United States of America v. $70,670.00 in U.S. Currency et al
Filing
167
ORDER denying 139 Motion to Alter Judgment; denying 141 Motion for Attorney Fees. Signed by Judge Darrin P. Gayles on 1/3/2018. (hmo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-CV-23616-GAYLES/TURNOFF
UNITED STATES OF AMERICA,
Plaintiff,
v.
$70,670 IN U.S. CURRENCY, et al.,
Defendants.
_____________________________________/
ORDER
THIS CAUSE comes before the Court on Claimants’ Motion to Alter or Amend Order
Dismissing Case Entered on August 10, 2017 [ECF No. 139] and Claimants’ Motion for Attorney
Fees, Costs, and Interest [ECF No. 141]. The Court held a hearing on the motions on December 15,
2017. [ECF No. 165]. The Court has carefully reviewed the motions, the record, arguments of
counsel, and the applicable law, and is otherwise fully advised. For the reasons that follow, the
motions are denied.
I.
BACKGROUND
In September 2015, the government filed its Complaint for Forfeiture In Rem [ECF No. 1],
alleging that over $200,000 in cash and cashier’s checks were the proceeds of or traceable to drug
trafficking, transportation of stolen goods in interstate commerce, and money laundering by
Wilson Colorado (“Colorado”). [Id. at 6–7]. The assets were found and seized when law
enforcement officers conducted a search of the home Colorado shared with Miladis Salgado
(“Salgado”), his ex-wife. In November 2015, Colorado, Salgado, and a company owned by
Colorado, Kurvas Secret by W, Inc. (“Kurvas Secret”) (collectively, “Claimants”), entered
verified claims for the assets. [ECF No. 22].
Meanwhile, AnnChery Fajas USA, Inc. (“AnnChery”)—a company that employed an
associate of Colorado’s, Tatiana Alejandra Narvaez-Caicedo (“Narvaez-Caicedo”)—filed an
action in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, alleging that
Colorado had aided a scheme to steal clothing from AnnChery. [ECF No. 110-3]. The stolen goods
counts alleged in the federal forfeiture action are related to AnnChery’s claims—in other words,
AnnChery is the victim of some of the alleged crimes forming the basis of the federal forfeiture
action. In November 2016, the state court entered judgment in favor of AnnChery and against
Colorado and Kurvas Secret, but reserved ruling on the award of damages and attorney’s fees.
[ECF No. 110-8]. In April 2017, the state court awarded AnnChery $318,520.70 in damages and
attorney’s fees. [ECF No. 117-1]. In July 2017, the state court authorized AnnChery to levy on
property of Colorado and Kurvas Secret, including its claims in this federal forfeiture action, and
assigned Colorado’s rights in the Defendants In Rem to AnnChery. [ECF No. 134-1].
On March 27, 2017, Claimants moved for summary judgment. [ECF No. 108]. Four days
later, the government filed its Motion for Summary Judgment on Second and Third Claims of the
Verified Complaint, or in the Alternative, Motion for Leave to Dismiss Action Without Prejudice
[ECF No. 110]. The government argued that in light of the state court action, there were no
genuine issues of triable fact as to the second and third forfeiture counts relating to stolen property,
but argued in the alternative that the Court should allow the government “to voluntarily dismiss
this matter so that ownership of the Defendants In Rem can be resolved by the Miami-Dade Circuit
Court.” [Id. at 4]. The Court granted the motion in part, finding good cause to permit the
government to voluntarily dismiss the action without prejudice in light of the parallel state court
action. [ECF No. 133]. Only after the Court granted the government’s motion, Claimants objected
that the dismissal should be with prejudice so that they could seek statutory attorney’s fees. [ECF
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No. 136]. The Court entered a final order of dismissal without prejudice on August 10, 2017. [ECF
No. 138].
In the instant motions, Claimants seek (1) to alter the dismissal without prejudice to a
dismissal with prejudice and (2) to be awarded attorney’s fees in light of the dismissal with
prejudice.
II.
MOTION TO ALTER OR AMEND ORDER DISMISSING CASE
A.
Legal Standard
Under Rule 41 of the Federal Rules of Civil Procedure, a plaintiff may unilaterally
voluntarily dismiss an action only before the opposing party has served either an answer or a
motion for summary judgment. See Fed. R. Civ. P. 41(a)(1). After the defendant has answered or
moved for summary judgment, a plaintiff seeking to voluntarily dismiss her complaint must obtain
a court order, which the court may issue “on terms that the court considers proper.” See id.
41(a)(2). “Unless the order states otherwise, a dismissal under [Rule 41(a)(2)] is without
prejudice.” Id. “The purpose of Rule 41(a)(2) ‘is primarily to prevent voluntary dismissals which
unfairly affect the other side, and to permit the imposition of curative conditions.’” Arias v.
Cameron, 776 F.3d 1262, 1268 (11th Cir. 2015) (quoting McCants v. Ford Motor Co., Inc., 781
F.2d 855, 856 (11th Cir. 1986)).
In most circuits, the district courts must apply some variation of a multi-factor test to
determine if voluntary dismissal under Rule 41(a)(2) should be permitted. See 9 FED. PRAC. &
PROC. CIV. § 2364 (3d ed.), Westlaw (database updated April 2017). Unlike other circuits,
however, “the Eleventh Circuit does not rely on a list of factors to examine when considering a
Rule 41 motion.” Bradley v. MARTA, 2014 WL 4449874, *1 (N.D. Ga. 2014). Instead, in the
Eleventh Circuit, a “district court must ‘weigh the relevant equities and do justice between the
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parties in each case, imposing such costs and attaching such conditions to the dismissal as are
deemed appropriate.’” Pontenberg v. Bos. Sci. Corp., 252 F.3d 1253, 1256 (11th Cir. 2001)
(quoting McCants, 781 F.2d at 857).
Thus, “[t]he district court enjoys broad discretion in determining whether to allow a
voluntary dismissal under Rule 41(a)(2).” Pontenberg, 252 F.3d at 1255. “Generally speaking, a
motion for voluntary dismissal should be granted unless the defendant will suffer clear legal
prejudice other than the mere prospect of a second lawsuit.” Arias, 776 F.3d at 1268.
B.
Discussion
Claimants point out that although no set list of factors must be weighed, in determining
whether legal prejudice precludes a Rule 41 dismissal without prejudice, courts in this circuit have
frequently considered “the length of time and amount of resources spent by the defendant in
litigating the case, dilatory tactics by the plaintiff, and whether the defendant had a motion for
summary judgment pending when the dismissal was requested.” Jones v. Smartvideo Techs., Inc.,
No. 06-cv-2760, 2007 WL 1655855, *3 (N.D. Ga. 2007). Here, Claimants argue that the duration
of the litigation and their pending dispositive motion at the time the government requested
dismissal weigh against voluntary dismissal without prejudice. They further argue that loss of a
basis for statutory attorney’s fees constitutes plain legal prejudice.
It is true that the government’s request for voluntary dismissal in the instant action came
after eighteen months of litigation. But while the duration of the litigation may be relevant to
determine whether the balance of equities makes voluntary dismissal without prejudice
appropriate, it is not dispositive. See Pontenberg, 252 F.3d at 1256 (“Neither the fact that the
litigation has proceeded to the summary judgment stage nor the fact that the plaintiff’s attorney has
been negligent in prosecuting the case, alone or together, conclusively or per se establishes plain
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legal prejudice requiring the denial of a motion to dismiss.”). Here, the voluntary dismissal also
came after the alleged victim of the fraud underlying one of the bases for forfeiture prevailed in a
private civil suit in state court. The government then sought either summary judgment or voluntary
dismissal without prejudice to allow the funds to be distributed to the alleged victim. So while
Claimants indeed had a motion for summary judgment pending at the time of dismissal, so too did
the government. Nothing suggests to the Court that the government acted in bad faith or that the
government did not believe it had a meritorious case for forfeiture. Rather, it determined that in
light of the state court judgment and AnnChery’s claim to the assets, voluntary dismissal without
prejudice would be an adequate alternate resolution. In the interests of justice and to limit waste of
both judicial resources and the resources of the parties, this Court found voluntary dismissal
without prejudice to be the appropriate resolution of the instant action.
The cases Claimants rely on are inapposite. In United States v. Certain Real Property, 543
F. Supp. 2d 1291 (N.D. Ala. 2008), for instance, the district court found a dismissal with prejudice
appropriate where the claimant had been acquitted of the alleged offense that formed the basis for
the forfeiture action. Id. at 1292. The facts here are readily distinguishable. Although the
government did not ultimately indict Mr. Colorado for offenses relating to the bases for forfeiture,
he was found liable to the alleged victim in a related state court action.
Further, here, as in other cases upheld by the Eleventh Circuit, the Court imposed “curative
conditions” on the voluntary dismissal. See, e.g., Pontenberg, 252 F.3d at 1256 (“Although the
district court found dismissal appropriate, it ordered that the court ‘should assess costs against
Plaintiff pursuant to Fed.R.Civ.P. 41(d)’ if Pontenberg re-files her action against Boston
Scientific.”). The Court’s Order Dismissing Case [ECF No. 138] mandated that if the government
refiles the case, Claimants will then be entitled to costs expended in defending this dismissed
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action. The Court believes that under the unique circumstances here, this condition was all that was
necessary to do justice among the parties.
Finally, Claimants argue that a dismissal without prejudice here plainly prejudices
Claimants because it prevents them from obtaining statutory attorney’s fees pursuant to the Civil
Asset Forfeiture Reform Act of 2000, 28 U.S.C. § 2465(b)(1) (2012) (“CAFRA”). First, this
argument is untimely. Claimants did not raise the issue of attorney’s fees in response to the
government’s motion. Rather, they raised the issue for the first time only after the Court had
granted the motion for voluntary dismissal without prejudice. Thus, the Court finds that Claimants
waived this argument and that reconsideration on this basis is inappropriate.1 But even absent
waiver, the Eleventh Circuit has not addressed whether loss of an argument for attorney’s fees
pursuant to CAFRA constitutes legal prejudice that should preclude voluntary dismissal without
prejudice, and the Court does not believe that the facts of this case warrant that determination.
Nothing before the Court indicates bad faith on the part of the government. Here, the government
determined that it was willing to forego trial on what it believed to be a meritorious forfeiture
complaint in light of the alleged victim’s state court judgment.
For the foregoing reasons, the Court determines that its dismissal without prejudice
pursuant to Rule 41(a)(2) was appropriate given the equities in this case, and therefore declines to
alter or amend its Order.
1
See United States v. $32,820.56 in U.S. Currency, 106 F. Supp. 3d 990, 996–97 (N.D. Iowa
2015) (“In resisting the Government’s motion to dismiss without prejudice, the Claimants did not
argue that they would suffer legal prejudice in the form of a denial of fees under CAFRA. . . . If the
Claimants would have raised this issue in response to the Government’s motion to dismiss, it could
have been fully briefed and argued at that time. Unfortunately, that did not happen and the case has
been dismissed without prejudice. . . . I find that the Claimants waived this argument and that
reconsideration is therefore not appropriate.”).
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III.
MOTION FOR ATTORNEY’S FEES
Pursuant to 28 U.S.C. § 2465(b)(1), a claimant who “substantially prevails” in a civil
forfeiture action is entitled to collect from the United States “reasonable attorney fees and other
litigation costs reasonably incurred by the claimant,” together with statutory post-judgment
interest. The parties agree that CAFRA’s “substantially prevails” standard is equivalent to a
“prevailing party” standard. Thus, a dismissal without prejudice cannot trigger the statutory
entitlement because such a dismissal lacks the necessary “material alteration of the legal
relationship of the parties” with a corresponding “judicial imprimatur on the change.” Buckhannon
Bd. & Home Care, Inc. v. W. Va. Dept. of Health & Hum. Servs., 532 U.S. 598, 604–05 (2001)
(quoting Tex. State Teachers Assn. v. Garland Indep. Sch. Dist., 489 U.S. 782, 792–93 (1989)).
Having determined that a voluntary dismissal without prejudice was appropriate given the equities
in the instant matter, the Court finds no basis on which to award statutory attorney’s fees.
IV.
CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED as follows:
1. Claimants’ Motion to Alter or Amend Order Dismissing Case Entered on August 10, 2017
[ECF No. 139] is DENIED; and
2. Claimants’ Motion for Attorney Fees, Costs, and Interest [ECF No. 141] is DENIED.
DONE AND ORDERED in Chambers at Miami, Florida, this 3rd day of January, 2018.
________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE
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