United States of America v. 1309 Fourth Street, La Grand, Union County, State and District of Oregon

Filing 43

OPINION AND ORDER. Based on the foregoing, the government's motion for summary judgment 22 is GRANTED. It is FURTHER ORDERED that Claimant may file a petition by April 2, 2015, demonstrating that the forfeiture of the property is excessive. The government shall file a response by April 16, 2015. Claimant may file a reply by April 30, 2015, at which time the petition shall be taken under advisement. IT IS SO ORDERED. Signed on 02/17/2015 by Judge Malcolm F. Marsh. (pvh)

IN THE UNITED STATES DISTRIC'r COURT
FOR THE DISTRICT OF OREGON
UNITED STATES OF AMERICA,

2:12-cv-02263-MA

Plaintiff,

OPINION AND ORDER

v.
1309 FOURTH STREET, LA GRANDE,
UNION COUNTY, STATE AND
DISTRICT OF OREGON, REAL
PROPERTY WITH BUILDINGS,
APPURTENANCES, AND
IMPROVEMENTS, .in rem,
Defendant.
S. AMANDA MARSHALL
United States Attorney
District of Oregon
KATHLEEN BICKERS
Assistant U.S. Attorney
1000 S.W. Third Ave., Suite 600
Portland, Oregon 97204-2902
Attorney for Plaintiff
WES WILLIAMS
Attorney at Law
115 Elm Street
La Grande, Oregon 97850
Attorney for Claimant Kathy Lepper

1 - OPINION AND ORDER

MARSH, Judge
The Government brings this forfeiture proceeding pursuant to
21

U.S.C.

881;

§

U.S.C.

§

motion

for

1610.

U.S.C.

28

§§

1345,

1355,

1356

and 19

1395;

&

Currently before the court is the Government's

summary

judgment

(#22).

For

the

reasons

set

forth

below, the motion is GRANTED.

BACKGROUND
On May 22,

2008,

a

Confidential Reliable

Informant

(CRI),

working with members of the Oregon State Police (OSP) and the Union
Wallowa

Drug Task Force,

Kiesecker.

purchased marijuana

Complaint (#1),

from Calvin

Perry

Declaration of OSP Detective Sergeant

Daniel D. Conner a t ! 7; Govt.'s Reply Brief (#37), Declaration of
OSP Sergeant David Aydelotte, Exh. A at 1.
Prior to the sale, the CRI ordered approximately 10 ounces of
marijuana from Kiesecker.
A

at

3.

entering

Shortly
the

Conner Dec. at! 7; Aydelotte Dec., Exh.

thereafter,

residence

of

Kiesecker

Tom Bobbitt,

was

seen

located at

by

officers

1309

Fourth

Street in La Grande, Oregon, empty handed and leaving with a white
plastic grocery bag which appeared to contain something.

Govt.'s

Reply (jf37), Declaration of Union County Sergeant William Miller at
! l; Aydelotte Dec. a t ! 2 & Exh. A at 4.

Kiesecker

w~s

later seen

giving the CRI the same bag (later determined to be containing a

2 - OPINION AND ORDER

ziplock bag of marijuana)

in exchange for

Dec., Exh. A at 5; Conner Dec. at I

7.

Aydelotte

$2000. 00.

1

As a result of the foregoing, police executed a search warrant
at Tom Bobbitt's residence and seized several firearms, $11,310.00
in

U.S.

currency,. bank

packaging

material,

records,

triple

beam

purported
scales,

approximately 8 3/4 pounds of marijuana.
6;

Conner Dec.

search,

at I I 8-18

officers

residence,

located

as well as a

35-37.

&

hidden

records, 2

drug

masking

agents,

and

Aydelotte Dec., Exh. A at
During the course of the

compartments

throughout

the

locked room in the basement where the

marijuana, scales, and packaging material were found.
at I I 9 & 11-14.

drug

Conner Dec.

Bobbitt was placed under arrest and charged with

unlawful possession and delivery of marijuana within 1,000 feet of
a school.

Connor Dec.

at I

18; Govt.'s Motion and Memo.

(#22),

Exh. A at 9-10.
On

May

23,

2008,

Detective

Aydelotte

went

to

Bobbitt's

residence to leave a receipt detailing the items seized from the
property.
Lepper

Aydelotte Dec.

(Bobbitt's sister)

at I

3 & Exh.

B at 2.

and Elysia Hudson

Claimant Kathy

(Bobbitt's long-term

1

Although latent fingerprints were found on the ziplock
bag, Bobbitt was excluded as a source of the prints.
Declaration
of Wes Williams (#27), Exhs. 122-23.
2

The parties' experts disagree as to whether the financial
records seized reflect drug transactions.
See Conner Dec. at
I I 15-16, 35-38; Declaration of Pat Montgomery (#31) at I I 6-17.

3 - OPINION AND ORDER

girlfriend) were at the house.

Aydelotte Dec. at '![ 3 & Exh. B at

2; Declaration of Kathy Lepper

(#26)

Elysia Hudson

( #38)

at '![ 4.

at '!['![ 21-22; Declaration of

According to Detective Aydelotte,

Claimant asked if her brother's bank accounts, house, or van would
be seized, and if a medical marijuana card "might help."
Dec. at'!['![ 3-4 & Exh. Bat 3; Hudson Dec. at'![ 4.
making these statements.

Aydelotte

Claimant denies

Lepper Dec. at '![ 23.

Also on May 23, 2008, Claimant attended Bobbitt's arraignment
where he was charged with one count of manufacturing marijuana
within 1,000 feet of a school, two counts of unlawful delivery of
marijuana

within

1,000

possession,of marijuana.

feet

of

a

school,

and

one

Lepper Dec. at'![ 24 & Exh. 106.

count

of

Claimant

posted $4,000 in bond to secure her brother's release from custody.

Id. at '!['![ 19 & 25, & Exh. 108.
On May 27,

2008,

Bobbitt executed a Bargain and Sale Deed

transferring the 1309 Fourth Street Property to Cl;climant.

The

consideration listed on the Bargain and Sale Deed was "love and
affection."

Govt.' s Motion and Memo.

( #22), Exh. A at 4.

On June

16, 2008, the deed was re-recorded to change the consideration to
"other."

Id., Exh. A at 6-7.

On that same date, Claimant executed

a document stating that "[t] he enclosed savings bonds valued at
80,000 today are in exchange for 1309 Fourth Street, La· Grande, OR

- previously owned by Tom Bobbitt.

Lepper Dec. at '![ 33 & Exh. 110

(emphasis added); Declaration of Annette Aschenbrenner (#30) at'!['![
4 - OPINION AND ORDER

2-3.

Bobbitt

continued

transfer of ownership.

to

live

on

Lepper Dec. at

the
~

property

despite

the

36.

On July 21, 2008, Union County Deputy District Attorney Jason
Larimer filed a "Notice of Intent to Forfeit,

0

declaring his intent

to initiate forfeiture proceedings against the 1309 Fourth Street
Property.

Id.,

Exh.

113.

On

July

28,

2008,

a

Superseding

Indictment was issued containing a forfeiture provision against the
property, and a lis pendens was filed on the property.
& Exhs. 113-15.

Id. at

~

38

On that same date, Claimant wrote the following

letter to the Deputy District Attorney:
My brother's attorney just gave me the notice of
intent to forfeit 1309 4~ Street, La Grande.
I
purchased this piece of property on 6/18/08.
I checked
with your local escrow office who said there was no lien
on this piece & I was OK to purchase it.
My brother TOM BOBBITT needed the money to pay for
his defense - his checking account has been locked as
well as his inheritance money from his safe deposit box
- he had to have money both to survive & defend himself.
Id. at

~

40 & Exh. 116 (emphasis added).

In August,

2008,

the state seized the property,

required Bobbitt to vacate the premises.
2008,

Id. at

~

39.

and police
In October,

the state court ordered that the property be restored to

Claimant pending the criminal proceedings against Bobbitt.
~

43

&

Exh. 119; see ORS 131. 573 (4) (a)

&

131. 576 (2).

Claimant began making repairs to the house,

and Claimant's

daughter, Dawn Norman, lived in the home until July, 2010.

5 - OPINION AND ORDER

Id. at

Lepper

Dec. at '!I'll 44--46;

Declaration of Dawn Norman

Bobbitt moved back into the home in February,

(#29)
2012,

Lepper Dec. at 'll 47.

diagnosed with Mesothelioma.

at 'll'll 15-16.
after being

Bobbitt died on

August 10, 2012, and the state criminal charges against him were
dismissed.
On

Conner Dec. at 'll 30.

December

17,

2012,

the

Government

filed

the

instant

proceeding, seeking forfeiture of the 1309 Fourth Street Property
on the basis that it was used or intended to be used to facilitate
On March 9,

a drug offense.

property asserting that

2013, Claimant filed a claim to the

she is the

In her answer, Claimant contends that she is an

Claim (Jf6) at 2.

innocent owner under 18 U.S.C.
acquired

her

fee owner of the property.

interest

in

§

the

983(d) (3), because at the time she
property,

she

was

a

bona

fide

purchaser for value and did not know, and was reasonably without
cause to believe,

that the property was subject to forfeiture.

Answer (#17) at 2.
STANDARDS

Summary judgment is appropriate if there is no genuine dispute
of material fact and the moving party is entitled to judgment as a
Fed. R. Civ. P. 56(a); Tolan v. Cotton, 134 S.Ct.

matter of law.

1861, 1866 (2014).

The moving party bears the burden of proving

the absence of a genuine dispute of material fact.
Netivork,

2012).

Inc.

v.

Parts Geek,

LLC,

692 F.3d 1009,

U.S. Auto Parts

1014

(9th Cir.

A genuine dispute of fact exists "if the evidence is such

6 - OPINION AND ORDER

that a reasonable jury could return a verdict for the nonmoving
party."

Anderson v.

L.iberty Lobby,

(1986); Scott v. Harris,

Inc.,

477 U.S.

242,

248-49

550 U.S. 372, 380 (2007).

This court reviews the evidence in the light most favorable to
the non-moving party,

and must draw all reasonable inferences in

favor of that party.

Tolan, 134 S.Ct. at 1863; Maxwell v. County

of San Diego, 2012 WL 4017462 *2 (9th Cir. Sept. 13, 2012), reh'g.
en bane denied,

708

F.3d

1075

(9th Cir.

2013).

In

the

civil

forfeiture context, summary judgment procedures must necessarily be
construed in light of the statutory law of forfeitures,
procedural

requirements

Currency, U.S.

set

forth

therein.

$42,500.00, 283 F.3d 977,

United

and the

States

v.

979 (9th Cir. 2002).

DISCUSSION
I.

Standing to Challenge Forfeiture

Article III standing is a threshold question in every federal
case.

Un.ited

States

v.

Real

Property

Franciscos Way, Los Angeles, Cal.,
2004) .

Located

at

385 F.3d 1187, 1191

5208

Los

(9th Cir.

In a civil forfeiture proceeding, "this determination turns

upon whether the Claimant has a sufficient interest in the property
to create a case or controversy."
heavy one,
property,

Id.

Claimant's burden is not a

she need only demonstrate a colorable interest in the
for

example,

by

title, or financial stake."

showing
Id.

actual

possession,

control,

(emphasis added); United States v.

$.133,420.00 in U.S. Currency, 672 F.3d 629, 637-38 (9th Cir. 2012).

7 - OPINION AND ORDER

To withstand a motion for summary judgment, a forfeiture claimant
cannot rely on mere allegations,

and instead must set forth by

affidavit or other evidence specific facts to support a finding
that she has an ownership or possessory interest in the property.
$133,420.00 in U.S. Currency, 672 F.3d at 638.

The Government contends that Claimant lacks standing because
she lacks a valid ownership interest in the defendant property.
Specifically,

the Government argues that the assignment of the

defendant property from Bobbitt to Claimant was fraudulent under
Oregon's Uniform Fraudulent Transfer Act

(UFTA),

because it was

intended to "hinder, delay, or defraud" the Government's forfeiture
action.

In response,

Claimant contends that there is a triable

issue of fact as to whether she has standing.

Claimant argues that

she has produced evidence that Bobbitt did not intend to defraud
the Government, and that she took the property in good faith and
for a

reasonably equivalent value.

For the reasons

set forth

below, I conclude that there is a genuine dispute of material fact
as to Claimant's standing.
Whether a claimant has an ownership interest in property is
,determined under the law of the state in which the interest arose.
Real Prop. Located at 5208 Los Franciscos Way, 385 F.3d at 1191

n. 3; see also United States v.
F.3d 1110, 1119 (9th Cir. 2004).
assets is fraudulent
8 - OPINION AND ORDER

$100, 348. 00 in U.S.

Currency,

&

354

Under Oregon law, a transfer of

if it is made by a debtor with an actual

intent to hinder, delay, or defraud a creditor.

ORS 95.230(1) (a).

In determining whether a transfer was made with "actual intent
to hinder, delay,

or defraud," a court may consider,

among other

things, the following factors set forth in ORS 95.230(2):

(a) The transfer or obligation was to an insider;
(b) The debtor had retained possession or control of the
property transferred after the transfer;
(c)
The transfer
concealed;

or

obligation

was

disclosed

or

(d) Before the transfer was made or obligation was
incurred, the debtor was sued or threatened with suit;
(e) The transfer was of substantially all the debtor's
assets;
(f) The debtor had absconded;
(g) The debtor had removed or concealed assets;
(h) The value of the consideration received by the debtor
was reasonably equivalent to the value of the asset
transferred or the amount of the obligation incurred;
(i) The debtor was insolvent or became insolvent shortly
after the transfer was made or the obligation was
incurred;
(j) The transfer had occurred shortly before or shortly
after a substantial debt was incurred; and
(k) The debtor had transferred the essential assets of
the business to a lienor who had transferred the assets
to an insider of the debtor.
"A transfer . . . is not voidable under ORS 95.230(1) (a) as against
a person who took in good faith and for a reasonably
value .

,,

ORS 95.270(1).

9 - OPINION AND ORDER

equivalen~

A.

Government's Evidence of Fraud

The Government argues that the fraudulent nature of Bobbitt's
transfer of the 1309 Fourth Street Property to Claimant is evidence
by the following:
(1) the transfer was to an insider (his sister);
(2) Bobbitt intended that the transfer would be temporary
and he ultimately would maintain possession of the
property (as evidence by Claimant's failure to put the
savings bonds in Bobbitt's name or change the beneficiary
and his continued presence on the property); 3
(3) before the transfer was made,
with drug trafficking;

Bobbitt was charged

(4) the consideration received at the time of the
transfer was not reasonably equivalent to the value.of
the asset and was not "authentic." Bobbitt and Claimant
exchanged fake consideration--first "love and affection"
and then savings bonds which were of no value to Bobbitt;
(5) it is likely that Bobbitt was insolvent at the time
of the transfer because he had no funds to pay for his
defense; 4
( 6) the transfer occurred shortly after
became subject to forfeiture.

the property

3

I do not consider statements allegedly made by Elysia
Hudson in a telephone interview (Govt.'s Motion and Memo. (#22),
Exh. A at 12-19) to support this assertion because the interview
transcript has not been authenticated.
See Fed. R. Evict. 90l(a).
4

Claimant argues that Bobbitt was not insolvent and points
to the fact that police returned $80,000 of the seized funds to
Bobbitt.
However, the seized funds were not returned until
February 6, 2009 (months after the property transfer) . See
Leeper Dec. at t 45; Conner Dec. at t 25.

10 - OPINION AND ORDER

Additionally, the Government contends that Claimant's lack of
good faith in purchasing the property is demonstrated by the fact
that:
(1) Claimant was aware of the criminal charges against
Bobbitt prior to the transfer;
(2) Claimant knew Bobbitt was a drug dealer, participated
in the drug activity, and was aware of the fact that drug
dealers can lose their homes for their crimes;
-Oregon State Police Detective David Aydelotte
and Elysia Hudson both state that, the day
after Bobbitt's arrest, Claimant asked whether
Bobbitt's bank accounts, house, or van would
be seized and whether a medical marijuana card
"might help."
-According to Hudson, Claimant was well aware
of Bobbitt's drug activity.
Hudson states
that she overheard Bobbitt speak with Claimant
about selling marijuana to Claimant's friends
and acquaintances.
( 3) Claimant knew Bobbitt's house had been searched,
property seized, and that his bank account had been
frozen;
(4) Claimant's contact with a title company employee and
Bobbitt's criminal lawyer concerning the propriety of the
property transfer demonstrates she was concerned about
whether Bobbitt could transfer good title.
The foregoing evidence is sufficient to meet the Government's
burden of presenting evidence from which a
conclude

that

the

transfer

of

property

trier of fact could

was

fraudulent.

The

undisputed evidence demonstrates that (1) Bobbitt transferred the
property to his sister; (2) the deed was recorded twice (originally
for love and affection and subsequently for bonds which remained

11 - OPINION AND ORDER

payable to Claimant);

(3)

the

sale was made

immediately after

Bobbitt had been charged with drug offenses and marijuana and drugpackaging materials were seized from his home; and ( 4) he continued
to reside in the home after the sale.

Accordingly,

the burden

shifts to Claimant to demonstrate a genuine dispute of material
fact as to her ownership.
Franciscos,
B.

See Real Property Located at 5208 Los

385 F.3d at 1192.

Claimant's Evidence Concerning Fraud and Good Faith

Claimant contends that her brother sold her the 1309 Fourth
Street property "to ensure he had enough money to pay an attorney
to defend him and other bills, and get on with his life.u
Dec. at 'll'll 29, 31, 40, 42 & see also Exhs. 116 & 118.
that

neither she nor Bobbitt

jeopardy of forfeiture,
considered improper.
that Lonnie Lester,

knew

that

his

Lepper

She states

house might be

in

or that the sale of the house would be

Id.

at 'll'll 20, 23,

&

26.

Claimant explains

an escrow officer with Eastern Oregon Title

Company, informed her that there were no liens or encumbrances on
Bobbitt's home and that there was no reason Bobbitt could not
transfer it to Claimant.

Id.

at 'll'll 20,

criminal attorney provided the same advice.

26,

31-32.

Bobbitt's

Id. at 'lI 35.

Claimant further declares that she was motivated to purchase
the property because it reminded her of property she had owned in
Torrance, California.

Id.

at 'll'll 2 & 18; Norman Dec. at 'll'll 11-12.

She states that when Bobbitt originally purchased the property, she
12 - OPINION AND ORDER

told him she would buy it if he ever wanted to sell the property.
Lepper Dec. at

18; Norman Dec. ·at

'l[

13.

'l[

Claimant explains that

she was interested in purchasing the home for resale after it was
repaired/updated.
Additionally,
might

give

Lepper

Dec.

at

18;

'l[

Norman

Claimant states that she had a

the

house

away during

a

Dec.

at

'l[

11.

fear that Bobbitt

drinking binge.

Claimant

explains that Bobbitt was an alcoholic and had a history of giving
away his possession when he was drunk.
19; Norman Dec. at

'l['l[

Lepper Dec. at

'l['l[

15-16 &

9-10.

Claimant declares that the savings bonds which were exchanged
as consideration for the sale remained in her name so as not to
lose interest from cashing them out.
see also Norman Dec. at

at

'l[

3.

'l[

Lepper Dec. at

'l['l[

42, 48-49;

14; Declaration of Ronald Schenck (#34)

She further states that the purchase price of $90,000 was

a reasonably equivalent value given the fact that Bobbitt purchased
the property in 2005 for $73,065.

Leeper Dec. at

'l['l[

17 & 30 & Exh.

103.

Finally, Claimant declares that she permitted her brother to

live

on

the

property after

the

sale

because

his

bail

release

agreement required him to do so, and ultimately to enable her to
provide him care during the final months of his life.
24, 36, 39

&

47

&

Id.

at

'l['l[

Exh. 107.

Given the low threshold to establish standing, I conclude that
there is a genuine issue of material fact as to whether Claimant
has a colorable interest in the property.
13 - OPINION AND ORDER

Although the government

has submitted evidence to support a finding that the transfer of
property

was

intended

to

hinder

its

forfeiture,

Claimant

has

offered sufficient evidence to create an issue of fact as to the
validity of the transfer under Oregon law, as well as to whether
she obtained the property in good faith.

Accordingly,

summary

judgment is not warranted on the issue of standing.
II.

Forfeitability & Innocent Owner Defense

The government also moves for summary judgment on the basis
that the property is forfeitable under 18 U.S.C.

§

983(c) (1) & (3),

and that there is no genuine dispute of fact as to whether Claimant
is an "innocent owner" under

§

983 (d) (1).

Claimant opposes summary

judgment on the basis that the government has failed to demonstrate
that the property is forfeitable,
faith in purchasing the property.

and because she acted in good
For the reasons set forth below,

I conclude that summary judgment is warranted.
A.

Property is Forfeitable

The Civil Asset Forfeiture Reform Act (CAFRA}, 18 U.S.C.
§

983, creates a burden-shifting scheme applicable in the summary

judgment context.

The initial burden "is on the Government to

establish, by a preponderance of the evidence, that the property is
subject to forfeiture."

18 U.S.C.

§

983(c} (1); United States v.

$11,500.00 in U.S. Currency, 710 F.3d 1006, 1013 (9th Cir. 2013);
United States v.

Ferro,

681 F.3d 1105, 1109 (9th Cir. 2012).

If

the government's theory of the case is that the property was used
14 - OPINION AND ORDER

in or to facilitate
government must

the commission of a

prove

that

there

was

between the property and the offense.

a

criminal offense,
substantial

18 U.S.C.

the

connection

983(c) (3).

§

A

" [ s) ubstantial connection may be established by showing that use of
the property made the prohibited conduct less difficult or more or
less free from obstruction or hindrance."
594 F. 3d 352,

364

(4th Cir.

construing 18 U.S.C.

§

2010)

United States v. Herder,

(internal quotations omitted,

853).

The determination of whether the government has met its burden
of proof is based on the aggregate facts, including circumstantial
evidence.

Herder,

594 F.3d at 364; United States v.

$14,000 in

U.S. Currency, 2014 WL 1230497, *3 (D.Ariz. Mar. 25, 2014); United

States v. Approximately $67,391 in U.S. Currency, 2013 WL 5645349,
*9

(N.D.Cal.

Oct.

15,

2013);

see Currency, U.S.

$42,500.00,

283

F.3d at 980 (addressing proof of probable cause).
In the instant proceeding,
that

there

is

government

has

no

genuine

sustained

the aggregate facts demonstrate

dispute
its

of

initial

fact

as

burden

to

whether

to

show,

by

the
a

preponderance of the evidence, that (1) Bobbitt used or intended to
use the defendant property to facilitate the May 22, 2008 drug sale
by Kiesecker

to

the CRI;

and

(2)

that

there

is

a

substantial

connection between the property and the criminal offense.
As outlined above, it is undisputed that (1) on May 22, 2008,
there

was

a

controlled buy of marijuana by a

15 - OPINION AND ORDER

CRI

from Calvin

Kiesecker;

(2) prior to the sale, the CRI ordered approximately 10

ounces of marijuana from Kiesecker;

( 3) police observed Kiesecker

enter Bobbitt's residence, remain for approximately 15 minutes, and
exit with a white plastic grocery bag containing something;
marijuana sold to the CRI was in the same bag;

( 4) the

(5) police searched

Bobbitt's home and seized firearms, $11,310.00 in currency, triple
beam scales, drug package materials, 8 3/4 pounds of marijuana, and
masking agents in a large duffel bag;

(6)

police located hidden

compartments in Bobbitt's house and the seized marijuana was found
in a locked room in the basement with the scales and packaging
material; and (7) Bobbitt admitted to police that he did not have
a medical marijuana card and that the seized marijuana came from
Mexico. 5

Additionally, Elysia Hudson declares that she personally

observed Bobbitt selling marijuana for many years prior to his
arrest

in 2008,

she

overheard Bobbitt

speak

to Claimant about

selling marijuana, and she heard Bobbitt admit to his attorney, Wes
Williams, that he had been selling marijuana for many years prior
to his arrest.
Claimant's
marijuana

from

evidence
Bobbitt,

that
that

Kiesecker
Bobbitt's

denies

getting

fingerprints

were

the
not

identified on the ziplock bag containing the marijuana, and that
5

I conclude that Bobbitt's statements to law enforcement
are admissible as statements against interest made by a declarant
who has since died.
See Fed. R. Evid. 804 (b) (3) (A).

16 - OPINION AND ORDER

Claimant's daughter never saw evidence of drug activity when her
art studio was located in Bobbitt's basement from 2005-07, does not
create a genuine issue of fact as to whether the government has

satisfied

its

preponderance

initial
of the

burden

to

evidence.

prove

forfeitability

Further,

I

reject

by

a

Claimant's

suggestion that the evidence supports only a finding that Bobbitt

possessed marijuana, and not that he delivered it.

Accordingly,

the burden shifts to Claimant to establish that she is an innocent
owner.
B.

Innocent Owner Defense

Pursuant to 18 U.S.C.
interest

in

property

forfeiture statute."

§

shall

983(d)(l),
not

be

"[a]n innocent owner's

forfeited

under

any

civil

The claimant bears the burden of proving that

he or she is an innocent owner by a preponderance of the evidence.
18 U.S.C.
the

§

claimant

983(d)(l); Ferro,
purchased the

681 F.3d at 1109.
property after

Where, as here,

the

alleged

illegal

conduct occurred, the claimant is an "innocent owner" only if she
(1) was a bona fide purchaser for value; and (2) did not know and
was

reasonably without

subject to forfeiture.

cause

to believe that

18 U.S.C.

§

the property was

983(d) (3) (A).

• Bona Fide Purchaser for Value

Because CAFRA does not define "bona fide purchaser for value,"
many

courts

have

borrowed

the

construction

given

to

the

language in the Continuing Criminal Enterprise Act (21 U.S.C.
17 - OPINION AND ORDER

same

§

See United States v.

853 (n) (b) (B)) .

Contents of Smith Barney

Citigroup Acct. No. 34-·19, 482 Fed. Appx. 134, 137 n. 2 (6th Cir.
June 5, 2012); United States v. Munson, 477 Fed. Appx. 57, *8 (4th
Cir. Apr. 17, 2012); U.S. v. Real Prop. Located at 148 Maunalanikai

Place in Honolulu Hawaii, 2008 WL 3166799, *10 (D. Hawai' i Aug. 6,
2008); United States v. One 1996 Vector M12, 442 F.Supp.2d 482, 486
(S. D.Ohio 2005); United States v. 198 Tra.ining Field Rd., 2004 .WL
1305875 *2 (D.Mass. June 14, 2004).
Consequently, courts have defined a "bona fide purchaser for
value"

(under §

983 (d) (3) (A) (i)),

as one who gives value in an

arms-length transaction with the expectation that he or she will
receive

equivalent

value

in return.

Con tents of Smith Barney

Cit.igroup Acct., 482 Fed. Appx. at 137; Munson, 477 Fed. Appx. 57
*8; United States v.

Phillips,

2013 WL 2156377 *3

(E.D.Va May 2,

2013); Un.ited States v. Real Property Commonly Known as 113 Maynard

Ave., N.W., Grand Rap.ids, Michigan, Kent Cty., 834 F.Supp.2d 713,
716

(W.D. Mich. 2011); Real Property Located at 148 Maunalanikai

Place .in Honolulu Haivaii,

2008 WL 3166799,

*10;

One 1996 Vector

M12, 442 F.Supp.2d at 486; 198 Training Field Rd., 2004 WL 1305875
*2;

see also United States v. Hunt.ington Nat. Bank,

(6th Cir. 2012)

682 F. 3d 429

(federal law controls who qualifies as a bona fide

purchaser for value) .
I

agree with the foregoing cases and conclude that a bona

purchaser

for

value

18 - OPINION AND ORDER

must

obtain

title

in

an

arm's-length

Because determining whether a purchaser is "bona

transaction.

fide" is especially difficult in intra-familial conveyances, courts
properly consider whether the transaction was executed at arm's
length.

United States v. Real Property Located at 6124 Mary Lane

Dr., San Diego, Calif., 2008 WL 3925074 (W.D.N.C. Aug. 20, 2008).
The government

contends that Claimant

is

not

a

bona

fide

purchaser for value because (1) she obtained the property through
a fraudulent conveyance in violation of state· law; ( 2) she provided
no consideration at the time the property was transferred;

(3) the

savings bonds subsequently provided as consideration were of no
monetary value to anyone other than Claimant;
dealing

at

arm's

length

would accept

and

savings

(4)

bonds

no party
issued

in

someone else's name in exchange for a house.
In

response,

consideration

for

Claimant
the

attests

property.

that

According

she
to

paid

valuable

Claimant,

the

sequence of events leading to the sale of the 1309 Fourth Street
Property occurred as follows:
1.

On May 27, 2008, Claimant offers to purchase the
property for $80,000, and Bobbitt agrees.
Lepper
Dec. at ' 19.
Claimant "decided it would be best
to allow Tom to convey the house to [her) for the
time being and then [they] would make sure [they)
agreed on the price when he was sober." Id.

2.

On May 27, 2008, Bobbitt signs and records a
Bargain and Sale Deed transferring ownership of the
property to Claimant for the consideration of "love
and affection;" Id. at ' 20 & Exh. 105. "

19 - OPINION AND ORDER

3.

On or about June 16, 2008, Bobbitt and Claimant
"were ready to exchange the money [they] had agreed
to, but added an additional $10,000 to the purchase
price (reflecting monies Claimant lent Bobbitt for
bail and living expenses).
Lepper Dec. at II 2930.

4.

On June 16, 2008, Claimant retrieves savings bonds
from her safety deposit box valued at $80,000 to
give Bobbitt in exchange for the property. On that
same day, she executes a document stating that "the
enclosed savings bonds valued at 80,000 today are
in exchange for 1309 4th Street, La Grande, OR previously owned by Tom Bobbitt."
Id. at I 33 &
Exh. 110 (emphasis added).

5.

Bobbitt and Claimant orally agree to leave the
savings bonds payable to Claimant because they do
not want to lose any interest from cashing out the
bonds before they mature.
When Bobbitt needs
money, Claimant will provide it to him and he will
return bonds to her with the same face value.
Claimant explains that this agreement was effective
because they "were fam.ily and trusted each other. "
Lepper Dec. at I 48 (emphasis added); Norman Dec.
at I 14.

6.

On June 18, 2008, Bobbitt and Claimant re-record
the Bargain and Sale Deed to reflect that the
consideration paid for the transfer was "other."
Lepper Dec. at II 32 & 34 & Exhs. 111.

7.

Claimant agrees to permit Bobbitt to live in the
house until his criminal case is resolved provided
that he pays Claimant's "house expenses."
This
agreement is in accord with Bobbitt's bail release
agreement wherein he agreed to reside at the
property.
Lepper Dec. at I 36 & Exh. 107.

Based on the foregoing,

I conclude that there is no

genuin~

dispute of material fact as to whether Claimant was a bona fide
purchaser for value because no reasonable jury could conclude that
the property was transferred in an arm's-length transaction.

20 - OPINION AND ORDER

A

seller in an arm's-length transaction would not record a bargain
and

sale

deed

for

"love

and

affection,"

based

upon

an

oral

agreement that the actual sales price would be determined at a
later date. 6

Moreover,

a seller in an arm's-length transaction

would not accept as consideration savings bonds payable to the
buyer

(or to the buyer's daughter

in the event of the buyer's

death), based only on an oral agreement that they would be cashed
out

on an "as

needed"

basis

by

the buyer. 7

Indeed,

Claimant

concedes that this agreement was based on the fact that they "were
family and trusted each other."
Finally, given the familial relationship between Bobbitt and
Claimant,

Claimant's payment in the form of savings bonds weeks

after the Bargain and Sale deed was recorded, her modification of
the

agreed-upon

sale

price

to

include

an

additional

$10,000

(without any new consideration), and the fact that Bobbitt remained
on the property after the sale (for "housing expenses" only), reenforce the conclusion that there is no genuine issue of fact as to
whether

Claimant

transaction.
6

(1959)

obtained

the

property

in

an

arm's-length

Because I find that there is no genuine issue of fact

See Halleck v. Halleck, 216 Or. 23, 27-28, 337 P.2d 330
(recording of deed creates presumption of delivery).

7

See United States v. Chandler, 410 U.S. 257, 260-61 (1973)
(per curiam) (inter vi vos deli very of bonds by decedent to her
grandchildren, without reissuing the bonds in the grandchildren's
names, did not remove bonds from decedent's estate).

21 - OPINION AND ORDER

as to whether Claimant was a bona fide purchaser for value, I need
not address whether she acted in good faith.
CONCLUSION
Based on the foregoing,
judgment (#22) is GRANTED.

the government's motion for summary

It is FURTHER ORDERED that Claimant may

file a petition by April 2, 2015, demonstrating that the forfeiture
of the property is excessive.
by April 16, 2015.

The government shall file a response

Claimant may file a reply by April 30, 2015, at

which time the petition shall be taken under advisement.
IT IS SO ORDERED.
DATED this

17

day of February, 2015.

Malcolm F. Marsh
United States District Judge

22 - OPINION AND ORDER