, 1987. 

Meanwhile, the county filed an amended complaint and a motion 

to strike Ferrell's third party complaint as improper in an in rem 

action. The trial court granted the county's motion to strike. 

During this period, although Ferrell claimed to be a party 

with an interest in the car, he refused to respond to discovery 

requests submitted by the county. In response to a motion filed 

by the county to compel or for default judgment, the trial court 

extended the time in which Ferrell could comply with the discovery 

process. Ferrell did not respond during the extension, and the 

state district court granted the county's second motion to compel 

(continued from previous page) 

"Property taken or detained under this section shall not be 

subject to replevin, but is deemed to be in the custody of the law 

enforcement agency seizing it subject only to the orders and 

decrees of the district court." 

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Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 3 
or for default judgment. As a sanction for Ferrell's willful 

failure to comply with discovery orders, the state district court 

entered default judgment against Ferrell and ordered all right, 

title and interest in the car transferred to the county. Ferrell 

filed a motion to vacate the default judgment as well as a motion 

for reconsideration, both of which were denied. 

Ferrell appealed the district court's default judgment to the 

state appellate court, but did not request a stay of execution of 

the judgment pending appeal, and the car was sold by the county. 

Subsequently, the state appellate court dismissed the appeal, 

holding that the forfeiture proceeding was an in rem action and 

that removal of the res, the car, from the control of the court 

deprived the state courts of further in rem jurisdiction. In re 

Forfeiture of One 1980 Honda Accord, VIN #SME-2157888, N.M. 

License #HRA 180, No. 10,790 (N.M. App. April 20, 1989). 

After the state district court struck Ferrell's third party 

complaint from the state district court action, Ferrell filed a 

complaint against the county, Hedges, Horton, Perera and Lawson in 

the federal district court (the federal court complaint), claiming 

procedural due process violations. The parties submitted cross 

motions for summary judgment, and Ferrell submitted a request to 

amend the federal court complaint to add claims for deprivation of 

property without a hearing and for violation of his fourth 

amendment rights by the inclusion of "triple hearsay" in the 

affidavit supporting the search warrant which resulted in seizure 

of the car. In addition, the defendants filed a motion to 

dismiss, raising the question of subject matter jurisdiction based 

4 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 4 
on the claim that Ferrell's complaint required application of 

unsettled state law. 

The district 

summary judgement 

court denied Ferrell's motion for partial 

on the grounds that the procedure used did not 

violate Ferrell's constitutional due process rights. Ferrell v. 

County of Los Alamos, No. 87-1463 JP, slip op. at 5-6 (D.N.M. June 

20, 1989). The district court granted the defendants' motion for 

summary judgment with regard to whether Ferrell was denied his 

right to a hearing within thirty days, ruling that because the 

issue had been fully and fairly litigated in the state courts, 

Ferrell was collaterally estopped from raising it in the federal 

court. Id. at 9. The district court granted summary judgment in 

favor of Hedges on the basis of absolute immunity for prosecuting 

attorneys, and in favor of police officers Horton, Perera and 

Lawson, holding that their status and actions satisfied the 

requirements for qualified immunity. Id. at 9-12. The district 

court granted summary judgment in favor of the county, sua sponte, 

because it found the county's actions to be entirely lawful, id. 

at 13, and denied as moot the defendants' motion to dismiss, in 

light of the summary judgment rendered against Ferrell's claims. 

It held that state law in this area was not unsettled and that it 

had jurisdiction to rule on the case. Id. Finally, it denied 

Ferrell's motion to amend his federal court complaint, noting that 

Ferrell could have made the additional claims in his original 

complaint and that they were unlikely to survive motions practice. 

Id. at 13-14. Ferrell appealed to this court. 

5 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 5 
We review the granting or denial of summary judgment de novo. 

See Flanagan v. Munger, 890 F.2d 1557, 1561 (10th Cir. 1989). 

"Summary judgment is proper if the record before the court shows 

that 'there is no genuine issue as to any material fact and that 

the moving party is entitled to a judgment as a matter of law.' 

Fed. R. Civ. P. 56(c)." Id. In addition, whether to grant or 

deny a motion to amend a complaint is within the discretion of the 

trial court. Las Vegas Ice & Cold Storage Co. v. Far West Bank, 

893 F.2d 1182, 1185 (10th Cir. 1990). 

On appeal, Ferrell argues that the Act, as interpreted by the 

New Mexico Supreme Court, requires a hearing within thirty days of 

the seizure of property. Ferrell relies on State v. Cessna 

International Finance Corp. (In re One Cessna Aircraft), 90 N.M. 

40, 559 P.2d 417, 419 (1977)("The statute provides for hearing 

within thirty days of the seizure .••. "), and on Weiler v. 

Carpenter, 695 F.2d 1348, 1350 (10th Cir. 1982}(same, citing In re 

One Cessna Aircraft; statute providing for hearing within thirty 

days satisfies due process). 

In addition to the district court's well-reasoned memorandum 

opinion and order on this issue concerning the requirements of due 

process, the clear and unambiguous language of the statute, and 

the definition of the term "proceeding," we note the Supreme 

Court's opinion in United States v. $8,850, 461 U.S. 555 (1983). 

In that case the Supreme Court reiterated the requirement of 

Fuentes v. Shevin, 407 U.S. 67, 80 (1972), that due process 

requires a meaningful hearing at a meaningful time and went on to 

note that "[u]nlike the situation where due process requires a 

6 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 6 
prior hearing, there is no obvious bright line dictating when a 

postseizure hearing must occur." Id. at 562. The Court applied a 

balancing test between the interests of the government and those 

of the claimant "to assess whether the basic due process 

requirement of fairness has been satisfied in a particular case," 

id. at 565, weighing four factors: the length of delay, the 

reason for the delay, the [claimant's] assertion of his right, and 

prejudice to the [claimant]. Id. at 564. 

Applying these factors to the present case, the hearing on 

Ferrell's motion for return of his car was held eighty-seven days 

after the date Ferrell's car was seized, the hearing was scheduled 

to be held merely eighteen days after Ferrell filed his reply 

brief to the county's response to his motion for return of his 

car, Ferrell did not request a hearing but rather the hearing was 

scheduled at the request of the county, and Ferrell demonstrated 

no prejudice suffered as a result of this eighty-seven day 

impoundment, either in the district court below, or on appeal. 

Under the factors set forth in United States v. $8,850, there was 

thus no deprivation of Ferrell's due process rights because the 

process was fair and the hearing was held within a meaningful 

time. 

It is also important to note that, although the New Mexico 

Supreme Court in In re One Cessna Aircraft held that a hearing 

must be held within thirty days of seizure, the Act was amended 

after the In re One Cessna Aircraft decision. The words "and the 

Rules of Civil Procedure for the District Courts of New Mexico" 

were added by amendment in 1981. This amendment makes it unlikely 

7 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 7 
that In re One Cessna Aircraft's holding continues to apply to the 

Act. Under the time allowances prescribed by New Mexico's rules 

of civil procedure, the defendant in a civil suit is allowed 

thirty days to file an answer, pursuant to SCRA 1986, 1-012. 

Thus, under In re One Cessna Aircraft's holding, even if the 

government filed its complaint requesting forfeiture on the day of 

the seizure, the hearing could be required to be held before the 

claimant's answer were filed and before the government had any 

opportunity to investigate the matters contained in the answer. 

This result is clearly inconsistent with the principles of 

fundamental fairness anticipated by the state rules of civil 

procedure, which rules were intended by the legislature to govern 

the procedures used by the Act. See Armijo v. Ex Cam, Inc., 843 

F.2d 406, 407 (10th Cir. 1988)("If the state's highest court has 

not addressed the issue presented, the federal court must 

determine what decision the state court would make if faced with 

the same facts and issue."). 

In the alternative, Ferrell argues that SCRA 1986, 1-065, a 

civil procedural rule regarding writs issued by state district 

courts before seizure, is the "rule of civil procedure" which 

applies in this case. However, seizures pursuant to the Act do 

not require prior notice to the property owner, see 

§ 30-31-35(B), rendering the requirements of SCRA 1986, 1-065 

inapplicable to such seizures. 

Ferrell argues that his claim is not barred by collateral 

estoppel because the state appellate court declined interlocutory 

review of the question of whether§ 30-31-35(C) requires a hearing 

8 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 8 
within thirty days. Ferrell claims that such denial is not a 

decision on the merits. We disagree. The issue was fully 

litigated in the state district court, and that court rendered a 

decision on the merits against Ferrell. See Allen v. Mccurry, 449 

U.S. 90, 95-96 {1980){federal courts may apply collateral estoppel 

to issues decided by state courts). The fact that the state 

appellate court chose not to review the issue does not control 

whether the issue has been fully and fairly litigated and does not 

change the fact that the state district court did, in fact, render 

a decision on the merits which can serve as the basis for 

collateral estoppel. 

On appeal, Ferrell challenges the district court's decision 

that the police officers were shielded by qualified immunity, 

contending that the officers were outside the scope of their duty 

by conducting an illegal search. Ferrell did not raise this 

argument below in connection with the police officers' qualified 

immunity claim. Because Ferrell presented this issue in the 

district court only in connection with his motion to amend the 

federal court complaint, which was denied, we will not hear it on 

appeal in association with his allegation that the police officers 

should not be shielded by qualified immunity. See Wilson v. St. 

Louis - San Francisco Ry. Co., 673 F.2d 1152, 1155 {10th Cir. 

1982). { "We are generally reluctant to affirm a trial court's 

decision on legal grounds not considered by the trial court, and 

will do so only when the facts are sufficiently clear to permit 

our determination.") 

9 

Appellate Case: 89-2153 Document: 01019967292 Date Filed: 05/02/1990 Page: 9 
• 

Finally, Ferrell argues that it was error for the district 

court to deny his motion to amend his federal court complaint to 

add two claims. First, he attempted to add a claim that the 

search warrant used by the county officers was invalid because it 

contained hearsay. We disagree. The record supports the probable 

validity of the search warrant under the "totality of the 

circumstances" test required by Illinois v. Gates, 462 U.S. 213, 

230-39, 241-46 (1983). Second, Ferrell attempted to add a claim 

that his refusal to appear at his own deposition, in contradiction 

of the state district court's order, was based on his fifth 

amendment right to protect himself from self-incrimination. 

Ferrell raised this argument in the state district court in 

connection with the proceedings before default judgment, R. tab 37 

ex. A to ex. B, Answers to interrogatories, ,, 12-17, 20-21, 23, 

25; R. tab 37 ex. B, "Response to motion to compel and for default 

and motion for protective order and to compel with points and 

authorities," , 8. The state district court rejected the 

argument. Ferrell then failed to preserve state court 

jurisdiction over his appeal, rendering the issue fully and 

finally litigated in the state district court. Ferrell is thus 

collaterally estopped from raising the argument before this court, 

as it has been fully and fairly litigated in the state court 

action. The federal district court did not abuse its discretion 

when it held that these claims would not survive motions practice. 

10 

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• 

' The judgment of the United States District Court for the 

District of New Mexico is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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