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United States v. 1461 W. 42d St., Hialeah, Florida

ELR Citation: 31 ELR 20618
Nos. 99-11130, 251 F.3d 1329/(11th Cir., 05/22/2001)

The court holds that the government must only return the net rental proceeds and not the mortgage payments of property it seized in a civil forfeiture that was then foreclosed by the property's mortgagee. The government seized the property in connection with a drug trafficking case and collected rents but did not make mortgage payments. The bank with title to the property foreclosed on the property, and development companies filed motions to compel the government to make mortgage payments. The court first holds that the government failed to provide notice and hearing prior to seizing the property, and did not alleged or establish the existence of exigent circumstances. Under United States v. James Daniel Good Real Property, 510 U.S. 43 (1993), the U.S. Supreme Court held that due process requires the government to provide the owner of real property notice and a meaningful opportunity to be heard before it seizes property, absent a showing of exigent circumstances. Therefore, the companies are entitled to the return of any rents received or other proceeds realized from the property during the illegal seizure. However, the court then holds that the companies are not entitled to include mortgage payments in the rents and proceeds to which they are entitled. To do so would allow the companies' possible recovery of damages in another action for the loss of property to be unjustifiably duplicated. Similarly, the court holds that the district court was correct in relying on sovereign immunity to exclude consideration of their loss of use and enjoyment of the property, pre-judgment interest, and return of property damages under 28 U.S.C. §2465 from the amount of damages recoverable by the development companies.

The full text of this decision is available from ELR (21 pp., ELR Order No. L-370).

Counsel for Plaintiff
Scott Ray
U.S. Attorney's Office
Federal Justice Bldg.
99 NE 4th St., Miami FL 33132
(305) 961-9000

Counsel for Defendant
Joel Kaplan
Akerman, Senterfitt & Eidson
One SE Third Ave., 28th Fl., Miami FL 33131
(305) 374-5600