Court Opinion

ID: 9964655
Source: CourtListenerOpinion
Date Created: 2024-04-30 16:03:45.138342+00
Date Added: 2024-06-11T08:25:38.539669
License: Public Domain

FILED
                                                         Apr 30 2024, 10:00 am

                                                              CLERK
                                                          Indiana Supreme Court
                                                             Court of Appeals
                                                               and Tax Court

                         IN THE

   Indiana Supreme Court
            Supreme Court Case No. 23S-MI-345

Angela Y. Smith, Dylan Williams, and $11,180 in
           United States Currency,
                           Appellants

                              –v–

                    State of Indiana,
                            Appellee

       Argued: February 19, 2024 | Decided: April 30, 2024

            Appeal from the Marion Superior Court
                   No. 49D03-2009-MI-33278
              The Honorable Gary L. Miller, Judge

    On Petition to Transfer from the Indiana Court of Appeals
                        No. 22A-MI-2910

                Opinion by Chief Justice Rush
       Justices Massa, Slaughter, Goff, and Molter concur.
Rush, Chief Justice.

   Civil forfeiture laws have been around since before our country’s
founding. But they are broader and far more widespread today, providing
law enforcement with a “highly profitable” tool 1 that allows the State to
seize property involved in criminal activity—particularly drug offenses.
This tool has broad remedial characteristics, such as creating an economic
disincentive to continue engaging in illegal drug activity and permitting
law enforcement to defray expenses incurred in the battle against drugs.
But it also has significant criminal and punitive characteristics, such as
permitting the seizure of property absent a criminal charge and punishing
those whose property is confiscated. As a result, there is an inherent
tension between the State’s use of civil forfeiture and citizens’ rights and
interests. And so, to ensure a proper balance, civil forfeiture actions must
strictly comply with the laws our Legislature has carefully crafted. 2

  Here, the State seized $11,180 found during a search of Dylan
Williams’s apartment. The State then initiated forfeiture proceedings
against the money. Williams did not answer the State’s complaint, but his
aunt successfully moved to intervene and filed an answer asserting that
she owned the money and that it was not tied to any criminal activity.
Following a hearing, the trial court entered judgment for the State.

   We reverse and remand. In reaching that decision, we clarify the
procedural framework for when the State seeks forfeiture of money and
who constitutes an “owner.” We then apply that framework and hold that
the State’s evidence fails to support the trial court’s forfeiture order. And
we hold that the money must be returned to the aunt because she alone
claimed ownership, she presented uncontradicted evidence establishing
the $11,180 belongs to her, and the trial court neither concluded she was
not the owner nor made any findings or statements questioning her
credibility.

1   Leonard v. Texas, 137 S. Ct. 847, 848–49 (2017) (Thomas, J., respecting denial of certiorari).
2We held oral argument in this case during our first “Night Court for Legislators.” We
sincerely thank the legislators and their staffs who attended this special event.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024                               Page 2 of 14
Facts and Procedural History
   Dylan Williams was on parole in September 2020 when he was notified
during a scheduled meeting that he had tested positive for illegal drugs.
Because of the positive test, agents decided to search Williams’s apartment
pursuant to his parole agreement. They brought Williams to the
apartment, and he let them inside where they encountered his cousin who
was visiting from Chicago. The agents recovered a digital scale from the
cousin’s pocket and found what they believed to be crack cocaine in a
closet. They then contacted a police detective to assist, and he applied for
and was granted a search warrant for the apartment.

  While executing the warrant, law enforcement recovered illegal drugs,
packaging materials, and $11,180 in cash—$3,500 in various
denominations from inside Williams’s wallet and $7,680 in various
denominations secured by a rubber band from a dresser in his bedroom.
As a result, the State charged Williams with Level 3 felony dealing in a
Schedule I controlled substance, Level 6 felony possession of a narcotic
drug, and Class A misdemeanor possession of a controlled substance.
Williams ultimately pleaded guilty to the Level 6 felony possession
charge, and the State dismissed the other two counts.

   Meanwhile, the State sought forfeiture of the $11,180, alleging the
money “had been furnished or was intended to be furnished in exchange
for a violation of a criminal statute, or is traceable as proceeds of a
violation of a criminal statute.” Williams did not answer the complaint. 3
But his aunt, Angela Smith, who lived in Milwaukee, Wisconsin, moved to
intervene under Trial Rule 24(A)(2), asserting the money is her “exclusive
property.” The trial court granted that motion, and Smith filed a timely
answer responding to the complaint. She stated that the money belonged
to her and that it was neither “proceeds of a violation of a criminal statute,

3We are concerned that the record does not confirm Williams was ever personally served
with the forfeiture complaint and summons. See Ind. Code § 34-24-1-3(d). In fact, our review
of the record and other documents on Odyssey suggest that he was never personally served.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024                      Page 3 of 14
nor furnished or intended to be furnished for a violation of any criminal
statute.”

   In December 2022, the court held a hearing at which the parties
presented competing explanations for the $11,180. The State argued that
“[t]he way the money was stored” and “the denominations that were
found all indicate that there was criminal activity.” In support, the State
presented testimony from one witness, Detective Ryan Graber, who
helped search the apartment. He testified that he “saw some cash . . . in a
couple different locations” and that he “observed some narcotics in there
as well.” But he did not identify what “narcotics” were found, and he did
not know where officers found “the particular narcotic drug” that led to
Williams’s conviction.

   Smith then testified, explaining that she withdrew $29,000 in June 2020
because her physically and emotionally abusive boyfriend regularly stole
money from her and forced her to give him money. Later that month,
about three months before the State’s seizure, Smith said she met Williams
at his mother’s house where she gave him $15,000 in cash “to hold for” her
so she could “hide the money” from her abuser. She kept the other $14,000
with her, “[u]nfortunately” carrying it in her purse every day. Smith
corroborated her testimony with bank records, a police report,
photographs of head injuries her boyfriend inflicted on her, and a
protective order she obtained and renewed against him.

   After the hearing, the trial court entered judgment for the State,
concluding that “the currency in question is subject to forfeiture . . . and
the State has met its burden of proof by a preponderance of the evidence
that the currency should be seized.” Smith appealed, and our Court of
Appeals affirmed. Smith v. State, No. 22A-MI-2910, at *1 (Ind. Ct. App. July
24, 2023) (mem.). We then granted Smith’s petition to transfer, vacating
the Court of Appeals’ opinion. Ind. Appellate Rule 58(A).

Standard of Review
   This appeal implicates two standards of review. We interpret the civil
forfeiture statutes de novo. Abbott v. State, 183 N.E.3d 1074, 1080 (Ind.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024       Page 4 of 14
2022). But in applying that interpretation, we consider only the evidence
favorable to the trial court’s judgment and any reasonable inferences
drawn therefrom without reweighing the evidence or assessing witness
credibility. Lipscomb v. State, 857 N.E.2d 424, 427 (Ind. Ct. App. 2006).

Discussion and Decision
   Civil forfeiture is a legal fiction that authorizes “action against
inanimate objects for participation in alleged criminal activity.” Abbott, 183
N.E.3d at 1079 (quotation omitted). Participation is all that’s required;
property can be seized and forfeited “regardless of whether the property
owner is proven guilty of a crime—or even charged with a crime.” Serrano
v. State, 946 N.E.2d 1139, 1140 (Ind. 2011). In the context of illegal drug
activity, forfeiture actions “are designed to be a relatively efficient means
to remove, from its owner, property used to further illegal trafficking in
drugs.” Katner v. State, 655 N.E.2d 345, 347 (Ind. 1995). Yet, despite that
laudable design, civil forfeitures “are not favored” due to their
“significant criminal and punitive characteristics.” Hughley v. State, 15
N.E.3d 1000, 1005 (Ind. 2014) (quotation omitted).

   In these ways, actions under Indiana’s civil forfeiture statutes implicate
unique characteristics—they can deter illegal activity, but they can also
provide the State with financial incentives that encumber property
owners. See State v. Timbs, 134 N.E.3d 12, 38 (Ind. 2019). Both our
Legislature and our Court have recognized these competing
characteristics in recent years. Indeed, the General Assembly has amended
the forfeiture statutes in seventeen of the last twenty years. Those changes
include expanding property that is subject to forfeiture, providing
innocent owners with the ability to petition for the release of certain
property during the pendency of an action, and reducing the State’s time
to file a forfeiture complaint. We have likewise been active in this area. For
example, we have held that forfeiture actions may be subject to the Eighth
Amendment’s Excessive Fines Clause, id. at 23, and that the right to a jury
trial under Article 1, Section 20 of the Indiana Constitution attaches when
the State seeks to confiscate money, State v. $2,435 in U.S. Currency, 220
N.E.3d 542, 544 (Ind. 2023). These decisions, among others, reflect our role

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024        Page 5 of 14
to apply the law as written and enforce civil forfeitures “only when within
both the letter and spirit of the law.” Hughley, 15 N.E.3d at 1005 (quotation
omitted).

   Turning to that law, the civil forfeiture statutes permit forfeiture in a
contested action if the State shows by a preponderance of the evidence at a
hearing that the seized property falls within one of several categories. Ind.
Code § 34-24-1-4; see also id. § -1. The State generally makes that showing
by establishing a “substantial connection,” or “nexus,” that the property
“was used to commit one of the enumerated offenses under the statute.”
Serrano, 946 N.E.2d at 1140, 1143. As is relevant here, the statute provides
two avenues for the State to seek forfeiture of money. I.C. § 34-24-1-1(a)(2),
(d). One creates a rebuttable presumption that money is subject to
forfeiture. Id. § -1(d). But the other does not, id. § -1(a)(2), imposing a
heightened burden on the State at a hearing. Here, the State proceeded
only under this latter avenue, and thus the rebuttable presumption does
not apply. This case, however, allows us to clarify and apply the proper
procedure, including the State’s burden under both avenues.

   We first analyze the relevant statutes and outline the procedural
framework when the State seeks the forfeiture of money in a contested
action. Within that discussion, we clarify who constitutes an “owner” of
money if the State fails to meet its burden. And we then apply those
principles to this forfeiture action in reviewing the trial court’s order.

I. In a contested action, the State’s burden depends
   on the alleged criminal offense that subjects the
   money to forfeiture.
    The parties dispute the State’s burden at a contested hearing. In the
State’s view, there is “no need” for a trial court “to address the merits of
the forfeiture” if an intervenor fails to establish that they own the money.
In Smith’s view, the State must always establish the money is subject to
forfeiture, and the court need only determine ownership if the State
doesn’t meet its burden. Analyzing the relevant statutes confirms Smith is
correct.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024        Page 6 of 14
      When bringing a forfeiture action, the State must timely file a
complaint “in the jurisdiction where the seizure occurred.” I.C. § 34-24-1-
3(a). At that point, an “owner” or “any person whose right, title, or
interest is of record” has twenty days to file an answer. Id. § -3(d). If, after
that time, “there is no answer on file,” then the court on the State’s motion
“shall enter judgment” in the State’s favor and order the money
distributed according to law. Id. § -3(e). But when there is an answer on
file, a hearing is triggered at which the contesting party “may appear.” Id.
§ -3(d). And at that hearing, the State “must show by a preponderance of
the evidence that the” money is “subject to seizure.” Id. § -4(a). But how
this burden is met turns on the statute the State relied on in its complaint.

     One statute, Section 34-24-1-1(a)(2), allows the State to seize money if
it was (1) “furnished or intended to be furnished by any person in
exchange for an act that is in violation of a criminal statute,” (2) “used to
facilitate any violation of a criminal statute,” or (3) “traceable as proceeds
of the violation of a criminal statute.” Id. § -1(a)(2). This “violation of a
criminal statute” language implicates a broad array of offenses, including
low-level drug offenses. See id. (permitting seizure of money that is
“commonly used as consideration for a violation of IC 35-48-4,” which is
titled “Offenses Relating to Controlled Substances”). At a hearing in a
forfeiture action invoking Section 34-24-1-1(a)(2), the State must identify
the applicable criminal statute that was violated and establish a
substantial connection between the seized money and that crime. See
Katner, 655 N.E.2d at 348; Serrano, 946 N.E.2d at 1140; Lipscomb, 857 N.E.2d
at 428–29; Gonzalez v. State, 74 N.E.3d 1228, 1231–32 (Ind. Ct. App. 2017);
Brown v. Eaton, 164 N.E.3d 153, 161–63 (Ind. Ct. App. 2021), trans. denied.
And if the trial court finds the State has made these showings by a
preponderance of the evidence, the court enters judgment for the State
and orders the money distributed accordingly. I.C. § 34-24-1-4(c).

    The other statute, Section 34-24-1-1(d), creates a rebuttable
presumption that money is subject to forfeiture if it was “found near or on
a person who is committing, attempting to commit, or conspiring to
commit” one of sixteen listed drug offenses. Id. § -1(d). Each is a serious
drug offense for dealing, manufacturing, or possessing significant
quantities. Id. At a hearing in an action invoking this statute, the State

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024          Page 7 of 14
must identify the listed offense and establish that the seized money was
found either near or on a person committing, attempting to commit, or
conspiring to commit that crime. At that point, the money “is presumed
forfeitable—period.” Lipscomb, 857 N.E.2d at 428 (quoting Caudill v. State,
613 N.E.2d 433, 438 (Ind. Ct. App. 1993)). The burden then shifts to the
contesting party to rebut the State’s showing. And if the trial court finds
the party failed to rebut that showing, the court enters judgment for the
State and orders the money distributed accordingly. I.C. § 34-24-1-4(c).

    The preceding two paragraphs raise a question—what happens to the
money if the State fails to meet its burden? In that event, the “court shall
order the property released to the owner.” Id. § -4(b). And an owner may
be an individual or other entity. See Olympic Fin. Grp., Inc. v. State, 176
N.E.3d 571, 575, 578 (Ind. Ct. App. 2021). But unlike an owner of a vehicle
or real property, the owner of money is not always readily identifiable,
particularly if the party contesting the forfeiture is not the person from
whom the money was seized.

    Since the Legislature has not defined “owner” under the civil
forfeiture statutes, we interpret the term in its “plain, or ordinary and
usual, sense,” I.C. § 1-1-4-1(1), by turning to general-language dictionaries,
Performance Servs., Inc. v. Randolph E. Sch. Corp., 211 N.E.3d 508, 512 (Ind.
2023). One such dictionary defines “owner” in relevant part as “one who
has the legal or rightful title to something,” and “one to whom property
belongs.” Owner, Merriam-Webster, https://www.merriam-
webster.com/dictionary/owner (last visited Apr. 30, 2024). Until the
Legislature tells us otherwise, we adopt these definitions and understand

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024        Page 8 of 14
that, for purposes of the civil forfeiture statutes, an owner of money refers
to the person to whom it belongs. 4

    And so, when the State fails to meet its burden at a forfeiture hearing,
the trial court must order the money released to the person to whom it
belongs. When the money was seized from the person contesting the
forfeiture, the court will release the money to that person. But when
someone else contests the forfeiture, that party must produce evidence
showing the money belongs to them. The court must then determine
whether that person has established ownership. If so, the court must order
the money returned to that person. But if that person has not established
ownership, the court must order the money returned to the person from
whom the money was seized.

    With this procedural framework in hand, we now determine its effect
on this forfeiture action.

II. The State failed to establish the requisite
    substantial connection, and Smith established the
    money belongs to her.

   In alleging the $11,180 was subject to forfeiture, the State’s complaint
relied on only Section 34-24-1-1(a)(2), and thus the rebuttable presumption
in Section 34-24-1-1(d) does not apply. Smith then successfully moved to
intervene under Trial Rule 24(A), which required her to “claim[] an
interest relating to a property” that “is the subject of the action.” Ind. Trial
Rule 24(A)(2). At that point, she adequately asserted her interest as a
potential “owner of the seized property.” I.C. § 34-24-1-3(d). And since she

4Other states that define “owner” in their civil forfeiture statutes use similar definitions. Haw.
Rev. Stat. § 712A-1 (“a person . . . who has an interest in property”); Kan. Stat. Ann. § 60-
4102(j) (same); Tenn. Code Ann. § 39-11-702(3) (same); Md. Code Ann. Crim. Proc. § 12-
101(k)(1) (“a person having a legal, equitable, or possessory interest in property”); N.M. Stat.
Ann. § 31-27-3(J) (“a person who has a legal or equitable ownership interest in property”);
Tex. Code Crim. Proc. Ann. art. 59.01(6) (“a person who claims an equitable or legal
ownership interest in property”).

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024                          Page 9 of 14
timely answered the State’s complaint, the trial court held a hearing at
which the State was required to prove its allegations by a preponderance
of the evidence. In entering judgment for the State, the trial court did not
determine that Smith was not the owner, concluding instead that “the
currency in question is subject to forfeiture . . . and the State has met its
burden of proof by a preponderance of the evidence that the currency
should be seized.”

   In reviewing that decision, we first conclude that the State neither
specifically identified an applicable criminal statute that was violated nor
established a substantial connection between that crime and the money.
We thus hold that the forfeiture order must be reversed. And we then
hold that the money must be released to Smith. As the only person to
claim ownership, she presented uncontradicted evidence that the money
belongs to her. And the trial court neither concluded she was not the
owner nor made any findings or statements questioning her credibility.

   A. The forfeiture order is not supported by sufficient
      evidence.
   The State failed to show by a preponderance of the evidence that the
$11,180 was forfeitable because the State did not identify a criminal statute
that was violated and did not produce evidence showing a substantial
connection between the money and any underlying offense.

   In fact, both in the trial court and on appeal, the State has never tied the
money to a specific, applicable offense. The complaint broadly alleged that
the money either “had been furnished or was intended to be furnished in
exchange for a violation of a criminal statute” or was “traceable as
proceeds of a violation of a criminal statute.” Then, at the hearing, the
prosecutor simply stated that “the State’s case is just that money received
from an apartment where crimes were being committed. And the most
highest explanation for that cash being present there is that Mr. Williams
committed the crimes being committed.” Though the State introduced
evidence that Williams was convicted of Level 6 felony drug possession
and was charged with two other counts that were dismissed, the State
never identified an applicable statutory violation that subjected the money

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024        Page 10 of 14
to forfeiture. The only explicit mention of any violation during the hearing
came from Smith’s counsel when he thrice mentioned Williams’s Level 6
felony conviction. And on appeal, the State simply asserts “the evidence
allowed the trial court to find by a preponderance of the evidence that
Williams possessed the seized money as part of [a] drug operation.” Thus,
on this record, it is unclear which drug offense in Indiana Code chapter
35-48-4 rendered the money forfeitable under Section 34-24-1-1(a)(2).

   But assuming the underlying drug offenses are those for which
Williams was charged, the State’s evidence at best establishes an
“incidental or fortuitous connection between” those crimes and the
money. Katner, 655 N.E.2d at 348–39. At the hearing, the State relied on the
sole testimony of Detective Graber, and he did not provide any evidence
showing a substantial connection between the $11,180 and drug
possession or dealing. He did not identify the type of drugs recovered
from Williams’s apartment, the quantity of those drugs, or the location
where they were found. He also confirmed that he did not find any
ledgers in the apartment and that the only scale found was recovered from
the visiting cousin’s pocket. As for the money, the State introduced
photographs of the cash both behind a TV on Williams’s bedroom dresser
and in his wallet. Detective Graber confirmed he saw the money in these
locations and explained that, consistent with narcotics trafficking, the
money on the dresser was “banded up” and in “different denominations.”
But it is well-settled that “[t]he possession of large amounts of cash is not
in and of itself illegal.” Brown, 164 N.E.3d at 161. And the fact that a large
sum of money in different denominations is held together by a rubber
band does not alone create a substantial connection between that money
and illegal drug activity.

   By not establishing the requisite nexus between the money and an
applicable offense, the State failed to meet its burden under the civil
forfeiture statutes. And thus, the trial court’s forfeiture order falls outside
the “letter and spirit of the law.” Hughley, 15 N.E.3d at 1005. We therefore
reverse the forfeiture judgment and now turn to determine ownership.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024         Page 11 of 14
   B. Smith’s uncontradicted sworn testimony and
      corroborating exhibits establish that she is the owner of
      the money.
   As stated above, the trial court did not conclude that Smith failed to
establish she owns the $11,180. Though we could remand for the court to
determine ownership, we decline to do so in the interest of judicial
economy for three reasons: (1) only Smith claims to own the money; (2)
she presented uncontradicted sworn testimony and corroborating exhibits
establishing the money belongs to her; and (3) the court did not make any
findings or statements to the contrary.

   At the hearing, Smith testified that she was in a “horrible . . . abusive”
relationship with a man who regularly stole money from her and forced
her to withdraw money and give it to him. She explained that criminal
charges had been filed against her abuser and that she was scheduled to
be a witness at the upcoming trial. And she introduced a police report
detailing an assault by him for which she had to have brain surgery,
pictures from the hospital after the surgery, and a protective order she
obtained and renewed against him. Though these incidents occurred
about a year after she gave Williams the money, Smith testified that the
physical abuse was just as severe when she made the exchange.

   As for that exchange, Smith stated—and introduced corroborating bank
statements—that she withdrew $29,000 “to hide the money” from her
abusive boyfriend. Later that month, Smith met with Williams at his
mother’s house, about three months before the money was seized, where
she gave him an envelope that included $15,000 in various denominations
“to hold for” her. She clarified that she gave the money to Williams
because the two had been close “throughout his childhood,” and she
“[a]bsolutely” believed she could trust him. And she explained that she
was not comfortable giving the money to other family members or friends
because she didn’t want them to “know that [she] was being abused; [she]
was ashamed of what was going on.” Smith also added that she was
“bothered” when she learned that only $11,180 of the $15,000 had been
found. The State did not introduce any evidence contradicting Smith’s
sworn testimony or corroborating exhibits.

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   Yet, on appeal, the State presents three arguments for why we should
conclude Smith is not the owner—each of them fails. The State first points
to the detective’s testimony that Williams did not mention Smith when
asked about the source of the money. But he could have declined to
mention his aunt for several reasons. The State next asserts that
“[f]orfeiture should still result in a case like this where the person found in
possession of the property makes no claim and an intervenor fails to
establish ownership.” Yet, for reasons explained above, this argument
conflicts with the plain language of the statute. See I.C. § 34-24-1-4(a), (b).
Finally, the State points to Williams’s failure to appear at the hearing,
asserting Smith “presented no testimony from Williams nor documents
that directly substantiate any of [her] claims.” To the latter point, as
addressed previously, Smith produced ample documents supporting her
claims. And to the former point, the State could have issued Williams a
subpoena if it believed his testimony was important, but it did not. In fact,
a close review of the record supports Smith’s assertion that Williams was
never “personally served with the Complaint and summons.”

   All in all, the uncontradicted evidence presented during the hearing
establishes that Smith is the owner of the $11,180. And the trial court
neither concluded she was not the owner nor made any findings or
statements questioning her credibility. Accordingly, under Section 34-24-
1-4(b), the money must be released to her.

Conclusion
  For the reasons articulated above, we reverse the trial court’s forfeiture
order and remand for the court to order the money released to Smith.

Massa, Slaughter, Goff, and Molter, JJ., concur.

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024        Page 13 of 14
ATTORNEY FOR APPELLANT SMITH
Stephen G. Gray
Indianapolis, Indiana

ATTORNEYS FOR APPELLEE
Theodore E. Rokita
Attorney General of Indiana

Justin F. Roebel
Supervising Deputy Attorney General
Indianapolis, Indiana

Indiana Supreme Court | Case No. 23S-MI-345 | April 30, 2024   Page 14 of 14