US v. Arroyo-Bla

Filing

OPINION issued by Sandra L. Lynch, Appellate Judge; Rogeriee Thompson, Appellate Judge and William J. Kayatta , Jr., Appellate Judge. Unpublished. [14-1885]

Case: 14-1885

Document: 00116881662

Page: 1

Date Filed: 08/28/2015

Entry ID: 5933348

Not for Publication in West's Federal Reporter

United States Court of Appeals
For the First Circuit
No. 14-1885
UNITED STATES OF AMERICA,
Appellee,
v.
YESENIA VALENTIN-ACEVEDO,
Claimant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. García-Gregory, U.S. District Judge]

Before
Lynch, Thompson, Kayatta
Circuit Judges

Anita Hill Adames, on brief for appellant.
Rosa Emilia Rodriguez-Velez, United States Attorney, with
whom Nelson-Pérez-Sosa, Assistant United States Attorney and
Francisco A. Besosa-Martínez, on brief, for appellee.

August 28, 2015

Case: 14-1885

Document: 00116881662

Page: 2

KAYATTA, Circuit Judge.

Date Filed: 08/28/2015

Entry ID: 5933348

This appeal arises out of an

order by the district court rejecting the validity of ValentinAcevedo's claimed interest in property forfeited to the United
States by Valentin-Acevedo's former husband in connection with his
guilty plea on charges of an illegal drug conspiracy.

Finding

that Valentin-Acevedo failed to submit to the district court any
evidence

sufficient

to

support

the

validity

of

her

claimed

interest, we affirm.
I.

Background

The forfeited property at issue in this appeal is the
real property known as the Rompe Olas Bar.

It is undisputed that

defendant Miguelito Arroyo-Blas acquired the bar in February 2007,
and that only his name was on the 2007 deed. As part of his plea
agreement, Arroyo-Blas agreed to forfeit the bar.
undisputed

that

the

government's

interest

in

It is also
Arroyo-Blas's

interest in the bar vested when the drug conspiracy began in June
2007.

See 21 U.S.C. § 853(c) (government's interest in property

subject to forfeiture vests "upon commission of the act giving
rise to forfeiture").
When the government asserts ownership of property by
virtue of forfeiture in connection with a criminal proceeding,
there is some chance that a person other than the target of the
criminal charges may possess an ownership interest in the property.
The principal statute regulating criminal forfeitures, 21 U.S.C.
- 2 -

Case: 14-1885

Document: 00116881662

Page: 3

Date Filed: 08/28/2015

Entry ID: 5933348

§ 853, recognizes two situations in which the interests of such
third

parties

trump

those

of

the

government.

First,

under

§ 853(n)(6)(A), a third party might establish that, before the
government

interest

in

the

property

vested,

the

third

party

acquired (and has since maintained) a vested interest in the
property superior to any interest of the criminal defendant.
Second, under § 853(n)(6)(B), the third party might show that she
is a bona fide purchaser without cause to believe that the property
was subject to forfeiture.
Seeking to assert a protected interest in the bar under
this statutory scheme, Valentin-Acevedo filed a verified petition
under § 853(n)(2) asking the court to adjudicate the validity of
her claimed interest.

As her sole ground for claiming a valid

interest, Valentin-Acevedo declared that she acquired the property
by deed as the defendant's wife on February 26, 2008. The petition
made no claim that, as of that date, Valentin-Acevedo had no cause
to believe that the property was subject to forfeiture as a result
of the government's interest that vested in June 2007.

In other

words, the verified petition did not set forth facts that would
justify a ruling in favor of Valentin-Acevedo.
The district court nevertheless allowed Valentin-Acevedo
and the government three months of discovery, with motions for
summary judgment due one month after the end of discovery, and a
forfeiture hearing to be held afterwards.
- 3 -

After discovery ended,

Case: 14-1885

Document: 00116881662

Page: 4

Date Filed: 08/28/2015

Entry ID: 5933348

the government filed a motion to dismiss or, in the alternative,
motion for summary judgment. In her opposition to the government's
motion, Valentin-Acevedo submitted no actual evidence beyond the
facts she verified in her petition.

Instead, she simply argued in

a brief that, in 2008, the 2007 deed to Arroyo-Blas was amended to
reflect that Valentin-Acevedo was married to Arroyo-Blas at the
time

of

the

conveyance.

The

district

court

granted

the

government's motion, apparently on two grounds: (1) the thirdparty petition failed to state a claim; and (2) applying the
summary judgment standard, Valentin-Acevedo did not generate a
factual dispute because she failed to provide any evidence or
documentation to back up her allegations.
Valentin-Acevedo filed a motion to reconsider, claiming
that the district court must conduct an ancillary proceeding under
Fed. R. Crim. P. 32.2 (by which she apparently meant a hearing) to
give her an opportunity to provide the court with the necessary
supporting documentation.

The district court denied her motion

without explanation.
II.

Governing Law

21 U.S.C. § 853(n) provides the only means for third
parties to claim an interest in property subject to criminal
forfeiture.

See Libretti v. United States, 516 U.S. 29, 44 (1995)

("[T]hird-party

claimants

can

establish

their

entitlement

to

return of the assets only by means of the hearing afforded under
- 4 -

Case: 14-1885

Document: 00116881662

21 U.S.C. § 853(n).").

Page: 5

Date Filed: 08/28/2015

Entry ID: 5933348

To trigger the procedure, a third party

must file a petition signed under penalty of perjury that "set[s]
forth the nature and extent of the petitioner's right, title, or
interest in the property, the time and circumstances of the
petitioner's acquisition of the right, title, or interest in the
property, any additional facts supporting the petitioner's claim,
and the relief sought."

21 U.S.C. § 853(n)(3).

To prevail, a

petitioner must show by a preponderance of evidence that she had
a valid legal interest in the property so as to satisfy one of the
two alternatives set out in § 853(n)(6).

Section 853(n) sets out

procedures for conducting a hearing, see id. § 853(n)(2), (4)-(5),
but is silent on prehearing procedure and dispositive motions.
Federal Rule of Criminal Procedure 32.2(c) fills that
gap.

Rule 32.2(c)(1) requires the court to conduct an "ancillary

proceeding" on a third-party non-money judgment claim, but clearly
contemplates that that proceeding may not require an evidentiary
hearing.

Rule 32.2(c)(1)(A) provides that "the court may, on

motion, dismiss the petition for lack of standing, for failure to
state a claim, or for any other lawful reason," taking the facts
in the petition to be true.

In addition, "[a]fter disposing of

any [motion to dismiss] and before conducting a hearing on the
petition, the court may permit the parties to conduct discovery in
accordance with the Federal Rules of Civil Procedure."
Crim. P. 32.2(c)(1)(B).

Fed. R.

And, importantly for this appeal, "[w]hen
- 5 -

Case: 14-1885

Document: 00116881662

Page: 6

Date Filed: 08/28/2015

Entry ID: 5933348

discovery ends, a party may move for summary judgment under Federal
Rule of Civil Procedure 56."
III.
Valentin-Acevedo's
deficient.

Id.
Analysis
third-party

claim

is

doubly

The verified facts, all set forth in her petition,

reveal that she acquired the property well after the date that the
government's interest vested, and provided no evidence at all that
she then had no cause to believe that the property was subject to
foreclosure.

Her claim in her brief that there is a document that

retroactively amends the February 2007 deed to reflect her interest
is backed up by no evidence, and in any event fails to establish
that her interest, even in an amended deed, would have been
superior to her husband's.
For these simple reasons the district court properly
granted the government's motion for summary judgment, Fed. R. Civ.
P. 56(a), (e)(3); Fed. R. Crim. P. 32.2(c)(1)(B).
affirm the judgment of the district court.

- 6 -

We therefore