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United States v. Mesle

August 4, 2010

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, YUBRAN S. MESLE, CLAIMANT-APPELLANT,
v.
SIGNED PERSONAL CHECK NO. 730 OF YURBAN S. MESLE, DRAWN FROM BANK OF AMERICA ACCOUNT NO. 0967267676 IN THE AMOUNT OF $240,000.00 IN U.S. CURRENCY; SIGNED PERSONAL CHECK NO. 1004 OF YUBRAN S. MESLE, DRAWN FROM WELLS FARGO BANK ACCOUNT 3572585739 IN THE AMOUNT OF $5,000.00 IN U.S. CURRENCY; SIGNED PERSONAL CHECK NO. 1040 OF YUBRAN S. MESLE, DRAWN, FROM BANK OF AMERICA ACCOUNT NO. 2454767190, NO AMOUNT STATED; $197,031.14 IN U.S. CURRENCY, SEIZED FROM BANK OF AMERICA ACCOUNT NO. 0967267676 ON FEBRUARY 22, 2008; $1,598.21 IN U.S. CURRENCY, SEIZED FROM WELLS FARGO BANK ACCOUNT NO. 3572585739 ON FEBRUARY 22, 2008, DEFENDANTS.



Appeal from the United States District Court for the Southern District of California William Q. Hayes, District Judge, Presiding, D.C. No. No. 3:08-cv-00394-WQH-CAB.

The opinion of the court was delivered by: Reinhardt, Circuit Judge

FOR PUBLICATION

OPINION

Argued and Submitted April 9, 2010 -- Pasadena, California

Before: Dorothy W. Nelson and Stephen Reinhardt, Circuit Judges, and Robert H. Whaley, Senior District Judge.*fn1

Yubran Mesle appeals the district court's denial of his motion to set aside an entry of default in a forfeiture proceeding against checks drawn on Mesle's accounts and funds in those accounts. "[J]udgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). Our rules for determining when a default should be set aside are solicitous towards movants, especially those whose actions leading to the default were taken without the benefit of legal representation. See id.; TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 695-98 (9th Cir. 2001). The district court failed to show such solicitude, holding the movant to a standard inappropriate for determining whether an unrepresented lay party's conduct demonstrated culpability; and made merits decisions as to the movant's defenses that were premature at this stage of the proceedings, and, moreover, were incorrect. We reverse.

I.

On November 8, 2007, Yubran Mesle's brother, Ata Dighlawi, entered the United States carrying three personal checks drawn on Mesle's accounts that totaled $245,000. Each was signed by Mesle, but the payee line for each was blank. Dighwali failed to declare the checks, and customs officials seized them pursuant to 31 U.S.C. §§ 5316(a)(1)(B) and 5324(c)(1).

A week later, Mesle received a letter from Customs informing him that it had seized the checks and that they were subject to forfeiture under 31 U.S.C. § 5317. The letter described a set of legal options available to Mesle, including, among others, filing a petition for administrative relief with US Customs and filing a claim that would give rise to a forfeiture proceeding in federal district court. Nowhere did the letter explain that these options were exclusive of one another, or what would happen if Mesle exercised more than one option.

Included with the letter were several forms, including a "Petition for Remission or Mitigation of Forfeiture," used to initiate an administrative proceeding with Customs; a "Seized Asset Claim Form," used to initiate an action in federal district court; and an "Election of Proceedings Form." The Election of Proceedings Form listed three options for Mesle - 1) requesting that Customs delay forfeiture proceedings and consider an administrative petition, 2) abandoning the property, and 3) requesting that Customs send his case for court action - and stated that Mesle was to choose only one of these options.

Mesle filled out this paperwork without the help of a lawyer, and apparently without understanding that the instructions to choose one option on the Election of Proceedings form meant that he had to choose either a court action or an administrative petition process. He mailed to Customs both the Petition for Remission and the Seized Asset Claim form; in his declaration he stated that he did so because he hoped for the aid in recovering his property of both the courts and the administrative apparatus at Customs. Mesle also mailed Customs the Election of Proceeding form, having checked the box for a court proceeding. He asserts that he did so only out of confusion, and without realizing that this would nullify his administrative petition.

In February 2008, a United States Magistrate Judge issued two warrants ordering the seizure of $240,000 and $5,000, respectively, from the bank accounts on which the seized checks were drawn. Federal agents then seized $197,031.14 from one of Mesle's accounts and $1,598.21 from another.

On March 3, 2008, the United States filed a complaint for forfeiture pursuant to 31 U.S.C. § 5317(c) against the three checks and the seized funds, and on March 6, 2008, it sent Mesle and other potential claimants a notice of judicial forfeiture proceedings and a copy of the complaint. The notice stated that in order to contest the forfeiture, a claimant had to file a verified claim in district court within 35 days, and an answer to the complaint within 20 days of filing the verified claim.

Mesle received the notice of forfeiture proceedings a few days later, but, again acting without the aid of a lawyer, took no action in response to it. Mesle asserts that he did nothing because he thought that his prior action in sending in the Peti- tion for Remission and the Seized Asset Claim form was sufficient at least until the resolution of the administrative process that he ...


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