Pimper v. State Ex Rel. Simpson
Pimper v. State Ex Rel. Simpson
Opinion of the Court
On January 29, 2001, under the authority of the Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act,
Also on January 29, the District Attorney obtained an ex parte order from the superior court temporarily restraining appellants from transferring, concealing, assigning or disposing of all assets held in both individual and corporate capacities. Also acting ex parte, the trial court appointed a receiver and assigned him plenary powers to take immediate control of appellants’ assets, books, and possessions; to assume sole control of the corporations; and to report to the court as to appellants’ financial status. The ex parte hearing was not transcribed. However, at a subsequently-held hearing, the trial court made statements indicating that on January 29, it was presented with sufficient sworn testimony and other evidence to support its entry of the TRO and appointment of the receiver.
Within 24 hours of entry of the trial court’s orders, on January 30, 2001, a hearing was held before the superior court at which appellants were afforded an opportunity to be heard on whether the State’s forfeiture action, the court’s ex parte appointment of a receiver, and issuance of the TRO were improper. Appellants, however, declined to give testimony or submit any evidence before the trial court, stating that they were “unable to bring witnesses forward who are willing to testify and risk criminal prosecution themselves, or further investigation, or risk waiving their privilege against self-incrimination.”
Six days later, on February 5, 2001, appellants filed a motion to dissolve the TRO and receivership order, alleging that the ex parte proceedings were improper. The following day, February 6, the supe
On February 21, 2001, the receiver reported to the trial court there were virtually no assets remaining in appellants’ estates not already subject to the claims of secured creditors, many of which were asserted before the State’s forfeiture action was filed. On February 22, 2001, an involuntary petition for bankruptcy was brought against one of the corporations, D.L. Pimper Group, Inc. On February 26, 2001, the other corporation, Wall Street Creations, Ltd., filed a voluntary petition for bankruptcy. On February 26 and 27, acting on the State’s motion, the trial court entered orders dismissing the State’s forfeiture action and the underlying TRO and receivership. The trial court reapproved its dismissal of the State’s action on April 17, 2001.
Thereafter, the receiver was automatically converted by operation of law into a Bankruptcy Court custodian, and thus became authorized to dispose of property in the two bankruptcy estates only in accordance with the directives of the Bankruptcy Court.
On June 22, 2001, the grand jury returned a 75 count indictment
Insofar as this appeal concerns the bankrupt corporations, it rests within the exclusive jurisdiction of the Bankruptcy Court and is subject to the mandatory automatic stay provisions of the United States Bankruptcy Code.
Insofar as this appeal concerns the Pimpers in their individual capacities, it is moot. An appeal is moot when it seeks to determine an issue which, if resolved, cannot have any practical effect on the underlying controversy,
Thus, the record shows that appellants have obtained the relief they sought in the superior court — dissolution — and the State no longer exercises dominion over their personal assets. Any resolution
The dissent raises well-grounded concerns regarding the constitutional ramifications of an in personam RICO forfeiture action such as the one brought in this appeal, and urges that because these constitutional issues might recur and yet evade review, this appeal should not be dismissed as moot. However, this Court is without jurisdiction to consider the constitutional issues raised by the dissent, because the issues were not ruled upon by the trial judge after having been raised in the trial court.
In conclusion, this Court may not exercise jurisdiction over that portion of this appeal that is now within the exclusive jurisdiction of the Bankruptcy Court, and all remaining issues are moot. Therefore, the appeal is dismissed in its entirety.
Dismissed.
OCGA § 16-14-1 et seq.
OCGA § 10-5-1 et seq.
See OCGA § 16-14-7 (e).
See Caldwell v. State, 253 Ga. 400-401 (321 SE2d 704) (1984).
Contrary to appellants’ argument, the record reflects legitimate bases for the State’s dismissal of its RICO action. The State’s decision to dismiss was based primarily upon its discovery that the receivership estate was “both smaller and less liquid” than had been anticipated. This information was brought to light on February 21, when it was reported to the trial court that virtually no assets remained in the appellants’ estates not already subject to secured claims. Two days later, the State informed the trial court that it no longer made sense to maintain the receivership, as appellants’ poor financial condition rendered the receivership estate of no use in compensating the victims of appellants’ purported fraudulent investment scheme. Three days later, on February 26, the State moved to dismiss its RICO action.
See 11 USC §§ 101 (1) (A), 543 (a).
OCGA § 16-8-3.
OCGA § 10-5-12.
OCGA § 16-10-71.
OCGA § 16-10-20.
11 USC § 362; Straton v. New, 283 U. S. 318, 320-321 (51 SC 465, 75 LE 1060) (1931).
Id.; 11 USC § 362.
Black’s Law Dictionary, p. 909 (5th ed. 1979); see Brown v. Spann, 271 Ga. 495, 496 (520 SE2d 909) (1999).
Alexander v. State, 239 Ga. 810 (239 SE2d 18) (1977) (The Supreme Court will not pass upon the constitutionality of a statute unless it clearly appears that the point was properly raised in the trial court and was the subject matter of a ruling by the trial judge). Moreover, the unique circumstances that led to the dissolution of the receivership in this appeal, and which form the basis of our dismissal, do not demonstrate that the issues raised by the dissent are likely to evade review, should they arise in future cases.
Dissenting Opinion
dissenting.
This appeal stems from an in personam RICO forfeiture complaint the Floyd County District Attorney filed against David and Amy Pimper and two corporations. The in personam nature of the complaint is incontrovertible, given the style of the complaint
Unlike civil in rem forfeitures, which are based on the legal fiction “that the property itself is ‘guilty’ of the offense,” Austin v. United States, 509 U. S. 602, 615 (113 SC 2801, 125 LE2d 488) (1993), in personam forfeitures are criminal proceedings that serve to “punish the property owner’s criminal conduct.” Id. at 624 (Scalia, J., concurring).
Because of the criminal nature of in personam forfeitures, there are serious constitutional ramifications when in personam proceedings are initiated against individuals who have not been indicted or convicted of any criminal activity. Self-incrimination concerns are directly implicated. See, e.g., Guerra, Between a Rock and Hard Place: Accommodating the Fifth Amendment Privilege in Civil Forfeiture Cases, 15 Ga. State Univ. L. Rev. 555 (1999); Blum, Self-Incrimination, Preclusion, Practical Effect and Prejudice to Plaintiffs: The Faulty Vision of SEC v. Graystone Nash, Inc., 61 Brooklyn L. Rev. 275 (1995).
Georgia’s in personam RICO forfeiture statutory scheme does not alleviate these concerns. OCGA § 16-14-7 (m), which contains the entirety of Georgia’s in personam RICO forfeiture provisions, consists solely of the following sentence:
In lieu of the provisions of subsections (c) through (g) of this Code section [the in rem proceedings], the state may bring an in personam action for the forfeiture of any property subject to forfeiture under subsection (a) of this Code section.
Subsection (m) clearly does not contain any procedural safeguards within its meager provisions. Moreover, it does not even incorporate the procedural safeguards set forth in the in rem RICO forfeiture proceedings, such as subsections (e) and (f) discussed in Waller, supra. To the contrary, it expressly states that in personam actions operate “in lieu of’ those provisions. Compare OCGA § 16-13-49 (p) (setting forth minimal procedural safeguards for in personam forfeitures under the drug act). But see Caldwell v. State, 253 Ga. 400 (321 SE2d 704) (1984) (RICO forfeiture action arguably brought in per-sonam assessed under statutory in rem procedural standards). The “amorphous and chameleon-like” nature of Georgia’s RICO statute, which has been compared to “an obscure iceberg, the dim outline of its base extending seemingly forever under the waters of Georgia criminal jurisprudence,” has been urged as the reason for reassessment of “the need for and effectiveness of the [Georgia RICO] in furthering the crime-fighting policies of Georgia.” Kenny and Smith, A Comprehensive Analysis of Georgia RICO, 9 Ga. St. U. L. Rev. 537, 583 (1993).
In the case at bar, the Floyd County District Attorney filed an in personam forfeiture action against the Pimpers and their two corpo
Georgia’s RICO Act has been criticized as “simply an affront to the most fundamental notions of justice.” Kenny and Smith, supra, 9 Ga. St. U. L. Rev. at 583. That criticism is borne out by the Floyd County District Attorney’s decision to bring an in personam criminal forfeiture proceeding against unindicted, preconviction individuals pursuant to a statute which contains absolutely no procedural safeguards to protect the constitutional rights of the defendants. The coercive effect of that choice of proceeding placed the defendants in a
I strongly disagree with the majority opinion that we can avoid addressing the matters raised by this appeal by dismissing it as moot even though the challenges against the receiver raised by the Pimpers in their individual capacities remain viable for resolution by this Court. Although the State urges that the Pimpers are entitled to nothing more than a remand to the trial court for the receiver to submit his final report,
I am authorized to state that Chief Justice Fletcher joins in this dissent.
Naming individuals as defendants rather than designating specified property as defendant establishes that a proceeding is in personam rather than in rem. See Cuellar v. State, 230 Ga. App. 203 (496 SE2d 282) (1998).
In addition to OCGA § 16-14-7 (m), the complaint recites that it was brought pursuant to OCGA § 16-14-9, which provides that the “application of one civil remedy under this chapter shall not preclude the application of any other remedy, civil or criminal.”
According to representations in the State’s brief, David Pimper, alone among the former defendants, was indicted by the State on various RICO-related criminal charges four months after the dismissal of the forfeiture proceedings in issue here.
For a history of the deodand and the development of forfeiture law, see Austin v. United States, supra, 509 U. S. at 611 (III); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663 (III) (94 SC 2080, 40 LE2d 452) (1974). See also Piety, Scorched Earth: How the Expansion of Civil Forfeiture Doctrine Has Laid Waste to Due Process, 45 U. Miami L. Rev. 911 (II) (1991).
Although Murphy v. State, 267 Ga. 120 (475 SE2d 907) (1996), in dicta indicates that in personam forfeiture proceedings under OCGA § 16-13-49 (drug act forfeitures) are civil actions, citing id. at (p) (4), this conclusion is erroneous. Subsection (p) (4) merely reflects that innocent third parties who have an interest in property involved in an in personam forfeiture proceeding may intervene in the proceeding by utilizing the relevant provisions in the Civil Practice Act. None of the other authority cited by Murphy supports its holding regarding the “civil” nature of in personam forfeiture proceedings and reliance upon Murphy for this holding is accordingly misplaced. See, e.g., Cuellar v. State, supra, 230 Ga. App. 203; Rojas v. State, 226 Ga. App. 688, 689 (487 SE2d 455) (1997).
While some jurisdictions allow the prosecuting attorney to obtain court orders that preserve the status of the property prior to indictment and conviction, the forfeiture is not completed until after conviction. E.g., Conn. Gen. Stat. Aiin. § 53-398 (a); Minn. Stat. Ann. § 609.907. Compare N.Y. CPLR § 1311 (1) (b) (expressly authorizing pre-conviction in personam forfeiture proceedings). Some states limit this pre-indictment seizure to a period not exceeding 90 days unless good cause or a subsequent indictment is shown. Nev. Rev. Stat. Ann. § 207.440 (3) (b); R. I. Gen. Laws § 7-15-3.1 (b). Many jurisdictions require a special verdict to be returned by the jury regarding forfeiture proceedings. E.g., Cal. Penal Code § 186.5 (c); Mich. Stat. Ann. § 750.159j (5), (7); Nev. Rev. Stat. Ann. § 207.440 (3); Okla. Stat. Ann. 22 § 1405 (B) (1); Ohio Rev. Code Ann. § 2923.32 (B) (4).
While self-incrimination problems also arise in in rem forfeiture proceedings, because the proceeding is against the property the owner may elect not to file an answer at all, see, e.g., OCGA §§ 16-14-7 (h) (1), 16-13-49 (n) (3), or may answer, contest the property’s alleged guilt and prove the property is untainted without testifying or otherwise necessarily providing incriminating evidence.
The case at bar serves as an example. The unindicted, preconviction defendants in this case were called upon to respond to numerous allegations regarding specified false representations the complaint claimed the defendants had made to clients regarding the “sophisticated account analyses” the corporate defendants performed as well as allegations that the defendants “unlawfully and through a pattern of racketeering activity . . . acquired and maintained, directly and indirectly, interest in and control of various enterprises, real property, personal property, and money in violation of OCGA § 16-14-4 (a),” with the complaint setting forth six predicate acts in violation of various State and Federal laws which the complaint asserted constituted a “pattern of racketeering activity” by the defendants under the Georgia RICO Act.
The State’s original position, as set forth in its briefs in this Court, was that the proceedings were in rem. The State corrected this error in a supplemental brief, filed September 28, 2001, but “notes that [the error is] not relevant to the merits of the case.”
The filing of the final report and accounting in the bankruptcy court regarding the estates of the two corporate defendants has no relevancy to the demand made by the Pimpers for an accounting of their individual assets. A receiver has a duty to keep his accounts in a regular manner and “to be always ready with them supported by proper vouchers.” OCGA § 10-6-30.
I find no merit in the State’s argument that individuals targeted by in personam forfeiture proceedings have any adequate remedy to challenge the State’s action outside an appeal in the forfeiture proceeding itself. See Kelleher v. State of Ga., 187 Ga. App. 64 (1) (369 SE2d 341) (1988) (claim against State for malicious criminal prosecution based on unfounded in rem forfeiture proceeding barred by sovereign immunity). Likewise, the State’s argument that forfeiture defendants may bring actions for malicious prosecution would not avail a defendant like Amy Pimper who has not been indicted. See Sizemore Security Intl. v. Lee, 161 Ga. App. 332 (1) (287 SE2d 782) (1982) (prosecution for criminal offense essential element of malicious prosecution claim).
Reference
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- PIMPER Et Al. v. STATE OF GEORGIA
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