Court Opinion

ID: 2963987
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:18:33.760346+00
Date Added: 2024-06-11T15:00:45.929228
License: Public Domain

USCA1 Opinion

	

          March 29, 1996
                                [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

        No. 95-1923
        No. 95-2016

                              UNITED STATES OF AMERICA,
                                 Plaintiff, Appellee,

                                          v.

             ALL FUNDS, MONIES, SECURITIES, MUTUAL FUND SHARES AND STOCKS
                        HELD IN FIDELITY INVESTMENTS, ET AL.,
                                 Defendant, Appellee.
                                                
                                      __________

                               THOMAS E. KNEELAND, JR.,
                                Defendant, Appellant.
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________
                                 ____________________

                                        Before

                                Torruella, Chief Judge,
                                           ___________
                           Stahl and Lynch, Circuit Judges.
                                            ______________
                                 ____________________

            Thomas E. Kneeland, Jr. on brief pro se.
            _______________________
            Donald K. Stern,  United States Attorney, and Patrick M. Hamilton,
            _______________                               ___________________
        Assistant United States Attorney, on brief for appellee, United States
        of America.

                                 ____________________

                                 ____________________

                 Per  Curiam.    These  consolidated appeals  have  their
                 ___________

            origin  in  a civil  forfeiture  action  which was  dismissed

            without prejudice,  on the government's  motion, pursuant  to

            Fed.  R.   Civ.  P.  41(a)(2).     Claimant  Thomas  Kneeland

            challenges the dismissal; the denial of various pre-dismissal

            motions, including his requests for an adversarial hearing or

            entry of judgment  in his  favor; and the  denial of  various

            post-dismissal  motions,  including  a  renewed   motion  for

            summary judgment, a motion  for return of property, a  motion

            to disqualify the district  judge, and a motion  for judgment

            on the pleadings.1  For the following reasons, we affirm.
                             1

                 Kneeland  allegedly  operated   an  advance  fee  scheme

            whereby he fraudulently promised  potential borrowers that he

            could obtain funding for their projects, accepted substantial

            up-front  fees, failed to arrange financing  or to return the

            fees, and subsequently  "laundered" the fees.  On December 2,

            1993, the  government received ex  parte warrants authorizing
                                           __  _____

            seizure of the defendant properties after persuading a United

            States  Magistrate Judge  that  there was  probable cause  to

                                
            ____________________

               1The  parties  dispute  the  scope  of  our  jurisdiction.
               1
            Kneeland claims to have appealed eight separate orders by way
            of eight notices of  appeal, whereas the government correctly
            points out  that Kneeland filed  only two notices  of appeal.
            We  need not  resolve  what issues  are  properly before  us.
            Assuming without deciding that we have jurisdiction to review
            each of the challenged  orders, we would affirm.   See Norton
                                                               ___ ______
            v.  Matthews, 427  U.S. 524,  530-32 (1976)  (explaining that
                ________
            jurisdictional inquiry  may be  bypassed where merits  can be
            easily   resolved   in  favor   of   the  party   challenging
            jurisdiction).

            believe  that  they were  involved in  or traceable  to money

            laundering.      Thereafter,    the   government    initiated

            administrative forfeiture  proceedings and   Kneeland filed a

            claim of ownership.  On March 30, 1994, a federal  grand jury

            returned an  indictment  charging Kneeland  with  conspiracy,

            mail  fraud,  wire  fraud,   money  laundering  and  criminal

            forfeiture.  The forfeiture count specifically identified the

            defendant properties.  On May  6, 1994, the government  filed

            the  instant civil  complaint for  forfeiture pursuant  to 18

            U.S.C.   981(a)(1)(A).  

                 For a  period  of time,  the  civil and  criminal  cases

            progressed forward in tandem.   The criminal case readied for

            trial.   In the civil case,  Kneeland filed an  answer to the

            complaint.  Back Bay,  Ltd., an alleged victim, filed  a late

            claim.  On October 20, 1994, less than three weeks before the

            criminal trial  was scheduled  to take place,  the government

            moved  to  stay  discovery  in  the  civil case  pending  the

            disposition of  the criminal matter.  Kneeland did not object

            to this request,  and it  was allowed.   The criminal  trial,

            however, was  delayed, and  eventually it was  rescheduled to

            take place on May 22, 1995.  

                 On December  27, 1994,  while  the stay  was in  effect,

            Kneeland  filed a motion for summary judgment in his favor on

            the alleged  ground that he was the only person to "perfect a

            claim" to the defendant properties.  The motion was summarily

                                         -3-

            denied.    Thereafter, Kneeland  moved to  lift the  stay and

            renewed  his motion for summary judgment.  These motions were

            denied.  On April 24, 1995,  Kneeland again moved to lift the

            stay, this time  requesting a  hearing on the  merits of  the

            seizure.  This motion was  followed by similar motions, filed

            approximately every  two or three days,  seeking, inter alia,
                                                              _____ ____

            dismissal  of  the  complaint,  an  adversarial  hearing,  or

            summary judgment.    On June  20,  1995, the  district  court

            granted  Kneeland's motion  to lift  the stay,  but otherwise

            denied his various motions.  By that time, the criminal trial

            had been delayed once again.  

                 The government immediately filed a motion to dismiss the

            civil case without prejudice.  On or about the same date, the

            government  moved  in  the  criminal case  for  new  warrants

            freezing  the  defendant  properties.     Kneeland  filed  an

            "omnibus" motion objecting to the dismissal and seeking entry

            of judgment  in his favor.   A week later, he  filed a motion

            for  adversarial hearing or entry  of judgment.   On July 18,

            1995, the district  court allowed the  motion to dismiss  and

            denied the "omnibus"  motion.   On July 20,  1995, the  court

            denied  the  motion  for  adversarial  hearing  or  entry  of

            judgment.  Thereafter, Kneeland filed, inter  alia, a renewed
                                                   _____  ____

            motion for summary judgment, a motion for return of defendant

            properties,  a   motion  to  vacate  the   dismissal  and  to

                                         -4-

            disqualify the district judge under 28 U.S.C.   455(a), and a

            motion for judgmenton thepleadings.  Thesemotions weredenied.

                 A  plaintiff's motion  for  dismissal without  prejudice

            pursuant to Fed. R. Civ. P. 41(a)(2) should be allowed unless

            the court  finds that the  defendant will suffer  plain legal

            prejudice.  9 Charles  A. Wright & Arthur R.  Miller, Federal
                                                                  _______

            Practice  & Procedure    2364,  at  280 (2d  ed. 1994).   The
            _____________________

            decision whether or not  to grant such a dismissal  is within

            the  sound discretion  of the  district court  and reviewable

            only  for  abuse of  discretion.   See  Puerto  Rico Maritime
                                               ___  _____________________

            Shipping Authority v. Leith, 668 F.2d 46, 49 (1st Cir. 1981).
            __________________    _____

            We find no such abuse of discretion here.

                 As an  initial matter,  we reject  Kneeland's suggestion

            that he was robbed of an imminent victory.  See Grover v. Eli
                                                        ___ ______    ___

            Lilly & Co.,  33 F.3d  716, 718-19 (6th  Cir. 1994)  (finding
            ___________

            abuse of  discretion where  district court dismissed  case at

            the point where  the law  clearly dictated a  result for  the

            defendant).  Indeed, Kneeland's argument that he was entitled

            to judgment in  his favor  because the government  is a  mere

            "escrow agent"  for potential claimants is  utterly frivolous

            even  if  we  assume  arguendo that  Kneeland  was  the  only
                                  ________

            claimant.  The government in a civil forfeiture action  under

            the  money laundering  statutes is  not an  escrow agent  for

            others;  rather,  if successful,  it  acquires  title to  the

            forfeited property.  See 18 U.S.C.   981(a),(f).  
                                 ___

                                         -5-

                 We also reject Kneeland's  argument that he was deprived

            of  his right to  an adversarial hearing.   Certainly, before

            forfeiture,  a claimant  must be  afforded an  opportunity to

            rebut the government's showing  of probable cause, see United
                                                               ___ ______

            States  v. Real Property Known  & Numbered as  Rural Route 1,
            ______     __________________________________________________

            Box 137-B, Cutler, Ohio, 24 F.3d 845, 848-49 (6th Cir. 1994),
            _______________________

            as well  as to  present evidence  bearing on other  potential

            defenses. However, it doesn't  follow that a civil forfeiture

            action, once begun, may not be aborted.  In the instant case,

            the dismissal obviated the need for a hearing.2
                                                          2

                 Finally, we add  that the  civil case was  still in  the

            pre-discovery  stage.    Although  Kneeland  claims  to  have

            devoted  many hours to the case, the record reveals that much

            of his efforts were  spent on frivolous, repetitious motions.

            Kneeland had gained no ground in the civil case which he lost

            by the dismissal.  Indeed, Kneeland benefited from not having

            to  litigate two  actions  simultaneously, and  from  certain

            procedural advantages he had in the criminal proceeding.  See
                                                                      ___

            David B. Smith, Prosecution  & Defense of Forfeiture  Cases  
                            ___________________________________________

            1.03   (1995)  (discussing,   by  contrast,   the  tremendous

            procedural  advantages  the  government  enjoys  in  a  civil

                                
            ____________________

               2Kneeland's  suggestion  that he  was  denied  due process
               2
            because he  was not afforded a  "timely" post-seizure hearing
            also  fails.   Kneeland  did not  object to  the government's
            motion  for a  stay; and while  the stay  was in  effect, the
            government   diligently   prosecuted  the   related  criminal
            indictment. 

                                         -6-

            forfeiture  action).    The  criminal case  was  procedurally

            advanced and  the  government ready  for  trial.   Under  the

            circumstances, we  think the district  court properly allowed

            the government's motion to dismiss the civil case.  

                 We  have  carefully   considered  Kneeland's   remaining

            arguments  and reject them as without  merit.  In particular,

            we find no error  in the denial of his  post-dismissal motion

            for  return of property since the assets were then being held

            in  connection  with his  criminal case.3    We also  find no
                                                    3

            error  in the denial of the motion for disqualification.  The

            district court's comments  in its order vacating the  stay do

            not  warrant an inference that it stepped outside its role to

            act as  adviser to the government, and we find no evidence of

            bias in  any of the court's rulings or in its handling of the

            case.   See Liteky  v.  United States, 114 S.  Ct. 1147, 1157
                    ___ ______      _____________

            (1994)  (observing that judicial  rulings alone  almost never

            constitute valid basis for a bias or partiality motion).

                 Affirmed.
                 _________

                                
            ____________________

               3Contrary  to Kneeland's suggestion,  there is no evidence
               3
            that  the district  court  held a  "transfer hearing"  or was
            otherwise  involved  in the  decision  to  issue new  seizure
            warrants.

                                         -7-