Court Opinion

ID: 2804153
Source: CourtListenerOpinion
Date Created: 2015-05-28 17:10:32.842335+00
Date Added: 2024-06-11T11:29:51.259155
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

                 STATE OF ARIZONA, Plaintiff/Appellant,

                                        v.

    RICHARD BYRD aka ROBERT SMITH aka DEANDRE BYRD aka
            CHRISTOPHER BYRD, Defendant/Appellee.

                                       and

 THE PROPERTY DESCRIBED IN APPENDIX ONE, Defendants In Rem.

                             No. 1 CA-CV 13-0181
                               FILED 5-28-2015

           Appeal from the Superior Court in Maricopa County
                          No. CV2012-000121
                The Honorable Lisa Daniel Flores, Judge

                                  AFFIRMED

                                   COUNSEL

Arizona Attorney General’s Office, Phoenix
By Jeffrey R. Borup, Katrin M. Nelson
Counsel for Plaintiff/Appellant

Perkins Coie LLP, Phoenix
By Jean-Jacques Cabou, D. Andrew Gaona
Counsel for Defendant/Appellee
                              STATE v. BYRD
                            Decision of the Court

                       MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Kent E. Cattani and Judge Peter B. Swann joined.

W I N T H R O P, Judge:

¶1            The State of Arizona (“State”) appeals the superior court’s
order dismissing its case against Richard Byrd (“Byrd”) with prejudice. The
State alleges the superior court erred when it (1) determined the State
violated Byrd’s due process rights; (2) dismissed the State’s case with
prejudice; and (3) failed to determine whether there was probable cause for
forfeiture when it held a hearing pursuant to Arizona Revised Statutes
(“A.R.S.”) section 13-4310(B).1 For the following reasons, we affirm the
superior court’s order dismissing the State’s case with prejudice.

                 FACTS AND PROCEDURAL HISTORY

       I.     First Forfeiture Action

¶2            On February 17, 2011, Byrd represented himself as a buyer in
a transaction to purchase 2,700 pounds of marijuana. The Chandler Police
Department arrested Byrd that same day. On March 7, 2011, detectives
from the Arizona Financial Crimes Task Force executed a search warrant at
Byrd’s residence. During this search, the detectives found and seized a
substantial amount of cash bundled in varying amounts, several cars, and
other personal property. On March 28, 2011, in accordance with A.R.S.
§ 13-4308(B), the State filed a “Notice of Pending Forfeiture and Notice of
Seizure for Forfeiture,” which detailed the property subject to forfeiture.
The State subsequently filed two supplemental notices, listing additional
property intended to be seized and forfeited. Byrd filed a notice of claim to
the seized property on April 26, 2011.

¶3             On May 25, 2011, two days before its forfeiture complaint was
due, the State filed a motion to extend time for filing its complaint until July
26, 2011, stating that negotiations between the parties had failed, and that

1     We cite the current Westlaw version of the applicable statutes
because no revisions material to this decision have since occurred.

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                              STATE v. BYRD
                            Decision of the Court

the State needed additional time to comply with A.R.S. § 13-4308(B). The
superior court granted the motion the following day without waiting for a
response from Byrd. On June 3, 2011, Byrd and his wife, Stacie Steward2,
filed a response and a separate motion to return Byrd’s property, alleging
the plain language of A.R.S. § 13-4308(B) did not allow the State to maintain
possession of Byrd’s property when it failed to file its forfeiture complaint
within sixty days and that the deadline for filing a complaint could not be
extended. The superior court set oral argument on this motion for August
10, 2011.

¶4             The State ultimately filed its verified complaint on July 26,
2011. The State alleged that, beginning in November 2009, Byrd engaged
in illegal conduct including forgery, possession and sale of marijuana,
fraudulent schemes, money laundering, and participation in a criminal
syndicate. Five days before the scheduled oral argument on Byrd’s motion
to return his property, Byrd retained new counsel, who immediately filed a
motion to vacate the pending argument. The superior court granted the
motion, re-setting the argument for December 2, 2011. In addition, Byrd
filed a motion to transfer the case to complex civil litigation court, which
the State joined, and the case was subsequently transferred.

¶5             On October 17, 2011, Byrd moved to dismiss the complaint on
the basis that the State had failed to properly allege the predicate acts of
racketeering under the Arizona Racketeering Act. One day prior to the
scheduled oral argument on Byrd’s motion to return the subject property,
the State filed a notice of voluntary dismissal of the forfeiture complaint
pursuant to Ariz. R. Civ. P. 41(a) and a “Notice of Release of Property from
Seizure for Forfeiture.” That same day, after filing the notice of release, the
State re-seized the subject property for forfeiture. The superior court
dismissed the action the following day, December 2, 2011.3 Byrd
immediately filed a motion for release of his property that same day. Byrd
then filed an application on December 16, 2011 for an order to show cause
pursuant to A.R.S. § 13-4310(B). On February 16, 2012, the superior court
determined that all pending matters in the first forfeiture action were moot

2      The State subsequently settled with Stacie Steward, and she is not a
party to this appeal.

3      Byrd alleges the State “informed the Court of its release and re-
seizure and handed Mr. Byrd’s counsel a copy of a new Notice of Pending
Forfeiture” in court on December 2, 2011.

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                             STATE v. BYRD
                           Decision of the Court

because the voluntary dismissal of the complaint had divested the court of
jurisdiction. The superior court, after several motions and oral argument,
subsequently awarded Byrd $46,833 in attorneys’ fees.

      II.    Second Forfeiture Action

¶6             On January 3, 2012, the State filed a second “Notice of
Pending Forfeiture and Notice of Seizure for Forfeiture.”4 Byrd again filed
an initial claim of lawful interest in the property. The State subsequently
filed a second verified forfeiture complaint on March 5, 2012. Byrd then re-
urged his application to show cause pursuant to A.R.S. § 13-4310(B) on
April 12, 2012. The State responded, asserting no probable cause hearing
was necessary because a judicial determination of probable cause had
already been made, and that Byrd’s request for a hearing was untimely. In
addition, the State attached a seizure warrant issued by Judge Joseph C.
Welty on December 19, 2011, under the original forfeiture action’s cause
number. The superior court granted Byrd’s request for a probable cause
hearing, but before such hearing occurred, the State applied for, and was
granted, an order of forfeiture on the subject property.5 Byrd then filed a
motion to dismiss the second verified complaint. The superior court
subsequently conducted a three day evidentiary hearing regarding the
application for an order to show cause.

¶7            As requested by the superior court, both parties submitted
written closing arguments. In his closing argument, Byrd asked the
superior court to dismiss the State’s second verified complaint with
prejudice as a sanction for the State’s “outrageous conduct.” In its
summation, the State noted that the re-seizure of the subject property was
“nowhere near as objectionable or intrusive as those unlawful seizures
[previously] upheld by the courts,” and denied violating Byrd’s due
process rights. In a detailed ruling, the superior court dismissed the action
with prejudice, finding “[t]hrough a continuing course of conduct, the State
deprived [Byrd] of the prompt hearing he was entitled to. The result was
that [Byrd’s] property was retained by the State for an unreasonable,

4     This filing generated a new cause number.

5      The State requested an Order for Forfeiture alleging the statutory
time periods prescribed by A.R.S. § 13-4311 had expired and no timely
claim had been properly filed relating to said property. The State filed a
proposed “Judgment: Findings of Fact, Conclusions of Law, and Order of
Forfeiture” for entry by the Court pursuant to A.R.S. § 13-4314.

                                        4
                               STATE v. BYRD
                             Decision of the Court

excessive period of time in violation of [Byrd’s] right to Due Process.” In
addition, the superior court expressly declined to address whether probable
cause existed at the time of the hearing for the seizures, and the other issues
raised in Byrd’s 12(b)(6) motion to dismiss. The State filed a timely notice
of appeal. The superior court subsequently awarded Byrd $123,275.01 in
attorneys’ fees.

                                  ANALYSIS

¶8             The State alleges the superior court erred when it (1)
determined the State violated Byrd’s due process rights; (2) dismissed the
State’s case with prejudice; and (3) failed to determine whether there was
probable cause for forfeiture when it held a hearing pursuant to A.R.S. § 13-
4310(B). We need not reach the issue of whether the actions by the State
amount to a violation of Byrd’s due process rights. The State repeatedly
violated applicable Arizona forfeiture statutes, and on this basis, we affirm
the trial court’s order dismissing the State’s case with prejudice. See Dube
v. Likins, 216 Ariz. 406, 417 n.3, ¶ 36, 167 P.3d 93, 104 n.3 (App. 2007) (stating
this court affirms the ruling of the trial court if it is correct for any reason).

¶9            Exercising its inherent sanction authority, the superior court
dismissed the current action against Byrd with prejudice, finding that the
State had denied Byrd his due process rights “by the combination of
violating Arizona forfeiture statutes and its conduct to delay resolution for
an unreasonable, excessive period of time.” We review the imposition of
sanctions for an abuse of discretion. Green v. Lisa Frank, Inc., 221 Ariz. 138,
153, ¶ 40, 211 P.3d 16, 31 (App. 2009); see also Woodworth v. Woodworth, 202
Ariz. 179, 180, ¶ 2, 42 P.3d 610, 611 (App. 2002) (“Sanctions are left to the
sound discretion of the trial court.”). In conducting our review, we defer to
the trial court’s findings of fact unless clearly erroneous, but review
questions of law de novo. Valley Med. Specialists v. Farber, 194 Ariz. 363, 366,
¶ 9, 982 P.2d 1277, 1280 (1999); Matter of U.S. Currency In the Amount of
$315,900.00, 183 Ariz. 208, 211, 902 P.2d 351, 354 (App. 1995).

¶10            From a procedural standpoint, both the first and second
forfeiture actions were extensively litigated. We agree with the superior
court that the issues raised in the first forfeiture action cannot now be re-
litigated, but the facts and procedural history are nonetheless relevant in
determining whether the State failed to comply with Arizona forfeiture
statutes.

                                        5
                               STATE v. BYRD
                             Decision of the Court

¶11            In the first forfeiture action, the State failed to timely file its
verified complaint as required by A.R.S. § 13-4308(B).6 Notwithstanding a
timely demand to release the property, the State did not do so. Instead,
several months later, on the eve of the hearing regarding Byrd’s motion to
return the subject property, the State unilaterally dismissed the case and
immediately re-seized the property. The following day, the superior court
formally dismissed the original action. At that time, the State provided
Byrd’s counsel with a notice, indicating Special Agent Adelstein of the
Arizona Attorney General’s Office had re-seized the property. Byrd then
filed several motions for relief under the original forfeiture action cause
number, but the superior court determined these pending matters were
moot because the original forfeiture action had been dismissed, divesting
the court of jurisdiction to deal with substantive issues arising out of the
forfeiture action.

¶12           Meanwhile, the State filed a new notice of pending forfeiture
on January 3, 2012, formally initiating the second forfeiture action. Of
course, the property had already been physically re-seized on December 1,
2011. Byrd again filed his claim of interest in the subject property.
Inexplicably, the State did not file its second (but essentially identical)
verified complaint until March 5, 2012, 95 days after the property was
seized, and 62 days after the second notice of pending forfeiture.7 In April
2012, Byrd re-urged his previous application for an order to show cause.
The State opposed the motion, alleging a judicial determination of probable
cause had already been made, and that Byrd’s request was untimely,
attaching the seizure warrant issued by Judge Welty on December 19, 2011,

6      The superior court is authorized to grant an extension of time to file
a complaint. See Ariz. R. Civ. P. 6(b). A.R.S. § 13-4308(B), however,
expressly states that if the State fails to initiate forfeiture proceedings within
sixty days of a notice of pending forfeiture, the subject property “shall be
released from its seizure for forfeiture on the request of an owner or interest
holder.” The trial court is obligated under this statute to release property
from its seizure for forfeiture when the State fails to timely act and a
defendant requests the property be released. In re $3,636.24 Three Thousand
Six Hundred Thirty Six Dollars and 24/100 U.S. Currency, 198 Ariz. 504, 506,
¶ 15, 11 P.3d 1043, 1045 (App. 2000). This did not occur here.

7     The State’s complaint was due by March 3, 2012, which fell on a
Saturday. Accordingly, the State timely filed its complaint the following
Monday, March 5, 2012. See Ariz. R. Civ. P. 6(a).

                                        6
                              STATE v. BYRD
                            Decision of the Court

under the cause number of the first forfeiture action. In making this
argument, the State did not advise the court that its unilateral dismissal of
the first action deprived the superior court of jurisdiction and thus its ability
to timely address Byrd’s prior repeated applications to show cause and for
release of the property. Further, the State without any substantial
justification argued that Byrd had failed to timely comply with A.R.S. § 13-
4310(B).8

¶13           At the evidentiary hearing regarding Byrd’s application to
show cause, Special Agent Adelstein testified that the State asked him in
December of 2011 to determine whether probable cause existed to re-seize
the property, expressing concern that, if probable cause was not found and
the property was released, it would not be subject to re-seizure. Special
Agent Adelstein’s only prior involvement in this case occurred when he
served seizure warrants on various banks. In determining that the State did
have probable cause to re-seize the subject property, Special Agent
Adelstein reviewed only a draft of an affidavit prepared by Phoenix Police
Detective Shallue and Arizona Department of Public Safety Detective
Kleinman.9 This draft was eventually finalized and signed by the two
detectives and presented to Judge Welty to obtain the seizure warrant.
After the conclusion of the evidentiary hearing, the superior court
ultimately dismissed the State’s case with prejudice.

¶14           Based on the record before this court, the superior court did
not abuse its discretion when it dismissed the State’s case with prejudice, as
the State repeatedly delayed resolution of this case in violation of Arizona

8       Byrd timely requested a hearing within fifteen days of the re-seizure,
and prior to the “judicial determination of probable cause” found in the
seizure warrant signed by Judge Welty. The State contends Byrd’s
application was untimely because it was filed under the “wrong cause
number” and was later determined to be moot by the superior court for lack
of jurisdiction; as previously noted, it was the State’s action in unilaterally
dismissing the first complaint that purportedly divested the court of
jurisdiction. It was the State’s delay in filing a new complaint that left Byrd
with the only option of filing this application under the former cause
number.

9      The detectives, as participants in the investigation against Byrd, took
part in drafting affidavits in support of both the first and second seizure
warrants.

                                       7
                              STATE v. BYRD
                            Decision of the Court

forfeiture statutes.10 Specifically, the State’s failure to file both a notice of
pending forfeiture and the verified complaint in a reasonable time after the
State unilaterally dismissed its case and re-seized the subject property
deprived the superior court of jurisdiction to timely address Byrd’s
repeated claims to his property under the original forfeiture action.11 The
State’s practices – whether intentional or merely inexcusably dilatory –
continually denied Byrd a timely and meaningful opportunity to contest
the State’s seizure – and re-seizure – of his property under Arizona
forfeiture statutes.12

¶15           Accordingly, the superior court did not abuse its discretion
when it dismissed the State’s case with prejudice as a sanction when the
State repeatedly violated Arizona forfeiture statutes. We acknowledge that
less drastic sanctions exist and were arguably available to the superior
court, and, absent extreme circumstances, a forfeiture complaint should not
be dismissed. Birds Int’l Corp. v. Arizona Maintenance Co., Inc., 135 Ariz. 545,

10     We acknowledge that Byrd also filed some motions that extended
the time and increased the complexity of this litigation, however, Byrd’s
motions did not serve to frustrate the forfeiture process and statutes and
were a legitimate exercise of his rights.

11     A.R.S. § 13-4308(B) provides that a forfeiture action “shall be
commenced within seven years after actual discovery of the last act giving
rise to forfeiture.” We acknowledge that the State was not required to
immediately file a second notice of pending forfeiture or verified complaint.
On this record, however, we cannot say the superior court erred in
determining that the State acted unreasonably. The State dismissed the first
action and simultaneously re-seized the property, but then waited over one
month to file a second notice of pending forfeiture that was substantially
similar to the first notice. During this time, the State was aware that Byrd
was actively seeking the return of his property. By dismissing the first
action and failing to promptly initiate a second action, the State precluded
the superior court’s timely consideration of Byrd’s various motions.

12     Moreover, the State avowed to the superior court that no probable
cause hearing was necessary; however, the superior court found the State
was not forthcoming with all the pertinent information when it requested
that Judge Welty and Special Agent Adelstein find probable cause for the
re-seizure of Byrd’s property, and we cannot conclude such findings were
clearly erroneous.

                                       8
                              STATE v. BYRD
                            Decision of the Court

547, 662 P.2d 1052, 1054 (App. 1983); Green at 153, ¶ 40, 211 P.3d at 31. The
superior court evaluated the severity of its decision, noting that Byrd faced
“substantial financial penalties” if convicted of the predicate offenses.13 The
repeated violations of Arizona forfeiture statutes perpetrated by the State
exemplify the extreme circumstances where dismissal with prejudice is
appropriate. The State had several opportunities at which it could have
remedied its procedural errors, however, it chose to take alternative routes
that contravened the applicable forfeiture statutes. We see no abuse of
discretion in the superior court’s decision to dismiss the State’s case with
prejudice.

¶16           Finally, the superior court did not err when it did not reach
the merits of the other issues raised in Byrd’s motion to dismiss, or
determine whether probable cause existed when it conducted a hearing
pursuant to A.R.S. § 13-4310(B). The superior court determined that the
appropriate sanction for failing to comply with Arizona forfeiture statutes
was dismissal of the forfeiture case with prejudice. This sanction was
dispositive to the remaining motions/issues before the court. Accordingly,
the superior court did not err when it declined to address these remaining
issues.

¶17            Byrd requests attorneys’ fees on appeal pursuant to Ariz. R.
Civ. App. P. 21(c) and A.R.S. § 13-2314(A). In our discretion, we deny his
request for attorneys’ fees. Conditioned upon compliance with Ariz. R. Civ.
App. P. 21, we award Byrd his costs on appeal.

13     Although the superior court did not make this finding, we take
judicial notice of the fact that substantially similar federal charges are also
currently pending against Byrd.

                                      9
                          STATE v. BYRD
                        Decision of the Court

                           CONCLUSION

¶18          For the foregoing reasons, we affirm the superior court’s
order dismissing the State’s case against Byrd with prejudice.

                                :ama

                                 10