Summary
stating that it does not construe § 4505.04 "to effectively deprive equitable owners of their interest in a vehicle where that vehicle may be forfeited to the state"
Summary of this case from In re GrovesOpinion
No. 83-201
Decided April 18, 1984.
Criminal law — Motor vehicles — Forfeiture of motor vehicle effected, how — R.C. 2933.41 and 2925.13 — Court has no authority to order "equitable distribution" of proceeds.
O.Jur 3d Abandoned Property § 20. O.Jur 3d Criminal Law § 2292.
1. Where a vehicle used in violation of R.C. 2925.13(A) is seized by law enforcement authorities, and a motion is made by the state to order the vehicle forfeited pursuant to either R.C. 2933.41 or 2925.13, and third parties enter the action claiming to be "innocent owners" of the vehicle, the trial court has two options: the court may find that the vehicle is "forfeited" and follow the dispositional alternatives provided in R.C. 2933.41, or the court may find the third parties to be "innocent owners" of the vehicle, in which case the forfeiture provisions "shall not apply" and the vehicle shall be returned to the innocent owners.
2. The trial court has no authority, under either R.C. 2933.41 or 2925.13, to order an "equitable distribution" of the proceeds generated by the disposition of a vehicle seized pursuant to R.C. 2925.13 once the court has declared the vehicle "forfeited."
APPEAL from the Court of Appeals for Cuyahoga County.
Louis F. Shimits, appellee herein, used a 1980 Oldsmobile Cutlass automobile, titled in his name, in the commission of a felony drug abuse offense for which he was subsequently convicted. The vehicle in question was seized by the Police Department of the city of Parma, Ohio, and was in the custody of that law enforcement agency at the time the state made an application to the Court of Common Pleas of Cuyahoga County, pursuant to R.C. 2925.13(A) and 2933.41(C)(1), requesting forfeiture of the vehicle to the Parma Police Department.
R.C. 2925.13(A) reads as follows:
"No person, being the owner, operator, or person in charge of a locomotive, watercraft, aircraft, or other vehicles as defined in division (A) of section 4501.01 of the Revised Code, shall knowingly permit such vehicle to be used for commission of a felony drug abuse offense."
R.C. 2933.41(C) reads as follows:
"A person loses any right he may have to possession of property:
"(1) That was the subject, or was used in a conspiracy or attempt to commit, or in the commission, of an offense other than a traffic offense, and such person is a conspirator, accomplice, or offender with respect to the offense;"
Edna Smith and Bernadine Shimits, being the grandmother and mother, respectively, of Louis F. Shimits, filed a "Third Parties' Claim for Return of Property," contending that they were the true owners of the automobile and that as "innocent owners," the forfeiture provision of R.C. 2925.13(D) should not be applied to them. After a hearing and upon stipulations, the trial court determined that the third-party claimants had an equitable interest in the 1980 Oldsmobile Cutlass automobile and that they were "innocent owners."
R.C. 2925.13(D) reads as follows:
"Vehicles used in violation of division (A) of this section shall be seized and forfeited to the municipal corporation or county in which such violation occurred, upon motion to the common pleas court, except that if the violation occurs in a township and the offender is lawfully arrested by a law enforcement officer employed by the township, the court shall order the vehicle forfeited to the township. Forfeiture shall not apply to common carriers or innocent owners, nor shall they affect the rights of a holder of a valid lien."
The trial court concluded that the proceedings were equitable in nature and opined, "* * * the court is asked to do equity and the court will do equity." The trial court then stated:
"So, the Court will forfeit the automobile as provided, and that upon it being sold, that 30 percent of the balance of the funds that are received from the sale of the car at an open sale to the court or I should say [go] to Parma, and that 70 percent of the funds will then be returned, and a check made out to Edna Smith and Bernadine Shimits." (Emphasis added.)
The trial court's decision making this disposition was reflected in a final order from which the state took an appeal.
In the court of appeals, the majority held that R.C. 4505.04 (evidence of ownership) would not preclude the third-party claimants from establishing their equitable ownership in the forfeited vehicle, and that the third parties herein, having satisfied the trial court that they were innocent, would be protected from the harsh effect of R.C. 2925.13(D), the forfeiture statute.
The cause is now before this court pursuant to the allowance of a motion for leave to appeal.
Mr. John T. Corrigan, prosecuting attorney, and Mr. Roger S. Kramer, for appellant. Messrs. Gold, Rotatori, Schwartz Gibbons, Mr. Gerald S. Gold and Mr. John Pyle, for appellee.
The position taken by the appellant in its second proposition of law, supported by the appellate minority, is that evidence of ownership of an automobile or other vehicle in a forfeiture proceeding under R.C. 2925.13(D) is limited by law to the "certificate of title," and that ownership could not be established in any other manner to avoid forfeiture. However, such construction is unnecessarily restrictive and would contradict the principles set forth in State v. Emmons (1978), 57 Ohio App.2d 173 [11 O.O.3d 173], and State v. Rhodes (1982), 2 Ohio St.3d 74.
Initially, we must conclude that the provisions of R.C. 4505.04 were designed to protect title as between true and fraudulent title claimants and to create an instrument evidencing title to and ownership of motor vehicles. Hughes v. Al Green, Inc. (1981), 65 Ohio St.2d 110, 115 [19 O.O.3d 307]. We do not hold that the legislature intended for said section to be construed to effectively deprive equitable owners of their interest in a vehicle where that vehicle may be forfeited to the state.
The circumstances in this cause place it among narrowly drawn case-law exceptions, along with theft and fraud, involving "equitable ownership." Though we reaffirm that concept today, and thereby reject appellant's second proposition of law, we further find that the issue raised is not necessary to the resolution of this cause.
The person to whom a "certificate of title" to the automobile in question was issued, Louis Shimits, was the operator of the vehicle during its use in the commission of a felony drug abuse offense, in violation of R.C. 2925.13(A). The vehicle was, in fact, seized by the Parma Police Department and Shimits was convicted of violating R.C. 2925.13(A). R.C. 2925.13(D), in pertinent part, provides:
"Vehicles used in violation of division (A) of this section shall be seized and forfeited to the municipal corporation * * *. Forfeiture shall not apply to * * * innocent owners * * *." (Emphasis added.)
The statutory framework is clear. When a person knowingly permits a vehicle to be used for the commission of a felony drug abuse offense in violation of R.C. 2925.13(A), that vehicle "shall be" seized and forfeited upon proper motion. R.C. 2925.13(D). The seized vehicle shall not be forfeited where there is an "innocent owner" of the vehicle. Once the court determines that the vehicle is to be forfeited, R.C. 2933.41(D) details the various dispositional alternatives for the court and R.C. 2933.41(E) explains exactly how any proceeds generated by the disposition of forfeited property are to be distributed. After a determination has been made that the vehicle is to be forfeited, R.C. 2933.41(D) and 2933.41(E) are absolute and there are no statutory exceptions.
R.C. 2933.41 provides, in pertinent part:
"(D) Unclaimed and forfeited property in the custody of a law enforcement agency, shall be disposed of on application to and order of any court of record that has territorial jurisdiction over the political subdivision in which the law enforcement agency has jurisdiction to engage in law enforcement activities, as follows:
"(1) Drugs shall be destroyed, or shall be placed in the custody of the secretary of the treasury of the United States for disposal or use for medical or scientific purposes under applicable federal law.
"(2) Firearms and dangerous ordnance suitable for police work may be given to a law enforcement agency for that purpose. Firearms suitable for sporting use, or as museum pieces or collectors' items, may be sold at public auction pursuant to division (D)(6) of this section. Other firearms and dangerous ordnance shall be destroyed.
"(3) Obscene materials shall be destroyed [sic];
"(4) Beer, intoxicating liquor, or alcohol seized from a person who is not the holder of a permit issued under Chapters 4301. and 4303. of the Revised Code or is an offender, and forfeited to the state under section 4301.45 or 4301.53 of the Revised Code shall be sold by the department of liquor control, if the department determines that the beer, intoxicating liquor, or alcohol is fit for sale. If any tax imposed under Title XLIII of the Revised Code has not been paid in relation to the beer, intoxicating liquor, or alcohol, the proceeds of the sale shall first be used to pay the tax. All money collected under division (A)(4) of this section shall be paid into the state treasury. Any such beer, intoxicating liquor, or alcohol that the department determines to be unfit for sale shall be destroyed.
"(5) Money received by an inmate of a correctional institution from an unauthorized source or in an unauthorized manner shall be returned to the sender, if known, or deposited in the inmates' industrial and entertainment fund if the sender is not known.
"(6) Other unclaimed or forfeited property may be sold at public auction, or disposed of as the court considers proper in the circumstances."
Clearly, R.C. 2933.41(D) only relates to the method of disposing of forfeited vehicles.
R.C. 2933.41 provides, in pertinent part:
"(E) The proceeds from property disposed of pursuant to this section shall be placed in the general fund of the state, the county, the township, or the municipal corporation, of which the law enforcement agency involved is an agency."
The problem in this case is that the trial court made contradictory findings. First, it determined that the third-party claimants were "innocent owners" by virtue of an equitable ownership interest, and then it ordered the vehicle "forfeited" and sold. The court further ordered, under the guise of "doing equity," that the proceeds generated by the sale of the vehicle were to be split between the third-party claimants and the appellant. This was improper.
As R.C. 2925.13(D) currently stands, if an "innocent owner" exists, then forfeiture "shall not apply." This can only mean that a seized vehicle must be returned to an innocent owner. If forfeiture is ordered, then the court has implicitly determined that no innocent owners exist and the relevant municipal corporation is entitled to all of the proceeds generated by the disposition of the forfeited property. R.C. 2933.41(E). We hold that the trial court has no authority, under either R.C. 2933.41 or 2925.13, to order an "equitable distribution" of the proceeds generated by the disposition of a vehicle seized pursuant to R.C. 2925.13 once the court has declared the vehicle "forfeited."
It is argued that R.C. 2933.41(D)(6) permits a trial court to make an equitable distribution of the proceeds generated by the sale of forfeited property. R.C. 2933.41(D)(6), however, details only the options available to a court in the disposal of forfeited property and permits a court to dispose of property as it "considers proper in the circumstances." Only R.C. 2933.41(E) speaks to the distribution of the proceeds generated by the disposal of forfeited property, and it only permits a distribution of the proceeds to the proper municipality.
Though the trial court found the third-party claimants to be "innocent owners," it is clear that it did not believe their equitable interest was strong enough to prevent the forfeiture and sale of the seized vehicle. Accordingly, we must find that, upon ordering forfeiture, the trial court erred by not following the legislative directive of R.C. 2933.41(E) and by not ordering that all of the proceeds generated by the sale of the seized vehicle be distributed to the city of Parma.
To summarize, we hold that where a vehicle used in violation of R.C. 2925.13(A) is seized by law enforcement authorities, and a motion is made by the state to order the vehicle forfeited pursuant to either R.C. 2933.41 or 2925.13, and third parties enter the action claiming to be "innocent owners" of the vehicle, the trial court has two options: the court may find that the vehicle is "forfeited" and follow the dispositional alternatives provided in R.C. 2933.41, or the court may find the third parties to be "innocent owners" of the vehicles, in which case the forfeiture provisions "shall not apply" and the vehicle shall be returned to the innocent owners.
Further, in determining whether a third party is an innocent owner, evidence establishing an equitable ownership interest is admissible.
Accordingly, the decision of the court of appeals is reversed and this cause is remanded to the trial court so that it may order that the proceeds of the sale of the forfeited vehicle be placed in the general fund of the city of Parma.
Judgment reversed and cause remanded.
CELEBREZZE, C.J., W. BROWN, SWEENEY, LOCHER, HOLMES and C. BROWN, JJ., concur.
KOEHLER, J., of the Twelfth Appellate District, sitting for J.P. CELEBREZZE, J.