Court Opinion

ID: 8993968
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:24:35.95962+00
Date Added: 2024-06-11T17:10:59.054549
License: Public Domain

LEVIN H. CAMPBELL, Circuit Judge
(Dissenting).
While I have sympathy for defendant Elisa Colon, wife of the convicted drug dealer, I believe that the district court and the majority of this panel have not correctly applied Rhode Island law. I, therefore, dissent.
In order to prevail as an innocent owner of half the property, Elisa Colon must establish both that she had no knowledge of *81her husband’s drug activities and that she is a beneficial owner of half the property by way of a resulting trust.1
With some hesitation, I accept this court’s holding that the district court did not err in finding that Elisa lacked knowledge of her husband’s drug dealing. My hesitancy stems from the existence of strong circumstantial evidence suggesting that she knew of the presence of heroin in the home which she shared with Esteban, her husband. When the officers, armed with a warrant, first arrived at the house and announced their presence in English and Spanish, Elisa did not come to the door or answer. The officers heard movement inside and then broke down the door, finding Elisa and one of her daughters sitting on the living room sofa. The officers found the heroin in a microwave oven in the nearby kitchen; recent use of the oven was indicated by food spatterings on the inside. There was evidence Elisa did all the cooking. Hence it is reasonable to believe she knew of any drugs in the oven, and highly improbable her husband would have placed them in this location if he believed she lacked such knowledge, as she would obviously have soon found them there.
As, from the foregoing, a reasonable factfinder could have determined that Elisa knew of the presence of the drugs notwithstanding her denial, I think the district court was plainly in error when it remarked, as it did, that there was “no evidence” of Elisa’s knowledge. My colleagues, however, apparently read this assertion in context as reflecting a judicial determination — after considering all the evidence, including Elisa’s own testimony— that Elisa was without knowledge of her husband’s drug activities (not merely that there was “no evidence” of her knowledge). If so, the question arises whether that imputed finding was clearly erroneous. I have to say not. The district court heard and saw Elisa and various witnesses. The issue boiled down to a question of credibility peculiarly within the court’s competence. Therefore, although I am personally not persuaded, I concur in affirming the district court’s determination that she lacked knowledge.
I cannot join, however, in this court’s conclusion that the district court properly found Elisa, on this record, to be half owner of the property by way of a resulting trust. The deed to the real estate was solely in her husband Esteban’s name. At trial, Elisa presented evidence that she and Esteban had agreed when they bought the property that Esteban would pay the $8,000 down payment and Elisa would pay the $8,000 mortgage. The district court found that “[tjhere is evidence that there was an agreement at the time of the purchase of the property ... between the husband and wife as to how they were to handle the obligations as to the down payment and as to the mortgage.... It seems to me quite probable in the circumstances that the arrangement as described in fact existed.” From this the court went on to a non sequitur, namely, that “the Defendant has carried the burden of clear and convincing evidence to the establishment of a resulting trust.” The majority now affirms this conclusion, on the grounds that it is a question of fact which can only be overturned on appeal if clearly erroneous. However, the ultimate conclusion that a resulting trust exists is not just one of fact; it is a mixed question of law and fact. Accepting the facts as found by the district *82court, they are insufficient, by themselves, to impose a resulting trust under Rhode Island law. A resulting trust is not proven in Rhode Island simply by establishing that the party seeking the trust paid for some portion of the property. Rather, the parties, at the time of the purchase, must additionally be shown to have intended that the party seeking the trust would then acquire an ownership interest. The district court here made no such finding as to the parties’ intent at the time of purchase,2 and the little evidence there is of such intent in the record is weak and conflicting. I would, therefore, remand to the district court to reopen the record and make a specific finding on the parties’ intent as to ownership.
In general, under Rhode Island law,
a resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein.
Roseman v. Sutter, 735 F.Supp. 461, 464 (D.R.I.1990), citing Restatement (Second) of Trusts § 404 (1959) and Reynolds v. Blaisdell, 23 R.I. 16, 18-19, 49 A. 42 (1901). Thus, where one party contributes a portion of the purchase price, but title is taken in the name of another, it must be shown that “at the time of the conveyance of the property it was the intention and understanding that the contributor was to have beneficial ownership in the whole or in a definite fractional part.” Cutroneo v. Cutroneo, 81 R.I. 55, 58, 98 A.2d 921, 923 (1953). Evidence of the contribution by one party may tend to shed light on what the parties meant the ownership to be, but it is merely one “circumstance[ ] which raise[s] an inference” of the parties’ intent. Rose-man, 735 F.Supp. at 464 (citations omitted).
To sustain the court’s ruling below, one can argue that while the district court omitted any finding as to an intent to share ownership, it inferentially made such a finding by its end result and by noting that the parties were not aware of “the niceties of recording of titles.” One might go on to contend that this implied finding was supported by a reasonable presumption that, as two spouses generally share their home, if one pays for half of the home but title is placed solely in the other’s name, the spouses intend that each will own half. See 5 W. Fratcher, Scott on Trusts § 454 (1989) (“In the case of a purchase of a matrimonial home the usual rules as to a resulting trust are much relaxed.”). The trouble with this analysis, however, is that there is no authority in Rhode Island for such a presumption. To the contrary, the Supreme Court of Rhode Island has held that, “[t]o prove a resulting trust by reason of the payment by one person of the whole or part of the purchase price of property conveyed to another person, especially if the relation between them is that of husband and wife, the evidence must be full, clear and convincing.” Robinson v. Robinson, 66 R.I. 321, 327, 19 A.2d 1, 3-4 (1941) (emphasis added). See also Chase v. Chase, 78 R.I. 278, 283, 81 A.2d 686, 688 (1951) (requiring “full, clear, satisfactory and convincing [evidence,] particularly where the relationship of husband and wife is involved”) (emphasis added).
My reading of the Rhode Island cases is that some quantum of evidence of an intent to share ownership beyond the mere fact of a contribution by the other spouse is necessary to create a resulting trust. After all, the placing of the deed in one name only, points in the other direction, suggest*83ing an intended gift. If the latter factor is to be overridden, one would expect additional evidence focusing on the parties’ intent.
In Robinson, a wife sought to establish a resulting trust in her husband’s share of property titled in their joint names. In addition to hearing evidence that the wife paid the entire purchase price, the trial court also heard evidence concerning the parties’ intent, in the form of testimony as to why the husband had never deeded his share over to the wife. Finding that the evidence as to both was unreliable, the trial court concluded that there was no resulting trust, and the Supreme Court of Rhode Island affirmed. 66 R.I. at 326-27, 19 A.2d at 2-3. In Chase, a wife sought to impose a resulting trust on half of property titled in her husband’s name, by showing that she and her husband had established a common fund, which they agreed would be used to purchase property jointly. The court examined both whether the common fund existed and the spouses’ agreement as to its use, concluding that the wife had failed to prove “either a capital contribution or a specific agreement.” 78 R.I. at 283, 81 A.2d at 689. Finally, in the only Rhode Island case to find a nontitled spouse to be the beneficiary of a resulting trust, the court found a specific agreement to share ownership. The court did not rest its decision on the spouses’ purchase of the property with joint funds; it found in addition that the joint funds were deposited “ ‘upon the distinct understanding that [the wife] would hold them and invest them for the joint benefit of herself and her husband.’ ” Comella v. Comella, 68 R.I. 275, 279, 27 A.2d 348, 350 (1942) (quoting the trial court). Thus, the wife “took title thereto in her name alone with the distinct understanding that such title was to be ‘half and half.’ ” Id. (quoting trial testimony). These cases strongly suggest that Rhode Island law requires clearer evidence than exists here of an intent to share ownership, evidence going beyond simply a contribution to the purchase price.3 At very least, these cases indicate the need for an explicit finding on intent by the trial court — a finding not made here.
It can be argued that Rhode Island’s requirement of a heightened showing of intent in the marriage context is based on archaic notions about marriage. Rhode Island has, in recent times, modified its divorce law so that a spouse can receive a share in the “estate” of the other spouse, based upon a lesser showing. Upon divorce, either spouse may receive a share of the other’s estate based on, among other factors, “the contribution of each of the parties in the acquisition ... of their respective estates,” without showing that the parties intended joint ownership. 1979 R.I.Pub.Laws Ch. 279 § 2, as amended, codified at R.I.Gen.Laws § 15-5-16.1.
But, while the Supreme Court of Rhode Island may conceivably someday wish to alter its law relative to resulting trusts between spouses in a nondivorce context, it has not done so to date, and it is not the province of a federal court to modify state law. This is especially so where the law, whether or not based on an arguably outdated rationale, serves a valuable policy goal. Here, by making it more difficult to establish a resulting trust, the rule makes the title recording system more secure. When a party sees that title to property is in the name of a certain person, he or she can be more confident that that person will be treated as its actual owner. Moreover, *84the courts of at least one state outside Rhode Island have required, as recently as 1978, proof of intent as well as contribution to the purchase price in order to establish a resulting trust between spouses. Bartula v. Bartula, 6 Mass.App. 907, 908, 378 N.E.2d 466, 468 (1978) (resulting trust found because the “parties intended at the time of the purchase that both own the property and assume the obligation of the mortgage, [and] ... both contributed to the mortgage payments....”) (rescript opinion dictum).
In this case the district court made no finding on the parties’ intent as to ownership, basing its decision entirely on Elisa’s payment of the mortgage, and treating this as a sufficient basis to find a resulting trust. My colleagues perpetuate the error. Yet the record evidence of the parties’ intent is both weak and in conflict. On the one hand Elisa answered “yes” to the question “did you purchase the house with your husband at 116 Emerson Street?” In addition, there was evidence of an agreement to share household expenses, which might make more likely an intent to share other items, i.e., ownership of the house. On the other hand, the evidence was that Elisa paid the mortgage by giving money orders to her daughters, who in turn filled them out in the sole name “Esteban Colon.” Cf. Robinson, 66 R.I. at 326, 19 A.2d at 2-3 (parties’ actions over time concerning existing state of title indicate their beliefs whether or not title accurately reflects ownership). In these circumstances, I would remand with directions to reopen the record on the issue of the parties’ intent regarding ownership; and for the district court to render a specific finding on whether the parties intended, at the time of the purchase, that Elisa become the beneficial half owner of the property.

. I agree with the majority that Elisa’s defense requires her to prove "an ownership interest in the property" as well as "ignorance of the illegal conduct which gave rise to the forfeiture.” (court’s opinion at 79). The forfeiture statute does not provide for any equitable defense simply on the grounds that it would be unfair to seize property in which an innocent spouse has invested money. The only lack of knowledge defense to a forfeiture of real property which the statute provides is that “no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act or omission, established by that owner to have been committed or omitted without the knowledge of that owner." 21 U.S.C. § 881(a)(7) (emphasis added). See United States v. Certain Real Property, 922 F.2d 129 (2d Cir.1990) (referring to defense as “ ‘innocent owner’ defense”). Accordingly, Elisa must be shown to be an "owner" of an interest in the property, and such ownership interest, if any, will have been created by state law, here that of Rhode Island.

. Counsel for Elisa stated to the court that a resulting trust requires "an agreement that [1] one would take property in the name and that the other would in effect invest money into that property ... and [2] that the person investing the money was to take some share of equity in the property." However, the court found only an agreement concerning the former, not the latter. Although the court did státe that, “[w]e’re not dealing here with people who have been to law school and are aware of all the niceties of recording of titles and that sort of thing," it is not clear whether this statement was addressed to the resulting trust issue or to a related government argument based on a Rhode Island statute requiring the recording of titles. Even if addressed to the resulting trust issue, this statement cannot be taken as a specific finding of intent.

. The government argues that Rhode Island law presumes that a contribution to the purchase price of a home by one spouse is a gift to the other spouse. The case cited by the government for this proposition, Luchetti v. Luchetti, 85 R.I. 105, 127 A.2d 244 (1956), differs factually from this case in two ways. First, it involved the payment by a husband of the entire purchase price, while the wife took title to the whole property. Second, it was the husband, not the wife, who made the contribution without getting the title. It may be that the presumption only applies to payments by the husband, based on the outdated view that a husband, as the partner with more assets, would be more likely to make a gift to his wife than vice versa. See 5 Fratcher, Scott on Trusts § 442 (1989). Thus this presumption may not apply to the facts of the present case. Regardless, Rhode Island law calls for "full, clear and convincing evidence” of an intent to share ownership. Here there was neither an express finding nor a developed record on this point.