United States District Court, D. New Mexico
PROPOSED FINDINGS AND RECOMMENDED
MATTER comes before the Court on Plaintiffs Edward and Eva
Atencio's Motion for Summary Judgment (Doc. 23) and
Defendant's Motion to Dismiss (Doc. 25). United States
District Judge Judith C. Herrera referred this case to me for
a recommendation as to its ultimate disposition. Doc. 11.
Based upon my review of the Motions, the relevant law, and
being otherwise fully advised, I recommend denying
Plaintiffs' Motion for Summary Judgment and granting
Defendant's Motion to Dismiss.
Court takes judicial notice of the following facts from
Plaintiffs' underlying criminal proceedings. See
United States v. Estep, 760 F.2d 1060, 1063 (10th Cir.
1985) (noting general rule that “judicial notice is
particularly applicable to the court's own records of
prior litigation closely related to the case before
it”). On December 22, 2003, a federal grand jury
returned a nine-count Second Superseding Indictment against
Plaintiffs charging them with various violations of federal
drug laws. United States v. Edward Atencio and Eva Palma
Atencio, CR No. 03-1014, Doc. 67 (D.N.M. December 22,
2003). Count 9 contained a forfeiture allegation pursuant to
21 U.S.C. § 853, which sought a forfeiture money
judgment in the amount of $10, 000, 000. This amount
represented “the amount of proceeds obtained as a
result of the offenses, continuing criminal enterprise and
conspiracy to possess with intent to distribute more than 1,
000 kilograms of marijuana and more than five kilograms of
cocaine.” Id. at 5-6. Count 9 further sought
forfeiture of four specific properties located in
Albuquerque, New Mexico: (1) 764 56th St.; (2) 2244 Pajarito
Road; (3) a 2001 mobile home; and (4) 1499 Hooper Rd. S.W.
Id. This number was reduced to three prior to trial,
however, as a result of the court granting a United
States' motion to dismiss the mobile home from the
indictment. Id. Doc. 88-89.
25, 2004, a jury convicted Plaintiffs on Counts 1-8.
Id. Docs. 101, 102. On September 9, 2004, the United
States moved for a preliminary order of forfeiture and,
separately, for a money judgment of $10, 000, 000.
Id. Docs. 111, 112. On September 16, 2004, the court
granted these motions. Id. Docs. 114, 115. The
court's order granting the United States' motion for
money judgment provided that the judgment would become
finalized at the time of sentencing. Id. Doc. 115.
The United States then published notice of the Preliminary
Order of Forfeiture regarding the three real properties.
Id. Doc. 136. On October 10, 2004, Midfirst Bank
filed a verified petition claiming a lienhold interest in the
764 56th St. property. Id. Doc. 118. The claim was
resolved by a stipulated settlement approved by the court.
Id. Doc. 137. Further, in response to an innocent
ownership claim regarding the 1499 Hooper Road SW property,
the court dismissed the property from the forfeiture
proceedings. Id. Docs. 147, 150. No claims were made
against the 2244 Pajarito Road SW property and the court
therefore ordered the property forfeited to the United
States. Id. Doc. 149.
court sentenced Plaintiffs on November 17, 2004 (Eva Atencio)
and January 12, 2005 (Edward Atencio). Id. Docs.
129, 138. The judgments provided that Plaintiffs
“forfeit all rights, ownership, and interest in all
United States Currency, land and property noted in Count IX
of [the] Second Superseding Indictment.” Id.
Docs. 132, 139. Plaintiffs appealed their convictions under
Counts 1-7 to the Tenth Circuit. Doc. 134, 143, 144.
Plaintiffs did not challenge the forfeiture proceedings. The
Tenth Circuit ultimately affirmed Plaintiffs' convictions
with the exception of Count 2 which it remanded to the
district court with instructions to vacate the sentences
levied pursuant to those counts. United States v.
Atencio, 435 F.3d 1222, 1228 (10th Cir. 2006). On
remand, the district court vacated Plaintiffs' sentences
previously imposed under Count 2 and entered amended criminal
judgments. CR No. 03-1014, Docs 151-154. The amended
judgments likewise provided that Plaintiffs “forfeit
all rights, ownership, and interest in all United States
Currency, land and property noted in Count IX of [the] Second
Superseding Indictment.” Id. Docs. 152-154.
27, 2015, Plaintiffs filed the current action seeking
“release of the money judgment of $10, 000, 000 and all
other personal property [sic] and assests [sic] which were
seized by the United States of America.” Doc. 1.
Plaintiffs' Motion for Summary Judgment
move for summary judgment on the basis that Defendant failed
to respond to their Complaint and have therefore defaulted.
Plaintiffs request that the money judgment against them be
dismissed and that monies previously collected be returned to
Plaintiffs. Although Defendant did not file a response to
Plaintiff's Motion for Summary Judgment, I am still
required to consider whether judgment for the moving party is
“appropriate.” See Reed v. Bennett, 312
F.3d 1190, 1994-95 (10th Cir. 2002).
undisputed material facts are as follows. Plaintiffs filed
their Complaint on July 27, 2015. Doc. 1. On December 9,
2015, I entered an Order to Show Cause directing Plaintiffs
to show cause as to why they had not effected service on
Defendant. Doc. 7. Plaintiffs timely filed a written response
purporting to have effected service. Doc. 8. The response,
however, failed to demonstrate that they complied with the
Court's order to properly effect service. See
Doc. 12. As a result, I issued another order in which I
precisely explained the deficiencies in service and provided
Plaintiffs a second opportunity to properly serve Defendant.
Doc. 12. In response, Plaintiffs requested additional time to
serve Defendant, which I granted in part. Doc. 16. Plaintiffs
served the United States on July 12, 2016. Doc. 18
Accordingly, Defendant's answer was due no later than
September 12, 2016. Doc. 18. Because Defendant did not file
an answer by this deadline and Plaintiffs had taken no action
in the case since July 2016, on October 13, 2016, I entered
an Order for a Status Report. Doc. 19. On November 7, 2016,
Defendant filed its status report representing that the
matter had inadvertently been logged incorrectly which
resulted in the case not properly being assigned. Doc. 21.
Defendant further contended that Plaintiffs had not properly
effected service pursuant to Rule 4(i)(1)(B). Finally,
Defendant represented that it planned to enter an appearance
and file a motion to dismiss the complaint. Doc. 21.
Plaintiffs also filed their status report representing that
they planned to object to any dispositive motion Defendant
might file. Doc. 22. On March 17, 2017, Plaintiffs filed the
instant Motion for Summary Judgment. Doc. 23. As of this
date, Defendant still had not filed its promised motion to
dismiss the complaint. Therefore, on March 21, 2017, I
entered an Order to Show Cause ordering Defendant to file its
motion to dismiss, answer the Complaint, or show cause in
writing as to why it had failed to answer or otherwise defend
this suit. On April 6, 2017, Defendant filed its Motion to
Dismiss. Doc. 25.
recommend denying Plaintiff's Motion for Summary
Judgment. Although at the time Plaintiffs filed their Motion
for Summary Judgment Defendant had not filed its Motion to
Dismiss or answered the Complaint, Plaintiffs never formally
moved for default judgment under Fed.R.Civ.P. 55. See
Watkins v. Donnelly, 551 Fed App'x 953, 958 (10th
Cir. 2014) (unpublished) (“Entry of default by the
clerk is a prerequisite that must be performed before a
district court is permitted to issue a default
judgment.”); Rowley v. Morant, 276 F.R.D.
669, 670 (D.N.M. 2011) (“the clear weight of authority
holds that a party must seek entry of default by the
clerk before it can move the court for default
default judgment is only appropriate “[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend.” Fed.R.Civ.P.
55(a). See also Cessna Finance Corp. v. Bielenberg
Masonry Contracting, Inc., 715 F.2d 1442, 1444 (10th
Cir. 1983) (“We do not favor default judgments because
the court's power is used to enter and enforce judgments
regardless of the merits of the case, purely as a penalty for
delays in filing or other procedural errors.”).
Although late, by virtue of its Rule 12(b)(6) motion in lieu
of a responsive pleading, Defendant has begun defending this
case. Therefore, the basis for Plaintiffs' motion for
Summary Judgment no longer exists.
decision to allow the United States an additional period of
time to file its motion to dismiss was also based on
principles of fairness. The undisputed facts demonstrate that
neither party has complied with their deadlines under the
Federal Rules of Civil Procedure. In the interest of
permitting the case to proceed on its merits, I granted
Plaintiffs two considerable extensions of time to properly
serve Defendant. Thus, in the interests of fairness, I later
provided Defendant more time than provided for under Federal
Rule of Civil Procedure 12 to file its responsive pleading or
move to dismiss. For these reasons, I recommend denying
Plaintiffs' Motion for Summary Judgment.