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P. Johnson v. D. Johnson and the City of Fairbanks (4/9/93), 849 P 2d 1361
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NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors to
the attention of the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, in order that corrections
may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
PERRY D. JOHNSON, )
)
Appellant, ) File No. S-5027
)
v. ) 4FA 90 01198 CI
)
DON P. JOHNSON, KENNETH ) O P I N I O N
STEINNERD, and the CITY OF )
FAIRBANKS, )
)
Appellees. ) [No. 3943 - April 9, 1993]
________________________________)
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Richard D. Savell, Judge.
Appearances: Dick L. Madson, Paul English,
Law Offices of Dick L. Madson, Fairbanks, for
Appellant. Patrick B. Cole, Deputy City
Attorney, Fairbanks, for Appellees. Betsy
O'Leary, Assistant United States Attorney,
Wevley William Shea, United States Attorney,
for the United States Amicus Curiae.
Before: Moore, Chief Justice, Rabinowitz,
Burke, Matthews and Compton, Justices.
BURKE, Justice.
I. INTRODUCTION
Perry Johnson appeals the superior court's order and
judgment dismissing his conversion claim against the City of
Fairbanks ("City"). Fairbanks police officers obtained a search
warrant to search Johnson's house. They seized drugs, drug
paraphernalia, weapons and $44,850. The police transferred the
money to the federal Drug Enforcement Administration ("DEA").
The DEA administratively forfeited the money and returned a
portion to the Fairbanks police department. In Johnson's
criminal case, the superior court suppressed all the evidence and
ordered the state to return "any currency or its equivalent
seized from the defendant and in the possession of the state."
When the money was not returned, Johnson filed the present
action. The superior court granted the City's summary judgment
motion, determining that the DEA's "adoptive seizure" had
deprived Johnson of his title to the money.
We declare the federal forfeiture void because the
City's transfer of the money violated state law regarding the
disposition of property held in connection with a criminal
proceeding. We therefore reverse the judgment and direct the
superior court to enter summary judgment in Johnson's favor.
II. FACTS AND PROCEEDINGS
On February 1, 1990 Fairbanks police officers responded
to a domestic violence call at the house of Perry Johnson. The
officers arrested Johnson, placed him in the patrol car, and then
entered his house, finding evidence of illegal narcotics
activity. The police then obtained a warrant to search Johnson's
house. As a result of the search, police seized and inventoried
75 items, including $44,850 in cash. A criminal complaint, based
on information gathered during this search, was filed against
Johnson on February 2.
On the same day, Fairbanks Police Officer Kenneth
Steinnerd contacted DEA Special Agent Fred Thomas in Anchorage to
discuss the case. Thomas told Steinnerd that the DEA would
"adoptively seize" the money through a federal forfeiture
proceeding. On the next working day, Steinnerd took the money to
a bank, exchanged it for a cashier's check made payable to the
U.S. Marshall's Office, and transferred the check to the custody
of the U.S. Marshall.
On February 7 a grand jury returned a 14 count
indictment against Johnson, charging him with misconduct
involving weapons in the first degree, theft in the second
degree, and misconduct involving a controlled substance in the
fourth degree.
On April 2 the DEA commenced forfeiture proceedings.
Johnson was notified of the proceeding by a certified letter but
took no action to reclaim the money. Forfeiture of the money was
accomplished administratively on May 17. The City of Fairbanks
received $17,940 of the forfeited money in consideration for its
participation.
Meanwhile, on April 5 Johnson moved the superior court
to suppress and return the evidence seized under the search
warrant, arguing that the police had no authority to search his
house after they had arrested him. On May 7 Superior Court Judge
Richard D. Savell granted Johnson's motion to suppress.
Thereafter, the state dismissed the criminal charges against
Johnson. On July 3, Judge Savell ordered the state to return the
money to Johnson:
The court does not decide the question
of whether the federal court has jurisdiction
over the subject matter of the currency
seized pursuant to the search warrant;
however, the court does have jurisdiction and
does decide the matter between the parties
before it. Consequently the state, its
agents, or employees have no claim and may
make no further claim to the proceeds seized
from the defendant. The state's right to
possess the currency is hereby extinguished
and therefore any currency or its equivalent
seized from the defendant and in possession
of the state or its agents or employees
should be returned.1
On July 12 Johnson filed a complaint against the City.
Johnson alleged that the transfer of currency constituted con
version and that he was denied access to the state courts.
Johnson moved for summary judgment on his conversion claim. The
City cross-moved for summary judgment. Judge Savell denied
Johnson's motion and entered summary judgment for the City.
Johnson appeals.
III. DISCUSSION
The DEA instituted forfeiture proceedings against
Johnson's money under the legal fiction of "adoptive seizure."
Through informal arrangements, local police departments agree to
notify the DEA when they seize property which may be subject to
forfeiture pursuant to federal narcotics laws. Upon a DEA
request, the local police department will transfer the property
to the DEA, which will treat the property as if it had been
seized by federal authorities. That is, the DEA will "adopt"the
seizure. The DEA will then institute federal forfeiture
proceedings against the property. Once the forfeiture is
complete, the DEA is authorized to "split the pot" with the
cooperating local police department. See 21 U.S.C.
881(e)(1)(A) (1988).
The City argues that Johnson's conversion claim is
barred by the "relation back doctrine." 21 U.S.C. 881(h)
provides,
All right, title, and interest in
property described in subsection (a) of this
section [which would include any money
traceable to the use or exchange of
controlled substances] shall vest in the
United States upon commission of the act
giving rise to forfeiture under this section.
Under the legal fiction of "relation back,"property rights are
divested "immediately at the moment such property is used in a
manner or context prescribed by section 881, and not at some
future time." Eggleston v. Colorado, 873 F.2d 242, 246 (10th
Cir. 1989), cert. denied, 493 U.S. 1070 (1990). According to
the City, Johnson lost his title and interest in the money before
it was even seized. Thus, the City argues, Johnson has no
conversion claim since, at the time the money was transferred to
the DEA, he had no title to the property. As the City would have
it, it simply "transferred the currency to the true owner, the
United States."
This argument ignores a fundamental problem: By
transferring the money without court approval, the City violated
state law regarding the disposition of seized property. Alaska
Statute 12.36.020 authorizes a law enforcement agency to return
property to the owner if
(1) the property is not in custody in
connection with . . . a criminal proceeding
. . .; and
(2) the property in custody is not
subject to forfeiture under the laws of the
state.
The City attempts to justify the transfer here by arguing that,
with the adoptive seizure and subsequent forfeiture, the DEA
became the sole owner of the money. Thus, the City argues, the
police properly returned the money to its rightful owner.
However, at the time of the transfer, the money was in custody in
connection with a criminal proceeding. Thus, the police could
not "return"the money to the owner, regardless of who the owner
might be. By transferring the money while it was still in the
custody of the district court, the Fairbanks police department
violated AS 12.36.020.
The state may only transfer seized property to the DEA
after it has completed forfeiture proceedings. The procedures
for forfeiting seized property are set out in detail in AS
17.30.100-.130. Alaska Statute 17.30.114(b) states:
Property taken or detained [in a
forfeiture proceeding] shall be held in the
custody of either the commissioner of public
safety or a municipal law enforcement agency
. . . subject only to the orders and decrees
of the court having jurisdiction over any
forfeiture proceedings. If property is
seized under this chapter, the commissioner
of public safety or an authorized municipal
law enforcement agency may
(1) place the property under seal;
(2) remove the property to a place
designated by the court; or
(3) take custody of the property
and remove it to an appropriate location for
disposition in accordance with law.
The remaining sections of Chapter 30 describe the procedures for
forfeiture and disposition of forfeited property. AS 17.30.116-
.130. After the property has been forfeited, it may be
transferred "to another agency of the state or a political
subdivision of the state for a use in furtherance of the
administration of justice."AS 17.30.122(3). It may also be
"forward[ed] to the Drug Enforcement Administration of the United
States Department of Justice for disposition."AS 17.30.122(6).
The City notes that AS 17.30.100 directs the
commissioner of public safety to cooperate with state and federal
agencies in suppressing the abuse of controlled substances.
However, nothing in AS 17.30.100 entitles law enforcement
agencies to circumvent either the requirements in AS 12.36.20
regarding the return of seized property, or the detailed
procedures found in AS 17.30.100-.130 for forfeiting and
disposing of seized property.
The City does not directly address the question of
whether state law prohibits police from unilaterally transferring
property seized and held in connection with a criminal
proceeding. Instead, it focuses on the fact that the DEA was the
first to institute in rem proceedings against the property. By
so doing, the City argues, the DEA obtained exclusive
jurisdiction over the property. See Penn Gen. Casualty Co. v.
Commonwealth of Pennsylvania ex rel. Schnader, 294 U.S. 189, 195
(1935) ("[T]he court first assuming jurisdiction over [] property
may maintain and exercise that jurisdiction to the exclusion of
the other.").
The City's position is that the issuance of the search
warrant only created in personam jurisdiction. Since the state
never instituted in rem forfeiture proceedings, it contends, the
DEA's "adoptive seizure"effectively deprived the state court of
any jurisdiction over the money. In other words, the DEA won the
"race to the res." Johnson argues that, by issuing a search
warrant, the state court obtained jurisdiction over the seized
property. Therefore, the City had no authority to transfer the
money to the DEA. It follows, he argues, that the DEA's
forfeiture proceeding had no legal effect. Johnson has the
better argument.
It is evident from a review of Chapters 35 and 36 of
Title 12 of the Alaska Statutes that a search warrant is directed
primarily against property. A search warrant is defined as a
written order "directed to a peace officer, commanding the peace
officer to search for personal property and bring it before the
judge or magistrate." AS 12.35.120. Once the property is
seized, the peace officer must inventory the property, and return
the warrant and the inventory promptly to the court. AS
12.35.025. In the present case, the warrant commanded the peace
officer to "bring the property before [the magistrate] within 10
days." Clearly, a search warrant is more than just a means of
establishing in personam jurisdiction. It also enables a court
to exercise jurisdiction over the property seized pursuant to it.
It follows, then, that the state court in this case had
jurisdiction over the money "to the exclusion"of the DEA as a
result of the search warrant.2
We conclude that because the district court was the
first to obtain jurisdiction over the property, and because the
City's transfer violated state law, the DEA's forfeiture had no
effect. In other words, the money "was never out of the legal
control of the state court and thus was never in the possession
of the federal government."Scarabin v. Drug Enforcement Admin.,
966 F.2d 989, 995 (5th Cir. 1992). It is as if the federal
forfeiture never occurred. Id. at 993.
By unilaterally transferring the property without any
authority and in contravention of state statutes, the City
committed a conversion. As we recently stated, "[D]elivery of
property by a bailee to a third person who is not entitled to the
property can be a form of conversion. `Perhaps the most common
way that conversion is committed is by an unauthorized transfer
or disposal of possession of the goods to one who is not entitled
to them.'" Thompson v. Anderson, 824 P.2d 712, 714-15 (Alaska
1992) (emphasis in original) (quoting W. Page Keeton, et al.,
Prosser & Keeton on the Law of Torts 15, at 96 (5th ed. 1984)).
We conclude that the City is liable for the "full value"of the
conversion. Id. at 714.3
REVERSED and REMANDED with instructions that summary
judgment be entered in Johnson's favor.
_______________________________
1. On December 12 Johnson filed a motion requesting the
court to order the state to show cause why it had not returned
the $44,850. Judge Savell denied the motion without comment.
2. The Fifth Circuit Court of Appeals, in a forfeiture
case with facts very similar to the facts of the present case,
reached the same conclusion we do today:
[W]e [] conclude that the DEA lacked in
rem jurisdiction to forfeit Scarabin's
property. From the moment of seizure the
state district court had exclusive control
over the res by virtue of issuing the search
warrant that procured the seized funds and
never relinquished that control to the DEA or
any other agency or person. A federal agency
cannot obtain jurisdiction over the res--and
thus cannot find the res administratively
forfeit--when a state court obtains
jurisdiction first and never relinquishes
that jurisdiction. Here, Louisiana's
statutory law, La. C. Cr. P. art. 167,
clearly and unequivocally (employing the
mandatory "shall") provides that the state
court asserts control over items seized
pursuant to its warrant:
When property is
seized pursuant to a search
warrant, it shall be retained under
the direction of the judge. If
seized property is not to be used
as evidence or is no longer needed
as evidence, it shall be disposed
of according to law, under the
direction of the judge.
Under art. 167, the state court's
control terminates when, but only when, the
seized property is disposed of according to
law. Nothing in Louisiana's comprehensive
forfeiture law indicates that forfeiture is
an exception to art. 167, or that
unsanctioned transfers by local police
operate to defeat the state court's control
over seized property.
Scarabin v. Drug Enforcement Admin., 966 F.2d 989, 993-94 (5th
Cir. 1992) (footnote omitted).
3. We will not allow the City to hide behind the immunity
statute, AS 09.65.070(d)(2), because to do so would allow the
Fairbanks Police to continue to illegally transfer property with
no recourse for aggrieved claimants. To argue that the City is
shielded from liability because Steinnerd's transfer of Johnson's
money to the DEA was a discretionary act is to miss the point of
this opinion, which is that the Fairbanks police had no authority
to transfer the money in the manner that they did.
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