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United States v. $2

United States District Court, M.D. North Carolina

November 14, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
$2, 990.00 in U.S. CURRENCY and $47, 000.00 in U.S. CURRENCY, Defendants.

MEMORANDUM OPINION AND ORDER

WILLIAM L. OSTEEN, Jr., District Judge.

The United States of America ("Plaintiff" or the "Government") has brought a civil forfeiture proceeding against $2, 990.00 and $47, 000.00 in U.S. currency (collectively, the "Defendant Properties"). Claimant Lucy Bell Dial ("Claimant") has filed a Verified Claim to the Defendant Properties. (Doc. 8.) Presently before the court is the Government's Motion for Summary Judgment. (Doc. 37.) Claimant has responded in opposition (Doc. 44) and the Government has filed a reply (Doc. 45). For the reasons that follow, the motion will be granted.

I. FACTS

The following facts are presented in the light most favorable to Claimant:

Between March 31, 2012, and the traffic stop precipitating the present action, Claimant's son, Lee Dial, had been under periodic surveillance by narcotics officers for suspected drug activity. (See Pl.'s Mem. in Supp. of Mot. for Summ. J., Ex. A, Declaration of John Pierce ("Pierce Decl.") (Doc. 38-2) ¶ 3.) On June 30, 2012, while conducting a license checkpoint, officers stopped Lee Dial for driving without a license. (Id. ¶ 4.) The officers then had a police canine perform a "narcotics sniff" on the vehicle. (Ex. D, Declaration of William Patterson, Jr. ("Patterson Decl.") (Doc. 38-5) ¶ 4.) The canine alerted to marijuana residue as well as to a "small compartment behind the driver's seat" where the officer found a large amount of cash. (Id. ¶ 5.) Ultimately, the traffic stop and search yielded $2, 990.00 in U.S. currency. (Ex. G, Declaration of Stephen Razik ("Razik Decl.") (Doc. 38-8) ¶ 8.) The money was "folded in half and secured with a rubber band." (Id.) The car search also revealed marijuana seeds and two cell phones. (Ex. A, Pierce Decl. (Doc. 38-2) ¶ 6.) Based on the information from the investigation and the traffic stop, officers applied for and received a warrant to search Lee Dial's residence. (Id. ¶ 8.) Lee Dial lived at home with Claimant, his mother. During the search of Claimant's residence, the police found marijuana seeds in the home as well as marijuana plants near the woodline of the property. (Ex. B, Declaration of David Hayworth ("Hayworth Decl.") (Doc. 38-3) ¶¶ 7, 9.)

During the search of Claimant's residence, Claimant asked to speak to one of the officers. Claimant claimed she had money in the house belonging to her; however, she could not verify the amount or location of the money. (Ex. A, Pierce Decl. (Doc. 38-2) ¶ 9.) Officers discovered $47, 000.00, consisting entirely of $100 dollar bills, inside a "red Christmas-themed bag" in Claimant's closet. (Id. ¶ 10.) Within the Christmas-themed bag, one bundle of the money was packaged with rubber bands; the remainder was found in different bank envelopes. (Id.) After discovering the cash, the officers again spoke again with Claimant, who claimed she had over $100, 000.00 in the house, mostly in $100 dollar bills. Claimant was unable to detail where she kept the money, asserting that she often moved the money around the house. Claimant further stated that the money came from her work as a Certified Nurse Assistant as well as from Social Security checks sent to her and her daughter. (Id. ¶ 11.)

After returning to the Hoke County Sheriff's Office, the officers placed the seized currency in two boxes, leaving a third box empty. (Ex. D, Patterson Decl. (Doc. 38-5) ¶ 6.) The police canine then performed a narcotics sniff and alerted to the two boxes containing the currency from the car and home. (Id.)

Upon searching the contents of the seized cell phones, officers discovered multiple text messages referencing slang drug terms, as well as a picture of Lee Dial holding three bundles of currency. (Ex. A, Pierce Decl. (Doc. 38-2) ¶ 7; see Doc. 38-7.) Lee Dial was charged with violations of N.C. Gen. Stat § 90-95(a)(1) (manufacturing, selling, or delivering controlled substances) and N.C. Gen. Stat. § 90-108(a)(7) (maintaining or keeping a dwelling house for the keeping or selling of controlled substances). (Ex. A, Pierce Decl. (Doc. 38-2 ¶ 12.)

II. PROCEDURAL HISTORY

On March 14, 2013, Claimant, through her attorney, filed a claim to the Defendant Properties. (Verified Claim (Doc. 8).) In her claim, Claimant argued that the Defendant Properties were not procured from any illegal source and that Claimant had been saving the cash over a number of years. (Id. at 1.)

In early May of 2013, the Government served Claimant, through her attorney, with a set of interrogatories and requests for production of documents. (Pl.'s Mem. in Supp. of Mot. to Strike ("Pl.'s Mem.") (Doc. 24) at 1-2.) Claimant failed to respond to the discovery requests by the June 12, 2013 deadline. (Id. at 2.) On June 19, 2013, the Government sent a letter to Claimant's attorney requesting responses to the discovery requests. (Id.) On July 15, 2013, the Government sent a second letter to Claimant's attorney inquiring about the unanswered discovery requests. (Id.)

After Claimant failed to respond to the discovery requests and the two letters, the Government filed a Motion to Compel Response to Discovery. (Doc. 13.) The Magistrate Judge granted the motion to compel, ordering the discovery requests be answered on or before September 17, 2013. (Doc. 15.) The order explicitly warned that a failure to abide by its terms "may result in sanctions as provided in Fed.R.Civ.P. 37(b)(2), and may include among other things, dismissal of Claimant's claim." (Id.) The Government received responses to the interrogatories by the September 17 deadline; however, the requests for production of documents remained outstanding. (Pl.'s Mem. (Doc. 24) at 2-3.)

On September 23, 2013, the Government sent a letter to Claimant's attorney inquiring about the status of the document production. (Id.; Ex. B (Doc. 24-2) at 1.) Two days later, Claimant's attorney responded, requesting a 20-day extension to respond to requests for production of documents. (Id.; Ex. C (Doc. 24-3) at 1.) On October 30, more than five months after the initial request, Claimant's attorney emailed the Government to advise it that Claimant was still in the process of gathering the requested documents. (Id. at 2-3; Ex. D (Doc. 24-4) at 1.)

This court held a hearing on April 4, 2014, where it determined Claimant's failure to respond to the court order constituted bad faith. This court then considered various sanctions, including striking Claimant's claim in its entirety. In lieu of outright dismissal, this court barred Claimant from arguing ...


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