13-4310 - Judicial forfeiture proceedings; damages

13-4310. Judicial forfeiture proceedings; damages

A. A person who claims an interest in seized property shall file an answer to the complaint of forfeiture within thirty days after service of the forfeiture complaint. The answer must include facts to support the claimant's alleged interest in the property. The clerk of court may not charge a person who claims ownership or to be an interest holder a filing fee or any charge for filing the answer.

B. A defendant convicted in any criminal proceeding shall be precluded from subsequently denying the essential allegations of the criminal offense of which he was convicted in any proceeding pursuant to this chapter. For the purposes of this chapter, a conviction may result from a verdict or plea including a no contest plea.

C. In any judicial forfeiture hearing, determination or other proceeding pursuant to this chapter, the applicant, petitioner or claimant must establish by a preponderance of the evidence that he is an owner of or interest holder in the property seized for forfeiture before other evidence is taken. The burden of proving the standing of the claimant and the existence of the exemption is on the claimant or party raising the claim, and it is not necessary to negate the standing of any claimant or the existence of any exemption in any notice, application, complaint, information or indictment.

D. In hearings and determinations pursuant to this chapter the law of evidence relating to civil actions applies equally to all parties, including the state, an applicant, a petitioner, a claimant and a defendant, on all issues required to be established by a preponderance of the evidence or clear and convincing evidence.

E. The court shall enter a judgment of forfeiture and the seized property shall be forfeited to the state if the state proves by clear and convincing evidence that:

1. The property is subject to forfeiture.

2. The criminal prosecution related to the seized property resulted in a conviction or the court waived the requirement for a conviction pursuant to section 13-4304.

3. There is no innocent owner or third-party interest holder to whom the property should be delivered.

4. The value of the property to be forfeited does not unreasonably exceed:

(a) The pecuniary gain derived or sought to be derived by the crime.

(b) The pecuniary loss caused or sought to be caused by the crime.

F. A person is not jointly and severally liable for orders for forfeiture of another person's property. If ownership of property is unclear, a court may order each person to forfeit the person's property on a pro rata basis or by another means that the court deems equitable.

G. All property, including all interests in such property, declared forfeited under this title vests in this state on the commission of the act or omission giving rise to forfeiture under this title together with the proceeds of the property after such time. Any property or proceeds subsequently transferred to any person are subject to forfeiture and thereafter shall be ordered forfeited if the state proves by clear and convincing evidence that the transferee:

1. Had actual knowledge that the property was subject to forfeiture.

2. Was not a bona fide purchaser for value not knowingly taking part in an illegal transaction.

H. On the motion of a party and after notice to any persons who are known to have an interest in the property and an opportunity to be heard, the court may order property that has been seized for forfeiture sold, leased, rented or operated to satisfy an interest of any interest holder who has timely filed a proper claim or to preserve the interests of any party. The court may order a sale or any other disposition of the property if the property may perish, waste, be foreclosed on or otherwise be significantly reduced in value or if the expenses of maintaining the property are or will become greater than its fair market value. If the court orders a sale, the court shall designate a third party or state property manager to dispose of the property by public sale or other commercially reasonable method and shall distribute the proceeds in the following order of priority:

1. Payment of reasonable expenses incurred in connection with the sale.

2. Satisfaction of exempt interests in the order of their priority.

3. Preservation of the balance, if any, in the actual or constructive custody of the court in an interest bearing account, subject to further proceedings under this chapter.

I. If the property is disposed of pursuant to subsection H of this section, a successful claimant may apply to the court for actual monetary damages suffered, if any, as a result of the disposal of the property, but the state, a political subdivision of the state, or an officer, employee or agent of any of them shall not be liable under this chapter for incidental or consequential damages or for damages either:

1. That could have been avoided if the claimant had made full and immediate disclosure to the attorney for the state of facts or evidence known or available to the claimant.

2. In excess of the fair market value of the property seized for forfeiture at the time of its seizure plus interest from the time of its seizure for forfeiture.

J. No person claiming to be an owner of or interest holder in property seized for forfeiture under this chapter may commence or maintain any action against the state concerning the validity of the alleged interest other than as provided in this chapter.

K. An injured person may submit a request for compensation from forfeited property to the court at any time before the earlier of the entry of a final judgment or an application for an order of the forfeiture of the property, or if a hearing pursuant to subsections M, N and O of this section is held, not less than thirty days before the hearing. The request shall be signed by the requestor under penalty of perjury and shall set forth all of the following:

1. The caption of the proceeding as set forth on the notice of pending forfeiture or complaint and the name of the requestor.

2. The address at which the requestor will accept future mailings from the court or parties to the action.

3. The property subject to forfeiture from which the requestor seeks compensation.

4. The nature of the economic loss sustained by the requestor.

5. All facts supporting each such assertion.

6. Any additional facts supporting the request.

7. The amount of economic loss that the requestor seeks compensation for.

L. If a proper request for compensation from forfeited property is timely filed, the court shall hold a hearing to establish whether there is a factual basis for the request. The requestor has the burden of establishing by a preponderance of evidence that the requestor is an injured person who sustained economic loss.

M. The hearing on the claim, to the extent practicable and consistent with the interest of justice, shall be held sixty days after all parties have complied with the disclosure required by rule 26.1, Arizona rules of civil procedure. The court may consolidate the hearing on the claim with a hearing on any other claim concerning the same property.

N. At the hearing, the claimant may testify, present evidence and witnesses on the claimant's own behalf and cross-examine witnesses who appear at the hearing. The state may present evidence and witnesses and cross-examine witnesses who appear at the hearing.

O. At the hearing, the state has the burden of establishing by clear and convincing evidence that the property is subject to forfeiture under section 13-4304. Any claimant who has previously established by a preponderance of the evidence that the claimant is an owner of or interest holder in the property has the burden of establishing by a preponderance of the evidence that the claimant's interest in the property is exempt from forfeiture under section 13-4304.

P. After a hearing:

1. The court shall order an interest in property returned or conveyed to a claimant, if any, who has established by a preponderance of the evidence that the claimant is an owner of or interest holder in the property if either of the following applies:

(a) The state has failed to establish by clear and convincing evidence that the interest is subject to forfeiture under section 13-4304.

(b) The claimant has established by a preponderance of the evidence that the interest is exempt from forfeiture under section 13-4304.

2. The court shall order all other property, including all interests in the property, forfeited to this state and proceed pursuant to sections 13-4314 and 13-4315.

3. If the court finds that a requestor is an injured person the court shall determine the amount of the injured person's economic loss caused by the conduct giving rise to the forfeiture of the designated property and shall require the following:

(a) If the designated property is not contraband and is not altered or designed for use in conduct giving rise to forfeiture, the attorney for the state shall sell the property as provided in section 13-4315, subsection A, paragraph 2 and shall apply the resulting balance to compensate the injured person's economic loss in the amount found by the court.

(b) If the balance is insufficient to compensate the economic loss of all injured persons the attorney for the state shall distribute the balance among the injured persons according to a method determined by the court.

(c) After compensating all injured persons, the attorney for the state shall transmit ten percent of the remaining balance, if any, to the state treasurer for deposit in the victim compensation and assistance fund established by section 41-2407.

(d) The attorney for the state shall deposit the remainder of the balance, if any, in an appropriate anti-racketeering revolving fund established by section 13-2314.01 or 13-2314.03.