United States of America v. Real Property Located at 6415 North Harrison Avenue, Fresno, Fresno County, California, APN: 407-751-08

Filing 47

ORDER GRANTING 20 Motion to Withdraw as Counsel; ORDER DENYING Motion to Appoint Counsel; ORDER GRANTING 23 Extension of Time to File an Answer signed by Magistrate Judge Gary S. Austin on 9/20/2011. Initial Scheduling Conference set for 11/1/2011 at 09:30 AM in Courtroom 10 (GSA) before Magistrate Judge Gary S. Austin.(Bradley, A)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 UNITED STATES OF AMERICA, 11 12 13 14 15 16 17 18 ) ) Plaintiff, ) ) v. ) ) REAL PROPERTY LOCATED AT ) 6415 NORTH HARRISON AVENUE, ) FRESNO, FRESNO COUNTY, ) CALIFORNIA, APN: 407-751-08, ) INCLUDING ALL APPURTENANCES ) AND IMPROVEMENTS THERETO, ) ) ) Defendant. ) ) ____________________________________ ) CASE NO. 1:11-cv-00304 LJO-GSA ORDER GRANTING MOTION TO WITHDRAW AS COUNSEL ORDER DENYING MOTION TO APPOINT COUNSEL ORDER GRANTING EXTENSION OF TIME TO FILE AN ANSWER (Docs. 20 and 23) 19 20 I. Introduction 21 On February 22, 2011, Plaintiff, United States of America (“United States” or “the 22 government”), filed a complaint for forfeiture of Defendant Real Property located at 6415 North 23 Harrison Avenue, Fresno, California (“the subject property”). (Doc. 1). On July 7, 2011, Brenda 24 Grantland, counsel for Claimant Bok Hee Ee (“Claimant” or “Ms. Ee”), filed a motion to allow 25 her to withdraw as counsel, as well as an application for court appointed counsel pursuant to 18 26 U.S.C. § 983(b)(2)(A). (Doc. 20). On July 11, 2011, the United States filed a response. (Doc. 27 21). On July 12, 2011, Claimant filed a motion for extension of time to file an answer to the 28 1 complaint and a reply to the United States’ response. (Doc.23).1 She also filed a supplement 2 memorandum in support of her requests on July 26, 2011. (Doc. 28). 3 On July 27, 2011, this Court ordered supplemental briefing. (Doc. 30). On August 10, 4 2011, Claimant filed a second declaration. (Doc. 38). The United States filed an opposition on 5 August 24, 2011. Claimant filed a Reply on August 31, 2011. (Doc. 41). The matter was set for 6 hearing on September 9, 2011. The Court took the matter under submission pursuant to Local 7 Rule 230(g) on September 8, 2011. (Doc. 54). Upon a review of all of the pleadings, the Motion 8 to Withdraw as Counsel is GRANTED. The Motion for Appointment of Counsel is DENIED. 9 The Motion for an Extension of Time to File an Answer is GRANTED. 10 11 II. The Motion to Withdraw as Counsel Ms. Grantland filed the Motion to Withdraw on the basis that she currently represents the 12 Claimant and Claimant’s daughter who are joint tenants of the subject property. Since the time 13 Ms. Grantland was retained, she contends that a conflict has arisen between her two clients. In 14 particular, she asserts pleadings filed in this case by the United States indicate that Claimant has 15 been under investigation as a co-conspirator in the underlying criminal case against Claimant’s 16 husband in United States v. Kwan Choi, 1:10-cr-206 OWW. Although Claimant has not been 17 indicted, counsel argues that her two clients now have divergent interests. Initially, both clients 18 had an innocent owner defense, however, if Ms. Ee were to reveal any Fifth Amendment 19 privileged information, Ms. Grantland’s representation of both clients would be compromised. 20 Ms. Grantland contends that California Rule of Professional Conduct 3-310(C) requires that she 21 withdraw since Ms. Ee is unwilling to sign a written consent waiving the conflict. Additionally, 22 although counsel has handled some criminal matters, criminal law is not her area of expertise and 23 she believes Claimant would be better served by an attorney who specializes in that area. 24 25 26 27 28 1 These motions were originally noticed before District Judge Oliver W . W anger. Judge W anger requested that the motions be reset and considered by Magistrate Judge Sheila K. Oberto who took the matter under submission. (Doc. 24.) The case was reassigned to the undersigned on July 19, 2011, due to Judge Oberto’s recusal. (Doc. 25). 2 1 The government argues that there currently is no conflict of interest because Ms. Ee has not 2 been criminally indicted. Moreover, the United States contends that counsel appears to be using the 3 alleged conflict as a basis to support Claimant’s request for court appointed counsel. 4 Rule 3-310(C)(2) of the California Rules of Professional Conduct prohibits counsel from 5 representing clients with adverse interests unless the client gives informed written consent. Rule 3- 6 310 (C)(2) of the California Rules of Professional Conduct; Cal West Nurseries, Inc. v. Superior 7 Court, 129 Cal. App. 4th 1170, 1175 (2005). In the Ninth Circuit, the California Rules of 8 Professional Conduct are interpreted according to California state law. Image Technical Services, 9 Inc. v. Eastman Kodak Co., 820 F.Supp. 1212, 1215 (N.D. Cal. 1993). Under California law, an 10 adverse interest is one that is hostile, opposed, antagonistic, detrimental, or unfavorable to one’s own 11 interests. Ames v. State Bar, 8 Cal. 3d 910, 917 (1973). An attorney-client conflict of interest exists 12 when an attorney must contend or assert a position on behalf of one client, that he must oppose on 13 behalf of another client. Flatt v. Superior Court, 9 Cal. 4th 275, 282 fn 2 (1994). 14 In this case, counsel has argued that an actual conflict exists because Claimant may be 15 criminally prosecuted in the future. The United States contends that there is no actual conflict 16 because no indictment has been filed. At this juncture, it is unclear whether an indictment may be 17 filed which at a minimum creates a potential conflict. The issue of whether this situation is a 18 potential or actual conflict is of no consequence because both forms of conflict requires a written 19 waiver. Rule 3-310 (C)(2) of the California Rules of Professional Conduct. In this instance, 20 Claimant has indicated that she is not willing to sign a consent to continued joint representation. 21 Thus, Ms. Grantland’s continued representation of Claimant and her daughter is not appropriate. 22 Moreover, counsel has indicated that given her limited experience in criminal law, she believes 23 counsel with criminal law expertise would better represent Claimant’s interest. This Court will not 24 require Ms. Grantland to continue representing Claimant under these circumstances. Accordingly, 25 the Motion to Withdraw as Counsel is GRANTED. 26 /// 27 /// 28 /// 3 1 2 III. The Motion to Appoint Counsel Claimant requests that she be appointed counsel pursuant to the Civil Asset Forfeiture 3 Reform Act (“CAFRA”) which provides that a claimant may be appointed counsel in a judicial 4 forfeiture proceeding if the claimant is financially unable to obtain representation by counsel and 5 the property subject to forfeiture is real property that is being used by the person as a primary 6 residence. 18 U.S.C. § 983(b)(2)(A). Claimant argues that she qualifies under this provision 7 because she has no funds to pay for counsel and the subject property is her primary residence. 8 The government opposes the appointment of counsel on the basis that Claimant has not lived at 9 the subject property for over three years. Moreover, the government alleges Claimant is 10 financially able to pay for counsel as evidenced by the fact that she recently transferred 11 approximately $400,000.00 to accounts in Korea. 12 Claimant concedes that she has not lived at the residence since March 2008 when she 13 moved to Korea. See, Declaration of Bok Hee Ee dated August 8, 2011 at ¶ 3. (Doc. 38 at pg. 3- 14 4). She returned to the United States in March of 2011 and moved to her daughter’s house 15 because she did not have any money. Id. Claimant alleges that while she was living in Korea she 16 intended to return to the subject residence. Id. She left her belongings at the house and allowed 17 a friend to stay there in her absence. Id. While she was gone, she kept the subject property as the 18 address listed on all of her bank accounts, tax documents, and drivers license and she set up 19 automatic payments to pay her monthly bills. Id. Claimant alleges that during her absence, her 20 friend stole her identity including taking out credit cards her name and making deposits and 21 withdrawals from her bank account. As a result, she has no money and her credit is ruined. Id. 22 She has rented out the subject property because she did not have a car or the money to pay the 23 mortgage when she returned to the United States. She is currently living with her daughter and 24 caring for her grandchild, however, she intends to move back into the residence when she is 25 financially able to do so. Id. at ¶¶ 4-5. 26 The issue in this case is whether the subject property can be considered Plaintiff’s 27 primary residence in light of her extended absence from the residence. As noted by both parties, 28 4 1 there are no cases that define the term “primary residence” in the context of the CAFRA statute. 2 However, the definition of this term in other contexts is instructive. 3 The term “primary residence” is a term of art. There are differing definitions in the Code 4 of Federal Regulations depending on the agency interpreting this term, however, all appear to 5 have the common theme that an individual must reside at the residence for a substantial portion 6 of the year: 7 8 9 10 11 12 13 14 15 16 Primary residence means the dwelling where the mortgagor maintains his or her permanent place of abode and typically spends the majority of the calendar year. A mortgager can only have one primary residence. 24 C.F.R. §§ 257.7 and 4001.07 (both relating to the Hope for Homeowners Program). Primary residence means the dwelling where the applicant normally lives during the major portion of the calendar year, a dwelling which is required because of proximity to employment, or to agricultural activities as referenced in paragraph (c)(1)(ii) of this section. 44 C.F.R. § 206.111 (relating to FEMA federal disaster assistance) Claimant means a person who has occupied and used a cabin or other structure as a primary, permanent resident for a substantial portion of the time, and who, when absent, has the intention of returning to it as his/her primary permanent residence. Factors demonstrating a person’s primary residence include, but are not limited to, documentary evidence, e.g. the permanent address indicated on licenses issued by the State of Alaska and tax returns and the location where the person is registered to vote. 36 C.F.R. 13.104 (relating to cabins in the National Park System) 17 18 Even under California law, a person is considered to be a resident if the individual is in 19 the state for more than a temporary or transitory purpose. Cal. Rev. & Tax § 17014. A person 20 who spends more than nine months in California shall be presumed to be a resident. Cal. Rev. & 21 Tax § 17016. Conversely, any individual absent from the state for an uninterrupted period of at 22 least 546 consecutive days under an employment related contract is considered outside this state 23 for other than a temporary or transitory purpose. Cal. Rev. & Tax § 17014 (d). This exemption 24 also applies to spouses who accompany their spouses for work purposes for at least 546 25 consecutive days. 26 Claimant urges the Court to employ a multi-faceted test to determine this issue. She 27 notes that other Courts have examined a variety of factors to define primary residence for the 28 purposes of insurance litigation and have held that an analysis of the totality of the circumstances 5 1 is required. See, State Farm Fire and Cas. Co v. Lange, 2011WL 149482 at * 5 (S.D. Tex. Jan 2 18, 2011). Factors the courts have considered include : 1) how transient a person is, 2) how long 3 he or she has resided in a residence, 3) where the person’s belongings are, 4) what address is 4 listed on important documents, 5) whether a person rents or owns the property, 6) whether he or 5 she plans to vacate the premises, 7) whether the residence is shared by others, 8) whether a blood 6 relationship exists between the individual and the other people living in the residence, 9) whether 7 the person has full and free access to the residence and its contents, and 10) the subjective views 8 of others living at the residence. Id. 9 However, in State Farm Fire and Cas. Co. v. Lange, the Court noted that where a person 10 spends the majority of time is the most important factor. State Farm Fire and Cas. Co v. Lange, 11 2011WL 149482, at * 6. Applying these factors to that case, the Court determined that Lange’s 12 parent’s address could not be considered his primary residence when he had been living in an 13 apartment for thirteen months. The Court made this determination despite the fact that Lange 14 kept many of his belongings at his parent’s house, both he and his parents testified that his stay in 15 the apartment was only temporary, and he had listed his parent’s address on a number of 16 important documents. Id. In doing so, the Court noted that these facts were “not enough, 17 however, to overcome the stronger evidence supporting a finding that [the apartment] was his 18 primary residence, including the fact that he spent the majority of his time there. The Court has 19 found no case in any jurisdiction where the term ‘primary residence’ was determined so as to 20 afford coverage.” Id. Applying this reasoning to the instant case, the subject property can not be 21 considered Plaintiff’s primary residence as she spent the majority of her time at another residence 22 in Korea. 23 Finally, Claimant argues that the legislative history of CAFRA indicates that this Court 24 has broad latitude when determining whether to appoint counsel. (Doc. 41 at pgs. 8-13). She 25 cites several of the proposed versions of the statute that allowed for the representation of counsel 26 even in cases where the property to be seized was not the primary residence. However, the fact 27 that the enacted version of the statute is more limiting indicates that Congress clearly intended 28 that appointment of counsel is to be granted only in cases where the subject property is the 6 1 primary residence. Even in the cases Claimant cited where counsel was appointed under 2 CAFRA, the claimants spent some time during the year at the residence in question. 3 Here, Claimant has not resided at the property or even in the United States for over three 4 years. Although she contends that she stored her belongings at the house and kept the address 5 listed on several documents, she did not return to the residence when she came back to the 6 United States. Instead, she rented the property out and is living with her daughter. While the 7 Court is sympathetic to the circumstances influencing Claimant’s decision to live with her 8 daughter, she nevertheless does not qualify for appointment of counsel. Accordingly, the Motion 9 to Appoint Counsel is DENIED. 10 Given the Court’s finding regarding the Claimant’s primary residence, it is not necessary 11 to assess Claimant’s ability to pay for counsel. It is noted however that the United States argues 12 that Claimant transferred monies in the sum of approximately $400,000.00 to Korea and she is 13 therefore able to pay for counsel. The parties are advised that these facts were not considered. 14 Although the government supplied a very organized graph of these transactions, it did not submit 15 any evidence for the Court’s review. As noted in this Court’s previous order, the representations 16 of counsel, without more, are not evidence. 17 IV. Motion for Extension of Time 18 In light of the above, Claimant’s request for an extension of time to file an answer is 19 GRANTED. Plaintiff shall file her answer no later than October 27, 2011. A Scheduling 20 Conference is scheduled for November 1, 2011 at 9:30 am before the undersigned in Courtroom 21 10. The parties shall submit a joint scheduling conference statement that contains the information 22 outlined in Judge Wanger’s order dated February 22, 2011 (Doc. 4) no later than October 26, 2011. 23 V. Conclusion 24 Based on the forgoing, IT IS HEREBY ORDERED that : 25 1) The Motion to Withdraw as counsel is GRANTED. Ms. Grantland shall provide Claimant 26 27 with copies of the relevant materials from her case file no later than September 30, 2011; 2) The Motion to Appoint Counsel is DENIED; 28 7 1 2 3) The Motion for an Extension of time is GRANTED in accordance with the deadlines set forth in this order. 3 Claimant is cautioned that she no longer has the assistance of an attorney and it is 4 recommended that she seek further legal assistance. If Claimant does not retain another attorney to 5 represent her, she is responsible for complying with all Court rules and applicable laws. Failure to 6 do so, or failing to comply with any order of this Court, including following the instructions 7 outlined in this order, may result in sanctions including an entry of entry of judgment against 8 her. 9 10 11 12 13 IT IS SO ORDERED. Dated: 6i0kij September 20, 2011 /s/ Gary S. Austin UNITED STATES MAGISTRATE JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8

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