## Facts

- In 1990, as part of a divorce settlement, John Palfrey conveyed his interest in certain real property in Ormond Beach, Florida (the “Property”) to his former wife by quitclaim deed naming the grantee as “Linda M. Palfrey.”
- Linda later married Luis E. Morales.
- In 2007, a deed conveyed the Property from “Linda M. (Palfrey) Morales” to “Linda M. Morales and Luis Enrique Morales” (as husband and wife). The deed was signed “Linda Marie Morales.”
- In 2012, after Luis Morales was convicted of multiple federal felony offenses involving minors, the United States obtained a preliminary forfeiture order that included forfeiture to the government of a one-half interest in the Property as substitute property under the federal criminal forfeiture framework.
- Linda Morales filed a third-party petition in the ancillary forfeiture proceeding under 21 U.S.C. § 853(n), claiming that she had a vested legal and equitable interest in the Property that, at the time of Luis’s criminal conduct, was superior to any interest held by Luis.
- Linda argued the 2007 deed did not transfer any ownership interest to Luis because (1) she allegedly never intended to give Luis an interest, and (2) the different versions of her name used across the 1990 and 2007 documents (e.g., “Linda M. Palfrey,” “Linda M. (Palfrey) Morales,” “Linda M. Morales,” and “Linda Marie Morales”) rendered the 2007 deed invalid.
- Linda also raised constitutional objections to forfeiture as applied to her home, including due process, Fifth Amendment takings, and Eighth Amendment arguments.
- After discovery, the United States moved for summary judgment on Linda’s petition. The matter was referred to a magistrate judge, who issued a report and recommendation concluding that Linda could not establish a superior interest under § 853(n)(6)(A).
- Both sides filed objections to the report and recommendation, and the district court conducted de novo review of the challenged portions.

## Issues

1. Whether, under 21 U.S.C. § 853(n)(6)(A), Linda Morales could prove that her legal interest in the Property was vested in her rather than Luis Morales, or was superior to Luis’s interest, at the time of the acts giving rise to forfeiture.
2. Whether the 2007 deed was legally ineffective because of the various forms of Linda’s name used in the deed history or because she claimed she lacked intent to convey an ownership interest to her husband.
3. Whether forfeiture of Luis Morales’s one-half interest in the Property violated Linda Morales’s constitutional rights under due process, the Fifth Amendment Takings Clause, or the Eighth Amendment.

## Decision

- The court adopted the magistrate judge’s report and recommendation and granted the United States’ motion for summary judgment.
- The court denied Linda Morales’s § 853(n) petition, concluding she failed to show a superior interest under § 853(n)(6)(A).
- The court held the 2007 deed validly conveyed the Property to Linda and Luis as husband and wife and created a tenancy by the entirety under Florida law.
- Because tenancy by the entirety gives each spouse an equal, undivided interest in the whole property, Linda could not establish that her interest was superior to Luis’s at the time of his criminal conduct.
- The court rejected Linda’s argument that differences in her name across the deeds defeated the 2007 conveyance, finding the record showed the name variants referred to the same person and did not create a genuine dispute of material fact.
- The court rejected Linda’s reliance on her asserted subjective lack of intent to convey an interest to Luis, treating the executed deed and the surrounding record as controlling for purposes of the ownership analysis.
- The court rejected Linda’s constitutional challenges, holding that the statutory ancillary process provided notice and an opportunity to be heard, that criminal forfeiture ordered as part of a criminal case is not a compensable taking, and that the forfeiture of Luis’s interest did not violate the Eighth Amendment.

## Legal Principles

- A third-party claimant in an ancillary forfeiture proceeding must satisfy 21 U.S.C. § 853(n)(6) by proving, among other options, that the claimant’s legal right, title, or interest was vested in the claimant rather than the defendant, or was superior to the defendant’s interest, at the time of the acts giving rise to forfeiture. § 853(n)(6)(A).
- State property law governs the nature of the petitioner’s claimed interest; federal law governs whether that interest defeats forfeiture under § 853(n).
- Under Florida law, a conveyance to spouses as husband and wife generally creates a tenancy by the entirety, an indivisible form of ownership in which each spouse holds the whole together with the other spouse.
- Where property is held as tenancy by the entirety, one spouse ordinarily cannot show a greater fractional ownership interest than the other spouse for purposes of establishing a “superior” interest under § 853(n)(6)(A).
- Minor inconsistencies in the way a person’s name appears in conveyance documents do not, without more, invalidate a deed where the evidence shows the names refer to the same person and the deed otherwise meets Florida’s requirements for a valid conveyance.
- The § 853(n) ancillary proceeding supplies the process for third parties to litigate interests in forfeited property; providing notice and a hearing opportunity satisfies procedural due process.
- Criminal forfeiture imposed through the criminal process is treated as punishment authorized by statute, not as a Fifth Amendment taking that requires just compensation.
- Eighth Amendment challenges to forfeiture generally require a showing that the forfeiture is constitutionally excessive; forfeiture of a defendant’s interest tied to serious criminal conduct is not unconstitutional on the record presented.

## Conclusion

The district court granted summary judgment to the United States and denied Linda Morales’s ancillary petition because the 2007 deed validly placed the Property into a Florida tenancy by the entirety with her husband, leaving her unable to prove a superior interest under § 853(n)(6)(A); the court also rejected her deed-defect, lack-of-intent, due process, takings, and Eighth Amendment arguments and allowed forfeiture of the defendant’s one-half interest to stand.


United States v. Morales, 36 F. Supp. 3d 1276 (2014)