United States v. Anahi Gutierrez ( 2018 )

FILED
NOT FOR PUBLICATION
MAY 09 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 16-50305
Plaintiff-Appellee, D.C. No. 2:15-cr-00606-RGK-1
v.
MEMORANDUM*
ANAHI E. GUTIERREZ,
Movant-Appellant,
ANDREW HARRISON KRAMER,
Defendant.
UNITED STATES OF AMERICA, No. 16-50306
Plaintiff-Appellee, D.C. No. 2:15-cr-00606-RGK-1
v.
ROSALINDA KRAMER; STUART
KRAMER, M.D.; BLUE MOUNTAIN
MANAGEMENT AND MARKETING,
INC.; PRIVATE FUNDING
MANAGEMENT, INC.,
Movants-Appellants,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
ANDREW HARRISON KRAMER,
Defendant.
Appeals from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
Argued and Submitted March 6, 2018
Pasadena, California
Before: GRABER, W. FLETCHER, and OWENS, Circuit Judges.
Rosalinda Kramer (“R. Kramer”), Stuart Kramer ( “S. Kramer”), Blue
Mountain Management and Marketing, Inc. (“BMM”), Private Funding
Management, Inc. (“PFM”), and Anahi Gutierrez (“Gutierrez”) (collectively
“Appellants”) appeal the district court’s order denying all but one of their third-
party petitions claiming ownership interest in properties listed in a preliminary
order of criminal forfeiture. The order arises from Defendant Andrew Kramer’s
conviction for felonious narcotics trafficking. The district court found that, as to
all but one of their petitions, Appellants failed to meet their burden of
demonstrating either (a) that they had a cognizable legal interest in the properties
that was superior to any interest held by Defendant, or (b) that they were bona fide
purchasers of the properties without notice. See 21 U.S.C. § 853(n)(6). We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
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“In a case involving [21 U.S.C.] § 853(n), we review the district court’s
findings of fact for clear error and its legal conclusions de novo.” United States v.
Nava, 404 F.3d 1119, 1127 n.3 (9th Cir. 2005) (citing United States v. Lester, 85
F.3d 1409, 1410–11 (9th Cir. 1996)). We review for abuse of discretion a district
court’s denial of equitable relief, such as Appellants’ requests for the creation of
resulting and constructive trusts. Chabner v. United of Omaha Life Ins. Co., 225
F.3d 1042, 1053 (9th Cir. 2000); Diaz v. San Jose Unified Sch. Dist., 861 F.2d 591,
595 (9th Cir. 1988).
1. Cognizable Legal Interests
The district court did not err in finding that Appellants had no cognizable
legal interests in the challenged forfeitable assets. A third-party petitioner may
prevail only upon showing, by a preponderance of the evidence, that (A) he
possessed a vested or superior legal right, title, or interest in the property at the
time the criminal acts began, or (B) he was a bona fide purchaser for value without
notice that the property was subject to forfeiture. 21 U.S.C. § 853(n)(6).
BB&T Branch Funds
Appellants R. Kramer, S. Kramer, and their entity BMM each claim that
their contribution of deposits into a seized bank account established a vested
proportional ownership interest, as well as equitable ownership in the form of
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constructive and resulting trusts. R. Kramer also contends that Defendant’s
contributions to the account were “intended as repayment” to her. BMM is listed
as owner of the seized account; however, evidence shows that the account was
initially opened by Defendant and a business partner.
R. Kramer’s deposits into the seized account do not show a proportional
ownership interest, as R. Kramer was merely a signatory on the account.
Moreover, the seized corporate assets of the account’s owner, BMM, do not
qualify as R. Kramer’s personal assets. See Merco Constr. Eng’rs, Inc. v. Mun.
Court, 581 P.2d 636, 639 (Cal. 1978) (“It is fundamental . . . that a ‘corporation is
a distinct legal entity separate from its stockholders and from its officers.’”
(quoting Maxwell Cafe, Inc. v. Dep’t of Alcoholic Beverage Control, 298 P.2d 64,
68 (Cal. Dist. Ct. App. 1956))). Nor is there evidence to support R. Kramer’s
claim that she maintains a superior interest over the account funds because they
were loan repayments from Defendant.
A constructive trust is used to remedy fraud when “[o]ne . . . wrongfully
detains a thing” or “[o]ne . . . gains a thing by fraud, accident, mistake, undue
influence, the violation of a trust, or other wrongful act.” Cal. Civ. Code §§ 2223,
2224. Neither R. Kramer nor S. Kramer has adduced any evidence to show that
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their deposits into the account were wrongfully obtained or induced through some
form of fraud.
Under California law,
[w]here a transfer of property is made to one person and a part of the
purchase price is paid by another, a resulting trust arises in favor of
the person by whom such payment is made in such proportion as the
part paid by him bears to the total purchase price, unless he manifests
an intention that no resulting trust should arise or that a resulting trust
to that extent should not arise.
Juranek v. Juranek, 84 P.2d 195, 198 (Cal. Dist. Ct. App. 1938) (quoting
Restatement of Law of Trusts § 454). However, a resulting trust is “not founded
on the simple fact that money or property of one [person] has been used by another
to purchase property.” Lezinsky v. Mason Malt Whisky Distilling Co., 196 P. 884,
890 (Cal. 1921). The formation of a resulting trust must be mutually intended
between the parties. Id. at 888 (“[I]t will be presumed that as between [the parties]
it was intended that the purchase be for the benefit of him who supplied the means
with which to make it.”); see also Lloyds Bank Cal. v. Wells Fargo Bank, 232 Cal.
Rptr. 339, 341 (Ct. App. 1986) (explaining that a resulting trust is an intention-
enforcing trust because the “trust carries out and enforces the inferred intent of the
parties”). R. Kramer produced no evidence of mutual intent that the claimed
deposits would benefit her. Id. at 342.
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Finally, BMM’s claim of superior interest as the account owner fails because
the evidence establishes that these funds were the proceeds of narcotics trafficking.
See United States v. Hooper, 229 F.3d 818, 821–22 (9th Cir. 2000) (explaining that
because proceeds of a crime do not exist before the commission of the underlying
offense, § 853(n)(6)(A) can never be used to challenge the forfeiture of proceeds).
Cantlay Property
Appellants Gutierrez and R. Kramer each claim ownership through
proportional interest, resulting and constructive trusts and, alternatively, as bona
fide purchasers for value of the Cantlay Property. R. Kramer and S. Kramer’s
entity PFM also claims ownership of the property as a bona fide purchaser for
value. The Cantlay Property was deeded to Defendant through purchase, after
which Defendant conveyed the property to Gutierrez through a gift deed that stated
he received nothing in return. Gutierrez claims to have then conveyed the property
to PFM, though the record shows that title to the property is held solely by
Gutierrez and that PFM has only a deed of trust secured by the property.
R. Kramer’s claim that her contribution to the purchase price gave her
proportional ownership is not supported by the evidence. Defendant’s deed
conveying full title to Gutierrez makes no mention of a proportional interest. As to
the constructive trust claim, there is no evidence that R. Kramer’s contribution to
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the purchasing price was induced through fraud on the part of Defendant or that
there was a breach of any fiduciary duty. Lezinsky, 196 P. at 886. As to the
resulting trust claim, there is no evidence that R. Kramer and Defendant were in
agreement that R. Kramer would benefit from the property. Lloyds Bank, 232 Cal.
Rptr. at 342. The lack of this mutual intention is evinced, inter alia, by
Defendant’s conveyance of full title to Gutierrez. Id.
Gutierrez contends that remodeling expenses and property taxes she paid on
the property established constructive and resulting trusts. However, Gutierrez has
produced neither evidence that she was defrauded into spending money on the
property, nor evidence that she put money towards the property’s purchase price.
See Juranek, 84 P.2d at 197–98.
Finally, neither Gutierrez, R. Kramer, nor PFM is a bona fide purchaser of
the Cantlay Property. As discussed, Gutierrez’ deed explicitly states that she paid
nothing in exchange for the property. R. Kramer contributed to the purchase price
but did not receive title. And the title obtained by PFM was neither received for
value nor obtained prior to the commission of the acts that gave rise to forfeiture.
See 21 U.S.C. § 853(n)(6)(A).
Chimineas Property
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R. Kramer and S. Kramer contend that their mortgage, maintenance, and tax
payments established their ownership, through proportional interest, constructive
and resulting trusts, and as bona fide purchasers of the Chimineas Property.
R. Kramer and S. Kramer failed to show proportional interest, as Defendant
deeded title to the property in full to his own entity Nevada External Properties,
LLC (“NEP”). R. Kramer and S. Kramer did not show that their payments on the
property were induced by fraud or a wrongful act, Cal. Civ. Code §§ 2223, 2224,
or that it was mutually intended that they would benefit from the property, forming
a resulting trust. Lloyds Bank, 232 Cal. Rptr. at 342. Finally, the Chimineas
Property was never conveyed to R. Kramer or S. Kramer in exchange for
consideration, and R. Kramer began making mortgage payments on the property
after Defendant was arrested. 21 U.S.C. § 853(n)(6)(B).
Hyde Park Property
R. Kramer contends that payments made for homeowner association dues
following Defendant’s arrest, generated a resulting and constructive trust in the
Hyde Park Property. However, R. Kramer has failed to adduce evidence that she
was defrauded into paying the homeowner association fees. Cal. Civ. Code §§
2223, 2224. Nor has she shown that she contributed to the purchase price of the
property or that there was a mutual agreement that she would benefit from the
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property. Lloyds Bank, 232 Cal. Rptr. at 342. Defendant deeded the Hyde Park
Property to his entity NEP in November 2012.
Escrow Funds
R. Kramer and S. Kramer claim that the litigation costs they incurred in
connection with the proposed sale of Defendant’s property created constructive and
resulting trusts as to the escrow funds that were Defendant’s net proceeds from the
sale of the property. However, the Kramers have failed to show that they were
fraudulently induced into contributing to the litigation costs of this property. Cal.
Civ. Code §§ 2223, 2224. There also is no evidence of mutual intention for the
Kramers to benefit from the sale of the property. Lloyds Bank, 232 Cal. Rptr. at
342. The Kramers admitted that the investment into the escrow account was paid
for Defendant’s benefit.
Foothill Property
S. Kramer and R. Kramer contend that their expenditures made on the
Foothill Property created proportional interests, constructive trusts, resulting trusts
and, alternatively, that they were bona fide purchasers for value. They also claim
that their entity, PFM, was a bona fide purchaser for value. Defendant conveyed
the Foothill Property to PFM. The deed specified that “the grantors and the
grantees in this conveyance are comprised of the same parties who continue to hold
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the same proportionate interest in the property.” While the language of the deed
suggests there was a proportional or resulting trust interest, the existence of such
an interest under state law is defeated by federal law. The deed was not created “at
the time of the commission of the acts which gave rise to the forfeiture of the
property.” 21 U.S.C. § 853(n)(6)(A) (emphasis added). Instead, Defendant deeded
the properties to the Kramers’ entity in June 2010, after the commencement of his
drug conspiracy. PFM thus can defeat forfeiture only by establishing, inter alia,
that it was a “bona fide purchaser for value.” Id. § 853(n)(6)(B). However there
was no evidence presented that PFM contributed its corporate assets toward the
purchase price of the property or that PFM was “without cause to believe that the
property was subject to forfeiture.” Id. R. Kramer and S. Kramer also fail to show
that they were defrauded into contributing to the down payment and maintenance
fees for the property. Cal. Civ. Code §§ 2223, 2224.
2. Compliance With the Plea Deal
We review de novo whether the Government violated the terms of a plea
agreement. United States v. Clark, 218 F.3d 1092, 1095 (9th Cir. 2000). The
Government’s opposition to Appellants’ third-party claims in the ancillary criminal
forfeiture proceedings was not a “criminal prosecution” in violation of Defendant’s
plea agreement. Defendant’s agreement included a promise not to prosecute
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Appellants. Appellants exercised their right to claim a third-party interest in
Defendant’s forfeitable assets by compelling an ancillary proceeding, 21 U.S.C. §
853(n)(2), and the Government participated in the proceeding to evaluate
Appellants’ claims, id. § 853(n)(6) & (7). The Government has not charged
Appellants with any crime, has not summoned Appellants into Defendant’s case,
and has made no formal allegations that any Appellant committed an illegal act.
3. Federal Appropriations Riders
We review de novo the denial of a motion to dismiss. See United States v.
Gomez-Rodriguez, 96 F.3d 1262, 1264 (9th Cir. 1996) (en banc). Federal
appropriations riders related to medical marijuana did not require dismissal of the
ancillary forfeiture proceedings. Appellants contend that congressional
appropriations riders, prohibiting the use of Department of Justice funds to prevent
states from implementing their state medical marijuana laws, preclude the
Government from participating in their ancillary forfeiture proceedings and compel
a dismissal of the Government’s claim to the properties. The concerned
appropriations riders, Consolidated and Further Continuing Appropriations Act,
2015, Pub. L. No. 113-235 , Div. B., Title V, § 538, 128 Stat. 2130, 2217 (2014)
(“section 538”); Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, Div.
B., § 542, 129 Stat. 2242, 2232–33 (2015) (“section 542”), do not compel
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dismissal. Neither section 538 nor section 542 precludes the Government’s
participation in ancillary forfeiture proceedings because the proceedings do not
prevent California from “implementing [its] own State laws that authorize the use,
distribution, possession, or cultivation of medical marijuana.” Olive v. Comm’r,
792 F.3d 1146, 1150–51 (9th Cir. 2015) (quoting rider). Contrary to Appellants’
claim, because the riders are not applicable to these ancillary hearings, violations
of the Anti-Deficiency Act, 31 U.S.C. § 1341 (a)(1)(A); id. § 1517(a), and Article I
of the United States Constitution are not apparent.
Finally, Appellants contend that they are entitled to an evidentiary hearing to
determine whether their claimed interests were tainted by the illegal sale of
marijuana. We have held that such a hearing is appropriate only where the
government is spending funds for the “prosecution of individuals who engaged in
conduct permitted by the State Medical Marijuana Laws and who fully complied
with such laws.” United States v. McIntosh, 833 F.3d 1163, 1177 (9th Cir. 2016).
Appellants do not face prosecution, and at least two of the charges against
Defendant were for lack of compliance with state law.
AFFIRMED.
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