USA v. 400 Roper Street, Morganton, North Carolina
Filing
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ORDER denying without prejudice 35 Motion for Default Judgment. Signed by District Judge Martin Reidinger on 8/10/2011. (pdf)
IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:10cv18
UNITED STATES OF AMERICA,
Plaintiff,
vs.
400 Roper Street, Morganton, North
Carolina, being real property as
described in a deed at Book 431,
Page 468, of the Registry of Burke
County, North Carolina, together
with the residences, and all
appurtenances, improvements, and
attachments thereon,
Defendant.
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ORDER
THIS MATTER is before the Court on the Government’s Motion for
Entry of Judgment by Default, Entry of Judgment, and Final Order of
Forfeiture [Doc. 35].
On January 15, 2010, the Government initiated this civil forfeiture
action pursuant to 18 U.S.C. §§ 981, 983, 985, and 21 U.S.C. § 881
against the defendant property. [Doc. 1]. As grounds for forfeiture, the
Verified Complaint alleges in part that the defendant property “was used or
intended to be used, in any manner or part, to commit, or to facilitate”
illegal drug trafficking in violation of 21 U.S.C. §§ 801, et seq. [Id. at ¶35].
According to the Verified Complaint, the defendant property is titled in
the name of “Cleveland Glenn and wife, Hattie E. Glenn.” [Id. at ¶10]. Both
are deceased. [Id. at ¶¶12, 13]. The four apparent heirs of Cleveland
Glenn and Hattie E. Glenn are Roy Nelson Patton, Sr., Barbara Ann Patton
Leonard, Harold E. Patton, and John Wilson Patton. [Id. at ¶14].
The Government posted notice of this civil forfeiture action on an
official internet government forfeiture site, www.forfeiture.gov, for a period
of 30 consecutive days, beginning on January 23, 2010, as required
by Rule G(4)(a)(iv)(C) of the Supplemental Rules for Admiralty or Maritime
Claims and Asset Forfeiture Actions. [Doc. 4]. The Government further
published notice pursuant to Rule G(4)(a)(iv)(A) in the News Herald, a
newspaper of general circulation in Burke County, North Carolina, for a
period of three consecutive weeks beginning on November 22, 2010. [Doc.
27].
The Government provided direct notice to Roy Nelson Patton, Sr.,
Barbara Ann Patton Leonard, Harold E. Patton, and John Wilson Patton.
[See Docs. 19-1, 19-2]. Barbara Ann Patton Leonard filed a Claim on
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March 17, 2010, but subsequently withdrew her Claim on March 11, 2011.
[Docs. 8, 28]. Roy Nelson, Sr. nor Harold Eugene Patton Sr. and Harold
Eugene Patton did not file claims and upon motion of the Government, the
Clerk of Court entered default against them on October 29, 2010. [Doc.
24]. John Wilson Patton filed his Claim on March 26, 2010. [Doc. 9]. The
Court entered summary judgment in favor of the Government on his claim
on June 16, 2011. [Doc. 34]. No other person or entity has filed a claim in
this action.
The Government now moves the Court for entry of default and entry
of default judgment against Associates Financial Services of America, Inc.,
and for entry of judgment and final order of forfeiture pursuant to Federal
Rule of Civil Procedure 58(a)(2)(A)(iii) against the defendant property.
[Doc. 35]. For grounds, the Government states in its motion that a title
search revealed two Deeds of Trust filed in 1995 on the defendant property
in Burke County, neither of which appear to have been cancelled. The first
Deed of Trust was executed by decedent Hattie Glenn in the amount of
$27,500.00 on April 20, 1995, for the benefit of Consolidated Mortgage and
Financial Services Corporation. [Doc. 35-2]. That Deed of Trust was then
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assigned by Consolidated Mortgage and Financial Services Corporation to
“Associates Financial Co., Inc.” on April 20, 1995. [Doc. 35-3].
The second Deed of Trust was executed by decedent Hattie Glenn in
the amount of $29,720.03 on November 10, 1995, for the benefit of
“Associates Financial Services of America, Inc.” [Doc. 35-4]. The mailing
address identified on this second Deed of Trust for mailing after recording
lists “Associates Financial Services P.O. Box 8129 Morganton, N.C.
28680.” [Id.].
The Government contends that an older and now cancelled Deed of
Trust by Hattie Glenn and her husband on the defendant property
“demonstrates that ‘Associates Financial Co. Inc.’ and ‘Associates
Financial Services of America, Inc.’ are the same entity.” [Doc. 35-5]. In
fact, however, this cancelled Deed of Trust identifies the Beneficiary as
“Associates Financial Services, Inc.,” the address of which is 1243
Burkemont Avenue, Unit #19, Morganton, North Carolina 28655. [Id.]. The
mailing address identified on this Deed of Trust lists “Associates Financial
Services P.O. Box 8129 Morganton, N.C. 28680.” A stamp added to the
Deed of Trust indicating that the Deed of Trust was paid in full and satisfied
lists “Associates Financial Services of America, Inc” as the beneficiary.
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[Id.]. Thus, this Deed of Trust does not, as the Government contends,
establish that “Associates Financial Co. Inc.” and “Associates Financial
Services of America, Inc.” are the same entity.
In its motion, the Government states that Associates Financial
Services of America Inc. has “been absorbed into Citi Mortgage (and/or Citi
Financial)” [Doc. 35 at 4], although no proof is offered to support this
claim.1 Further, while the Government states that it has provided notice by
certified mail to both Citi Mortgage and Citi Financial [Doc. 35 at 4], the
Government does not offer any affidavit or other competent proof in
support of this statement.
In order for a default to be entered, the “elements of a default must
be shown by means of an affidavit or by other competent proof.” 10A
Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice
and Procedure: Civil § 2682 (3d ed. 1998). Here, the Government has
presented to the Court two Deeds of Trust, which indicate two possible
lienholders on the defendant property: Associates Financial Co., Inc. and
Associates Financial Services of America, Inc. Based on the record
presented by the Government, the Court cannot determine that the
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The Government fails to clarify which entity -- Citi Mortgage or Citi Financial -allegedly has absorbed Associates Financial Services of America, Inc.
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Government has identified the proper corporate entities entitled to notice
under the applicable Rules. Even if the proper corporate entities were
identified, the Government has not offered any affidavit or other competent
evidence to establish that these lienholders were notified properly and have
failed to plead or otherwise defend this action.
For these reasons, the Government’s Motion for Entry of Judgment
by Default, Entry of Judgment, and Final Order of Forfeiture must be
denied.
Accordingly, IT IS, THEREFORE, ORDERED that the Government’s
Motion for Entry of Judgment by Default, Entry of Judgment, and Final
Order of Forfeiture [Doc. 35] is DENIED WITHOUT PREJUDICE.
IT IS SO ORDERED.
Signed: August 10, 2011
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