15‐2882‐cv
In re 650 Fifth Avenue
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A
PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 8th day of December, two thousand sixteen.
PRESENT: JOHN M. WALKER, JR.,
ROBERT D. SACK,
DENNY CHIN,
Circuit Judges.
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15‐2882‐cv
FIONA HAVLISH, individually and on behalf of the
Estate of Donald G. Havlish, Jr., et al., STEVEN M.
GREENBAUM, ALAN D. HAYMAN, SHIRLEE
HAYMAN, RENAY FRYM, STUART E. HERSH,
ABRAHAM MENDELSON, DANIEL MILLER,
ELANA ROZENMAN, NOAM ROZENMAN, TZVI
ROZENMAN, DEBORAH RUBIN, JENNY RUBIN,
DANIEL MILLER, CARLOS ACOSTA, MARIA
ACOSTA, TOVA ETTINGER, IRVING FRANKLIN,
BARUCH KAHANE, LIBBY KAHANE, NORMAN
KAHANE, ETHEL J. GRIFFIN, CIPORAH KAPLAN,
ANNA BEER, HARRY BEER, on his own behalf and as
Administrator of the Estate of Alan Beer, ESTELLE
CARROLL, PHYLLIS MAISEL, JASON
KIRSCHENBAUM, ISABELLE KIRSCHENBAUM, on
her own behalf and as Executrix of the Estate of Martin
Kirschenbaum, JOSHUA KIRSCHENBAUM, DAVID
KIRSCHENBAUM, and DANIELLE TEITLEBAUM,
Plaintiffs‐Appellees,
UNITED STATES OF AMERICA,
Plaintiff‐Counter‐Defendant‐Appellee,
v.
EDWENA R. HEGNA, Executrix of the Estate of Paul
B. Hegna, CRAIG H. HEGNA, LYNN M. HEGNA
MOORE, PAUL B. HEGNA, STEVEN A. HEGNA,
Claimants‐Appellants,
DEBORAH D. PETERSON, Personal Representative,
WILLIAM R. HIGGINS, Higgins, et al., HAVLISH
PLAINTIFFS, RUTH ANN BLAND, FATEMEH
BAYANI, in her Individual Capacity, BANAFSHEH
BAYANI, in her Individual Capacity and as
Representative of the Estate of Siavash Bayani, BABAK
BAYANI, in his Individual Capacity, ESTATE OF
MICHAEL HEISER, ESTATE OF MILLARD D.
CAMPBELL, GARY HEISER, FRANCIS HEISER,
ESTATE OF LELAND TIMOTHY HAUN, IBIS S.
HAUN, MILAGRITOS PEREZ‐DALIS, SENATOR
HAUN, ESTATE OF JUSTIN R. WOOD, RICHARD
WOOD, KATHLEEN M. WOOD, SHAWN M. WOOD,
ESTATE OF EARL F. CARTRETTE, JR., DENISE M.
EICHSTAEDT, ANTHONY W. CARTRETTE, LEWIS
W. CARTRETTE, ESTATE OF BRIAN MCVEIGH,
SANDRA M. WETMORE, JAMES V. WETMORE,
ESTATE OF MILLARD D. CAMPBELL, MARIE R.
CAMPBELL, BESSIE A. CAMPBELL, ESTATE OF
KEVIN J. JOHNSON, SHYRL L. JOHNSON, CHE G.
COLSON, KEVIN JOHNSON, NICHOLAS A.
JOHNSON, a minor, by his legal guardian, SHYRL L.
JOHNSON, LAURA E. JOHNSON, BRUCE
JOHNSON, ESTATE OF JOSEPH E. RIMKUS,
BRIDGET BROOKS, JAMES R. RIMKUS, ANNE M.
RIMKUS, ESTATE OF BRENT E. MARTHALER,
KATIE L. MARTHALER, SHARON MARTHALER,
HERMAN C. MARTHALER, III, MATTHEW
2
MARTHALER, KIRK MARTHALER, ESTATE OF
THANH VAN NGUYEN, CHRISTOPHER R.
NGUYEN, ESTATE OF JOSHUA E. WOODY, DAWN
WOODY, BERNADINE R. BEEKMAN, GEORGE M.
BEEKMAN, TRACY M. SMITH, JONICA L. WOODY,
TIMOTHY WOODY, ESTATE OF PETER J.
MORGERA, MICHAEL MORGERA, THOMAS
MORGERA, ESTATE OF KENDALL KITSON, JR.,
NANCY R. KITSON, KENDALL K. KITSON, STEVE
K. KITSON, NANCY A. KITSON, ESTATE OF
CHRISTOPHER ADAMS, CATHERINE ADAMS,
JOHN E. ADAMS, PATRICK D. ADAMS, MICHAEL
T. ADAMS, DANIEL ADAMS, MARY YOUNG,
ELIZABETH WOLF, WILLIAM ADAMS, ESTATE OF
CHRISTOPHER LESTER, deceased, CECIL H.
LESTER, JUDY LESTER, CECIL H. LESTER, JR.,
JESSICA F. LESTER, ESTATE OF JEREMY A.
TAYLOR, deceased, LAWRENCE E. TAYLOR,
VICKIE L. TAYLOR, STARLINA D. TAYLOR,
ESTATE OF PATRICK P. FENNIG, deceased,
THADDEUS C. FENNIG, CATHERINE FENNIG,
PAUL D. FENNIG, MARK FENNIG, 650 FIFTH
AVENUE COMPANY, ALAVI FOUNDATION,
Claimants‐Appellees,
SOHRAB VAHABZADEH, DJHANBANI FAMILY
MEMBERS, KHOSROWSHAHI FAMILY MEMBERS,
KHOSHKISH FAMILY MEMBERS,
Claimants,
ALL RIGHT, TITLE, AND INTEREST OF ASSA
CORPORATION, ASSA COMPANY LIMITED, BANK
MELLI IRAN IN 650 FIFTH AVENUE COMPANY,
INCLUDING BUT NOT LIMITED TO THE REAL
ESTATE PROPERTY AND APPURTENANCES
LOCATED AT 650 FIFTH AVENUE, NEW YORK,
NEW YORK, WITH ALL IMPROVEMENTS AND
ATTACHMENTS THEREON, ALL FUNDS
FORMERLY ON DEPOSIT AT CITIBANK, N.A., NEW
YORK, NEW YORK, IN ACCOUNT NUMBER
78429712, IN THE NAME OF ASSA CORPORATION
3
AND ALL FUNDS TRACEABLE THERETO, ALL
FUNDS FORMERLY ON DEPOSIT AT CITIBANK,
N.A., NEW YORK, NEW YORK, IN ACCOUNT
NUMBER 888165552, IN THE NAME OF ASSA
CORPORATION AND ALL FUNDS TRACEABLE
THERETO, ALL FUNDS FORMERLY ON DEPOSIT
AT JPMORGAN CHASE BANK, N.A., BATON
ROUGE, LOUISIANA, IN ACCOUNT NUMBER
2724409590, IN THE NAME OF ASSA
CORPORATION, AND ALL FUNDS TRACEABLE
THERETO, ALL FUNDS FORMERLY ON DEPOSIT
AT JPMORGAN CHASE BANK, N.A., BATON
ROUGE, LOUISIANA, IN ACCOUNT NUMBER
725700280, IN THE NAME OF ASSA
CORPORATION, AND ALL FUNDS TRACEABLE
THERETO, ASSA CORP., 650 FIFTH AVENUE
COMPANY, ALAVI FOUNDATION, ASSA
CORPORATION, ASSA COMPANY LIMITED,
ALAVI FOUNDATION OF NEW YORK, ALL RIGHT
TITLE AND INTEREST IN 650 FIFTH AVENUE, ALL
RIGHT TITLE AND INTEREST IN THE REAL
PROPERTY AND APPURTENANCES LOCATED AT
650 FIFTH AVENUE, NEW YORK, NEW YORK WITH
ALL IMPROVEMENTS AND ATTACHMENTS
THEREON, ALL RIGHT TITILE AND INTEREST IN
2313 SOUTH VOSS ROAD, ALL RIGHT, TITLE AND
INTEREST IN THE REAL PROPERTY AND
APPURTENANCES LOCATED AT 2313 SOUTH
VOSS ROAD, HOUSTON, TEXAS 77057, WITH ALL
IMPROVEMENTS AND ATTACHMENTS
THEREON, ALL RIGHT TITLE AND INTEREST IN
5511 QUEENS BOULEVARD, ALL RIGHT, TITLE
AND INTEREST IN THE REAL PROPERTY AND
APPURTENANCES LOCATED AT 5511 QUEENS
BOULEVARD, QUEENS, NEW YORK 11377, BLOCK
1325 LOTS 1,6,7 AND 8 WITH ALL IMPROVEMENTS
AND ATTACHMENTS THEREON, ALL RIGHT,
TITLE AND INTEREST IN 4836 MARCONI AVENUE,
ALL RIGHT, TITLE AND INTEREST IN THE REAL
PROPERTY AND APPURTENANCES LOCATED AT
4836 MARCONI AVENUE, CARMICHAEL,
4
CALIFORNIA 95608, WITH ALL IMPROVEMENTS
AND ATTACHMENTS THEREON, ALL RIGHT,
TITLE AND INTEREST IN 4204 ALDIE ROAD, ALL
RIGHT, TITLE AND INTEREST IN THE REAL
PROPERTY AND APPURTENANCES LOCATED AT
4204 ALDIE ROAD, CATHARPIN, VIRGINIA
201431133 WITH ALL IMPROVEMENTS AND
ATTACHMENTS THEREON, ALL RIGHT, TITLE,
AND INTEREST IN 4300 ALDIE ROAD, ALL RIGHT,
TITLE, AND INTEREST IN THE REAL PROPERTY
AND APPURTENANCES LOCATED AT 4300 ALDIE
ROAD, CATHARPIN, VIRGINIA 201431133, ALL
RIGHT, TITLE AND INTEREST IN 7917 MONTROSE
ROAD, ALL RIGHT, TITLE AND INTEREST IN THE
REAL PROPERTY AND APPURTENANCES
LOCATED AT 7917 MONTROSE ROAD,
ROCKVILLE, MARYLAND 20854, WITH ALL
IMPROVEMENTS AND ATTACHMENTS
THEREON, ALL RIGHT, TITLE AND INTEREST IN
8100 JEB STUART ROAD, ALL RIGHT, TITLE AND
INTEREST IN THE REAL PROPERTY AND
APPURTENANCES LOCATED AT 8100 JEB STUART
ROAD, ROCKVILLE MARYLAND 20854, WITH ALL
IMPROVEMENTS AND ATTACHMENTS
THEREON, ALL FUNDS FORMERLY ON DEPOSIT
AT CITIBANK, N.A., ALL FUNDS FORMERLY ON
DEPOSIT IN ACCOUNT NUMBER 78429712 AT
CITIBANK, N.A., NEW YORK, NEW YORK, ALL
FUNDS FORMERLY ON DEPOSIT AT CITIBANK,
N.A., ALL FUNDS FORMERLY ON DEPOSIT IN
ACCOUNT NUMBER 8881654552, AT CITIBANK,
N.A., NEW YORK, NEW YORK, ALL FUNDS
FORMERLY ON DEPOSIT AT JPMORGAN CHASE
BANK, N.A., ALL FUNDS FORMERLY ON DEPOSIT
IN ACCOUNT NUMBER 2724409590, AT
JPMORGAN CHASE BANK, N.A., BATON ROUGE,
LOUISIANA, ALL FUNDS FORMERLY ON DEPOSIT
AT JPMORGAN CHASE BANK, N.A., ALL FUNDS
FORMERLY ON DEPOSIT IN ACCOUNT NUMBER
725700280 AT JPMORGAN CHASE BANK, N.A.,
BATON ROUGE, LOUISIANA, ALL FUNDS ON
5
DEPOSIT AT JPMORGAN CHASE BANK, N.A., ALL
FUNDS ON DEPOSIT AT JPMORGAN CHASE
BANK, N.A., IN ACCOUNT NUMBER 230484468,
HELD IN THE NAME OF 650 FIFTH AVENUE
COMPANY, AND ALL FUNDS TRACEABLE
THERETO, ALL FUNDS ON DEPOSIT AT
JPMORGAN CHASE BANK, N.A., IN ACCOUNT
NUMBER 230484476 HELD IN THE NAME OF 650
FIFTH AVENUE COMPANY AND ALL FUNDS
TRACEABLE THERETO, ALL FUNDS ON DEPOSIT
AT JPMORGAN CHASE B, ALL FUNDS ON
DEPOSIT AT STERLING NATIONAL BANK, ALL
FUNDS ON DEPOSIT AT STERLING NATIONAL
BANK IN ACCOUNT NUMBER 3852524414 HELD IN
THE NAME OF ALAVI FOUNDATION AND ALL
FUNDS TRACEABLE THERETO, ALL FUNDS ON
DEPOSIT AT STERLING NATIONAL BANK, ALL
FUNDS ON DEPOSIT AT STERLING NATIONAL
BANK IN ACCOUNT NUMBER 3802032201 HELD IN
THE NAME OF ALAVI FOUNDATION AND ALL
FUNDS TRACEABLE THERETO, ALL FUNDS ON
DEPOSIT AT STERLING NATIONAL BANK, ALL
FUNDS ON DEPOSIT AT STERLING NATIONAL
BANK IN ACCOUNT NUMBER 3802032216 HELD IN
THE NAME OF ALAVI FOUNDATION AND ALL
FUNDS TRACEABLE THERETO,
Defendants‐in‐Rem.*
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FOR CLAIMANTS‐APPELLANTS: RALPH PAUL DUPONT (Barbara J. Dupont,
on the brief), The Dupont Law Firm, Stamford,
Connecticut.
FOR PLAINTIFF‐COUNTER‐ MARTIN S. BELL, Assistant United States
DEFENDANT‐APPELLEE Attorney (Michael D. Lockard, Anna M.
UNITED STATES OF AMERICA: Skotko, Assistant United States Attorneys, on
the brief), for Preet Bharara, United States
Attorney for the Southern District of New
York, New York, New York.
* The Clerk of Court is directed to amend the official caption as shown above.
6
FOR CLAIMANTS‐APPELLEES MELISSA R. GINSBERG (Daniel S. Ruzumna,
ALAVI FOUNDATION AND 650 on the brief), Patterson Belknap Webb & Tyler
FIFTH AVE. CO.: LLP, New York, New York.
FOR PLAINTIFFS‐APPELLEES PATRICK N. PETROCELLI (Curtis C.
STEVEN M. GREENBAUM, et al., Mechling, James L. Bernard, Nathan H.
CARLOS ACOSTA, et al., ANNA Stopper, Pamela S. Takefman, on the brief),
BEER, et al., AND JASON Stroock & Stroock & Lavan LLP, New York,
KIRSCHENBAUM, et al.: New York.
Appeal from the United States District Court for the Southern District of
New York (Forrest, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED
and the appeal is otherwise DISMISSED.
Claimants‐appellants Edwena R. Hegna, executrix of the estate of Paul B.
Hegna, Steven A. Hegna, Craig H. Hegna, and Lynn Marie Hegna Moore (together, the
ʺHegna Partiesʺ) appeal from a judgment of the district court entered August 11, 2015
pursuant to Federal Rule of Civil Procedure 54(b), granting the governmentʹs motion to
strike or for summary judgment as to the Hegna Partiesʹ innocent owner defenses to
forfeiture and denying the Hegna Partiesʹ motion for summary judgment.1 The district
court explained its reasoning in an opinion and order filed May 15, 2014. The
government, claimants‐appellees Alavi Foundation (ʺAlaviʺ) and 650 Fifth Avenue
1 The Hegna Parties also appeal from the district courtʹs October 6, 2014 opinion
and order denying their motion to extend their purported judgment lien under New York Civil
Practice Law and Rules § 5203(b). Because the district court did not enter final judgment as to
the October 6 order, we lack appellate jurisdiction over that aspect of the Hegna Partiesʹ appeal.
7
Company (ʺ650 Fifth Avenue Co.ʺ), and the Greenbaum, Acosta, Beer, Kirschenbaum,
and certain other groups of judgment creditors, also claimants‐appellees, oppose the
appeal.2 We assume the partiesʹ familiarity with the underlying facts, procedural
history, and issues on appeal.
The Hegna Parties hold a judgment from the United States District Court
for the District of Columbia against Iran and the Iranian Ministry of Information and
Security (ʺMOISʺ), arising out of Iran and MOISʹs default in an action relating to the
terrorist attack that killed Charles Hegna. The judgment, entered February 7, 2002,
provided for $42 million in compensatory damages against Iran and MOIS, and $333
million in punitive damages against MOIS alone. On November 27, 2002, the Hegna
Parties registered the judgment in the Southern District of New York. The remaining
unpaid amount of their judgment is approximately $33,618,878.86.3
On December 17, 2008, the government filed this civil forfeiture action in
the district court below seeking forfeiture of property owned by Assa Corporation, Assa
Company Limited (together, ʺAssaʺ), and Bank Melli Iran (ʺBank Melliʺ), alleging
2 The Greenbaum, Acosta, Beer, and Kirschenbaum judgment creditors filed a
brief in opposition to the Hegna Partiesʹ opening brief, which the Rubin, Heiser, Bland,
Peterson, Havlish, and Bayani judgment creditors join in whole or in part.
3 On March 20, 2003, the Hegna Parties applied to the United States Department of
the Treasury for payment under the Victims of Trafficking and Violence Protection Act, Pub. L.
No. 106‐386, 114 Stat. 1464, as amended by section 201 of the Terrorism Risk Insurance Act of
2002, Pub. L. No. 107‐297, 116 Stat. 2322. The Hegna Parties received $8,381,121.14 from the
Office of Foreign Assets Control and, as a condition to receiving payment, relinquished ʺall
rights and claims to punitive damages awarded in connection with the claim or claims [the
Hegna Parties] brought under 28 U.S.C. [§] 1605(a)(7) and any related interest, costs, and
attorneys fees.ʺ
8
violations of the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq.,
and 18 U.S.C. §§ 1956 and 1957. By amended complaint filed November 12, 2009, the
government added properties held by Alavi and 650 Fifth Avenue Co. as defendants in
rem. The government seeks forfeiture of the interests of Assa, Bank Melli, Alavi, and
650 Fifth Avenue Co. in a 36‐story office building located at 650 Fifth Avenue in
Manhattan (the ʺBuildingʺ), other real properties in several states, and the contents of
several bank accounts (collectively, the ʺdefendant propertiesʺ). The parties do not
dispute that the Building is owned by 650 Fifth Avenue Co., a partnership between
Alavi, a New York not‐for‐profit organization, and Assa. The government also alleges
that the two Assa entities are shell companies controlled by Bank Melli, a bank owned
and controlled by the government of Iran.
On September 16, 2013 and April 18, 2014, the district court granted
summary judgment, inter alia, in favor of the government, forfeiting Assa, Alavi, and
650 Fifth Avenue Co.ʹs interests in the defendant properties. The district court entered
final judgment as to these orders at the request of Alavi and 650 Fifth Avenue Co., who
timely appealed. On July 20, 2016, we vacated the district courtʹs judgment after
concluding that the record contained disputes of fact regarding Alaviʹs knowledge of
Bank Melli and Iranʹs ownership of Assa. In re 650 Fifth Ave. & Related Properties, 830
F.3d 66, 75 (2d Cir. 2016).
Meanwhile, the Hegna Parties had filed notices in this action below
claiming the right to satisfy their outstanding judgment ʺfrom the proceeds of the Sale
9
of all right, title, and interest of [Assa and Bank Melli] in 650 Fifth Avenue Company.ʺ
The Hegna Parties assert that they are innocent owners and bona fide purchasers for
value of Assa and Bank Melliʹs assets within the meaning of 18 U.S.C. § 983(d)(2)(A)(i)
and (d)(3)(A)(i)‐(ii).4
The Hegna Parties filed a motion for summary judgment on their claims,
which became fully briefed on March 3, 2014, arguing that they were innocent owners
of the Building because they purportedly had obtained a judgment lien on all of Iranʹs
real property in New York County.5 The government opposed the motion and moved
to strike the Hegna Partiesʹ innocent owner defenses or, in the alternative, for summary
4 The Hegna Parties took additional steps to enforce and satisfy their judgment
outside of the civil forfeiture proceeding. On December 29, 2008, the Hegna Parties obtained a
Writ of Execution from the Clerk of Court for the Southern District of New York for ʺgoods and
chattels of the Islamic Republic of Iran, its agencies and instrumentalities, including, but not
limited to, Bank Melli Iran, Assa Corporation and/or Assa Co Limited (entities owned or
controlled, directly or indirectly by Iran) and/or one Mohammad Hassan Dehghani Tafti.ʺ The
writs were delivered to the U.S. Marshal Service for service on Assa, Alavi, and 650 Fifth
Avenue Co. on December 30, 2008.
Separately, on March 27, 2009, the Hegna Parties sought an order to show cause
in the district court for the turnover and sale of the Building to satisfy their judgment against
Iran and MOIS. Other private judgment creditors of Iran have also filed individual turnover
actions against Assa, Alavi, and 650 Fifth Avenue Co. seeking attachment and turnover of their
properties to satisfy the creditorsʹ outstanding judgments. The turnover actions, which have
been consolidated with the forfeiture action in the district court, generally allege that Assa,
Alavi, and 650 Fifth Avenue Co. are sufficiently related to Iran to render their property subject
to turnover pursuant to the Foreign Sovereign Immunities Act (ʺFISAʺ) and the Terrorism Risk
Insurance Act (ʺTRIAʺ). The Hegna Parties also appeal from several non‐final orders entered in
their turnover action; we dispose of that appeal in a separate summary order filed today. See
Hegna v. Islamic Republic of Iran, 15‐3007‐cv.
5 At the time the Hegna Parties filed their motion, they had not attempted to
extend or renew their judgment lien. They subsequently filed a motion to extend the lien on
August 22, 2014, after the district court had denied their motion for summary judgment on their
innocent owner defenses; the district court denied the motion to extend the lien on October 6,
2014.
10
judgment. Alavi, 650 Fifth Avenue Co., and several groups of judgment creditor
plaintiffs also opposed the Hegna Partiesʹ motion.
On May 14, 2014, the district court issued an opinion and order denying
the Hegna Partiesʹ motion and granting the governmentʹs motion to strike or for
summary judgment on the Hegna Partiesʹ innocent owner defenses. The district court
held that the Hegna Parties did not qualify as innocent owners of the building because
they lacked an ownership interest in the Building. In so holding, the district court noted
that (1) the Hegna Parties held judgments against Iran and MOIS, who were not the
record owners of the Building, (2) the Hegna Parties claimed an interest only in
personal property, against which their judgment could not create a lien, and (3) any
judgment lien they once held had expired. The district court further concluded that,
even if the Hegna Parties did hold a valid ownership interest in the Building, they could
not avail themselves of the innocent owner defense because any property interest they
held did not predate the illegal activity giving rise to the forfeiture and they did not
acquire any interest in the Building as bona fide purchasers for value.
After the district court denied the Hegna Partiesʹ motion for
reconsideration of its decision, the Hegna Parties filed a motion for entry of final
judgment pursuant to Federal Rule of Civil Procedure 54(b), requesting that the district
court ʺcertify their innocent owner defenses to forfeiture for immediate appeal.ʺ App.
at 382. The district court granted the Hegna Partiesʹ motion, and they timely appealed.
11
We review a district courtʹs grant of summary judgment de novo,
ʺresolv[ing] all ambiguities and draw[ing] all inferences against the moving party.ʺ
Garcia v. Hartford Police Depʹt, 706 F.3d 120, 127 (2d Cir. 2013) (per curiam).6 ʺSummary
judgment is proper only when, construing the evidence in the light most favorable to
the non‐movant, ʹthere is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.ʹʺ Doninger v. Niehoff, 642 F.3d 334, 344 (2d Cir.
2011) (quoting Fed. R. Civ. P. 56(a)).
If a claimant in a civil forfeiture can show that it is an innocent owner of
the property to be seized, that property will not be forfeited. 18 U.S.C. § 983(d)(1). The
claimant must prove that it is an innocent owner by a preponderance of the evidence.
Id. For purposes of the innocent owner defense, an owner is ʺa person with an
ownership interest in the specific property sought to be forfeited, including a leasehold,
lien, mortgage, recorded security interest, or valid assignment of an ownership interestʺ
and not, inter alia, a ʺperson with only a general unsecured interest in, or claim against,
the property or estate of another.ʺ Id. § 983(d)(6).
Section 983(d) classifies innocent owners by whether their property
interest was in existence when the illegal conduct giving rise to the forfeiture took place.
If the interest already existed, a claimant qualifies as an innocent owner if the claimant
was unaware of the conduct or, ʺupon learning of the conduct giving rise to the
6 Because we conclude that there are no material fact disputes and the government
is entitled to judgment as a matter of law on the Hegna Partiesʹ innocent owner defenses, we do
not separately consider their claims under the standard for a motion to strike.
12
forfeiture, did all that reasonably could be expected under the circumstances to
terminate such use of the property.ʺ Id. § 983(d)(2)(A). If the property interest was
acquired after the illegal conduct took place, the claimant must have been a ʺbona fide
purchaser or seller for valueʺ who ʺdid not know and was reasonably without cause to
believe that the property was subject to forfeiture.ʺ Id. § 983(d)(3)(A).
On appeal, the Hegna Parties argue principally that their judgment
against Iran and MOIS functions as a lien against the Building. That judgment,
however, is not against 650 Fifth Avenue Co., the entity that owns the Building; thus, it
does not create a legal interest in the Building. See United States v. Ribadeneira, 105 F.3d
833, 836 (2d Cir. 1997) (ʺ[A]n interest ʹinʹ property must be an interest in a particular,
specific asset, as opposed to a general interest in an entire forfeited estate or account.ʺ).
The Hegna Parties cite no authority for their claim that ʺthe 650 Fifth Ave. Co.
partnership is ignored under New York partnership lawʺ such that the Hegna Partiesʹ
judgment lien would attach to Assa and Alaviʹs interests in the Building. Appellantsʹ
Br. at 10‐11. Because the Hegna Parties lack a specific property interest in the defendant
properties, they are general creditors who cannot be owners for the purposes of the
innocent owner statute. 18 U.S.C. § 983(d)(6)(B)(i).7
Furthermore, any ownership interest that the Hegna Parties once held has
since expired under New York law. See N.Y. C.P.L.R. 5203(a) (explaining that a
7 To the extent the Hegna Parties assert that they are innocent owners of
unidentified personal property held by Alavi and Assa as a result of the writs of execution
served in December 2008, that argument has been waived as it is raised for the first time on
appeal. Millea v. Metro‐N. R.R. Co., 658 F.3d 154, 163 (2d Cir. 2011).
13
judgment lien is effective until ʺten years after filing of the judgment‐rollʺ). As noted
above, there is no evidence on this record suggesting that the Hegna Parties ever sought
renewal under the mechanism outlined in N.Y. C.P.L.R. 5014(3), which permits
judgment creditors to apply for a renewal of their judgment liens in the year prior to
expiration of the ten years. The Hegna Partiesʹ argument that the post‐complaint
protective order in the forfeiture action extends or somehow excuses the expiry of their
judgment lien is baseless.
Finally, the Hegna Parties appeal the district courtʹs approval of a
settlement agreement between the government and several groups of judgment
creditors, which provides for the pro rata distribution of proceeds to the judgment
creditors who are parties to the agreement from any defendant properties that are
ultimately forfeited in the civil action. Because the Hegna Parties did not challenge the
settlement agreement in the district court, this argument is waived. Millea v. Metro‐N.
R.R. Co., 658 F.3d 154, 163 (2d Cir. 2011). Moreover, we lack appellate jurisdiction to
consider the argument as it is not covered by the district courtʹs Rule 54(b) judgment.8
We have considered all of the Hegna Partiesʹ remaining arguments and
find them to be without merit. Accordingly, for the reasons stated above, we AFFIRM
8 In contesting the settlement agreement, the Hegna Parties argue that their claims
under the Terrorism Risk Insurance Act take priority over the governmentʹs forfeiture claims,
an argument they also make in the appeal in their turnover action. We also lack jurisdiction to
consider this argument as it has never been presented to the district court and is not the subject
of an appealable order.
14
the judgment of the district court certified to this court pursuant to Federal Rule of Civil
Procedure 54(b) and DISMISS the remainder of the appeal.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
15
In re 650 Fifth Avenue
Combined Opinion