COA overturns forfeiture judgment, but splits on allowing owners to use seized cash for defense

Summary judgment for the state has been overturned in an action seeking to forfeit nearly $9,000, with a majority of judges holding that owners of seized property can used seized cash to help fund their defense. A dissenting judge, however, thinks that ruling exceeds statutory limits.

In Terry L. Abbott v. State of Indiana, 19A-PL-1635, the state in June 2015 moved to forfeit four firearms and more than $9,000 in cash from Terry Abbott that was found during a search warrant. Abbott was suspected of dealing drugs in 2015, the state alleged, designating evidence that he had sold methamphetamine and other narcotics to undercover law enforcement during two controlled buys.

Police obtained a search warrant for Abbott’s residence, where they found the guns, various drugs and $9,184 in cash. About $6,760 was found in the pocket of Abbott’s pants, while another $2,000 was found in a safe, including $250 believed to be “drug buy” money. Also, $11 was found in a bag with pills in Abbott’s basement.

Abbott was arrested and eventually convicted of multiple offenses including two counts of dealing.

Abbott originally had a lawyer, but his counsel withdrew in November 2015 based on Abbott’s failure to pay legal fees. Then, when the state moved for summary judgment in July 2018, Abbott unsuccessfully requested the appointment of counsel at public expense.

During summary judgment proceedings, Abbott claimed the money found in his pocket was lawfully obtained and was set aside to purchase a motorcycle the same day he was arrested. The sale had been postponed, he said, and he simply had not taken the cash out of his pocket. Also, he said, he was employed leading up to his arrest, and his 2015 tax documents showed two sources of lawful wages collectively exceeding $20,000.

The Elkhart Superior Court entered summary judgment for the state, finding that the “overwhelming designated evidence” indicated the cash in his pocket was related to criminal conduct. Abbott then appealed and moved to obtain a transcript at public expense, but the trial court denied his request.

The Indiana Court of Appeals allowed Abbott to proceed without a transcript, then partially reversed in a Monday opinion.

Abbott only challenged the seizure of the $9,184 in cash, so the appellate panel affirmed summary judgment on the seizure of the firearms seized from his residence. And as to the cash, “Abbott disclaimed interest in the $11 found commingled with pills and he has not presented a cogent argument concerning the $250 of documented ‘drug buy’ money,” Judge L. Mark Bailey wrote. “Thus, we declined to reverse summary judgment as to $261 and hereafter regard the res as $8,923.”

“In seeking summary judgment, the State claimed entitlement to the res because the cash was connected to criminal drug-dealing activities,” Bailey wrote. “Assuming without deciding that the State met its initial burden, Abbott designated evidence that he lawfully obtained $6,760 of the res.

“By doing so, he created a genuine issue of material facts as to whether the res was ‘derived from,’ ‘realized through,’ or ‘used in the course of’ criminal conduct. … That leaves only whether the res was ‘intended for use in the course of’ criminal conduct.”

There are “conflicting inferences” regarding the use of the cash found in Abbott’s pocket, Bailey wrote. Abbott designated evidence that he intended to use the money for the lawful purpose of purchasing a motorcycle for personal transportation, while the state argued the motorcycle would have been used for drug dealing.

“Ultimately, Abbott’s affidavit created a genuine issue of material fact as to the State’s entitlement to the res,” Bailey wrote. “We therefore conclude that the trial court improperly granted summary judgment and we reverse and remand for further proceedings regarding the res.”

The COA opinion added that the panel was “concern(ed) that the trial court characterized the State’s designated evidence as ‘overwhelming.’” The panel reminded trial courts that forfeitures “are not favored” and that “’weighing [evidence] – no matter how decisively the scales may seem to tip – [is] is a matter for trial, not summary judgment.’”

Abbott also brought an appellate challenge to the denial of his request for counsel. The COA held that he was not entitled to counsel at public expense, but because the money in the res is still his, he has the means to fund his own defense.

“We ultimately find no statute precluding a court from (1) considering the res when examining a person’s means or (2) allowing use of the res for the limited purpose of funding a defense to forfeiture,” Bailey wrote. “Not only do we discern no statutory impediment here, allowing use of the res harmonizes the pertinent statutes and is consistent with Indiana law.

“Indeed, it is especially notable that Indiana Code Section 34-24-2-4(c), which applies to this appeal, expressly provides that the res ‘is considered to be in the custody of [law enforcement], subject only to order of the court,’” Bailey continued. “Allowing use of the res is such an order of the court.

“… Ultimately, in light of the parties’ competing interests in the res and in view of Appellate Rule 66(C)(1), which permits us to grant ‘any … appropriate relief,’ we conclude that a defendant in a civil forfeiture proceeding is not excluded from using the res to retain counsel, purchase a transcript if needed, and pay for other reasonable expenses associated with preparing a defense. … Thus, on remand, we instruct the court to allow Abbott to use the res for these limited purposes.”

On remand, the trial court was instructed to “adopt reasonable procedures to supervise expenditures from the res.

Judge Leanna Weissmann fully concurred, but Judge Nancy Vaidik penned a partial dissent, writing that she would not allow Abbott to use the seized cash to pay for an attorney.

“Based on his criminal convictions and the evidence seized from his house, I do not believe the trial court erred in concluding Abbott is unlikely to prevail in his defense and denying him appointed counsel under the statute,” Vaidik wrote. “This is where the analysis should end – an affirmation of the trial court’s ruling on Section 34-10-1-2 and a reversal of the order granting summary judgment.

“… While I recognize there has been prosecutorial overreach in civil-forfeiture cases requiring our intervention, this is not one of those cases. And when there is abuse, the judiciary has appropriate remedies to address such issues – holding the State to its burden of proof, overturning statutes based on constitutional violations, and appointing an attorney under the civil-appointment statute,” Vaidik continued. “… We are not handcuffed as a judiciary. But we cannot substitute our will for the legislature and circumvent a detailed statutory scheme using equity to provide our desired relief.”

In a footnote, Vaidik pointed to Senate Bill 24, which was introduced in the General Assembly this year to, among other things, extend the right to counsel to owners of seized property in forfeiture actions. The majority of judges Bailey and Weissmann acknowledged the bill but added that “we cannot know whether the bill will be enacted as currently drafted.”

At IL deadline, SB 24 had been assigned to the Senate Judiciary Committee but had not been scheduled for a hearing.

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