IN justices: Forfeited funds can’t be released for defense, but summary judgment for state was inappropriate

A trial court cannot release money seized from a defendant back to the defendant for the purpose of funding his or her defense, the Indiana Supreme Court has ruled. However, the forfeiture action in question will continue after the high court reversed summary judgment for the state.

Justice Steven David wrote the opinion that partially reversed and affirmed the Elkhart Superior Court in Terry L. Abbott v. State of Indiana, 21S-PL-347. Indiana Chief Justice Loretta Rush concurred and dissented in part.

Appellant Terry Abbott was convicted of several felony drug-related offenses after police executed a search warrant of his home in 2015 following two controlled buys during which Abbott sold drugs to a confidential informant. Police seized marijuana, methamphetamine, hundreds of pills containing amphetamine and Xanax, drug paraphernalia, several firearms and $9,185 in cash during the search.

As Abbott’s criminal case was pending, a civil forfeiture action was filed against him under Indiana’s racketeering forfeiture statute, Indiana Code § 34-24-2, seeking forfeiture of the cash and firearms.

The Elkhart Superior Court denied Abbott’s request for the appointment of counsel at public expense after his attorney withdrew from the forfeiture proceeding. The trial court later granted the state’s motion for summary judgment in the forfeiture action.

But a split Court of Appeals of Indiana reversed, with the majority concluding Abbott could use $8,923 from the seized money to fund his defense. Judge Nancy Vaidik partially dissented and opined that she would not allow Abbott to use the seized cash to pay for an attorney.

The COA also affirmed the denial of Abbott’s request for appointed counsel.

In a divided Tuesday decision, the Indiana Supreme Court held that the racketeering forfeiture statute does not permit a court to release funds seized in a forfeiture action so the defendant can hire counsel in that same action.

The high court found the COA’s interpretation to be inconsistent with the statute’s structure and the legislative intent underlying Indiana’s forfeiture scheme. Considering the legislative goals underlying forfeitures generally, the court concluded the Indiana General Assembly did not intend for the racketeering forfeiture statute to permit a court to release the seized res to the defendant to defend the forfeiture action.

Even so, the justices reversed the grant of summary judgment in the state’s favor, finding that decision was improper given the genuine issues of material fact that exist as to whether the seized funds were part of Abbott’s alleged racketeering activity.

“Abbott’s designations, showing lawful income and testimony that much of the seized cash was for a lawful purpose — purchasing a motorcycle — create the requisite ‘conflicting inferences’ to ‘preclude summary judgment,’” David wrote, citing Hughley v. State, 15 N.E.3d 1000 (Ind. 2014). “… Accordingly, Abbott’s sworn statements create sufficient factual issues to be resolved at trial.”

But the high court affirmed the denial of Abbott’s request for appointed counsel, “even if ‘exceptional circumstances’ may have existed.”

“Given the facts, we cannot say that the trial court erred when finding that Abbott was unlikely to prevail in the forfeiture action, nor was its decision to deny Abbott’s request for appointed counsel ‘clearly against the logic and effect of the facts and circumstances,’” the high court wrote.

Rush broke from her colleagues on the appointed counsel issue, arguing that denying Abbott’s request for counsel was clearly against the logic and effect of the facts and circumstances before the trial court.

The chief justice opined that the trial court’s denial of counsel, premised on its merits determination, was an abuse of discretion. She argued that unique characteristics of in rem forfeiture actions constrain Abbott’s ability to show a likelihood of prevailing in his defense, and that his defense undermines the trial court’s merits determination.

Additionally, the dissenting chief justice said the trial court’s alternative reasons for denying counsel “do not withstand even deferential review.”

“At its core, the civil appointment-of-counsel statute anticipates that not all cases should be treated alike. Thus, we need not — and should not — treat incarcerated, indigent, civil-forfeiture defendants like Abbott as akin to all other civil litigants,” Rush wrote. “To be sure, exceptional circumstances surrounding forfeiture actions will not in all cases render a trial court’s decision to deny counsel an abuse of discretion. But for the reasons provided above, they do here.”

The high court remanded the case for further proceedings.

The Virginia-based Institute for Justice, which argued the case before the Indiana Supreme Court, reacted to the court’s decision on Wednesday, saying the decision “reaffirms the principle that Hoosiers are due their day in court” while also “effectively den(ying) many of them the help of an attorney.”

“Mr. Abbott is like many property owners who cannot afford to hire an attorney to fight for their rights,” IJ attorney Marie Miller, who argued the case, said in a news release. “This decision allows forfeiture cases to remain woefully lopsided: the state with all its resources on one side and an unrepresented, oftentimes-impoverished property owner on the other.”