Way v. State

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

In re the Matter of:

$18,000.00 US CURRENCY

SUSAN LEE WAY, Appellant,

v.

STATE OF ARIZONA, Appellee.

No. 1 CA-CV 20-0378
FILED 02-04-2021

Appeal from the Superior Court in Maricopa County
No. CV 2019-012377
The Honorable Margaret R. Mahoney, Judge

AFFIRMED

COUNSEL

Stephen L. Crawford PLLC, Phoenix
By Stephen L. Crawford
Counsel for Appellant

Maricopa County Attorney’s Office, Phoenix
By Reid C. Pixler
Counsel for Appellee
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MEMORANDUM DECISION

Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge David B. Gass and Judge David D. Weinzweig joined.

B R O W N, Judge:

¶1 Susan Lee Way appeals the superior court’s judgment
ordering the forfeiture of cash seized from her. For the following reasons,
we affirm.

BACKGROUND

¶2 The State seized Way’s cash during a police raid of a home
associated with drug-trafficking in April 2019. After multiple successful
purchases of methamphetamine (“meth”) that appeared to originate from
a specific residence, an undercover detective served a search warrant at that
location. During the search police found several individuals in the
residence, including Way, who was in a bedroom. She had a vial of meth
and $18,000 cash on her person, which she told police was money from a
Walmart settlement. Way admitted she was an addict but denied selling
drugs.

¶3 After searching the bedroom, police found $1,131 in cash, a
scale, clear plastic baggies, multiple mobile phones, and an energy drink
can with a false top containing meth. Way was the only person at the
residence who had a sale amount of meth and a large quantity of cash.
Police discovered that Way had an extensive criminal history, including
many drug arrests. Twelve days after the search, Way pled guilty to one
count of conspiracy to commit possession of dangerous drugs for sale, a
class two felony, in violation of A.R.S. § 13-3407(A)(2).

¶4 In September 2019, the State filed a Notice of Seizure for
Forfeiture and Notice of Pending Forfeiture, seizing two quantities of
cash—$18,000 and $1,131—as property used in the commission of a crime.
The notice included a warning:

The owner [of] . . . the property must personally sign the
Claim . . . under the penalty of perjury. It is the State’s
position that a Power of Attorney does not satisfy the
statutory signature requirement. If your Claim does not meet

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the statutory requirements, it may not be recognized as valid
and the State may proceed with the case as though it were
uncontested.

¶5 On October 7, 2019, Way’s counsel filed a Claim, signing on
Way’s behalf while she was an inmate in county jail. The State moved to
strike the Claim because it was not verified as required by A.R.S. § 13-
4311(E) (“The claim shall be signed by the claimant under penalty of perjury
. . . .”). In response, Way argued her signature was not required, and she
made no attempt to cure the verification by adding her signature. The
superior court eventually struck the Claim, finding it was defective under
§ 13-4311(E). Way does not challenge that ruling on appeal.

¶6 On November 5, 2019, the State initiated a civil in rem
forfeiture action by filing a Complaint for the $19,131 belonging to Way, as
eligible for forfeiture under A.R.S. § 13-4304. The State alleged it could seize
“[a]ll proceeds traceable to” the sale of prohibited drugs and “all monies . . .
used or intended to be used in any manner or part to facilitate” such sale.
A.R.S. § 13-2314(G)(3); see also § 13-2301(4)(b)(xi) (racketeering offense
triggering forfeiture). In support of these allegations, the State alleged (1)
Way was found in possession of a sale quantity of meth, a large amount of
cash, and other implements of drug trafficking; and (2) she admitted she
used the cash to purchase drugs. See A.R.S. § 13-4305(F) (money found in
proximity to contraband “gives rise to an inference that the money . . . was
the proceeds of contraband or was used or intended to be used to facilitate
commission of the offense.”). The State also asserted that because Way pled
guilty to a criminal offense, she was precluded from denying the essential
allegations of that offense in the forfeiture proceedings. See A.R.S. § 13-
4310(C).

¶7 The Complaint’s verification page was signed by the case
detective but the date was incomplete: “this ___ day of October, 2019.” The
State later moved to attach an addendum to the Complaint, explaining its
attorney had been communicating with the detective via email, and after
approving its contents, the detective signed and returned the verification
without filling in the date. The attorney noticed the omission and had the
detective complete another verification page that day, but the wrong form
was inadvertently attached to the filed Complaint. Way did not respond to
this motion, and the superior court granted it. In later filings, Way argued
the addendum should not have been allowed. But the court reaffirmed its
ruling that the addendum was properly added to correct a clerical error,
and noted Way had waived her objection by failing to respond.

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¶8 In response to the State’s Complaint, Way filed an Answer,
which only addressed the first 6 of the Complaint’s 76 allegations.
Although the motion to strike Way’s Claim was still pending, the State filed
a motion under Arizona Rule of Civil Procedure (“Rule”) 12(c), asserting it
was entitled to judgment on the pleadings because Way’s Answer failed to
address most of the Complaint’s allegations, meaning they were deemed
admitted. The State’s motion also noted that Way failed to properly verify
her Answer as required by A.R.S. § 13-4311(G), as her attorney had again
signed in her stead.

¶9 Way filed an untimely response, arguing the State’s
Complaint was defective, and briefly suggesting she should be allowed to
amend her Claim, but failing to address the substance of the Rule 12(c)
motion. The superior court granted the State’s motion. In later pleadings,
Way tried to challenge the court’s ruling, claiming her counsel had not read
it correctly and thought the motion’s substance was solely about
verification. However, the court found this was not good cause and
declined to re-assess its ruling. The court noted it had ruled after full
briefing, and Way had not filed a motion for reconsideration.

¶10 As stated in its February 14, 2020 ruling, the court gave Way
an additional chance to present arguments as to why she should be given
leave to amend her Claim and Answer:

The Court does not know what Way is seeking to amend, on
what grounds and based on what authority. Accordingly, if
Way seeks leave to amend . . . Way shall file a specific and
detailed Motion . . . including citing legal authorities for her
request . . . to which Way shall attach the actual proposed
amended filings . . . .

Way then moved to amend her Claim and Answer, proposing she would
provide verifications and add allegations to her Answer to dispute that the
cash was proceeds of drug sales, instead claiming it was from her
settlement.

¶11 The superior court denied leave to amend, noting Way cited
no authority that would allow amendment. It reasoned that failure to verify
a Claim is a substantive deficiency, so that retroactive amendment could
not cure it. In addition, if the Claim could not be amended, amending the
Answer would be futile. The court then entered a judgment ordering that
all “right, title, and interest” to the $19,131 is “forfeited to and vested in the

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State.” Way timely appealed, and we have jurisdiction under A.R.S. § 12-
2101(A)(1).

DISCUSSION

A. State’s Motion to Attach Addendum

¶12 Way argues the superior court erred in granting the State’s
motion to attach an addendum to its Complaint. She contends, in fairness,
the court could not strike her Claim for lack of verification and at the same
time allow the State to file the addendum correcting the incomplete date.

¶13 We review a court’s decision to correct a clerical error for an
abuse of discretion. Blanton v. Anzalone, 813 F.2d 1574, 1577 (9th Cir. 1987).
The court “must correct a clerical mistake or a mistake arising from
oversight” in the record. Rule 60(a); see also A.R.S. § 13-4311(G) (noting that
Arizona Rules of Civil Procedure for answers apply to forfeiture
proceedings); M-11 Ltd. P’Ship v. Gommard, 235 Ariz. 166, 170, ¶ 13 (App.
2014) (recognizing “human error may occur from time to time, despite the
best of practices and intentions”). In addition, the court has “broad
discretion” to allow supplemental pleadings to be filed under Rule 15(d).
Sw. Soil Remediation, Inc., v. City of Tucson, 201 Ariz. 438, 446, ¶ 31 (App.
2001).

¶14 Way argues Rule 8 required the State to verify its Complaint
with a notarized affidavit, instead of an unsworn declaration like the one
provided. Rule 8(h) states that, whenever a statute “requires a pleading to
be verified,” the pleading must include an affidavit “attesting under oath”
to the truth of its contents. Here, the relevant statute required the State to
initiate a forfeiture proceeding with a “verified complaint.” A.R.S. § 13-
4311(A). However, whenever Rule 8 requires a sworn written verification,
Rule 80 states that an unsworn declaration also suffices, provided it is
signed under penalty of perjury, dated, and in a certain form. Rule 80(c).
Consistent with these rules, the State chose to use the Rule 80(c) procedure
to verify its Complaint, attaching an unsworn declaration by the case
detective.

¶15 Way also contends the State flouted Rule 80(c)’s
requirements, as the original copy of the declaration attached to the
Complaint failed to include the date. The State filed the incorrect
attachment with its Complaint, inadvertently omitting the properly signed
and dated verification. The State promptly moved to file the correct
signature page after realizing the clerical error. Given the court’s broad
discretion in allowing supplemental pleadings, as well as its duty to correct

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clerical errors, we do not find an abuse of discretion in allowing the
addendum.

B. Motion for Judgment on the Pleadings

¶16 Way argues the superior court erred in granting the State’s
motion for judgment on the pleadings. She claims her proposed amended
Answer presented a disputed question of fact: whether the cash was
proceeds from the sale of drugs or from her personal injury settlement.
However, even assuming the court erred in denying her motion to amend
the Answer, the amended version failed to address the State’s contention
that the cash was “used [or] intended to be used to facilitate” drug
trafficking.

¶17 After the pleadings are closed, a party may move for
judgment on the pleadings under Rule 12(c). In reviewing a court’s ruling
on such a motion, we “accept the allegations of the complaint as true, but
review de novo the court’s legal determinations.” Muscat by Berman v.
Creative Innervisions LLC, 244 Ariz. 194, 197, ¶ 7 (App. 2017); see also Fajardo
v. County of Los Angeles, 179 F.3d 698, 699 (9th Cir. 1999) (A Rule 12(c)
motion is “properly granted when, taking all the allegations in the non-
moving party’s pleadings as true, the moving party is entitled to judgment
as a matter of law.”). We will affirm the court’s disposition if it is correct
for any reason. Logerquist v. Danforth, 188 Ariz. 16, 18 (App. 1996).

¶18 In a forfeiture proceeding, the State’s burden is to prove that
the property is subject to forfeiture by clear and convincing evidence.
A.R.S. § 13-4311(M). The Complaint includes two main allegations: (1) the
cash found was proceeds of the sale of prohibited drugs, and (2) the cash
was used or intended to be used to facilitate the sale of drugs. Specifically,
the State alleged that Way was involved in drug trafficking, citing evidence
that she was in possession of a sale quantity of meth and large quantities of
cash. Undercover police had purchased drugs from a source that appeared
to come from the residence twice in one week, and when they executed a
search warrant, Way was the only occupant who possessed drugs in a sale
quantity. In addition, Way had other paraphernalia commonly used for
selling drugs in her bedroom, and she had a long criminal history that
included drug arrests. When a detective questioned her, Way admitted she
used cash from the settlement to buy meth. Later, she pled guilty to
conspiring to possess prohibited drugs for sale.

¶19 Despite these allegations, Way made no effort to dispute them
in her Answer, providing responses to only the first 6 of the Complaint’s 76

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paragraphs. Because Way failed to deny the remaining allegations, they are
deemed admitted. See Rule 8(c)(6). Way’s amended answer, if accepted,
denied the cash was proceeds of selling drugs, claiming it was from her
personal injury settlement. Even if these allegations created a disputed
question of fact, Way again failed to address the State’s allegation that she
used or intended to use the money for drug trafficking. Allegations not
denied are admitted. We affirm the superior court’s ruling granting
judgment on the pleadings.

C. Way’s Motion to Amend Claim and Answer

¶20 Way argues the superior court abused its discretion when it
failed to grant leave to amend her Claim and Answer. She contends the
failure to verify her Claim was merely a technical inadequacy that could be
amended, and that the court had broad discretion to permit amendment
under Rule 15. We disagree, finding that Way’s failure to verify her Claim
was a substantive deficiency, barring retroactive amendment.

¶21 We review the denial of a motion to amend for an abuse of
discretion. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co., 231
Ariz. 517, 519, ¶ 4 (App. 2013); see also Haroutunian v. Valueoptions, Inc., 218
Ariz. 541, 549, ¶ 22 (App. 2008) (determining whether denial of request to
extend time to file post-judgment motion was proper under abuse of
discretion standard). The superior court has discretion to determine “under
all the facts and circumstances . . . whether [amendment] should be
permitted.” Sanders v. Brown, 73 Ariz. 116, 119 (1951). A motion to amend
should not be granted if amendment would be futile. Tumacacori, 231 Ariz.
at 519, ¶ 4.

¶22 In deciding whether to allow a claimant to amend a claim,
courts look to whether the “two primary substantive concerns” of
ownership claims in forfeiture actions are satisfied. In re $70,269.91 in US
Currency, 172 Ariz. 15, 20 (App. 1991).

First, the claimant must claim and verify a specific property
interest. The claim must be verified on oath or solemn
affirmation because the danger of false claims in these cases
is substantial. Second, the claimant must properly and timely
file the claim to notify the government and the court that the
claimant is entitled, by virtue of his sworn claim to the
property, to join the action and be heard.

Id. (citations internal quotations omitted). A claim that fails to satisfy these
substantive requirements is invalid. For example, in State ex rel. McDougall

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v. Superior Court, this court struck a claim for substantive deficiencies when
the claim was signed not by the claimant personally, but by the claimant’s
attorney. 173 Ariz. 385, 386–87 (App. 1992). Further, the fact that no valid
claim exists eliminates the possibility of retroactive amendment. See
Safeway Stores, Inc. v. Maricopa County Superior Court, 19 Ariz. App. 210, 212–
13 (1973) (explaining that when a plaintiff failed to sign her complaint, she
failed to “submit to the jurisdiction of the court” and thus the complaint
had “no legal significance”).

¶23 Way failed to personally sign her Claim under penalty of
perjury, instead arguing that her attorney’s signature in her place was
sufficient. Such a failure to verify a claim is a substantive deficiency under
In re $70,269.91. See 172 Ariz. at 20. Because the Claim was invalid from its
inception, attempts to retroactively amend it after the statutory period for
filing claims had passed were improper. In addition, Way never tried to
add her signature to the Claim until after the court granted the State’s
motion for judgment on the pleadings, despite being on notice the State
considered her verification deficient. Because the court did not abuse its
discretion when it denied leave to amend Way’s Claim, amending the
Answer would have been futile.

CONCLUSION

¶24 We affirm the superior court’s judgment granting forfeiture
of the seized cash. We deny Way’s request for attorneys’ fees and costs,
filed under A.R.S. § 13-2314(A) and A.R.S. § 12-341.01, because she has not
prevailed on appeal.

AMY M. WOOD • Clerk of the Court
FILED: JT

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