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The People v. Twelve Thousand Six Hundred One Dollars and Thirty-Three Cents

September 10, 2012

THE PEOPLE, PLAINTIFF AND RESPONDENT,
v.
TWELVE THOUSAND SIX HUNDRED ONE DOLLARS AND THIRTY-THREE CENTS ($12,601.33) IN U.S. CURRENCY, DEFENDANT, CYRUS CARDAN, DEFENDANT AND APPELLANT.



APPEAL from an order of the Superior Court of Los Angeles County, Craig E. Veals, Judge. (Los Angeles County Super. Ct. No. BA242217)

The opinion of the court was delivered by: Klein, P. J.

CERTIFIED FOR PUBLICATION

Affirmed.

Cyrus Cardan, the defendant in the underlying criminal proceedings and the claimant in the forfeiture proceedings at issue, appeals from a post-judgment order awarding him $12,601.33, which represents $10,153.33 seized from Cardan's hotel room in 2003, plus the interest actually earned on the seized funds while on deposit in an interest bearing account.

The essential issue presented is whether the trial court erred in failing to award Cardan interest at the legal rate of 7 percent per annum specified in the California Constitution.

With respect to the rate of interest applicable to seized funds returned to a claimant, the controlling provisions in Chapter 8 of the Health and Safety Code*fn1 applicable to the Seizure and Disposition of property subject to forfeiture requires a seizing agency to preserve the value of seized property (§ 11469, subd. (i)) and, in the case of seized funds, to place the funds in an account subject to audit (§ 11469, subd. (h)).

Given these statutory directives, it follows that, in order to preserve the value of seized funds, the seizing agency must deposit the funds into an interest bearing account. Further, because the seizing agency is required only to preserve the value of seized funds, upon the return of such funds to a claimant, the claimant is entitled to the return of the funds plus the interest actually earned by the funds, rather than interest at the constitutional rate of 7 percent per annum.

FACTS AND PROCEDURAL BACKGROUND

1. Previous proceedings.

On January 21, 2003, City of Los Angeles police officers seized 150 grams of cocaine base, 400 grams of marijuana and $10,153.38 in currency from Cardan's hotel room. While Cardan was in custody awaiting trial on charges of possession for sale of cocaine base and marijuana (§§ 11351.5, 11359), the People served notice of Cardan's right to oppose forfeiture of the funds. (See § 11488.4, subd. (c).) Cardan timely filed a claim opposing forfeiture of the funds.

A week later, the People filed a petition of forfeiture which alleged the funds were the proceeds of narcotics trafficking within the meaning of section 11470, subdivision (f).

Cardan's criminal case went to jury trial in September of 2003. The People's evidence indicated Cardan sold narcotics from his hotel room. Cardan's defense was that he sold candy, cigarettes and soda from his hotel room and the money seized by the police was the proceeds of those sales, not drug sales. Cardan was convicted as charged and sentenced to prison. The forfeiture action was not tried in conjunction with the criminal case. We affirmed Cardan's conviction in People v. Cardan (Feb. 28, 2005, B171861) [nonpub. opn.].

In May of 2006, the People served requests for admission which asked Cardan to admit he had abandoned the claim opposing forfeiture of the funds. The trial court thereafter granted the People's motion for summary judgment and entered an order of forfeiture of the funds. Cardan appealed the order of forfeiture and, in People v. $10,153.38 in United States Currency (2009) 179 Cal.App.4th 1520, 1530, we held the People's failure to try the forfeiture proceeding in conjunction with the underlying criminal case, as required by section 11488.4, subdivision (i), precluded entry of an order of forfeiture. We reversed the order and remanded for further proceedings.

2. The first post-appeal hearing.

Following issuance of the remittitur, the trial court set a hearing on the matter. In advance of the hearing, the People submitted a proposed order awarding Cardan $10,153.38, plus any actual accrued interest the funds had earned while on deposit.

Cardan appeared at the hearing on August 18, 2010, and filed a motion for return of the seized funds, for a jury trial to appraise the market value of rare coins included among the seized funds, and for interest at the rate of 10 percent from the date of seizure. Cardan asserted approximately $2,000 worth of the seized currency consisted of coins and at least $53.38 worth of these coins were rare and had a value in excess of face value. Cardan requested payment of the undisputed portion of the funds, $10,100, plus interest, and a jury trial on the actual value of the rare coins.

The trial court ruled the only issue before it was return of the funds, and the order submitted by the People, which the trial court ...


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