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United States v. Real Property Located at 5294 Bandy Road

United States District Court, D. Idaho

October 31, 2014

Real Property located at 5294 BANDY ROAD, PRIEST RIVER, BONNER COUNTY, IDAHO, and all fixtures, improvements, and appurtenances thereon (Owner of Record: Nathan A. Schumacher), Defendant, NATHAN SCHUMACHER and DANE SCHUMACHER, Claimants.


CANDY W. DALE, Magistrate Judge.

This is a civil asset forfeiture action under 21 U.S.C. § 881 and 18 U.S.C. § 983. The Government of the United States of America brings this action in rem against real property located at 5295 Bandy Road in Priest River, Idaho, and all fixtures, improvements, and appurtenances to it (the Property). Dane Schumacher resided at the Property from 2005 until 2012, when he was arrested on, and later pled guilty to, state felony drug charges related to an indoor marijuana growing operation at the Property. Dane's son, Nathan Schumacher, has held legal title to the Property since 2006. Both Dane and Nathan Schumacher claim interests in the Property, and Nathan seeks dismissal of the forfeiture action.[1]

Before the Court are the parties' cross-motions for summary judgment. In a motion filed on March 10, 2014, (Dkt. 19), Nathan asserts two grounds for dismissal of the United States' forfeiture action against the Property. First, he argues his ownership interest in the Property is not forfeitable because he is an "innocent owner" as defined in 18 U.S.C. § 983(d). In the alternative, he claims forfeiture of the Property would be in violation of the Excessive Fines Clause of the Eighth Amendment to the Constitution of the United States.

The Government filed its Motion to Strike the Claim of Nathan Schumacher and for Summary Judgment, (Dkt. 28), on August 4, 2014, pursuant to Rule G(8)(c) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (Supplemental Rules). Relying on Nathan's statement of undisputed facts (Dkt. 19-2), the Government claims Nathan lacks standing to challenge the forfeiture and does not meet the statutory definition of an "innocent owner" because, despite holding legal title to the Property, Nathan did not exercise dominion and control over it. Additionally, the Government requests summary judgment of forfeiture, arguing Nathan's Eighth Amendment analysis is premature until the forfeiture judgment issues.

A hearing on these matters was held on October 22, 2014, at which time the Court took all pending motions under advisement. After carefully considering the record, the arguments of the parties, and applicable law, the Court will grant in part and deny in part both motions.


1. Undisputed facts

In July of 2005, Marsha Hester conveyed the Property by warranty deed to Dane, following Dane's purchase of the Property for approximately $65, 000. At the time of purchase, the Property was undeveloped, but Dane later erected a dwelling on it.

In December of 2005, while the dwelling was still under construction, Dane suffered a heart attack and underwent triple-bypass surgery. After his heart surgery, Dane executed a quitclaim deed transferring the Property to his son, Nathan, on June 6, 2006. (N. Schumacher Stmnt. of Facts, Ex. A, Dkt. 19-3 at 2.) The quitclaim deed was recorded the same day. ( Id. ) According to the Schumachers, Dane conveyed the property to Nathan as an estate planning measure and in anticipation of further health problems. (D. Schumacher Aff. ¶ 9, Dkt. 19-3 at 5; N. Schumacher Aff. ¶ 3, Dkt. 19-3 at 10.) Dane continued to reside in the dwelling on the Property while Nathan continued to reside on his farm in Rathdrum, Idaho.

Nathan has paid all property taxes for the Property after execution of the 2006 quitclaim deed. (Tax Records, Dkt. 30-1 at 2-9.) Additionally, Nathan held and paid premiums on an insurance policy covering the Property, the correspondence for which is mailed to Nathan's residence in Rathdrum. Nathan also stored farm equipment on the Property and paid for improvements, maintenance, and repairs to the Property. Dane, on the other hand, lived on the Property rent free, kept his vehicle and all his personal belongings on the Property, and paid for the utilities.

Dane at some point in time operated a marijuana growing operation concealed in two rooms beneath the living quarters in the dwelling on the Property. Dane kept the grow area locked at all times and possessed the only key. (D. Schumacher Aff. ¶ 12, Dkt. 19-3 at 6.) Although the parties dispute when Dane began growing marijuana at the Property, utility records indicate that power usage at the Property rose from 304 kilowatt hours per month (KWH/month) to 2, 483 KWH/month in November of 2008 and remained above 2, 000 KWH/month through June of 2012. (Wiseman Aff. ¶ 11, Dkt. 1-1 at 5.) This level of power usage is high for a single-occupant dwelling and is unusual in that it did not significantly vary with the seasons. ( Id .)

In March of 2012, the Idaho State Police began investigating a suspected marijuana growing operation on the Property. On June 12, 2012, Idaho State Police detectives and officers from the Bonner County Sheriff's Office served a search warrant on Dane's residence at the Property. The search revealed an active indoor marijuana grow, consisting of 65 plants in various stages of growth, packing materials, scales, and various other drug paraphernalia. Dane was arrested by Idaho authorities and charged by information with one felony count of manufacturing marijuana and one felony count of possessing marijuana with intent to distribute in the First Judicial District of the State of Idaho, in and for the County of Bonner. In April of 2013, Dane plead guilty to both counts. In June of that year, Dane received a withheld judgment and a withheld sentence pending successful completion of three years of supervised probation and payment of $500 in restitution and $270 in fees and costs.

2. Procedural history

The Government initiated this lawsuit on June 12, 2012, by filing a Verified Complaint In Rem against the Property, alleging the Property is subject to forfeiture under 21 U.S.C. § 881(a)(6)-as proceeds traceable to a drug exchange-and under § 881(a)(7)-as property used in connection with a drug offense. (Dkt. 1.) Pursuant to 18 U.S.C. § 985(c), the United States posted a Notice of Forfeiture on the Property on July 26, 2012. (Dkt. 2.) On August 22, 2012, Nathan filed a Verified Statement of Interest, claiming sole ownership of the Property by virtue of the June 6, 2006 quitclaim deed. (Dkt. 3.) Dane received notice of this forfeiture action on August 22, 2012, and filed a Verified Statement of Interest in the Property on September 5, 2012.

On September 25, 2012, the Schumachers moved to stay further proceedings, pending resolution of the criminal charges against Dane. (Dkt 14.) In response, the Government argued against a stay at least until it could serve and receive responses to special interrogatories pertaining to ownership of the Property. The Court denied the motion to stay in an Order dated January 11, 2013. Thereafter, acting under Supplemental Rule G(6), the Government served special interrogatories and requests for production of documents on Dane and Nathan. In April of 2013, the Schumachers served their respective answers to the special interrogatories and produced certain documents to the Government. (D. Schumacher Ans., Dkt. 19-3 at 13-21; N. Schumacher Ans., Dkt. 19-3 at 29-37.) The Government did not request additional discovery or seek clarification of any of the Schumachers' answers to the special interrogatories.

There was no apparent action in the case for almost one year. On March 7, 2014, the Court ordered the parties to participate in a judicially supervised settlement conference before the Honorable Richard Tallman. Nathan filed his motion for summary judgment three days later. (Dkt. 19.) Nathan's motion argues the case should be dismissed because Nathan is an "innocent owner" under 18 U.S.C. § 983(d) and because the forfeiture would be constitutionally excessive, but it does not challenge the Property's forfeitability under §§ 881(a)(6) or (7). Thereafter, on March 24, the Government withdrew from the settlement conference, explaining that it would be more appropriate to respond to Nathan's motion for summary judgment. (Dkt. 20.) The Government filed a response on April 24, claiming disputed issues of fact preclude summary judgment in favor of Nathan. (Dkt. 24.) Nathan replied on May 12, 2014, (Dkt. 25), and, one week later, the Court set the matter for an August 19 hearing.

On August 4, 2014, the Government requested that the hearing be continued, based on scheduling conflicts of both counsel, and also filed its Motion to Strike Claim of Nathan Schumacher and for Summary Judgment of Forfeiture. (Dkt. 28.) In its motion, the Government asserts Nathan lacks both standing and the dominion and control over the Property necessary to establish the innocent owner defense. The Court reset the hearing on Nathan's motion for October 22, 2014. Meanwhile, on August 28, 2014, Nathan filed a response in opposition to the United States' motion to strike, arguing the undisputed facts establish both his standing to contest the forfeiture and his dominion and control over the Property. The Government did not file a reply brief. However, on October 17, 2014, the Government filed a "Pre-hearing Memorandum of Recent Cases [sic], " citing a single case- United States v. 2007 Honda Civic EX Sedan , 13-CV-483-JDP, 2014 WL 4211203 (W.D. Wis. Aug. 25, 2014).[2] As requested by the Government, (Dkt. 28-1 at 17), the Court heard argument on all pending motions during the October 22, 2014 hearing.

All parties have given their express written consent to proceed before the undersigned United States Magistrate Judge. (Dkt. 11.) Accordingly, the Court now addresses the parties' cross-motions for summary judgment.


Federal Rule of Civil Procedure 56 "is silent as to how the court must analyze simultaneous cross-motions for summary judgment." Fair Hous. Council of Riverside County, Inc. v. Riverside Two , 249 F.3d 1132, 1135 (9th Cir. 2001). However, the United States Court of Appeals for the Ninth Circuit has held that "when parties submit cross-motions for summary judgment, each motion must be considered on its own merits." Id. at 1136 (citing William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions , 139 F.R.D. 441, 499 (Feb. 1992)) (internal quotations and alterations omitted). Although the Court must decide each party's motion on an individual basis and in accord with Rule 56 standards, the decision must be made in light of the evidence offered to support both motions. Id. (quoting Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720, at 335-36 (3d ed. 1998)). Therefore, when cross-motions for summary judgment are filed, each motion must be "considered with all reasonable inferences favoring the nonmoving party." Baldwin v. Trailer Inns, Inc. , 266 F.3d 1104, 1117 (9th Cir. 2001).

One of the principal purposes of summary judgment "is to isolate and dispose of factually unsupported claims...." Celotex Corp. v. Catrett , 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut, " but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986).

The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. Id. at 255. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA , 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu , 849 F.2d 1205, 1208 (9th Cir. 1988).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey , 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson , 212 F.3d 528, 532 (9th Cir.2000).

This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in his favor. Id. at 256-57. The non-moving party must go beyond the pleadings and show "by her affidavits, or by the depositions, answers to interrogatories, or admissions on file" that a genuine issue of material fact exists. Celotex , 477 U.S. at 324.

However, the Court is "not required to comb through the record to find some reason to deny a motion for summary judgment." Carmen v. San Francisco Unified Sch. Dist. , 237 F.3d 1026, 1029 (9th Cir.2001) (quoting Forsberg v. Pac. Nw. Bell Tel. Co. , 840 F.2d 1409, 1418 (9th Cir. 1988)). Instead, the "party opposing summary judgment must direct [the Court's] attention to specific triable facts." S. Cal. Gas Co. v. City of Santa Ana , 336 F.3d 885, 889 (9th Cir. 2003). Statements in a brief, unsupported ...

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