United States Court of Appeals
For the First Circuit
No. 00-1215
UNITED STATES OF AMERICA,
Plaintiff, Appellant,
v.
15 BOSWORTH STREET,
Defendant.
HENRY T. KONICK AND DELORES KONICK,
Claimants, Appellees.
______________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
Before
Selya and Stahl, Circuit Judges,
and Lisi,* District Judge.
Shelbey D. Wright, Assistant United States Attorney, with
whom Donald K. Stern, United States Attorney, was on brief, for
appellant.
Roger Witkin for appellees.
January 4, 2001
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*Of the District of Rhode Island, sitting by designation.
SELYA, Circuit Judge. In this forfeiture action, the
United States sought to seize a structure housing a tavern in
which drug dealers had set up shop. The building was owned by
a married couple, Henry and Delores Konick. They answered the
complaint and filed a claim to the property, asserting that they
neither knew of the drug trafficking nor had given their
imprimatur to it. The district court ruled in the claimants'
favor.
The government appeals, arguing that the court
impermissibly eased the claimants' burden of proving their
"innocent owner" defense. We agree that the district court
erred, but we fear that the court's comments about the burden of
proof, voiced at various stages of the bench trial, may have
lulled the claimants into a false sense of security. To guard
against that possibility, we vacate the judgment and remand for
further proceedings before a new trier.
I. BACKGROUND
In 1981, the claimants purchased the land and building
located at 15 Bosworth Street, Boston, Massachusetts (the
Property). The Property comprises a three-story brick frame
structure with entrances on both Bosworth and Bromfield Streets.
It houses three businesses: a delicatessen, a jewelry store,
and Ye Olde Province Tavern (colloquially known as Hanks Bar).
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The delicatessen and the jewelry store share the entrance at 53-
55 Bromfield Street.
The tavern, which operates on the second floor of the
building, has its own entrance at 15 Bosworth Street. Its
public area consists of an open space with tables and an L-
shaped bar. Delores Konick is the president of the corporation
that holds the liquor license for the premises, and the Konicks'
son Stephen is the treasurer and clerk.
The Boston police began investigating Hanks Bar in
1995. Their probe revealed evidence of gambling and a
flourishing trade in stolen goods. Although the police
hierarchs eventually decided not to press charges, the officers
supervising the investigation repeatedly warned Henry Konick
that they would not tolerate continued illicit activity on the
premises.
These admonishments did little good. In a matter of
months, the authorities began to receive anonymous tips that a
different type of criminal conduct had reared its head. The
informants suggested that the claimants' sons Ronald and Robert
(who were, respectively, the day manager and the night manager
of Hanks Bar) were trafficking in controlled substances. The
suspicions generated by this suggestion intensified when, on
December 1, 1997, two patrons overdosed on heroin in the bar's
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restroom. The police responded to the ensuing emergency call
and recovered six glassine bags coated with heroin residue.
Following this incident, the municipal licensing board held a
series of hearings. Stephen, Ronald, and Robert Konick all
testified and offered solemn assurances that they were
exercising due vigilance to prevent drug use on the Property.
In 1998, the Boston police launched a covert
investigation. An undercover detective became a "regular" at
the tavern and, over an eight-month interval, bought drugs there
on approximately twenty-five occasions. These transactions
included purchases of cocaine and other controlled substances
from Robert Konick and two other members of the tavern's work
force. On August 14, 1998, matters reached a predictable
climax; police officers executed a search warrant at the
premises and recovered a substantial quantity of cocaine, along
with marijuana, codeine, and sundry drug paraphernalia. Three
employees of the tavern, including Robert Konick, were charged
criminally and eventually convicted.
On November 2, 1998, the United States commenced a
forfeiture action in which it alleged that the Property had been
used, or was intended for use, to distribute narcotics in
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violation of 21 U.S.C. § 856(a),1 and thus was forfeitable under
21 U.S.C. § 881(a)(7). The following day, the district court
authorized the filing of a notice of lis pendens. The Konicks
opposed the petition for forfeiture and timely filed a claim to
the Property.
The case was tried to the court. The government
presented testimony from two law enforcement officers (including
the detective who had infiltrated the bar). This testimony
clearly established that the Property had been used over a
substantial period of time for the unlawful distribution of
controlled substances. Neither witness, however, made much
mention of the claimants.2 When the United States completed its
case in chief, the district court denied the claimants' motion
1This statute renders it unlawful to —
(1) knowingly open or maintain any place for the
purpose of manufacturing, distributing, or using any
controlled substance;
(2) manage or control any building, room, or
enclosure, either as an owner, lessee, agent,
employee, or mortgagee, and knowingly and
intentionally rent, lease, or make available for use,
with or without compensation, the building, room, or
enclosure for the purpose of unlawfully manufacturing,
storing, distributing, or using a controlled
substance.
21 U.S.C. § 856(a).
2The undercover detective did testify that Henry Konick was
present at the bar on at least two occasions, but he could not
say definitively whether or not Konick was on the premises when
particular drug sales were consummated.
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for judgment as a matter of law. After a brief recess, the
claimants rested without calling any witnesses. The court
entertained arguments and then found that the claimants had
proved by a preponderance of the evidence that they neither knew
about, nor had consented to, the commission of any proscribed
act on the Property. The court entered judgment accordingly.
This appeal ensued.
II. THE STANDARD OF REVIEW
When a district court conducts a bench trial, its legal
determinations engender de novo review. Smith v. F.W. Morse &
Co., 76 F.3d 413, 420 (1st Cir. 1996). This includes its
determinations about the sufficiency of the evidence. Sierra
Fria Corp. v. Evans, 127 F.3d 175, 181 n.2 (1st Cir. 1997). In
contrast, the court's factual findings are entitled to
considerable deference. Cumpiano v. Banco Santander P.R., 902
F.2d 148, 152 (1st Cir. 1990). This deference comports with
common sense: a judge, sitting jury-waived, has the opportunity
to see and hear the witnesses at first hand and to immerse
himself in the nuances of the proof. Consequently, the
appellate process ought to respect the trial judge's superior
"feel" for the case and his enhanced ability to weigh and
evaluate conflicting evidence. Anderson v. City of Bessemer
City, 470 U.S. 564, 574-75 (1985).
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We hasten to add that respect does not mean blind
allegiance. Despite the deference due, an appellate court will
displace factual findings made in the aftermath of a bench trial
if those findings are clearly erroneous. Jackson v. United
States, 156 F.3d 230, 232-33 (1st Cir. 1998); Fed. R. Civ. P.
52(a). Moreover, when a trial court bases its findings of fact
on an inaccurate appraisal of controlling legal principles, the
rationale for deference evaporates entirely. See Vinick v.
United States, 205 F.3d 1, 6-7 (1st Cir. 2000); Johnson v. Watts
Regulator Co., 63 F.3d 1129, 1138 (1st Cir. 1995).
We append one final observation. When doubt arises,
the duty to determine whether the "clearly erroneous" standard
applies in a particular case lies with the court of appeals, not
with the district court. Just as litigants cannot evade the
clearly erroneous standard by relabelling issues of fact as
issues of law, e.g., Johnson, 63 F.3d at 1138, so too a trial
judge may not insulate a decision from plenary review by
characterizing a determination of law as a factual finding.
With this prelude, we proceed to analyze the decision
below. In the course of that analysis, the relevance of the
preceding discussion will become apparent.
III. ANALYSIS
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Congress has devised a mechanism for civil forfeiture
of assets and property used in connection with certain drug
violations. See 21 U.S.C. § 881. Insofar as real estate is
concerned, the statute authorizes the forfeiture of:
All real property, including any right,
title, and interest . . . in the whole of
any lot or tract of land and any
appurtenances or improvements, which is
used, or intended to be used, in any manner
or part, to commit, or to facilitate the
commission of, [certain drug violations],
except that no property shall be forfeited
under this paragraph, to the extent of an
interest of an owner, by reason of any act
or omission established by that owner to
have been committed or omitted without the
knowledge or consent of that owner.
Id. § 881(a)(7). It is this provision that the government
invoked against the Property.
In section 881(a)(7) cases, as in all civil forfeiture
cases brought pursuant to section 881, the customs laws dictate
the progression of proof. See id. § 881(d) (mandating reference
to the customs laws); 19 U.S.C. § 1615 (codifying relevant
provisions of the customs laws). In practice, then, if the
United States brings a forfeiture action against a parcel of
real estate and a person claiming an interest in the real estate
chooses to contest the forfeiture, the government bears the
burden of demonstrating probable cause to support a belief that
a nexus existed between the real estate and some specified
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illegal activity sufficient to justify forfeiture. United
States v. One Parcel of Real Property (Great Harbor Neck, New
Shoreham, R.I.), 960 F.2d 200, 204 (1st Cir. 1992); United
States v. Parcel of Land (28 Emery St.), 914 F.2d 1, 3-4 (1st
Cir. 1990); United States v. Parcels of Real Property (1933
Commonwealth Ave.), 913 F.2d 1, 3 (1st Cir. 1990). Once the
government carries its relatively modest burden of showing
probable cause, the devoir of persuasion shifts to the claimant,
who must refute the government's prima facie case in one of two
ways: either (1) by demonstrating that the property was not in
fact used for the specified illegal activity, or (2) by proving
that she (the claimant) neither knew about, nor consented to,
the illicit activity. Great Harbor Neck, 960 F.2d at 204. The
second of these avenues is commonly called the "innocent owner"
defense.
In a civil forfeiture case, lack of knowledge or
consent is an affirmative defense. See United States v. One
Parcel of Property (121 Allen Pl.), 75 F.3d 118, 121 (2d Cir.
1996); United States v. Parcel of Land (18 Oakwood St.), 958
F.2d 1, 4 (1st Cir. 1992). Thus, the claimant bears the burden
of proving the absence of knowledge or consent by a
preponderance of the evidence. Great Harbor Neck, 960 F.2d at
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204; see also United States v. One Lot of U.S. Currency
($68,000), 927 F.2d 30, 32 (1st Cir. 1991).
The instant appeal plays out against the backdrop of
this progression of proof. Here, however, the claimants do not
contest that the government satisfied its burden of showing that
it had probable cause to believe that the Property was subject
to forfeiture. The case turns, then, on the persuasiveness of
the claimants' contention that they established, by a fair
preponderance of the evidence, that they were innocent owners,
that is, that the illicit activity conducted on the premises
transpired without their knowledge or consent.
We have read the record with care and find it to be
barren of any evidence that would permit a reasoned resolution
of the question of the Konicks' knowledge or consent. We are
constrained to conclude, therefore, that the lower court took an
empty record (a record which, as a matter of law, contains
inadequate evidence to ground a finding concerning the innocence
of the owners), gave lip service to the accepted allocation of
the burden of proof, and effectively inverted that burden. That
constitutes reversible error: after all, it is a bedrock rule
that when there is insufficient evidence on a particular issue,
that issue must be resolved against the party who bears the
burden of proof. See NLRB v. Louis A. Weiss Mem'l Hosp., 172
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F.3d 432, 446 (7th Cir. 1999); United States v. Certain Real
Property (566 Hendrickson Blvd.), 986 F.2d 990, 995 (6th Cir.
1993); cf. Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.
1990) (holding that the party who bears the burden of proof on
a particular issue may not rely on the absence of competent
evidence on that issue to defeat summary judgment). Even when
the burden is to prove a negative — here, the lack of knowledge
or consent — the absence of evidence on the issue redounds to
the detriment of the burden-holder. E.g., Otero v. Buslee, 695
F.2d 1244, 1248-49 (10th Cir. 1982); Martinez v. E.J. Korvette,
Inc., 477 F.2d 1014, 1016-17 (3d Cir. 1973).
The claimants attempt to fend off this conclusion in
two principal ways. First, noting that the district court
called its holding a factual determination, they proceed to
clasp the standard of review as if it were a life preserver.
But this argument sinks under its own weight. When nomenclature
diverges from substance, substance controls. See Johnson, 63
F.3d at 1138. It would bring a Kafkaesque quality to the
adjudication of cases if trial courts could inoculate themselves
against meaningful appellate review by the simple expedient of
creative labelling. We reject that notion. The dispositive
question here is whether the evidence was sufficient, as a
matter of law, to permit a finding on the innocence vel non of
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the owners — and the district court's answer to that question is
not entitled to deference.
Next, the claimants posit that it is not always
necessary for the burden-holder to present witnesses in order to
establish an affirmative defense. As an abstract proposition,
that is true. E.g., United States v. Scout, 112 F.3d 955, 960
(8th Cir. 1997) (explaining that a criminal defendant can
prevail on an affirmative defense of insanity without calling
witnesses); United States v. Dalpiaz, 527 F.2d 548, 552 (6th
Cir. 1975) (holding that a party carried the burden of proving
his affirmative defense by cross-examining the adverse party's
witnesses). In most cases, however, the proponent of an
affirmative defense will have to supply evidence to sustain that
defense. This case is of that genre: the testimony of the
government's witnesses, even if taken in the light most
favorable to the claimants, fails to furnish a sufficient
foundation for a finding that the claimants satisfied their
burden of proof. We explain briefly.
There is no direct evidence pertaining to the
affirmative defense; neither claimant took the stand to deny
knowledge or consent, and the record contains no disclaimers
from them. Nor is there sufficient circumstantial evidence to
prove the point. The only testimony is that of the government's
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witnesses. The most that this testimony proved was that the
drug transactions involving the undercover operative occurred in
the claimants' absence. This information alone cannot sustain
the claimants' burden of proof.
The decisive issue in this case involves whether the
claimants knew about, or gave their consent to, drug sales that
took place over an eight-month span. While proof of personal
observation of particular transactions would constitute
competent evidence of knowledge and perhaps found an inference
of consent, lack of personal observation proves relatively
little. Apart from observation, knowledge and consent can come
about in myriad other ways. For example, property owners might
know about ongoing criminal activity through conversations with
the participants, or by involvement in ancillary matters (e.g.,
financing the acquisition of the contraband), or from third
parties who seek to inform them of what is happening on their
premises. The possibilities are virtually endless. Seen from
that perspective, the record falls far short of furnishing an
adequate basis for a finding that the claimants proved their
innocence.3
3
Indeed, the scanty circumstantial evidence contained in the
record points in the opposite direction. Two notorious near-
fatal drug overdoses had occurred in the bar. Moreover, the
undercover investigation that led to the forfeiture action
followed on the heels of a police inquiry during which the
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We summarize succinctly. The government proved its
prima facie case. The burden then shifted to the claimants to
sustain their innocent owner defense. Because the record, taken
in the light most favorable to the claimants, contains
insufficient evidence to permit a reasonable finder of fact to
conclude that the claimants had proved a lack of knowledge or
consent, the judgment in their favor cannot stand.
IV. CONCLUSION
In the majority of cases, a finding that the evidence
was insufficient as a matter of law to support an owner's claim
of innocence will result in reversal and the entry of judgment
for the opposing party. See, e.g., 566 Hendrickson Blvd., 986
F.2d at 995 ("It is well settled that the government is entitled
to a judgment of forfeiture upon an unrebutted showing of
probable cause."). Here, however, we think that fairness
dictates a somewhat different course. Throughout the trial, the
district court persistently implied that the affirmative defense
would carry the day unless the United States adduced some
evidence that the claimants knew or consented to the ongoing
drug sales.4
authorities warned Henry Konick in no uncertain terms about
criminal activity on the premises.
4
For example, before the claimants decided to rest, the
court stated: "I think I better ask the government, what
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Trial lawyers pay attention to judges, and rightly so.
In this instance, there is a considerable risk that the judge's
comments led the claimants' attorney astray, inducing him to
rest without presenting any evidence. This possibility suggests
to us that, in the interests of justice, the claimants ought to
be afforded an opportunity to offer evidence in support of their
assertion of innocence.5 Accordingly, we vacate the judgment and
remand for a new trial before a new trier. In that proceeding,
the newly-assigned judge may, if he or she so elects, take the
government's case in chief on the record heretofore established,
or in the alternative, may require the government to introduce
evidence is there, even on the low standard of probable cause,
which indicates that Hank Konick was aware on the two occasions
that he was present that a drug transaction occurred?" The
court then directly challenged the government to point to
positive evidence that Henry Konick knew about the drug
transactions: "What you're asking me is to forfeit real estate
[worth] an awful lot of money [and] I'm asking you to show me on
the record of this case any evidence as to Henry Konick's
knowledge or consent of drug transactions." On yet another
occasion, the court told the prosecutor straightforwardly that
the "ultimate question that you have to support is . . . that
Henry Konick had any relationship with any drug transactions
that might have taken place on those days." (Emphasis
supplied.)
5 To be sure, lawyers have an independent responsibility to
know the law, and we sometimes have refused to rescue parties
whose attorneys arguably were misled by a judge. E.g., McGrath
v. Spirito, 733 F.2d 967, 968-69 (1st Cir. 1984). However, the
case at hand has special qualities: the judge was presiding
over a bench trial, his comments were persistent, the claimants
have much at stake, and any possible harm easily can be undone.
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its evidence anew. In either event, the court shall afford the
claimants an opportunity to present evidence in support of their
affirmative defense.
So ordered.
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