Source: http://www.ecases.us/case/ca9/c719654/united-states-v-richard-j-lester-and-sheila-lester
Timestamp: 2019-11-18 08:13:04
Document Index: 386336862

Matched Legal Cases: ['§ 760', '§ 751', '§ 853', '§ 770', '§ 852', '§ 881']

United States v. Richard J. Lester, and Sheila Lester, Petitioner-Claimant-Appellant, Ninth Circuit, US Court of Appeals Cases, Federal Courts, COURT CASE
United States v. Richard J. Lester, and Sheila Lester, Petitioner-Claimant-Appellant , 85 F.3d 1409 ( 1996 )
"In drug forfeiture actions, ownership of property is determined by state law." See United States v. Ranch Located in Young, Arizona, 50 F.3d 630, 632 (9th Cir.1995); see also United States v. Yazell, 382 U.S. 341, 352-53, 86 S. Ct. 500, 506-07, 15 L. Ed. 2d 404 (1965); United States v. Smith, 966 F.2d 1045, 1054 n. 10 (6th Cir.1992) ("because forfeiture proceedings implicate property rights which have traditionally been measured in terms of state law, and because section 853 contains no rule ..., it is appropriate to refer to state law"); United States v. Certain Real Property at 2525 Leroy Lane, 910 F.2d 343, 348 (6th Cir.1990) (observing that "[p]roperty interests have long been acquired and defined by state law"), cert denied, 499 U.S. 947, 111 S. Ct. 1414, 113 L. Ed. 2d 467 (1991). Once the ownership interests are defined under state law, however, the federal forfeiture statutes determine whether those property interests must be forfeited to the Government.
Here, the parties agree that the law of California, where the Indianola property is located and where the Lesters resided during the relevant time period, applies. Under California law, "[e]xcept as otherwise provided by statute, all property, real or personal ... acquired by a married person during the marriage while domiciled in [California] is community property." Cal. Fam.Code § 760 (West 1994). Thus, "[p]roperty acquired by purchase during a marriage is presumed to be community property." In re Marriage of Marsden, 130 Cal. App. 3d 426, 181 Cal. Rptr. 910, 918 (1982). Accordingly, the Lesters' 3/8 interest in the Indianola property, acquired during the marriage while the Lesters were domiciled in California, is presumed to be community property.4
Under California law, "each spouse has a vested undivided one-half interest in the community property." See Estate of Wilson, 183 Cal. App. 3d 67, 227 Cal. Rptr. 794, 798 (1986); Cal. Fam.Code § 751 (West 1994) ("[t]he respective interests of the husband and wife in community property during continuance of the marriage relation are present, existing, and equal interests"). Thus, under California law, both Mr. Lester and Mrs. Lester have an undivided one-half ownership interest in their 3/8 interest in the Indianola property.
Our holding not only comports with the plain language of section 853, but it also is consistent with the underlying legal proposition that "[a] criminal forfeiture is an in personam judgment against a person convicted of a crime." United States v. $814,254.76 in United States Currency, 51 F.3d 207, 210-11 (9th Cir.1995) (emphasis added); see also Certain Real Property at 2525 Leroy Lane, 910 F.2d at 346 (section 853 "authorize[s] an in personam action against a defendant in a criminal case, and forfeiture in such a case is imposed as a sanction against the defendant upon his conviction." (emphasis added)); In re Moffitt, Zwerling & Kemler, P.C., 875 F. Supp. 1152, 1162 (E.D.Va.1995) ("criminal forfeiture of substitute assets is available against a defendant, but not against a third party"). Our decision also heeds the Supreme Court's recent admonition that "[i]mproperly used, forfeiture could become more like a roulette wheel employed to raise revenues from innocent but hapless owners ..., or a tool wielded to punish those who associate with criminals, [rather] than a component of a system of justice." Bennis v. Michigan, --- U.S. ----, ----, 116 S. Ct. 994, 1003, 134 L. Ed. 2d 68 (U.S.Mich 1996) (Thomas, J., concurring);5 see also Certain Real Property at 2525 Leroy Lane, 910 F.2d at 349 ("[t]he protection of the interest of an innocent owner ... is not inconsistent with federal forfeiture policy"); United States v. Tanner, 853 F. Supp. 190, 197 (W.D.Va.1994) ("The court understands that the purpose of 21 U.S.C. § 853(c), vesting in the United States title to forfeited property, is not to divest innocent persons of their legitimate interests in property.").
At the time Active Investments was formed, 50% of the shares of stock in the corporation was issued solely in Mrs. Lester's name and the other 50% in Mr. Lester's name. This demarcation of the shares as the separate property of each spouse may be sufficient to rebut the presumption that the shares in Active Investments are community property. See Cal. Fam.Code § 770(a)(2) ("[s]eparate property of a married person includes ... [a]ll property acquired by the person after marriage by gift ..."); Johnson v. Johnson, 214 Cal. App. 2d 29, 29 Cal. Rptr. 179, 182 (1963) ("if a husband transfers his community property to his wife, the mere fact of transfer raises a presumption that he intended the transfer to be a gift"); but cf., Cal. Fam.Code § 852(a) (requiring that transmutations of property from community to separate property be accompanied by an express declaration "made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected").
In Bennis, the Court held that there was no federal constitutional violation when an innocent wife's joint ownership interest in an automobile was forfeited under a state nuisance abatement statute because the husband had used the vehicle as the setting for a sexual liaison with a prostitute. --- U.S. ----, 116 S. Ct. 994, 134 L. Ed. 2d 68 (U.S.Mich. 1996). Because the case involves a state statute and property forfeited as a result of its use in a criminal activity, its holding does not control in this case
In the related context of civil forfeiture, under 21 U.S.C. § 881(a)(6), courts also have found that the marital property of an innocent spouse is not subject to forfeiture. See, e.g., United States v. South 23.19 Acres of Land, 694 F. Supp. 1252 (E.D.La.1988) (Government acknowledged that wife entitled to one half of residence as "innocent owner" because under Louisiana law, each spouse owns an undivided one-half interest in the community property; court ordered profits from sale of house split between Government and wife, even though Government was a "creditor" and community property subject to spouse's debts); United States v. Property Entitled in the Names of Alexander Morio Toki & Elizabeth Mila Toki, 779 F. Supp. 1272 (D.Haw.1991) (property held jointly by innocent spouse and by guilty spouse as tenants by the entirety cannot be forfeited to Government)
DocketNumber： 95-10288
Citation Numbers： 85 F.3d 1409
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