Court Opinion

ID: 999273
Source: CourtListenerOpinion
Date Created: 2013-07-04 17:23:13.466065+00
Date Added: 2024-06-11T13:22:39.605832
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.

ALFRED WRIGHT,
Claimant-Appellant,

and

TEN (10) VEHICLES, each together
with its equipment, accessories and
contents, more particularly
described as follows: One (1) 1991
HONDA ACCORD, VIN
JHMCB7684MC065272, Blue in
color, South Carolina License
Number DJT290 (1995), Registered
Owner: Alfred Wright; ONE (1)
                                      No. 97-2031
1994 PLYMOUTH VOYAGER SPORT
VAN, VIN 1P4GH44RX160897,
green in color, South Carolina
license number JBJ665 (1995),
Registered owner: Alfred Wright;
ONE (1) 1994 CHEVROLET SILVERADO
EXTENDED CAB PICKUP TRUCK,
VIN2GEC19K4R1160802, red in
color, South Carolina license
number LZR315 (1994), registered
owner: Alfred Wright; ONE (1) 1994
MERCEDES S420, VIN
WDBGA43EXRA181611, black in
color, South Carolina license
number XUBUZZY (1994),
Registered owner: Alfred Wright;
ONE (1) 1995 MITSUBISHI ECLIPSE
AUTOMOBILE, VIN
4A3AK34UXSE029749, green in
color, South Carolina license
number KD7877 (1995), Registered
owner: Geraldine Wilson; ONE 1991
VOLVO 944SE, VIN
YV1KA87423M001852, black in
color, New York license number
SCHEMARA (1994), Registered
owners: Alfred C. Wright and
Schemara Wright; ONE (1) 1993
CADILLAC ALLANTE CONVERTIBLE,
VIN 1G6VS3397PU125112, red in
color, New York license number
ZUBUZZY (1994), Registered
owner: Alfred C. Wright; ONE 1992
CHEVROLET FLEETSIDE PICKUP TRUCK
K2500, 4-Wheel Drive with
snowplow, blue in color, VIN
1GCGK24K1NE188473, New York
license number F3D632 (1994),
Registered owner: Alfred Wright;
ONE (1) 1994 MERCEDES BENZ
S600V, VIN
WDBGA57E0RA157706, black in
color, New York license number
ZOBUZZY (1994), Registered
owner: Alfred Wright; ONE (1) 1994
HONDA PASSPORT, VIN
4S6CY58V7R4406983, green in
color, New York license number
Y3F498 (1994), Registered owner:
Alfred C. Wright; ONE PARCEL OF

              2
REAL PROPERTY DESIGNATED AS LOT
11 BLOCK GIN OTRANTO SUBDIVISION
SECTION III-BAND LOCATED IN THE
COUNTY OF BERKELEY, STATE OF
SOUTH CAROLINA WITH ALL
IMPROVEMENTS THEREON AND WITH
ALL RIGHTS AND EASEMENTS
APPERTAINING BEING TITLED IN THE
NAME OF ALFRED C. WRIGHT; ONE
PARCEL OF REAL PROPERTY
CONTAINING TWENTY AND 01/100
(20.01) ACRES MORE OR LESS AND
LOCATED IN SECOND ST. JAMES GOOSE
CREEK PARISH IN THE COUNTY OF
BERKELEY, STATE OF SOUTH
CAROLINA WITH ALL IMPROVEMENTS
THEREON AND WITH ALL RIGHTS AND
EASEMENTS APPERTAINING BEING
TITLED IN THE NAME OF ALFRED C.
WRIGHT; 13 SECOND AVENUE, ONE
PARCEL OF REAL PROPERTY
LOCATED AT 13 SECOND
AVENUE IN THE CITY OF SPRING
VALLEY, COUNTY OF ROCKLAND,
STATE OF NEW YORK WITH ALL
IMPROVEMENTS THEREON AND WITH
ALL RIGHTS AND EASEMENTS
APPERTAINING, BEING TITLED IN THE
NAME OF ALFRED C. WRIGHT;

              3
17 SECOND AVENUE, ONE PARCEL OF
REAL PROPERTY LOCATED AT 17
SECOND AVENUE IN THE CITY OF
SPRING VALLEY, COUNTY OF
ROCKLAND, STATE OF NEW YORK
WITH ALL IMPROVEMENTS
THEREON AND WITH ALL RIGHTS AND
EASEMENTS APPERTAINING, BEING
TITLED IN THE NAME OF ALFRED C.
WRIGHT; 19 SECOND AVENUE, ONE
PARCEL OF REAL PROPERTY
LOCATED AT 19 SECOND
AVENUE IN THE CITY OF SPRING
VALLEY, COUNTY OF ROCKLAND,
STATE OF NEW YORK WITH ALL
IMPROVEMENTS THEREON AND WITH
ALL RIGHTS AND EASEMENTS
APPERTAINING, BEING TITLED IN THE
NAME OF ALFRED C. WRIGHT; 21
SECOND AVENUE, ONE PARCEL OF
REAL PROPERTY LOCATED AT 21
SECOND AVENUE IN THE CITY OF
SPRING VALLEY, COUNTY OF
ROCKLAND, STATE OF NEW YORK
WITH ALL IMPROVEMENTS
THEREON AND WITH ALL RIGHTS AND
EASEMENTS APPERTAINING, BEING
TITLED IN THE NAME OF ALFRED C.
WRIGHT; BLOCK "C", ONE PARCEL OF
REAL PROPERTY CONTAINING
FOUR AND 8/10 (4.8) ACRES MORE OR
LESS DESIGNATED AS BLOCK "C"AND

              4
LOCATED IN SECOND ST. JAMES GOOSE
CREEK PARISH ON EVA HILL LAND
NEAR THE CITY OF HOLLY
HILL IN THE COUNTY OF BERKELEY,
STATE OF SOUTH CAROLINA WITH ALL
IMPROVEMENTS THEREON INCLUDING
ONE 1991 FLEETWOOD 24 X 52
DOUBLE-WIDE MOBILE HOME MODEL
EAGLE TRACE SERIAL NUMBER
GAFLL35A&B03696ET
TITLED IN THE NAME OF GERALDINE
WILSON SITUATED ON AND/OR
AFFIXED TO THE ABOVE DESCRIBED
REAL PROPERTY AND WITH ALL
RIGHTS AND EASEMENTS APPERTAINING
BEING TITLED IN THE NAMES OF
ALFRED C. WRIGHT VESTED
REMAINDER INTEREST AND EVA
BROWN WRIGHT LIFE ESTATE AND
GERALDINE WILSON MOBILE HOME,
Defendants,

MERCEDES-BENZ CREDIT
CORPORATION; CHASE MANHATTAN
AUTO; GERALDINE WILSON; CAROLYN
M. UMPHLETT, Treasurer of Berkeley
County, SC; DARLENE KINLOCK;
GEORGE W. RENC; ETHEL MURPHY;
JAMES RODEN; SHIRLEY ANN JACKSON;
PAULINE PETRKIN; SCHEMARA WRIGHT,
Claimants.

Appeal from the United States District Court
for the District of South Carolina, at Charleston.
David C. Norton, District Judge.
(CA-95-2360-2-18, CA-95-3062-18, CA-96-2008-2-18,
CA-96-2359-2-18)

                 5
Argued: May 3, 1999

Decided: July 19, 1999

Before MURNAGHAN, LUTTIG, and KING, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Michael S. Seekings, Charleston, South Carolina, for
Appellant. Stanley D. Ragsdale, Assistant United States Attorney,
Columbia, South Carolina, for Appellee. ON BRIEF: J. Rene Josey,
United States Attorney, Columbia, South Carolina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The United States ("Government") brought in rem civil forfeiture
proceedings against various properties owned by Alfred Wright
("Wright"), alleging that he acquired those properties with proceeds
from illegal gambling and money laundering operations. After Wright
failed to appear at two depositions, in contravention of the district
court's order, the court granted the Government's Second Motion for
Sanctions and/or Default Judgment and, pursuant to Rule 37(d) of the
Federal Rules of Civil Procedure, entered a default judgment against
Wright. Wright now appeals from that order. Finding no abuse of dis-
cretion, we affirm.

                    6
I.

On August 14, 1996, Wright was indicted in the District of South
Carolina on forty-six counts of gambling and money laundering.1
Concurrently, the Government instituted in rem civil forfeiture pro-
ceedings against various properties owned by Wright, alleging that
Wright acquired those properties with illegitimate funds.

On May 19, 1997, Wright appeared before the district court for
sentencing in his criminal case. Upon reviewing the Pre-Sentence
Report, however, the district judge decided that Wright had not pro-
vided sufficiently detailed financial information for the court to deter-
mine the appropriate sentence. United States v. Alfred Wright, 2:95-
883, Tr. at 14-15 (D.S.C., May 19, 1997). Accordingly, the court
stayed the sentencing proceedings in the criminal case until the com-
pletion of the parallel civil forfeiture case.

Wright's deposition in the civil forfeiture case was initially sched-
uled to occur in New York on June 5, 1997. Although the Govern-
ment served Wright with a subpoena commanding his attendance at
the deposition, Wright failed to appear. On June 9, 1997, the Govern-
ment filed its first Motion for Sanctions and/or Default Judgment.
Subsequently, on June 30, 1997, Wright filed a Motion to Stay Pro-
ceedings in the civil forfeiture case pending final resolution of his
criminal case.

On July 3, 1997, the parties appeared before the district court in the
civil forfeiture case. The district court found that, by failing to appear
for his deposition, Wright had acted in bad faith and had prejudiced
the Government. The court sanctioned Wright by imposing on him
_________________________________________________________________
1 As the alleged leader of an illegal gambling and money laundering
operation, Wright instructed his co-conspirators to open various bank
accounts in South Carolina. In order to avoid Internal Revenue Service
filings by those banks, Wright provided his co-conspirators with explicit
instructions regarding the timing and amount of deposits to be made into
the accounts.

Wright eventually entered into a negotiated plea agreement with the
Government and, on October 7, 1996, pleaded guilty to one count of
money structuring, in violation of 31 U.S.C. § 5324(a)(3) and (c)(2).

                     7
the Government's costs to attend the aborted deposition in New York,
and it rescheduled the deposition in Columbia, South Carolina. Dur-
ing the hearing, the district court also explicitly warned Wright's
counsel that, if Wright failed to appear at the rescheduled deposition,
the court would enter a default judgment against him. At his counsel's
request, Wright's Motion to Stay Proceedings in the civil forfeiture
case was held in abeyance.

Wright's deposition was rescheduled for July 10, 1997, in Colum-
bia, South Carolina. Once again, without explanation, Wright failed
to attend. The Government filed its Second Motion for Sanctions
and/or Default Judgment on the same day. On July 22, 1997, the dis-
trict court granted the Government's motion and entered a default
judgment against Wright. The district court simultaneously denied
Wright's Motion to Stay Proceedings. Wright now appeals the district
court's decision ordering judgment by default.

II.

On appeal, Wright raises two issues. First, Wright contends that the
district court abused its discretion in denying his motion to stay the
civil forfeiture case pending final resolution of the related criminal
case. Second, he argues that the district court abused its discretion by
imposing the sanction of judgment by default against him for failing
to comply with discovery in the civil forfeiture case. We address each
issue in turn.

A.

We review a district court's denial of a motion to stay for abuse of
discretion. Ungar v. Sarafite, 376 U.S. 575, 589 (1964). Although
Wright concedes that there is no constitutional guarantee requiring a
stay in a civil forfeiture proceeding pending completion of all crimi-
nal matters, he maintains that "it is imperative and proper that the two
matters be kept separate and distinct." Wright contends that the dis-
trict court should exercise its discretion to stay civil forfeiture pro-
ceedings pending completion of the related criminal proceedings to
avoid any conflict between the two and any prejudice to the defen-
dant.

                    8
Wright correctly asserts that the Supreme Court has indicated that
the Government may not use evidence against a criminal defendant
which has been coerced from him under penalty of suffering a forfei-
ture of his property. United States v. Kordel , 397 U.S. 1, 13 (1970).
Additionally, this court has noted that, when the Government directly
or indirectly sponsors a civil suit for the purpose of aiding a criminal
investigation, Fifth Amendment and ethical concerns are raised. In re
Grand Jury Subpoena, 836 F.2d 1468, 1472 n.6 (4th Cir. 1988).

Such concerns, however, are simply not implicated in this case.
Here, Wright entered into a negotiated plea agreement in his criminal
case, then proceeded to participate, without objection, in the parallel
civil forfeiture action. At the time of his sentencing hearing in the
criminal case, however, Wright had not provided the probation officer
with a full and complete financial history. As the district court noted,
Wright's failure to provide complete financial information created the
possibility of an anomalous result. If allowed to proceed with sentenc-
ing with incomplete financial information, Wright may have been
able to underestimate his income in order to avoid a criminal fine, yet
overstate his legitimate income in the parallel civil forfeiture action
to prove the properties in question were acquired with untainted
funds.

Significantly, Wright did not raise a claim of Fifth Amendment
privilege against self-incrimination in the district court proceedings,
nor does he do so now. In addition, Wright never requested a protec-
tive order from the district court. Until he filed his Motion to Stay
Proceedings, Wright never raised any concerns regarding the fact that
the civil forfeiture case was proceeding concurrently with the criminal
case. Wright then requested that his Motion to Stay proceedings be
held in abeyance. Because Wright did not raise any of these potential
objections below, the district court was never given the opportunity
to rule on them; Wright has therefore waived his ability to raise them
here.

The district court's decision to deny a stay in Wright's civil forfei-
ture case pending the completion of the related criminal case does not
run afoul of any concern identified by this court or the Supreme
Court. Consequently, there was no abuse of discretion and we affirm
the district court's decision on this issue.

                    9
B.

Wright next argues that the district court abused its discretion by
entering judgment by default against him as a sanction for his failure
to appear at the rescheduled deposition. A district court's decision to
impose judgment by default as a sanction is governed by Rule 37 of
the Federal Rules of Civil Procedure. Rule 37(d) gives the district
court wide discretion to impose sanctions for a party's failure to com-
ply with its discovery orders. Mutual Fed. Sav. & Loan Ass'n v. Rich-
ards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir. 1989). This court,
therefore, reviews a district court's decision under Rule 37(d) for an
abuse of discretion. National Hockey League v. Metropolitan Hockey
Club, Inc., 427 U.S. 639, 642 (1976). However, when the sanction
imposed is judgment by default, the district court's range of discretion
is more narrow due to a party's right to a jury trial and a fair day in
court and the "sound public policy of deciding cases on their merits."
Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 503-04 (4th Cir.
1977). A district court should only exercise its discretion to enter a
default judgment where it is demonstrated that the failure to comply
with discovery "materially affects the substantial rights of the adverse
party and is prejudicial to the presentation of his case." Id. at 504.

Wright's deposition was scheduled to occur in New York on June
5, 1997. The civil forfeiture trial was scheduled to begin on July 14,
1997. Prior to the deposition, the Government served Wright with a
subpoena commanding his presence at the deposition. Without expla-
nation, Wright failed to appear.

In response to Wright's failure to appear, the Government, pursu-
ant to Rules 37(d) and 55(b)(2) of the Federal Rules of Civil Procedure,2
moved the district court for the imposition of sanctions against
Wright, as well as for the entry of a default order against Wright. Rule
37(d) provides, in pertinent part:
_________________________________________________________________
2 The district court addressed the Government's initial Motion for
Sanctions and/or Default Judgment and its Second Motion for Sanctions
and/or Default Judgment under Rule 37(d). Accordingly, we review the
district court's decision under that rule.

                    10
          If a party . . . fails (1) to appear before the officer who is
          to take the deposition, after being served with proper notice
          . . . the court in which the action is pending on motion may
          make such orders in regard to the failure as are just, and
          among others it may take any action authorized under sub-
          paragraphs (A), (B), or (C) of subdivision (b)(2) of this rule.

Fed. R. Civ. P. 37(d). Subparagraph (C) of Rule 37(b)(2) authorizes
the district court to make the following orders:

          An order striking out pleadings or parts thereof, or staying
          further proceedings until the order is obeyed, or dismissing
          the action or proceeding or any part thereof, or rendering a
          judgment by default against the disobedient party.

Fed. R. Civ. P. 37(b)(2)(C) (emphasis added).

When it considered the Government's initial Motion for Sanctions
and/or Default Judgment, the district court made the following find-
ings: (1) Wright acted in bad faith by not attending his deposition; (2)
the Government was prejudiced by Wright's "unilateral failure to
attend"; and (3) this type of noncompliance with discovery should be
deterred. The district court then sanctioned Wright by imposing on
him the Government's travel costs and ordered the deposition to be
rescheduled to take place in Columbia, South Carolina. The district
court did not grant the Government's request for entry of a default
judgment against Wright; however, it specifically informed Wright's
counsel that failure to appear at the rescheduled deposition would
result in default.

Subsequently, and notwithstanding the clear warning of the district
judge, Wright failed to appear for the rescheduled deposition in
Columbia, South Carolina. Once again, Wright's counsel could pro-
vide no legitimate excuse for Wright's absence. The Government
filed its Second Motion for Sanctions and/or Default Judgment and
the district court, acting as it had represented it would, granted the
motion and entered a default judgment against Wright and in favor of
the Government on July 22, 1997.

                    11
When deciding a Rule 37(d) default judgment motion, a district
court must weigh the competing interests of the court's desire to
enforce its discovery orders against the party's right to a trial by jury
and a fair day in court by applying a four part test. Wilson, 561 F.2d
at 503-04; Mutual Fed., 872 F.2d at 92. The factors a court must con-
sider are:

          (1) whether the noncomplying party acted in bad faith; (2)
          the amount of prejudice his noncompliance caused his
          adversary, which necessarily includes an inquiry into the
          materiality of the evidence he failed to produce; (3) the need
          for deterrence of the particular sort of noncompliance; and
          (4) the effectiveness of less drastic sanctions.

Wilson, 561 F.2d at 503-06. The purpose of such an evaluation is to
ensure that only the most flagrant cases of noncompliance will result
in judgment by default. Mutual Fed., 872 F.2d at 92.

In this case, the district court clearly applied the Wilson factors.
First, it specifically found that, although Wright had actual notice of
both depositions, he wilfully and in bad faith failed to appear.

Second, the court found that because Wright had denied the Gov-
ernment's factual assertions in his answers and alleged that the prop-
erties in question were acquired with legitimate funds, his refusal to
be deposed deprived the Government of the ability to discover mate-
rial evidence that Wright intended to offer at trial as a defense to the
forfeitures. This deprivation of discovery was prejudicial to the Gov-
ernment's ability to present its case.

Third, the district court found that there was an obvious need to
deter this sort of noncompliance. Parties in civil proceedings must be
afforded the opportunity to uncover evidence which could affect the
outcome of the case. The district court found that to rule otherwise
would render the rules governing civil discovery meaningless.

Finally, the district court found that a less drastic sanction would
be ineffective. The court had previously imposed a less drastic sanc-
tion when it assessed costs and rescheduled the deposition, and it had

                     12
specifically warned Wright that failure to attend the rescheduled
deposition would result in the entry of default judgment against him.
Additionally, the court found that any lesser sanction would not sup-
ply the Government with the material evidence which Wright had
refused to provide.

The Supreme Court has instructed that the most severe sanction,
judgment by default, "must be available to the district court in appro-
priate cases, not merely to penalize those whose conduct may be
deemed to warrant such a sanction, but to deter those who might be
tempted to such conduct in the absence of such a deterrent." National
Hockey League, 427 U.S. at 643. We conclude that the district court
acted within its discretion when it decided that Wright's conduct war-
ranted the imposition of the default judgment sanction, and accord-
ingly, affirm the judgment.

AFFIRMED

                    13