UNITED STATES OF AMERICA v. Sampson Personal Property, et al

Filing 24

ORDER granting 22 Motion to Set Aside Default; granting 23 Motion to Set Aside Default. The Entry of Default 20 and Default Judgment 21 are SET ASIDE. The Clerk of Court is DIRECTED to cause the claimants' separate proposed Answers appe nded to their motions to be filed and docketed, and to continue administration of this case according to the proceedings of this district. Counsel is reminded to read the order in its entirety for further information. Signed by Senior Judge James C. Fox on 11/2/2011. (Edwards, S.)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NORTH CAROLINA

SOUTHERN DIVISION

NO.7:11-CV-7S-F
UNITED STATES OF AMERICA,
Plaintiff,

v.
SAMPSON PERSONAL PROPERlY,
DESCRIBED AS FOLLOWS:
A 2007 HAULMARK TRAILER,
VIN: 16HPB12267G09074S;
A 2008 POLARIS SPORTSMAN 800
RECREATIONAL VEHICLE,
VIN: 4XADN7GM8A26S397;
A 2008 POLARIS RANGER RZR 800
RECREATIONAL VEHICLE,
VIN: 4XAVH76A88D32S336;
A 2008 POLARIS RANGER RZR 800
RECREATIONAL VEHICLE,
VIN: 4XAVN76A080337223;
A 2007 KAWASAKI ZX1400A MOTORCYCLE,
VIN: JKBZXNAI87AoI7839;
A 2008 BOURGET COBRA MOTORCYCLE,
VIN: IB9BCY8A78A393049;
A 2004 KAWASAKI NINJAZX10-R
MOTORCYCLE,
VIN: JKAZXCCIX4A002809;
A2009 KAWASAKI KX2S0-W
MOTORCYCLE,
VIN: JKAKXMWC09AooI63S;
A 2006 KAWASAKI KX4soD6F
MOTORCYCLE,
VIN: JKAKXGDC46AoOI63S;
A 2007 YAMAHA YZ8SWI
MOTORCYCLE,
VIN: JYACB09C27Aolls06;
A 2010 CHEVROLET CAMARO
AUTOMOBILE,
VIN: 2GIFKIEJ8A9131S44;
A 200S KAWASAKI KLXllO-M
MOTORCYCLE,
VIN: JKALXSAllSDA288S2;
A 2007 CHEVROLET EXPRESS VAN,
VIN: IGAHG39US71198139;
A 200S YAMAHA YFZ4soT ATV,
VIN: JY4AJllY2so030021;
A 2006 BOMBARDIER OUTLANDER

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ORDER

MAX AlV (TRAILER),

VIN: 23VEPCH116Vo0034S;

A 2006 SEADOO GTI 4TEC

WATERCRAFf,

HIN: YDVS2906E606;

A 2008 KAWASAKI NINJA

MOTORCYCLE,

VIN: JKAZX4P1X8A04378S;

A 2005 CHEVROLET G3S00 EXPRESS,

VIN: 1GAHG39U7S1170923;

A 2007 CADILLAC ESCALADE,

VIN: 1GYFK63807R372186;

A 2008 HAULMARK TRAILER,

VIN: 16HGB24278G093061;
A 2008 CHEVROLET SILVERADO,
VIN: 1GCHK23608F106014;
A 2008 QUEEN COBRA,
VIN: 1B9BCY8A78A398049;
A 2007 KTM 6SSX,
VIN: VBKMRA23S7M017687;
AND ANY AND ALL ATTACHMENTS
THERETO; AND ANY AND ALL
PROCEEDS FROM THE SALE OF SAID
PROPERlY,
Defendants.

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This matter is before the court on the uncontested motions [DE-23 & -22] filed by
claimants Andetra Michelle Sampson and Romanual Lynn Sampson, respectively, to Set Aside
Entry of Default [DE-20] and Default Judgment [DE-21] in this civil forfeiture proceeding.
According to the Assistant United States Attorney's affidavit [DE-16] of July 15, 2011, the
Sampson claimants filed timely verified individual pro se Claims of Interest in this matter on
June 17 [DE-u] and June 20, 2011 [DE-12]. However, neither claimant filed a timely answer as
required by 18 U.S.C. § 983(a)(4)(B) and Rule G(S) of the Supplemental Rules for Admiralty or
Maritime Claims and Asset Forfeiture Actions ("Supplemental Rules").

2

The Government moved for Entry of Default [DE-17] and for Default Judgment [DE-18],
supported by the United States' Notification of Service [DE-ISV and Affidavit of Failure to
Plead or Otherwise Defend [DE-16J,2 The Government's motions seeking default do not
contain a copy of the documents that purportedly were served on the claimants. 3

However,

the Warrant of Arrest and Notice In Rem issued by the Clerk's Office on April 28, 2011, which
specifically is directed "To: THE UNITED STATES SECRET SERVICE WITHIN THE EASTERN
DISTRICT OF NORTH CAROLINA," contains the following two-sentence instruction:
YOU ARE, THEREFORE, hereby commanded to arrest, attach, and retain the
above-described property until the further order of this Court respecting the
same; to give due notice to all persons claiming the same, knowing or having
anything to say why the same should not be condemned and disposed of
pursuant to the prayer of the Complaint, that they must file their claims to the
property within thirty-five (3S) days after the earlier of (a) the date this Warrant
of Arrest and Notice In Rem is sent, as defined by Supplemental Rule G(4) (b)
(iv) or (b) from completed publication of the notice of filing of the Complaint, if
required, pursuant to Rule G(S) of the Supplemental Rules for Admiralty or
Maritime and Asset Forfeiture Claims, and shall serve and file their answers
within twenty-one (21) days after the filing of the claim, with the Office of the
Clerk, United States District Court, Eastern District of North Carolina, 310 New
Bern Avenue, P.O. Box 2S670, Raleigh, North Carolina 27601-1481, with a copy
thereof sent to Assistant U. S. Attorney, Stephen A. West, 310 New Bern Avenue,

1 Notification of Service [DE-IS] was made as to claimant Romanual Sampson only.
Therein, the Assistant United States Attorney stated that service was effected on Romanual
Lynn Sampson by certified mail on May 24, 2011, and was accompanied by "a copy of the
Complaint for Forfeiture in Rem and Warrant of Arrest and Notice In Rem," referencing Exhibit
A, which is a copy of a Postal Service return receipt. Presumably, the Notification was referring
to the Amended Complaint [DE-4], filed on April 26, 2011.

2
No proof of service was filed as to claimant Andetra Sampson, although the Assistant
United States Attorney's Affidavit of Failure to Plead contains the statement, "Examination of
the Court files and records shows that service of plaintiff's Complaint and the Warrant of Arrest
In Rem was made on Andetra Michelle Sampson, a potential claimant of the defendants, via
regular mail on approximately May 17,2011, by an agent ofthe U.S. Postal Service." Affidavit
[DE-16], ~ 3. The return receipt is not attached.

The Complaint from which this civil forfeiture action arises alleges that, "[t]his is a civil
action in rem brought to enforce the provision of 18 U.S.C. § 981(a)(I)(C) providing for the
forfeiture of property constituting or derived from proceeds traceable to violations of 18 U.S.C.
§§ 1029 and 1343." Section 1029 of Title 18 is entitled, "Fraud and related activity in connection
with access devices." Section 1343 concerns federal mail fraud.
3

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Federal Building, Suite 800, Raleigh, North Carolina 27601-1461. The claim
must, at a minimum, identify the specific property claimed, identify the claimant
and state the claimant's interest in the property, and be signed by the claimant
under penalty of perjury, as provided by Supplemental Rule G(5).
Warrant of Arrest and Notice In Rem [DE-6] ,pp. 3-4. The Government also filed a copy of an
Advertisement Certification Report [DE-14], Exhibit A, evidencing publication of notice
between May 3, 2011, and June 2, 2011. The Sampsons' timely Claims of Interest4 evidence
their receipt at some time prior to mid-June 2011, of actual notice ofthe forfeiture proceedings. s
They did not, however, thereafter file timely Answers.
Upon the Government's uncontested motions filed on July 15, 2011, the Clerk filed
Entry of Default on that same day [DE-20]. The undersigned directed Default Judgment on
August 10, 2011 [DE-21].
Two weeks after entry of the Default Judgment, both claimants filed individual pro se
Motions to Set Aside Default. See [DE-22 & -23]. Both declare that "although the Claim was
not designated as [an] 'Answer,' it contained information that answered the Government's
allegations, and affirmatively set out the bases of Sampson's claim." [DE-11 & -12],

~

4. The

claimants attached separate Proposed Answers to their respective "Motions to Set Aside
Default." The Government has filed no objection or other response to the claimants' motions.
The claimants' "Motions to Set Aside Default," [DE-22 & -23] cite Rule 55, Fed. R. Civ. P.
as the legal basis for those motions. Pursuant to Rule 55(c), Fed. R. Civ. P., "[t]he court may set
aside an entry of default for good cause, and it may set a side a default judgment under Rule

The Government asserts that it received the Claims of Interest on June 17th (Andetra)
and June 20th (Romanual). See Affidavit [DE-16], ~~ 7 & 8.
4

S Rule G (4)(b)(v), Supplemental Rules, provides that "A potential claimant who had
actual notice of a forfeiture action may not oppose or seek relief from forfeiture because of the
government's failure to send the required notice."

4

60(b)." The court perceives that the claimants seek to have both the entries of default and the
default judgments set aside.
The order of Default Judgment [DE-21], filed on August 10, 2011, is a final judgment
against all claimants. As such, any attempt to challenge the forfeiture is governed by Fed. R.
Civ. P. 60(b). See United States v. $39,000 U.S. Currency, No. 3:02CV281, 2006 WL 1431830,
at *2 (W.D.N.C. May 24, 2006). To obtain relieffrom a judgment under Rule 60(b), a moving
party first must establish that his motion is timely, that he has a meritorious defense to the
action, and that the opposing party would not be unfairly prejudiced by having the judgment set
aside. Park Corp. v. Lexington Ins. Co., 812 F.2d 894,896 (4th Cir. 1987). "If the moving party
makes such a showing, he must then satisfy one or more of the six grounds for relief set forth in
Rule 60(b) in order to obtain relief from the judgment." Id.
The claimants' explanation for their failure to file an Answer within the time required
suggests their omission was inadvertent. They point out that their verified Claims of Interest
contained information that answered the Government's allegations and affirmatively set out the
bases of their claims. That their Motions to Set Aside Default were filed only two weeks after
Judgment was entered indicates the claimants acted without undue delay and is consistent with
their expressed intent, contained in their Claims of Interest, to contest the instant forfeiture
proceedings.
According to the confidential declaration submitted by the Government in support of its
request for issuance of a Warrant for Arrest In Rem in this civil forfeiture case, the items of
personal property named as defendants herein allegedly were obtained from the proceeds of the
claimants' criminal conduct. The undersigned takes judicial notice of the criminal prosecution
ongoing in this district styled, United States v. Sampson, No. 7: 11-CR-76-1 & 2-FL (E.D.N.C.), in
which both Andetra Sampson and Romanual Sampson were arrested and detained pursuant to
a sealed Indictment, see [DE-1; -10], on June 28,2011. Both claimants have been represented
5

in that criminal case by individual appointed counsel since their arrest, and both ultimately
were released upon conditions, pending trial. The Government filed a Superseding Indictment
[DE-42] on August 16, 2011.
The Superseding Indictment alleges 43 counts Medicaid Fraud in violation of 18 U.S.C. §
1347, a Conspiracy to Defraud the United States in violation of 18 U.S.C. § 371, and one count of
Wire Fraud occurring on March 27,2008, in violation of 18 U.S.C. § 1343. It contains a notice
of the Government's intent to seek the criminal forfeiture of certain described real property as
well as United States currency in excess of $2 million, pursuant to 18 U.S.C. § 982(a)(7)
(criminal forfeiture of health care fraud proceeds).
Arraignments are scheduled in that criminal case before United States District Judge
Flanagan during her December 2011, term of court. Therefore, there are allegations of
wrongdoing contained in the confidential declaration supporting this civil forfeiture proceeding
and in a Superseding Indictment in United States v. Sampson, No. 7: 11-CR-76-1 & 2-FL
(E.D.N.C.), naming both claimants. Of course, the claimants are presumed innocent unless
proven guilty.
The claimants' motions do not address the "meritorious defense" factor, but both state in
their attached Proposed Answers that the "[u]ndersigned has a superior interest in the subject
properties, as set out in the incorporated Claim ofInterest." The Claims ofInterest [DE-11 and
-12] both purport to identify the specific property claimed, identify the claimant and state the
claimant's interest in the property, and are signed under penalty of perjury. The respective
Motions to Set Aside Default [DE-22 and -23] state that the Claims of Interest were served on
"the Assistant United States Attorney that filed the complaint." The Claims of Interest appear to
comply with the requirements of Rule G(s)(a).
The Government has not filed any response to the pending motions, which therefore are
uncontested. Apparently, the property has been seized and is in the custody of the Government.
6

This court carefully has considered the appropriate Rule 60(b)(1) factors in light of the
considerable deference to be afforded pro se litigants, cf. Noble v. Barnett, 24 F.3d 582,587 n.6
(4th Cir. 1994) ("pro se complaints, however unskillfully pleaded, must be liberally construed")
(citation omitted)), and the fact that the motions are uncontested. Under the circumstances,
the court concludes that the interests of justice support setting aside the Entry of Default and
Default Judgment, and permitting the claimants to go forward.
Accordingly, the claimants' Motions to Set Aside Default [DE-22 & -23] are ALLOWED
pursuant to Rule 60(b)(1) "mistake, inadvertence ... or excusable neglect," and the Entry of
Default [DE-20] and Default Judgment [DE-21] are SET ASIDE. The Clerk of Court is
DIRECTED to cause the claimants' separate proposed Answers appended to their motions to be
filed and docketed, and to continue administration of this case according to the proceedings of
this district.
SO ORDERED.
This the

).

-I day of November, 2011.
ESC. FOX
S ior United States District Judge

J

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