debtor has a substantial . . . interest." 28 U.S.C. § 3203(a).
As a threshold matter, each party seems to assume that the other bears the burden of proving ownership of the subject property. Reference to the standing requirements of the civil forfeiture laws is instructive on this burden of proof question.
The burden of proof to establish sufficient standing to contest a forfeiture rests with the claimant. Mercado v. United States Customs Service, 873 F.2d 641, 644 (2d Cir. 1989). To establish standing, the claimant must demonstrate a possessory or ownership interest in the property that is the subject of the forfeiture proceeding. Id.; United States v. One 1982 Porsche 928, 732 F. Supp. 447, 451 (S.D.N.Y. 1990). "While ownership may be proven by actual possession, dominion, control, title and financial stake, 'the possession of bare legal title to the res may be insufficient,' absent other evidence of control or dominion over the property." One 1982 Porsche, 732 F. Supp. at 451 (cites omitted); cf. United States v. Certain Real Property, 945 F.2d 1252, 1255 (2d Cir. 1991) (once Government establishes probable cause that property was used to facilitate drug crimes, burden shifts to owner to establish "innocent owner" defense); United States v. All Funds on Deposit, 767 F. Supp. 36, 40 (E.D.N.Y. 1991) (once Government establishes probable cause for civil forfeiture, burden shifts to claimant to prove that factual predicates for forfeiture under statute have not been met).
By analogy, then, the burden of proof is on the claimant -- Ms. Coluccio -- to demonstrate her ownership of the $ 2,500. Ms. Coluccio has provided written documentation proving that $ 1,400 of the $ 2,500 came from savings accounts maintained in her own name. She testified that she withdrew funds from these two different accounts and supplemented that amount with cash she had on hand. The court found Ms. Coluccio's testimony credible, and concludes that she has satisfied her burden of proving ownership of the $ 2,500.
However, the fact that Ms. Coluccio has proven ownership of the $ 2,500 does not end the inquiry. Rather, this court still must decide whether the defendant has a "substantial . . . interest" in the property, subjecting it to forfeiture under 28 U.S.C. § 3203(a).
Research has yielded no cases construing the terms "property" or "interest" within the meaning of the FDCPA. The legislative history for the FDCPA indicates that "'property' is defined broadly to encompass all present and future interests in real and personal property . . . . " H.R. Rep. No. 101-736, 101st Cong., 2d Sess. (1990), reprinted in 1990 U.S.C.C.A.N. 6630, 6631 (emphasis added). For further guidance, reference to New York law governing enforcement of money judgments is particularly appropriate, given that the FDCPA was designed to create a uniform framework for collection of federal debts from the "patchwork of State laws governing collection procedures." Id.; see also Nat'l Labor Relations Bd. v. E.D.P. Medical Computer Sys., Inc., 6 F.3d 951, 954 (2d Cir. 1993).
Ray v. Jama Productions, Inc., 74 A.D.2d 845, 425 N.Y.S.2d 630 (2d Dep't), appeal denied, 49 N.Y.2d 709, 429 N.Y.S.2d 1026 (1980), cited by the Government, indicates that a debtor has an "interest" in property utilized to satisfy his or her debts or expenses. In that case, a judgment was entered against a theatrical performer (the "judgment debtor") in an action brought by plaintiff Ray. Pursuant to N.Y. Civ. Prac. L. & R. 5222, which permits a restraining notice to "be served upon any person, except the employer of a judgment debtor where the property sought to be restrained consists of wages or salary due or to become due to a judgment debtor," a restraining notice was served on defendant D-M Restaurant Corporation ("D-M"). Prior to receiving the restraining notice, D-M had entered into a contract with a theatrical organization which called for the judgment debtor to provide entertainment at a restaurant. D-M thereafter transferred $ 10,000 to the theatrical organization. The Appellate Division held that the judgment debtor derived the benefits of the transfer notwithstanding the fact that he did not receive the money directly because "it was to be utilized to satisfy his debts and expenses"; therefore, the transfer of funds by D-M was a violation of the restraining notice. Id. 74 A.D.2d at 846, 425 N.Y.S.2d at 631; cf. David D. Siegel, Practice Commentaries to N.Y. Civ. Prac. L. & R. § 5201 at 62 (McKinney 1978) ("The rule of thumb is that whatever the interest the debtor has is an interest the creditor can reach.").
The defendant in the present action clearly had an "interest" in the $ 2,500 akin to that of the judgment debtor in the Ray case. He benefitted from Ms. Coluccio's posting of the bond to the extent that he thereby satisfied the statutory requisites and was permitted to contest the administrative forfeiture proceeding. The $ 2,500 therefore is property in which defendant has a "substantial . . . interest," and is subject to execution by the Government in accordance with 28 U.S.C. § 3203(a).
Ms. Coluccio's alternative argument that the Government was required to return the cost bond after the dismissal of the forfeiture action can be readily disposed of. While 19 U.S.C. § 1608 does not specify how or to whom cost bonds are to be returned when the claimant in a forfeiture proceeding prevails, other courts have indicated that the bond should be returned to a successful claimant. E.g., Faldraga v. Carnes, 674 F. Supp. 845, 850 (S.D. Fla. 1987). Since only the defendant -- not Ms. Coluccio -- was a claimant in the earlier forfeiture proceeding, if the bond was to be returned at all, it would have been returned to the defendant.
Ms. Coluccio's argument that the Government's application to execute upon the cost bond is premature also is unavailing. This Court previously denied defendant's motion for a stay of enforcement of its April 30, 1993 order reducing the amount of the fine owed by defendant to $ 125,000 pending defendant's appeal of that order to the Second Circuit:
Should the court of appeals decide that a lesser fine is appropriate, Coluccio may recover from the United States the value of any property sold to satisfy his debt. Therefore, since defendant has indicated neither a legal basis for the appeal nor that he will suffer irreparable harm should this court deny his request for a stay, see United States v. Bestway Disposal Corp., 724 F. Supp. 62, 70 (W.D.N.Y. 1989), his motion is denied.
(Govt's Ex. 21). For the same reasons, Ms. Coluccio's request for a stay is denied.
Finally, Ms. Coluccio's argument that the Cost Bond Application is premature because the Plane Application neither had been heard nor decided when the Cost Bond Application was filed similarly is unpersuasive. This argument effectively has become moot in light of the order of the Eastern District of Michigan granting the Plane Application and denying defendant's motion for a stay pending appeal. (Govt's Ex. 23, 24, 25).
For the reasons set forth above, Ms. Coluccio's application for return of the cost bond is denied.
Dated: Brooklyn, New York
February 2, 1994
I. LEO GLASSER, U.S.D.J.