NOTE TO COMMONWEALTH: If you’re going to take property, you need to follow the rules.
The Commonwealth Court has decided the case of Commonwealth v. Neighbor’s First Federal Credit Union Check of $76,389.27, et al. – Appeal of Shifler, 97 C.D. 2015 (Commonwealth Court, 2/26/2016), holding that the Pennsylvania Rules of Civil Procedure apply to default judgments sought under the Forfeiture Act.
In this case, Shifler appealed from the trial court’s denial of his emergency motion to vacate a default judgment entered against him, ordering the condemnation and forfeiture of certain property seized from his residence during the execution of a search warrant pertaining to his alleged unlawful distribution of marijuana.
On January 11, 2013, the Commonwealth executed a search warrant on Shifler’s residence during which it seized $1,659.00 in United States currency, seven firearms, and a statement from Neighbor’s First Federal Credit Union indicating that Shifler’s account had in excess of $70,000.00. Five days later, the Commonwealth then seized $76,389.27 from his bank account pursuant to a search warrant.
On March 18, 2013, pursuant to the Controlled Substances Forfeiture Act, the Commonwealth filed a petition for forfeiture and condemnation. Two days later, the trial court issued a rule to show cause upon Shifler, specifically stating “Failure to Answer this Petition within 30 days of service hereof will result in an Order of Forfeiture being entered against said property, any law or rule of Court to the contrary notwithstanding.” The forfeiture petition and the rule to show cause were not served upon Shifler until over a year later—on June 10, 2014—when the Commonwealth personally served him with the rule, with the forfeiture petition attached.
After being served, Shifler failed to respond to the petition and, on July 22, 2014, the Commonwealth filed a motion for order of forfeiture attaching an affidavit in which a Senior Deputy Attorney General stated that Shifler was personally served on June 10, 2014. By order filed on July 30, 2014, the trial court ordered that the subject property be forfeited to the Office of the Attorney General.
The next day, on August 1, 2014, Shifler filed an answer to the petition and a counterclaim, denying that the subject property was subject to the Forfeiture Act.
On August 8, 2014, Shifler filed an emergency motion to set aside order of forfeiture on the bases that: (1) the order violated Shifler’s due process rights because he was denied a hearing and an opportunity to be heard before his property was forfeited; (2) the Commonwealth did not effectuate proper service under the Pennsylvania Rules of Civil Procedure because Shifler was served with process, if at all, more than 30 days after the Commonwealth filed its forfeiture petition; (3) the petition did not properly describe the property it intended to forfeit; and (4) the Commonwealth sought forfeiture in bad faith.
The trial court found that the Forfeiture Act has a procedure for default specific to forfeiture actions and does not require the Commonwealth to file any procedural prerequisites before the court is authorized to enter default judgment.
Shifler contended that the trial court erred in denying his emergency motion based upon numerous procedural deficiencies.
Whether the Pennsylvania Rules of Civil Procedure apply to default judgments sought under the Forfeiture Act?
The Pennsylvania Rules of Civil Procedure apply to default judgments sought under the Forfeiture Act. The Forfeiture Act provides for the entry of a decree of forfeiture but does not specify the procedure for entering the decree; therefore, the Rule of Civil Procedure apply.
In sum, the Commonwealth Court found that the trial court’s Order entering default judgment against a property owner in forfeiture proceedings in this particular case revealed fatal procedural deficiencies in the form of the Commonwealth’s failure to comply with the Rules of Civil Procedure, specifically, Rule 401(a) and (b) and Rule 237.1(a)(2)(ii). Therefore, the trial court’s order entering default judgment against Shifler was stricken and the matter remanded for further proceedings.
The two most significant issues raised by the case involved (1) the failure of the Commonwealth to reinstate the action after it failed to serve Shifler within 30 days from the filing date and (2) the failure of the Commonwealth to provide Shifler ten days’ notice of its intent to seek default judgment as required by Pennsylvania Rule of Civil Procedure.
A PROPERTY OWNER MUST BE SERVED WITHIN 30 DAYS OF FILING A FORFEITURE PETITION; FAILURE OF COMMONWEALTH TO REINSTATE THE SUIT AFTER 30 DAYS RENDERS THE SUIT DEAD
Shifler contended that the trial court erred in denying his emergency motion because the Commonwealth violated Pennsylvania Rule of Civil Procedure 401(a) in failing to serve its petition upon Shifler within 30 days of its filing and Rule 401(b) in failing to reinstate its petition after the 30 days expired. Shifler asserted that prior case law and the Rules of Civil Procedure apply because the Forfeiture Act is not specific regarding the timeline for service of original process.
The Forfeiture Act provides as follows: “Notice to property owners.–A copy of the petition required under subsection (a) shall be served personally or by certified mail on the owner or upon the person or persons in possession at the time of the seizure.”
The Commonwealth Court concluded that although the Forfeiture Act makes clear that personal service or service by certified mail is required, it leaves open the timeframe in which service must occur. Therefore, the Commonwealth Court found that a “procedural gap” exists in the Forfeiture Act with respect to which it believe that the Rules of Civil Procedure must then be applied to “regulate practice” and “supply a fair and efficient methodology for resolution.”
APPLICABLE RULES OF CIVIL PROCEDURE
With regard to original service of process, the Pennsylvania Rule of Civil Procedure require that process “be served within the Commonwealth within thirty days after the issuance of the writ or the filing of the complaint.” Further, in the event that process is not served within 30 days, “the prothonotary upon praecipe and upon presentation of the original process, shall continue its validity by reissuing the writ or reinstating the complaint.”
In Shifler’s case, after filing its forfeiture petition in March 2013 and obtaining a rule to show cause in the same month, the Commonwealth took no further action with respect to its case until June 2014, nearly 15 months later. This was a procedural deficiency. Although a suit is not dead merely because original process has not been served upon a defendant within 30 days, reinstatement is still required and did not occur here.
THE COMMONWEALTH MUST PROVIDE TEN (10) DAYS NOTICE BEFORE OBTAINING A DEFAULT JUDGMENT
Shifler also argued that the trial court erred in denying his emergency motion because the Commonwealth did not provide him ten days’ notice of its intent to seek default judgment as required by Pennsylvania Rule of Civil Procedure.
The Forfeiture Act does not specifically provide that a defendant property owner must be provided further notice in advance of the Commonwealth seeking a default judgment.
APPLICABLE RULES OF CIVIL PROCEDURE
The Pennsylvania Rule of Civil Procedure, on the other hand, provide that “No judgment of non pros for failure to file a complaint or by default for failure to plead shall be entered by the prothonotary unless the praecipe for entry includes a certification that a written notice of intention to file the praecipe was mailed or delivered … in the case of a judgment by default, after the failure to plead to a complaint and at least ten days prior to the date of the filing of the praecipe to the party against whom judgment is to be entered and to the party’s attorney of record, if any.”
In Shifler’s case, he was not provided ten days’ notice that the Commonwealth sought default against him. He argued that the Rules of Civil Procedure do not contradict the Forfeiture Act; rather, they act to supplement the Forfeiture Act by giving the same notice that all other civil litigants receive before a default judgment is taken against a defendant, i.e. – ten days.
The Commonwealth Court concluded that in the above circumstances, the Forfeiture Act does not implicate the trial court’s jurisdiction; rather, it only authorizes the trial court to carry out discretionary acts. Here, the trial court may grant default judgment where appropriate.
Additionally, the Commonwealth Court concluded that since the Pennsylvania Rules of Civil Procedure apply to default judgments sought under the Forfeiture Act and the Forfeiture Act provides does not specify the procedure for entering the decree of forfeiture, the Rules of Civil Procedure should apply.
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