In Re $70,070 in U.S. Currency

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO

IN RE $70,070 IN U.S. CURRENCY

No. 2 CA-CV 2014-0013
Filed September 30, 2014

Appeal from the Superior Court in Pinal County
Nos. S1100CV201301076 and S1100CV201301129 (Consolidated)
The Honorable Bradley M. Soos, Judge Pro Tempore
The Honorable Karen J. Stillwell, Judge Pro Tempore

VACATED AND REMANDED

COUNSEL

Law Office of Robert Louis Murray, Tucson
By Robert Louis Murray
Counsel for Appellant

M. Lando Voyles, Pinal County Attorney, Florence
By Craig Cameron, Deputy Pinal County Attorney
Counsel for Appellees

OPINION

Judge Espinosa authored the opinion of the Court, in which
Presiding Judge Miller and Chief Judge Eckerstrom concurred.

E S P I N O S A, Judge:

¶1 Fernando Peña challenges a trial court ruling striking
his answer to a forfeiture complaint and ordering the state to
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proceed with an uncontested forfeiture pursuant to A.R.S. §§ 13-4314
and 13-4315. He contends the court erred when, at a hearing held
prior to entry of this order, it refused to consider his motion for
summary judgment and applied the wrong standard to his motion to
dismiss. We vacate the court’s order and remand the case for further
proceedings consistent with this decision.

Factual and Procedural Background

¶2 This case turns on procedural issues and its history
requires detailed explication. In April 2013, Peña was stopped by an
Arizona Department of Public Safety (DPS) officer while driving on
Interstate 10. After a consensual search of his truck revealed
“numerous bundles of currency” hidden in a compartment in the
truck bed, police seized the currency and the truck, and served Peña
with a notice of pending forfeiture. He filed a timely notice of claim
and the state subsequently filed an in rem complaint, under a
different cause number, seeking forfeiture of the seized property
based on an allegation of racketeering. The two actions were
subsequently consolidated at Peña’s request.

¶3 Peña filed a Rule 12(b)(6), Ariz. R. Civ. P., motion to
dismiss, in which he argued the state would be unable to “show
probable cause to believe that the property is subject to forfeiture”
and that its complaint “fail[ed] to allege any specific conduct that
will tie the currency and the truck to any act on the part of Mr. Peña
which can be traced to racketeering.” In response, the state argued
Peña’s motion was untimely because it did not comply with the time
limit for such challenges under A.R.S. § 13-4310(B). The trial court
found that statute inapplicable, but deferred its ruling on Peña’s
motion to dismiss pending an evidentiary hearing “pursuant to
A.R.S. § 13-4311.N.1(a),” to determine “whether the State can
establish by a preponderance of the evidence that the [property] is
subject to forfeiture under A.R.S. § [13-]4304.” Peña then filed a
“Motion for Summary Judgment” in which he argued that his
motion to dismiss should be “disposed of as provided in [Arizona
Rule of Civil Procedure] 56” because it had been accompanied by
matters outside the pleadings. The state objected to the conversion
of Peña’s motion on grounds that the forfeiture statutes preclude
motions for summary judgment before an answer has been filed.

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¶4 At the evidentiary hearing, the trial court initially
indicated that the purpose of the hearing was to “determine whether
the State could conclude by preponderance of the evidence that the
[property] is subject to forfeiture.” After denying the state’s motion
to continue the hearing, the court inquired whether it was prepared
to proceed. The state’s attorney said he was “prepared to proceed
on a probable cause basis,” and the court replied: “Okay. Well, let’s
do that, then.” Peña’s counsel objected, and a discussion about the
purpose of the hearing ensued:

[COUNSEL]: Your Honor, if I may make a
record. Well, I’ll object and—because this
is supposed to be a 12(b)(6) hearing, and
the State has filed no response to my
12(b)(6) motion. I mean, they provided me
with no disclosure. I don’t know who the
[testifying officers] are.

....

THE COURT: Well, the 12(b)(6) motion
means that the complaint on its face is
deficient. Okay? That’s an easy thing to
resolve. They have alleged that these items
are subject to forfeiture. Okay. That’s what
a complaint does. It makes allegations.
You wanted something more specific. I
don’t know that they are required to do
that. . . . But the way I read your reply to
me was that since you asserted they can’t
come forward with any evidence, I set this
hearing to see if they could provide that
evidence. That’s why we’re here.

[COUNSEL]: Your Honor, I understand,
but at this point . . . none of this has ever
been disclosed as to who these officers are,
what they have to say, there’s been no
reports.

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THE COURT: Okay, so . . . are there
dislosure requirements for an evidentiary
hearing on a probable cause basis? Am I
missing something?

[COUNSEL]: Well, Judge, I think that
certaily I’m entitled [to] appropriate cross-
examination to know if they have reports.

THE COURT: You said there’s no facts.
They’r here to present those facts. That’s
why we’re here.

¶5 The court also addressed Peña’s motion for summary
judgment, stating at first that it would treat his motion to dismiss
and motion for summary judgment as “one and the same” based on
its consideration of the evidence. However, after the state argued
that the forfeiture statutes do not allow a motion for summary
judgment to be filed in advance of an answer, the court denied the
motion as “premature.” The court proceeded to hear evidence and
take testimony from several DPS officers. At the conclusion of the
hearing, the court denied Peña’s motion to dismiss and found that
the state had “established probable cause to believe that the currency
and the truck are subject to forfeiture.” It instructed Peña that he
“ha[d] 20 days to file an answer to the Complaint.”

¶6 Two weeks later, the state filed an application for an
order of forfeiture, asserting that “[n]o answer to the [forfeiture
complaint] has been received from the Claimant within the . . . time
frame of A.R.S. § 13-4311(G), which requires a claimant to answer
the complaint within twenty days.” Several days later, Peña filed an
answer and an opposition to the state’s application, in which he
argued that his time to respond to the complaint had been extended
by the filing of his motion to dismiss and that his answer, filed
within twenty days of the evidentiary hearing, was therefore timely.
In its reply, the state argued that even if the forfeiture statutes permit
the time for an answer to be tolled—a premise it did not concede—
Rule 12(a)(3)(A), Ariz. R. Civ. P., requires an answer “be served
within ten days after notice of the court’s action.” It also asserted
that Peña’s failure to personally verify the pleading rendered it

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defective under § 13-4311(G), which requires answers to be “signed
by the owner or interest holder under penalty of perjury.”

¶7 The trial court heard argument on the matter and later
ruled that Peña’s answer was neither timely under Rule 12(a)(3)(A),
nor in compliance with the requirements of § 13-3411(G). The court
further ordered the state to proceed with an uncontested forfeiture
as provided in §§ 13-4314 and 13-4315, “and to provide the
appropriate affidavits offering proof that the State is entitled to
forfeiture, which will be decided at a later-requested hearing.” Peña
timely appealed and we have jurisdiction pursuant to A.R.S.
§ 12-2101(A)(3). See State ex rel. Goddard v. Ochoa, 224 Ariz. 214, ¶ 6,
228 P.3d 950, 952 (App. 2010) (applying prior version of A.R.S.
§ 12-2101(A)(3) to review order striking notice of claim).

Motion for Summary Judgment

¶8 Peña first argues the trial court committed error by
denying his motion for summary judgment as premature, citing
§ 13-4311(H). That section provides, “Any party may move for
summary judgment at any time after an answer or responsive
pleading is served and not less than thirty days before the hearing.”
We review the court’s ruling on Peña’s motion de novo. See Desert
Mountain Props. Ltd. P’ship v. Liberty Mut. Fire Ins. Co., 225 Ariz. 194,
¶ 12, 236 P.3d 421, 426 (App. 2010) (denial of motion for summary
judgment reviewed de novo); Hourani v. Benson Hosp., 211 Ariz. 427,
¶ 4, 122 P.3d 6, 9 (App. 2005) (same).

¶9 Because § 13-4311(H) precludes the filing of a motion
for summary judgment in advance of a responsive pleading, Peña’s
legal argument hinges on the meaning of the term “responsive
pleading” in the context of § 13-4311(H). When the legislature does
not define an operative term, we employ “accepted principles of
statutory construction” to discern its meaning. Stauffer v. U.S. Bank
Nat’l Ass’n, 233 Ariz. 22, ¶ 8, 308 P.3d 1173, 1176 (App. 2013); see also
TDB Tucson Grp., L.L.C. v. City of Tucson, 228 Ariz. 120, ¶ 9, 263 P.3d
669, 672 (App. 2011) (principles of statutory construction applied
unless legislature “‘provides a specific definition or the context of
the statute indicates a specific meaning’”), quoting Mercy Healthcare
Ariz., Inc. v. Ariz. Health Care Cost Containment Sys., 181 Ariz. 95, 98,

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887 P.2d 625, 628 (App. 1994); Home Builders Ass’n of Cent. Ariz. v.
City of Mesa, 226 Ariz. 7, ¶ 7, 243 P.3d 610, 614 (App. 2010) (relying
on the language of the statute to determine legislative intent and
construing statutory provisions in a manner consistent with related
provisions). Pursuant to subsection (B) of § 13-4311, “[j]udicial in
rem forfeiture proceedings are in the nature of an action in rem and
are governed by the Arizona rules of civil procedure unless a
different procedure is provided by law.” We therefore look to our
rules of civil procedure and decisions interpreting them for
guidance.

¶10 Rule 7(a), Ariz. R. Civ. P., lists the types of “[p]leadings
allowed” in a civil proceeding, stating,

There shall be a complaint and an answer; a
reply to a counterclaim denominated as
such; an answer to a cross-claim, if the
answer contains a cross-claim; a third-party
complaint, if a person who was not an
original party is summoned under the
provisions of Rule 14; and a third-party
answer, if a third-party complaint is served.
No other pleading shall be allowed, except
that the court may order a reply to an
answer or a third-party answer.

In Graham v. Goodyear Aerospace Corp., we relied on this provision to
conclude that the term “responsive pleading,” as used in Rule 15(a),
Ariz. R. Civ. P., (“Amendments to Pleadings”) did not include a
motion to dismiss. 120 Ariz. 275, 276-77, 585 P.2d 884, 885-86 (App.
1978); see also Douglas N. Higgins, Inc. v. Songer, 171 Ariz. 8, 10, 827
P.2d 469, 471 (App. 1991) (“Nor is a motion to dismiss a responsive
pleading within the meaning of Rule 15(a).”); cf. State v. Five
Thousand Five Hundred Dollars in U.S. Currency, 169 Ariz. 156, 159,
817 P.2d 960, 963 (App. 1991) (concluding, based on Rule 7(a), notice
of claim filed in forfeiture proceeding was not a “responsive
pleading”). Jurisdictions that employ a similar version of this Rule
are in accord. See, e.g., Morrison v. Mahoney, 399 F.3d 1042, 1046 (9th
Cir. 2005) (“The requirement in Rule 8(c) that a party set forth the
affirmative defenses listed in that rule applies only to responsive

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‘pleadings,’ not to motions.”); McGruder v. Phelps, 608 F.2d 1023, 1025
(5th Cir. 1979); Boca Burger, Inc. v. Forum, 912 So.2d 561, 567 (Fla.
2005) (“[A] motion to dismiss is not a ‘responsive pleading’ because
it is not a ‘pleading’ under the rules.”); Nat’l Equity Props., Inc. v.
Hanover Ins. Co., 910 N.E.2d 392, 393 (Mass. App. Ct. 2009).

¶11 This distinction is supported by Rule 12(b)(6) itself,
which expressly distinguishes motions to dismiss from responsive
pleadings: “Every defense, in law or fact, to a claim for relief in any
pleading . . . shall be asserted in the responsive pleading thereto if
one is required, except that the [12(b)(6) defenses] may at the option
of the pleader be made by motion . . . .” The language of Rule 55,
Ariz. R. Civ. P., (“Default”) likewise confirms that a motion to
dismiss is not considered a “pleading” under the Rules, stating that
default may be entered against a party who “has failed to plead or
otherwise defend as provided by these Rules.” See also Prutch v.
Town of Quartzsite, 231 Ariz. 431, ¶ 17, 296 P.3d 94, 99 (App. 2013)
(“Although a motion to dismiss is not a pleading under Rule 7(a), it
satisfies the ‘otherwise defends’ requirement for avoiding entry of
default under Rule 55(a).”). Accordingly, in the absence of any
indication that the legislature sought to imbue the term “responsive
pleading” with a different meaning than the one it has been afforded
under the rules of civil procedure, we agree with the trial court that
§ 13-4311(H) precluded Peña’s summary judgment motion.1

1We note that in Five Thousand Five Hundred Dollars in U.S.
Currency, we determined that a motion to dismiss an in rem
forfeiture action does not toll the thirty-day time limit for filing a
notice of claim under the forfeiture statutes because Rule 12(a)(1)
“extends only the time for filing a ‘responsive pleading.’” 169 Ariz.
156, 159, 817 P.2d 960, 963. Thus, while “[t]he filing of a [R]ule 12
motion may delay the deadline for filing an answer, . . . it does not
affect the deadline for filing a claim.” Id. Yet in its application for
forfeiture, the state inexplicably portrayed our holding as: “[T]he
filing of a Rule 12(b)(6) motion does not extend the time to properly
file responsive pleadings.”
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Motion to Dismiss

¶12 Peña also asserts the trial court erred in its analysis of
his motion to dismiss. He argues the court inappropriately took
evidence on the issue of probable cause in connection with that
motion and, as a result, it failed to apply the proper standard in its
ruling. Because Peña’s claim implicates the legal standard applied
by the court, we review the denial of his motion to dismiss de novo.
See In re Estate of Long, 229 Ariz. 458, ¶ 22, 276 P.3d 527, 533 (App.
2012); Mobilisa, Inc. v. Doe, 217 Ariz. 103, ¶ 9, 170 P.3d 712, 716 (App.
2007) (“Whether the superior court applied the correct legal
standard in reaching its discretionary conclusion is a matter of law
that we review de novo.”).

¶13 At the outset of the hearing on Peña’s motion, the trial
court stated its purpose was “to determine whether [the state could]
establish by a preponderance of the evidence that the sought items
are subject to forfeiture.” As noted above, however, the state
requested that the hearing proceed “on a probable cause basis,” and
the court acquiesced.2 Peña’s counsel objected, stating, “[T]his is
supposed to be a 12(b)(6) hearing.” He also claimed he had not been
provided with any disclosure or the identities of the state’s
witnesses.3 The court overruled the objection, and went on to
consider the testimony of three DPS officers, and several
photographs introduced by the state.

¶14 Toward the end of the hearing, the court alluded to
Peña’s absence, suggesting there was “no evidence” to rebut the
state’s allegations because Peña “didn’t show up.” After counsel
referred to Peña’s affidavit, which had been attached to his motion
to dismiss, the court stated, “I understand, but your client didn’t
show up to testify, so I don’t have a chance to observe his demeanor

2Some of the trial court’s apparent confusion may have
stemmed from its reading of Peña’s motion to dismiss, which
repeatedly argued that the state would be unable to demonstrate
probable cause that the property was subject to forfeiture.
3This statement appears inconsistent with Peña’s motion to

dismiss, which referred to “police reports” that he apparently had
been provided.
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and credibility.” It went on to rule that, “based on the totality of the
circumstances, the State has established probable cause to believe
that the currency and the truck are subject to forfeiture, so the
motion to dismiss is denied.”

¶15 The trial court’s decision to deny Peña’s motion to
dismiss based on an evidentiary determination of probable cause is
troublesome for several reasons. First, as the state observes, “[t]he
difference between probable cause and stating a claim upon which
relief may be granted is distinct and separate.” The determination
that officers had reasonable grounds to believe the property in
question was subject to forfeiture is a separate issue from whether
the state’s complaint sufficiently pleaded a cause of action for
forfeiture. See Matter of U.S. Currency In the Amount of $315,900.00,
183 Ariz. 208, 211-12, 902 P.2d 351, 354-55 (App. 1995)
(distinguishing probable cause finding from state’s ability to meet
substantive forfeiture statute). While a probable cause inquiry
focuses on the reasonableness of the seizing officers’ belief that the
property is subject to forfeiture, e.g., In re Twenty-Four Thousand
Dollars ($24,000) in U.S. Currency, 217 Ariz. 199, ¶ 11, 171 P.3d 1240,
1243 (App. 2007), Rule 12(b)(6) requires that the complaint’s
allegations be tested against the elements of the cause of action
pleaded, see Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, ¶¶ 6-7, 189
P.3d 344, 346 (2008); Builders Fin. Co. v. Holmes, 89 Ariz. 157, 159, 359
P.2d 751, 752 (1961) (“[T]est as to whether a complaint is sufficient
. . . is “whether enough is stated therein[.]”), quoting Mackey v.
Spangler, 81 Ariz. 113, 115, 301 P.2d 1026, 1027 (1956).

¶16 Second, we are concerned the parties lacked notice of
the nature of the scheduled hearing. A notice of hearing on
“Counsel’s Motion to Dismiss” was signed by the trial judge and
filed alongside an order setting an evidentiary hearing pursuant to
§ 13-4311(N)(1)(a) for the same date, September 19, 2013. That order
indicated the hearing was being set “to determine whether the State
can establish by a preponderance of the evidence that the interest is
subject to forfeiture.” However, it did not state why a hearing on the
ultimate issue would be held before the parties had engaged in
discovery. See § 13-4311(K) (“The hearing on the claim, to the extent
practicable and consistent with the interest of justice, shall be held
sixty days after all parties have complied with the disclosure
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required by [R]ule 26.1 of the Arizona rules of civil procedure.”);
Ariz. R. Civ. P. 26.1 (listing requisite disclosures).

¶17 The parties’ confusion regarding the nature of the
proceedings was apparent. In response to the trial court’s order, the
state filed a motion to continue “the probable cause hearing
currently set for September 19.” And when the trial judge stated at
the hearing that he had “set the . . . evidentiary hearing to determine
whether the . . . interest is subject to forfeiture,” Peña’s counsel
stated that he “d[id]n’t interpret [the order] the same way.” As a
result of this confusion, Peña was denied the opportunity to
meaningfully contest the state’s allegations through the presentation
of testimony and cross-examination of the state’s witnesses.4 Cf.
Lund v. Donahoe, 227 Ariz. 572, ¶ 36, 261 P.3d 456, 465-66 (App. 2011)
(finding due process violation where court provided insufficient
notice that “order to show cause” hearing would involve evidentiary
hearing at which attorneys would be called upon to testify).
Accordingly, because the court applied an erroneous standard to
Peña’s motion to dismiss, going beyond the pleadings, taking
evidence, and evaluating the state’s claim pursuant to a “probable
cause” standard, we conclude its order denying the motion must be
vacated and the case restored to its posture prior to the hearing. In
the event the motion is again denied, the trial court shall provide
Peña with additional time to answer the complaint pursuant to
Rule 12(a)(3).

Disposition

¶18 Pursuant to the foregoing analysis, the trial court’s
orders denying Peña’s motion to dismiss and striking his answer are
vacated and the case remanded for further proceedings consistent
with this decision.

4The state asserts that the evidence presented at the hearing
“did not assist the trial court with the determination of the
sufficiency of the complaint.” However, it is apparent from the
court’s statements, as set forth above, that it evaluated the factual
support presented at the hearing, as well as the absence of testimony
from Peña, and issued its ruling on that basis.

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