1986 Mercedes Benz 560 Ce Vin: WDBCA45DGA211147 v. State

ROBERT M. BELL, Judge. This case requires us to construe and then apply Maryland Code (1957,1992 Repl.Vol.) Art. 27, § 297(1). 1 Specifically, we must decide whether, in this case, the State is entitled to the benefit of the presumption that the motor vehicle, which is the subject of the forfeiture proceedings, is forfeitable as proceeds 2 of drug activity. 3 If we determine that it is — that the State has established the necessary prerequisites by the prescribed level of proof — then we must decide whether the claimant of the property, in this case, the registered owner, Troy Bowers (“Bowers” or “the claimant”), has rebutted the presumption. The trial court held that the State properly forfeited the motor vehicle, the claimant not having rebutted the presumption that it was subject to forfeiture as proceeds. In an unreported opinion, the Court of Special Appeals, af ²⁶⁷ firmed. 95 Md.App. 737 .

We granted certiorari upon the claimant’s petition to consider the important issue presented, 331 Md. 284 , 627 A.2d 1063 . We shall reverse. I. The State filed a “Complaint For Forfeiture of Vehicle Pursuant To Article 27, Section 297,” the subject of which was a 1986 Mercedes Benz 560CE, Tag: ITA-719 (Virginia), serial VIN WDB CA45D9GA211147. As amended, the complaint alleged, inter alia, that the aforementioned vehicle was used or intended for use, to transport or facilitate the transportation, sale, receipt, possession or concealment of the controlled dangerous substances as listed in the schedules found in Article 27, Section 279, or the raw materials, products and equipment which were used or intended for use in the manufacturing, compounding, processing and delivering of such controlled dangerous substances or constitutes proceeds traceable to the exchange of controlled dangerous substances.

In this case, the motor vehicle [as] utilized constitutes proceeds traceable to the exchange of controlled dangerous substances. With respect to Bowers, the statement of facts attached to the complaint stated: The State alleges that the registered owner was merely a nominee in regards to this subject vehicle and that the actual owner of the subject vehicle was the alleged owner [i.e. Estate of Keith Delante Joiner], The State also alleges that the subject vehicle was purchased by the alleged owner with proceeds derived from the sale of CDS. ²⁶⁸ The claimant and Joiner’s estate 4 answered the complaint and moved to dismiss. Their answer admitted “that said vehicle was registered to Troy F. Bowers and owned by the Estate of Keith Joiner.” The evidence on the basis of which the trial court ordered forfeiture largely is not in dispute.

Corporal Michael Leadbeter of the Prince George’s County Police Department, Narcotics Enforcement Division, testified that he initiated an investigation into Joiner’s alleged involvement in the distribution of cocaine in the Washington, D.C. metropolitan area in June, 1990, after receiving information to that effect from a confidential informant. Before he testified, the claimant objected, arguing that the testimony as to what the informant said was hearsay. The claimant’s objection on hearsay grounds was overruled; however, the trial court ruled that the information received from the informant was admitted “only to explain the subsequent actions of this. witness. It is not necessarily being admitted for the truth but to say what his state of mind was as to why he did things.

It could not be and would not be used to prove drug activity.” Corporal Leadbeter further testified that the informant also stated that Joiner drove “a blue two-door Mercedes Benz with blue BBS rims,” although he or she did not specify the year. Corporal Leadbeter testified that he “checked the County Police department’s intelligence files both to verify or [corroborate] Mr. Joiner’s involvement in controlled dangerous substance activity, along with corroborating the fact that he [was] driving the blue Mercedes Benz.” Surveillance was established at Joiner’s residence, “the address where [Joiner] was involved in that action [distribution of controlled dangerous substance],” according to the informant, “along with other places.” He stated that he saw the Mercedes Benz at Joiner’s ²⁶⁹ residence on occasions and at other places and, on one occasion, Joiner was in the car when it was stopped. 5 Joiner was killed in an automobile accident in the early morning of August 5, 1990. Later that morning, his apartment was searched pursuant to a search and seizure warrant, issued on August 3, 1990, for narcotics, narcotics paraphernalia, and guns. Recovered from a weightlifting bench in the dining room area of the apartment were a hand rolled cigarette containing marijuana and PCP and 0.4 grams of PCP.

A white box, containing an acculab electronic scale, three kitchen measuring spoons, a pill bottle containing a single-edge razor blade, and three “zip-loc” style plastic sandwich bags, was seized from the kitchen. On the paraphernalia and in the white box in which they were contained was a white “powdery residue” which was field tested and determined to be cocaine. Having qualified as an expert in methods of distribution and the significance of the items found in the distribution of controlled dangerous substances, Corporal Leadbeter opined, based on the items seized, that Joiner was a distributor of controlled dangerous substances. With respect to the Mercedes Benz, 6 Corporal Leadbeter testified that he recovered, in Joiner’s bedroom, a sales receipt for it from Mark Cook’s Euro-Classics Auto Dealership in Midlothian, Virginia.

The receipt listed Troy Bowers, rather than Joiner, as the purchaser. Believing it to be Joiner’s property, Corporal Leadbeter obtained a seizure warrant for the Mercedes Benz. It was subsequently located in a District of Columbia police impound lot, returned to Maryland, and searched. Relevant to the case sub judice, recovered in the ²⁷⁰ search of that car was “a price list kind of thing with some business cards on it that had Keith Joiner’s name on it.” Following up on that lead, Corporal Leadbeter learned that the business, Hollywood Car Care, “was some kind of auto detailing business,” which was located next to Joiner’s apartment.

He testified, without objection, that he “called the business and asked if Keith Joiner worked there. And they said that he did not work there.” The State’s only other witness, Detective William T. Whig-ham of the Prince George’s County State’s Attorney’s Office, testified concerning his conversation with the claimant. According to Detective Whigham, Bowers contacted him to claim the Mercedes Benz. Notwithstanding that he had no documentation to that effect, he indicated that he had “sold” the Mercedes Benz to Joiner approximately four months earlier.

To date, he said, he had received only $4400.00, consisting of a $3,000.00 downpayment and two installments of $700.00 each. Bowers claimed that Joiner was in default of their agreement. Shortly before his death, he reported, Joiner purchased another car, also titled in Bowers’ name, for $28,000.00 cash and, thereafter, had ceased making installments on the Mercedes Benz. The trial court denied Bowers’ motion to dismiss, ruling: “There is sufficient evidence to give rise to the statutory presumption, which may be rebutted.” As will become obvious from the court’s final ruling, see infra, the presumption to which the court referred was that Joiner, and not Bowers, owned the Mercedes Benz.

Bowers then presented his case. Testifying in his own behalf, he confirmed that he sold the Mercedes Benz to Joiner, but denied that Joiner owned it at the time of Joiner’s death. His explanation was consistent with what he had related to Detective Whigham, that Joiner was in default of their agreement as a result of not having made the agreed $700.00 installment payments. Bowers also testified that the Joiner deal was not the only one of its kind that he had engaged in.

He explained that he had purchased a number of cars in his name, but had either lent, given, or leased them to others, including his sisters. The source of the funds he used for these purchases, he asserted, was either his savings or loans from various relatives. ²⁷¹ The trial court ordered forfeiture of the Mercedes Benz. It reasoned (emphasis added): Court has already ruled that the evidence that was put on by the moving party gave rise to the presumption of ownership. Now, the issue before the Court is whether or not that additional evidence placed before the Court [by the] person claiming the property has been sufficient to rebut the presumption.

The Court has reviewed the evidence presented, applying its own common sense and everyday experiences, but also taking into consideration the manner in which the witness has testified, the recollection of the witness, ability to remember. These are all the standards in which the trier of the fact is required to apply; whether or not the witness had an interest in the outcome [of] the case, whether or not the witness’ testimony is supported or contradicted] by other evidence that the court believes. And applying all of these and the other standards of which the trier of the fact is required to apply in the State of Maryland, the Court finds that the defense or the claiming party’s evidence does not rise to that level that would rebut the presumption. The claimant’s timely appeal to the Court of Special Appeals was unsuccessful.

While, in affirming the judgment of the trial court, that court acknowledged “the interplay between § 297(b), 7 on the one hand, and § 297(Z) 8 on the other,” it ²⁷² held that “there is ... no necessity for the State [to seek to forfeit certain property] under § 297(Z).... That section— § 297(l) — exists only to provide the State with a mechanism for achieving the forfeiture of the property whose link to CDS otherwise is rather attenuated.” This is true, the court opined, even when, in fact, the State attempted to prove the elements of § 297(Z). All that is required, the intermediate appellate court asserted, is that the State have adduced evidence tending to prove that the subject property fell within the definition of § 297(b)(4), ie. that it was “used [or intended to be used] to facilitate ... [drug distribution activities.]” Subsection (b) is, after all, it observed, “the sieve through which all forfeited property must pass.” (citing State v. 1982 Plymouth, 67 Md.App. 310, 314 , 507 A.2d 633, 635 (1986)). Turning to the case sub judice, applying § 297(b)(4), the Court of Special Appeals held that Corporal Leadbeter’s testi ²⁷³ mony detailing the information he received from his informant “was clearly sufficient to indicate (1) that Joiner was engaged in the ‘sale, receipt, possession, or concealment,’ of controlled dangerous substances, and (2) that the Mercedes was ‘used, or intended for use, to transport, or in [some] manner to facilitate the transportation’ of said substances.” 9 Although the court did not specify what level of proof was required, presumably it tested the sufficiency of the evidence by the preponderance standard.

Similarly, the court found that the trial court was not clearly erroneous in determining that, despite being the registered owner, the claimant did not own the Mercedes, having previously sold it to Joiner.

II

A forfeiture proceeding is a civil action in rem. State v. Greer, 263 Md. 692, 694 , 284 A.2d 233, 235 (1971); Prince George’s County v. Blue Bird Cab Company, 263 Md. 655, 659 , 284 A.2d 203, 205 (1971); Bozman v. Office of Finance, 52 Md.App. 1, 6, 445 A.2d 1073, 1076 (1982), aff'd, 296 Md. 492 , ²⁷⁴ 463 A.2d 832 (1983). As such, the burden of proof necessary to sustain a forfeiture is by a preponderance of the evidence. Blue Bird Cab Company, 263 Md. at 659, 284 A.2d at 205.

As the Court of Special Appeals recognized, there are three subsections of section 297 that potentially have relevance to the case sub judice: subsections (b)(4) and (b)(10) and subsection (l). Subsections (b)(4) and (b)(10) define categories of property subject to forfeiture. The former focuses on the use of the property, the latter on its source. Thus, in the case of subsection (b)(4), an automobile or other conveyance may be forfeited if the State is able to prove that it was used, or intended for use, in connection with, or to facilitate, drug activities.

On the other hand, pursuant to subsection (b)(10), forfeiture of property may be ordered if the State proves that it constitutes proceeds of drug activity. In neither case is there a requirement that the property’s owner also be implicated. See Greer, 263 Md. at 694 , 284 A.2d at 235 ; Blue Bird Cab Co., 263 Md. at 659 , 284 A.2d at 205 . Subsection (l) provides an alternate method of proving the category of property, i.e., proceeds, addressed by subsection (b)(10).

There is no provision in § 297 creating a presumption of use or intended use of the property referenced pursuant to subsection (b)(4); hence, the proof of its use or intended use affirmatively must be proven. The situation is quite different when the issue involves proof of proceeds. In contrast to subsection (b)(4) the State is given the option either affirmatively to prove that the subject property is “derived directly or indirectly in connection with or as a result of an offense or offenses under this subheading,” § 297(a)(10), pursuant to subsection (b)(10) or, when certain enumerated offenses are involved, of relying on the presumption prescribed by subsection (l). Should the State proceed pursuant to § 297(b)(10) and adduce evidence to prove that the property constitutes proceeds, it need neither establish the property owner’s involvement in drug transactions, nor negate other likely sources of that property.

As relates to proceeds, section 297(b)(10) requires only that the property be traceable to an exchange for a controlled dangerous substance. Section ²⁷⁵ 297(Z), on the other hand, addresses the situation in which the connection between the property and the drug activity is attenuated — where the property is not directly traceable to drug activity, but there is proof of the owner’s involvement in certain kinds of drug activity — by creating a presumption that the property constitutes proceeds and, thus, is forfeitable. In the former situation, proof by a preponderance of the evidence, as in other civil cases, is all that is required; in the latter, by the express terms of section 297(Z), the proof as to those elements prerequisite to the establishment of the presumption must be shown by clear and convincing evidence.

III

Rule 8-131(a), pertaining to the scope of appellate review, provides: (a) Generally. — The issues of jurisdiction of the trial court over the subject matter and, unless waived under Rule 2-322, over a person may be raised in and decided by the appellate court whether or not raised in and decided by the trial court. Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court, but the Court may decide such an issue if necessary or desirable to guide the trial court or to avoid the expense and delay of another appeal. Although it recognized, at least implicitly, that section 297(Z) could apply to the facts sub judice, the Court of Special Appeals did not undertake to apply it in this case. Rather, construing that section only cursorily, the intermediate appellate court decided that another section, § 297(b)(4), was the applicable section and that the State’s proof of its elements was sufficient.

The applicability of section 297(b)(4), and the sufficiency of the evidence with respect thereto, was not decided by the trial court, however. In denying the claimant’s motion to dismiss for failure of the State to carry its burden of proof, made at the end of the State’s case, the trial court found the State’s ²⁷⁶ evidence to be sufficient to raise the statutory presumption. At the close of all the evidence, the trial court again ruled that it had already found that the State’s evidence “gave rise to the presumption of [Joiner’s] ownership [of the Mercedes Benz],” and that the only issue it had to resolve was whether the claimant had rebutted the presumption. Only section 297(1) explicitly prescribes a presumption; hence, notwithstanding that the presumption relates to what property is subject to forfeiture as proceeds, rather than to the ownership of the property, as the trial court stated, it necessarily was to section 297(l) to which the trial court referred.

While section 297(s)(3) permits the court to resolve claims arising under section 297 and the ownership of property under certain circumstances may be, and in this case is, such a claim, neither section 297(b)(4) nor section 297(a)(9) 10 provides for a presumption of ownership in lieu of affirmative proof of that issue. Moreover, it is far from clear that the section 297(b)(4) issue was even presented to, or raised in, the trial court. Not only does the State concede that it did not seek forfeiture pursuant to section 297(b)(4), 11 but the record reflects that, at the end of the State’s case, having been invited by the trial court to expand upon its contention that the State had not met its burden of proof, the claimant referenced section 297(0(1)-The court then acknowledged that, “[t]here is a presumption, and it has to be rebutted____” Furthermore, the State’s approach was the same as the claimant’s. Its argument was that it had established that: (1) distribution of controlled ²⁷⁷ dangerous substances had occurred on Joiner’s premises; (2) Joiner had no legitimate source of income, and (3) the Mercedes Benz was owned by Joiner, it having been sold to him about four months earlier by Bowers, the title owner.

Implicit in its last point is that Joiner acquired the automobile during the time when he was distributing cocaine. Summing up, the State argued: As I indicated, we showed that [Joiner] was in fact involved with the distribution of cocaine. We show[ed] that at the very least he came up with three thousand seven hundred dollars. Rational inference is that in fact that those are the proceeds of his drug activity he was involved in.

And, therefore, our complaint is based upon the fact that this vehicle constitutes proceeds. And therefore I think we have in fact made our prima facie case regarding that issue. At the close of all the evidence, the claimant again referred to section 297(0, urging the trial court “not to impose this rebuttable presumption.” He argued that the presumption did not apply “because under the Code Section that I’ve cited, we have sufficient information to show he’s the owner.” While not referring to section 297(l) explicitly, the prosecutor, in rebuttal, acknowledged that “[t]he only question is whether or not this vehicle constitutes the proceeds of drug activity and that drug being cocaine.” Clearly, therefore, neither party addressed the use of the Mercedes Benz as section 297(b)(4) would have required. The Court of Special Appeals held that Corporal Leadbeter’s testimony detailing the information he received from his confidential informant, his surveillance of Joiner’s residence and other places, and his verification or corroboration of the information the informant provided was sufficient evidence of Joiner’s involvement in the “sale, receipt, possession, or concealment of controlled dangerous substances,” and that the Mercedes Benz was “ ‘used or intended for use, to transport, or in [some] manner to facilitate the transportation’ of said substance.” It found, in addition, that the trial court believed that testimony and that the claimant did not challenge its admissibility on appeal.

These holdings are belied by the ²⁷⁸ record. First, as we have seen, the trial court’s ruling was based on section 297(0(1), not section 297(b)(4). Furthermore, the record reflects that when Corporal Leadbeter first gave an indication that he would refer to information received from confidential informants, the claimant objected, arguing: But it’s not first [hand] information, and to get it second hand from the officer, he has no first hand knowledge of what use either the vehicle has or whether Mr. — what Mr. Joiner’s involvement is. And if it’s coming directly from unnamed sources, we have a right to know who they are and actually they should be here to testify first' hand.

As we have also seen, the trial court agreed and admitted the testimony to explain the witness’ subsequent actions, not to prove Joiner’s drug activity. Later, after the testimony relied upon by the Court of Special Appeals had been given, the claimant reminded the trial court of its prior ruling that the information from confidential sources was not admitted as substantive evidence. Neither the court nor the State challenged those remarks. See Mejia v. State, 328 Md. 522, 537 , 616 A.2d 356, 363 (1993); Henry v. State, 324