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Alaska v. Johnson (5/22/98), 958 P 2d 440
<![CDATA[
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, )
) Supreme Court No. S-7673
Appellant, )
) Superior Court No.
v. ) 3AN-95-4305 CI
)
DEMETRIUS JOHNSON AND ) O P I N I O N
$66,020.00, )
)
Appellee. ) [No. 4991 - May 22, 1998]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Karen Hunt, Judge.
Appearances: Marilyn J. Kamm, Assistant
Attorney General, Bruce M. Botelho, Attorney General, Juneau, for
Appellant. Lance Christian Wells, Law Offices of Lance Christian
Wells, P.C., Anchorage, for Appellee.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
PER CURIAM
I. INTRODUCTION
The State of Alaska appeals the superior court's award of
Alaska Civil Rule 82 attorney's fees against it in a civil
forfeiture proceeding. We affirm in part, reverse in part, and
remand.
II. FACTS AND PROCEEDINGS
On May 24, 1995, the State of Alaska filed a complaint in
the district court seeking the civil forfeiture of $66,020 pursuant
to AS 17.30.100 - 900. Since the action was unconnected to a
criminal prosecution, the proceeding was in rem. AS 17.30.112(a).
On May 31 an attorney entered an appearance "on behalf of
Demetrius Johnson"who claimed to be "the lawful owner of the
$66,020 in United States currency." Johnson filed an answer and
notice of claim. He also filed a petition for release of the
$66,020 seized by the State. The principal basis of the petition
was Johnson's claim that the State held the $66,020 for more than
forty-eight hours without a court order authorizing its continued
detention, in violation of AS 17.30.114(a)(3). [Fn. 1]
On July 11 the State filed a motion requesting removal of
the case from the district court to the superior court, and an
extension of time to respond to Johnson's petition, answer, notice
of claim, and discovery requests. Specifically, the State
requested "a thirty day extension of time . . . from the date that
jurisdiction is transferred to the Superior Court." In an affi-
davit attached to the State's motion, the assistant district
attorney stated that one reason the State was requesting an
extension was that she was "new to the area of forfeitures." She
also affied that the State sought removal because "the
jurisdictional amount of the District Court is only $50,000 and the
amount of money seized in this case is $66,020."
Johnson opposed only the State's request for an extension
of time to respond to his petition. However, he did not oppose the
motion for removal to the superior court. On July 25 the case was
removed to the superior court.
On September 13 Johnson filed a motion requesting a
ruling from the superior court on his petition for release of the
$66,020. The State still had not filed its opposition to the
petition, and neither the district court nor the superior court had
ever ruled on the State's motion for an extension of time.
On September 25 the superior court granted the State's
motion for an extension of time, but only until August 23, which
was thirty days from the transfer of the case to the superior
court. It ruled that the State's opposition to Johnson's petition
"should have been prepared and filed in anticipation of the
[expiration of the] 30 day extension." Accordingly, the superior
court entered the following order:
IT IS HEREBY ORDERED, ADJUDGED AND
DECREED that the above $63,900 [sic] in United States Currency is
hereby released to its lawful owner Demetrius Johnson.
On the same day the superior court also granted Johnson's motion
to issue an order that the State be deemed to have admitted certain
requests for admission.
The State moved for reconsideration of both of these
orders. The superior court denied the State's motion for recon-
sideration of its order releasing the $66,020 to Johnson. However,
the superior court vacated its order deeming admitted the requests
for admission.
The assistant district attorney for the State affied that
"on or about October 25, 1995,"she notified Johnson's attorney
that the State would release the $66,020 to his client on condition
that Johnson "present himself at the trooper headquarters and show
positive proof of I.D. to the property and evidence custodian."
She affied that "[n]o one named Demetrius Johnson ever showed up at
trooper headquarters to claim the money."
On November 7 the State released the $66,020 to an agent
of the United States Internal Revenue Service who had obtained a
seizure warrant from the United States District Court for the
District of Alaska authorizing him to seize the currency.
On December 21 Johnson filed a motion for summary
judgment. The State opposed the motion. The superior court
granted Johnson's motion and dismissed the State's complaint on
March 21, 1996. It emphasized that
there are no genuine issues of material fact.
As a matter of law, the court no longer has subject matter
jurisdiction over the property in question. The subject matter of
this action lawfully passed to the jurisdiction of the United
States District Court pursuant to a valid court order. This court
is unable to grant the relief sought in the pleadings.
On March 28 Johnson filed a motion for full attorney's
fees totaling $15,780.00. Johnson computed the total amount of
fees using an hourly rate of $200.
On April 23 the superior court awarded Johnson attorney's
fees of $10,780.00. It indicated that its award was predicated on
"vexatious carrying on [of] litigation after [the] reasonable[ness]
of dismissal was apparent." Citing Civil Rule 82(b)(3)(C), [Fn. 2]
the superior court apparently determined its award in accordance
with an hourly rate lower than that claimed by Johnson's attorney.
The State appeals the award of attorney's fees, making
several arguments which will be discussed below. The State does
not appeal the superior court's decision granting Johnson's
petition for release of the currency, or its decision granting
Johnson's motion for dismissal of the State's complaint.
Additionally, the State does not argue that Rule 82 should not
apply to civil forfeiture proceedings.
III. DISCUSSION
A. The Superior Court Had Jurisdiction to Award Attorney's
Fees against the State.
The State's first argument is that the superior court
lacked jurisdiction to award costs and attorney's fees after the
res was lawfully seized by the federal government pursuant to a
search warrant. Whether a court has jurisdiction is a matter of
law which we review de novo. See, e.g., Hydaburg Co-Op Ass'n v.
Hydaburg Fisheries, 925 P.2d 246, 248 (Alaska 1996); Washington
Ins. Guar. Ass'n v. Ramsey, 922 P.2d 237, 240 n.10 (Alaska 1996).
We reject this argument. When the State's complaint was
removed to the superior court, it unquestionably possessed personal
jurisdiction over the State, [Fn. 3] and subject matter
jurisdiction over the forfeiture proceeding. Whether or not the
superior court later relinquished its jurisdiction over the res by
ordering the release of the currency, [Fn. 4] it never relinquished
its jurisdiction over the State or its power to award attorney's
fees against the State. The State comes close to conceding this
point when it states in its reply brief that "[t]he trial court
still has authority under Civil Rule 11 to sanction parties and
counsel for abuses."
B. The Superior Court Did Not Err in Designating Johnson the
Prevailing Party for Purposes of an Award of Civil Rule 82
Attorney's Fees.
The State's next argument is that the superior court
erred in designating Johnson the prevailing party within the
meaning of Rule 82. The State argues that it was the prevailing
party because "[t]he order releasing the funds to [Johnson] was a
hollow victory. The main issue in the case was whether the funds
should be forfeited as the product of illegal drug transactions.
The State was the prevailing party because the funds were seized
. . . [by] the federal government."
"The determination of which party is the prevailing party
is committed to the discretion of the trial court." Demoski v.
New, 737 P.2d 780, 787 n.7 (Alaska 1987) (citing Owen Jones & Sons,
Inc. v. C. R. Lewis Co., 497 P.2d 312, 314 (Alaska 1972)). We
review such determinations for abuse of discretion. Howard S.
Lease Constr. Co. & Assocs. v. Holly, 725 P.2d 712, 720 (Alaska
1986).
We have allowed an award of Rule 82 fees against a
plaintiff who sought and received a voluntary dismissal without
prejudice. Miller v. Wilkes, 496 P.2d 176, 178 (Alaska 1972),
overruled on other grounds by R. A. Davenny & Assocs., Inc. v.
Shinjin Motor Sales Co., 533 P.2d 1112, 1114-15 (Alaska 1975). We
have also indicated that when litigation is dismissed as a result
of the delay or intransigence of one of the litigants, the trial
court may deem the other litigant the prevailing party for purposes
of Rule 82. Hart v. Wolff, 489 P.2d 114, 119 (Alaska 1971).
Specifically, in Hart we held that even though there had not been
a final determination on the merits in the case, a defendant was
"clearly"the prevailing party where the complaint was dismissed
without prejudice because the plaintiff failed to comply with an
order to produce corporate records. Id. In view of the circum-
stances of the case, we called "misplaced"the plaintiff's reliance
on the general rule "that the prevailing party to a suit is the one
who successfully prosecutes the action or successfully defends
against it prevailing on the main issue. . . ." Id. [Fn. 5]
The superior court dismissed this action because of the
State's delay. As mentioned above, contrary to AS 17.30.114, and
despite the fact that the State was in possession of the $66,020
for approximately four months, the State never obtained a court
order authorizing the detention of the property for more than
forty-eight hours. Additionally, the State failed to respond to
Johnson's motion requesting a release of the $66,020 within the
thirty-day extension the State requested. As a result of the
State's tardiness, the superior court issued an order directing the
State to turn over the currency "to its lawful owner Demetrius
Johnson."[Fn. 6] It is true that the superior court's order which
ultimately dismissed the State's complaint did not explicitly refer
to the State's delay. It dismissed the State's complaint because
"[t]he subject matter of this action lawfully passed to the
jurisdiction of the United States District Court pursuant to a
valid court order." There is no doubt, though, that if the State
had acted in a timely fashion, the superior court would have had
jurisdiction over the res.
Under these circumstances, the superior court did not
abuse its discretion by designating Johnson as the prevailing
party.
C. The Award of Attorney's Fees Should Be Reversed If
Demetrius Johnson Is an Alias. Since the Superior Court Did Not
Make a Finding on This Point, the Case Is Remanded.
The State's next argument is that an award of attorney's
fees to Johnson should be reversed because Johnson "is a fictitious
person." In support of its argument, the State notes that Alaska
Civil Rule 17(a) provides that "every action shall be prosecuted in
the name of the real party in interest."[Fn. 7] The State also
cites Stevens v. Secretary of Department of Health & Social
Services, 31 Fed. Cl. 12 (1994), which interpreted an almost
identical federal rule, Rules of the United States Court of Federal
Claims (RUSCFC) Rule 17(a). The court in that case concluded that
"[t]he Rule . . . plainly did not envision that an action could be
filed in the name of an entirely fictitious person and amended once
counsel identifies a client." Id. at 21. Finally, the State cites
In re Forfeiture of Cessna 401 Aircraft, N8428F, 431 So. 2d 674,
675-76 (Fla. App. 1983), which held that the assignee of an alias
lacked standing to contest the forfeiture of an aircraft. [Fn. 8]
We adopt the rule advocated by the State. Johnson offers
no response to the State's argument, our own research has failed to
disclose persuasive contrary authority, [Fn. 9] and there would
appear to be little to commend a rule permitting an action to
recover property seized by the government to be maintained on
behalf of a fictitious person. Since the superior court did not
make a finding concerning whether Demetrius Johnson is an alias, we
remand the case to the superior court to enable the court to make
that determination.
D. Was the Amount of Attorney's Fees Awarded by the Superior
Court Excessive?
The State's final arguments are that (1) "the superior
court erred in characterizing the State's conduct in [this]
litigation as 'vexatious'"and (2) the superior court erred by
failing to "first calculate the award authorized under Rule 82(a)
or (b) and then state its reasons for the deviation from that
schedule."[Fn. 10]
Given the superior court's unchallenged finding that
Johnson's attorney's fees were excessive, the superior court's
award is properly viewed as an award of 100% of Johnson's
reasonable attorney's fees. The superior court's award was pred-
icated on its finding that the State's conduct amounted to
"vexatious carrying on [of] litigation after [the] reasonable[ness]
of dismissal was apparent." The superior court, however, failed to
indicate when it believed that it was "apparent"that dismissal was
"reasonable,"or what subsequent conduct by the State amounted to
"vexatious carrying on [of] litigation." It is therefore possible
that the superior court's finding was based on an erroneous legal
premise.
The superior court may have been of the view that
dismissal was required shortly after the complaint was filed,
because the State's attorney failed to obtain an AS 17.30.114
warrant. Accordingly, it may have believed that every motion the
State filed after forty-eight hours elapsed was "vexatious carrying
on [of] litigation,"because it was "apparent"that dismissal was
required after forty-eight hours. Assuming that the State's
failure to obtain the warrant resulted from the State attorney's
negligence or inexperience, rather than from the fact that the
State lacked sufficient evidence to justify retention of the
property, [Fn. 11] the view that dismissal after forty-eight hours
was required was mistaken. [Fn. 12]
Accordingly, we vacate the superior court's award of
attorney's fees in this case. If the superior court concludes that
Demetrius Johnson is not an alias, it should make a new
determination of the appropriate amount of attorney's fees. If it
concludes that it is appropriate to award attorney's fees in excess
of those provided by the schedule of Rule 82, "[t]he court must
first calculate what award is authorized under the schedule set
forth in Civil Rule 82(a) and then state its reasons for deviating
from that award." Kowalski v. Kowalski, 806 P.2d 1368, 1373 n.7
(Alaska 1991).
IV. CONCLUSION
AFFIRMED in part, REVERSED in part, and REMANDED for
further proceedings consistent with this opinion.
FOOTNOTES
Footnote 1:
AS 17.30.114 provides in pertinent part:
(a) Property listed in AS 17.30.110 may
be seized by a peace officer upon an order issued by a court having
jurisdiction over the property upon a showing of probable cause
that the property may be forfeited under AS 17.30.110. Seizure
without a court order may be made if
. . . .
(3) there is probable cause that the
property was used, is being used, or is intended for use, in
violation of this chapter or AS 11.71 and the property is easily
movable; property seized under this paragraph may not be held for
more than 48 hours without a court order obtained to continue its
detention.
Footnote 2:
Civil Rule 82(b)(3) provides in pertinent part:
(3) The court may vary an attorney's fee
award calculated under subparagraph (b)(1) or (2) of this rule if,
upon consideration of the factors listed below, the court
determines a variation is warranted:
. . . .
(C) the reasonableness of the attorneys'
hourly rates and the number of hours expended[.]
Footnote 3:
See, e.g., United States v. 51 Pieces of Real Property,
Roswell, N.M., 17 F.3d 1306, 1313 (10th Cir. 1994) (holding that
government submits itself to personal jurisdiction of court when it
institutes forfeiture action); cf. United States v. $12,390.00, 956
F.2d 801, 804 (8th Cir. 1992) (holding that appellate court retains
in personam jurisdiction over the party who initiated a drug
forfeiture proceeding even if in rem jurisdiction is absent).
Footnote 4:
We express no opinion concerning whether the superior court
was correct in concluding that the order releasing the currency to
Johnson, the seizure of the currency by the federal government, and
the initiation of forfeiture proceedings in federal court divested
the superior court of jurisdiction over the res.
Footnote 5:
We note that a contrary rule would require that in an action
dismissed as a result of a party's failure to comply with court
deadlines, the trial court must (1) wait to see if the losing party
files a new action, and if so, (2) await the result of the new
action on the merits before (3) designating a prevailing party in
the original action. Such an approach would be inefficient, and
would fail to tax dilatory litigants for the additional costs they
imposed by requiring their opponents to respond to two actions.
Footnote 6:
As mentioned above, the State does not challenge the validity
of this order in this appeal.
Footnote 7:
The full text of Civil Rule 17(a) provides:
Every action shall be prosecuted in the
name of the real party in interest. An executor, administrator,
guardian, trustee of an express trust, a party with whom or in
whose name a contract has been made for the benefit of another, or
a party authorized by statute may sue in that person's own name
without joining the party for whose benefit the action is brought;
and when a statute of the state so provides, an action for the use
or benefit of another shall be brought in the name of the state.
No action shall be dismissed on the ground that it is not
prosecuted in the name of the real party in interest until a
reasonable time has been allowed after objection for ratification
of commencement of the action by, or joinder or substitution of,
the real party in interest; and such ratification, joinder, or sub-
stitution shall have the same effect as if the action had been
commenced in the name of the real party in interest.
Footnote 8:
The court wrote:
In the present case it is uncontradicted
that there is no such person, Philip R. Duffe; and that the name
itself is either fictitious or an alias; therefore, we find the
representation of an assignment therefrom to be so offensive to the
lofty purpose of protecting an identified owner's interest from an
unfair seizure as to warrant the action we take here. We are
determined to protect the rights of innocent property owners; but
we are equally determined not to wrestle with important
constitutional drug issues for the benefit of an assignee of a
nonexistent person.
In re Forfeiture of Cessna 401, 431 So. 2d at 675-76.
Footnote 9:
Some support for Johnson's position is provided by cases such
as United States v. 16510 Ashton, 47 F.3d 1465, 1471 (6th Cir.
1995) (opinion of a single judge), which held that in a forfeiture
proceeding involving real property, a straw man fronting for a drug
dealer is entitled to a preseizure hearing. For reasons indicated
in the dissent and in other cases criticizing the single judge's
opinion, however, we think that few courts are likely to follow
this holding. See id. at 1472-75 (Boggs, J., dissenting); United
States v. 2030 E. Monroe Street, 884 F. Supp. 1218, 1225-26 (C.D.
Ill. 1995); People v. $28,500 in U.S. Currency, 59 Cal. Rptr. 2d
239, 251-52 (Cal. App. 1996) ("A party seeking to challenge the
government's forfeiture of money or property used in violation of
federal law must first demonstrate an interest in the seized item
sufficient to satisfy the court of its standing to contest the
forfeiture. There is language in a few opinions to the contrary --
that the government must first show probable cause for the
institution of the action before claimant is put to his proof of
standing. If that were the law, then persons with no interest
whatsoever in seized property could make a handsome living filing
claims.") (citations and quotations omitted).
Footnote 10:
In general, a trial court has broad discretion to award Rule
82 attorney's fees in amounts exceeding those prescribed by the
schedule of the rule, so long as the court specifies in the record
its reasons for departing from the schedule. Taylor Constr. Serv.,
Inc. v. URS Co., 758 P.2d 99, 102-103 (Alaska 1988); Hayes v. Xerox
Corp., 718 P.2d 929, 938-39 (Alaska 1986). "An award of attorney's
fees will be overturned only upon a showing of abuse of discretion
or a showing that the award is manifestly unreasonable."
Feichtinger v. Conant, 893 P.2d 1266, 1268 (Alaska 1995) (citing De
Witt v. Liberty Leasing Co. of Alaska, 499 P.2d 599, 601 (Alaska
1972)). However, "[a]n award of full attorney's fees is manifestly
unreasonable in the absence of bad faith or vexatious conduct by
the losing party." State v. University of Alaska, 624 P.2d 807,
817 (Alaska 1981); see also Demoski v. New, 737 P.2d 780, 788
(Alaska 1987).
Footnote 11:
The superior court did not make any findings on this question,
and the record is not clear on this point.
Footnote 12:
See United States v. James Daniel Good Real Property, 510 U.S.
43, 63-64 (1993). The Supreme Court stated:
We have held that if a statute does not
specify a consequence for noncompliance with statutory timing
provisions, the federal courts will not in the ordinary course
impose their own coercive sanction.
In Montalvo-Murillo, for example, we
considered the Bail Reform Act of 1984, which requires an
"immediat[e]"hearing upon a pretrial detainee's "first appearance
before the judicial officer." 18 U.S.C. sec. 3142(f). Because
"[n]either the timing requirements nor any other part of the Act
[could] be read to require, or even suggest, that a timing error
must result in release of a person who should otherwise be
detained,"we held that the federal courts could not release a
person pending trial solely because the hearing had not been held
"immediately." We stated that "[t]here is no presumption or
general rule that for every duty imposed upon the court or the
Government and its prosecutors there must exist some corollary
punitive sanction for departures or omissions, even if negligent."
To the contrary, we stated that "[w]e do not agree that we should,
or can, invent a remedy to satisfy some perceived need to coerce
the courts and the Government into complying with the statutory
time limits."
(Citations omitted.) Like the statutes referred to in Good Real
Property, AS 17.30.114 fails to specify a consequence for
noncompliance. If the superior court concluded that a sanction of
dismissal was required after the State missed the forty-eight hour
deadline for obtaining a warrant, it erred.
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