United States District Court, S.D. Texas, Houston Division
ROSENTHAL, CHIEF UNITED STATES DISTRICT JUDGE.
Bertman, a third-party petitioner, moves to require the
government to pay property taxes, interest, and penalties
that have accrued on the Wickford property since the offenses
for which her husband, Abraham Moses Fisch, was convicted.
(Docket Entry No. 674). Bertman also moves for miscellaneous
relief and for reconsideration of the Bank of the Ozarks'
third-party claim for accrued interest and attorney's
fees. (Docket Entry No. 677). The motions are denied, for the
reasons explained below.
Fisch's conviction, the Harris County taxing authorities,
the Bank of the Ozarks, and Bertman all petitioned the court
under 21 U.S.C. § 853(n) asking for adjudication of
their alleged interests in the Wickford property. (Docket
Entry Nos. 502, 509, 511, 515, 552). The government agreed
that the taxing authorities and the Bank of the Ozarks had
"superior interests in the property" and argued
that "[i]n the event of sale ... the delinquent taxes
and mortgage payments should be paid out of the gross
proceeds." (Docket Entry No. 599, at 3). No. party
disputed that the Wickford property is "subject to a
mortgage" and "to taxes on which the owner is in
default." Id. After the court granted an
interlocutory sale of the Wickford property, the court
granted the government's motion to amend the order.
(Docket Entry No. 620). The amended interlocutory-sale order
1. At closing of the sale of 9202 Wickford Drive, Houston,
Texas 77024, the following shall be paid out of the gross
b. all ad valorem taxes due and owing on the Wickford
Property at the time of closing to the taxing authorities in
accordance with the petitions for adjudication of interest
filed in the case under Docket Entry Nos. 502 and 552 and the
notices of amounts due and owing in Docket Entry Nos. 584 and
c. all amounts due and owing to Bank of the Ozarks, successor
by merger to OmniBank, N.A., in accordance with the petition
filed in this case under Docket Entry No. 511.
2. The United States shall deposit the remaining proceeds
into the registry of the Court until further order of this
(Docket Entry No. 620).
Bertman's Motion to Deny the Taxing Authorities'
moved to deny the taxing authorities' claims, arguing
that the Harris County taxing authorities have failed to
establish an interest under 21 U.S.C. § 853(n)(6) in
taxes claimed for 2013 to 2016. (Docket Entry No. 674 at 2).
She argues that although the property was forfeited to the
government in 2015, (Docket Entry No. 471), the relation-back
doctrine means that the government's interest vested when
the offenses occurred between 2006 and 2010. Id.
Bertman asserts that because the government's interest in
the property vested before 2013, the taxing authorities
cannot claim an interest in taxes from 2013 or later. She
also asserts that the taxing authorities do not fall into the
"bona fide purchasers" exception of §
asserts that the taxing authorities had constructive notice
that the property was subject to forfeiture because the
government recorded a lis pendens claiming an
interest in the property in 2011. Id. at 3. She
cites to a recent Sixth Circuit case, United States v.
Hall, 877 F.3d 676, (6th Cir. 2017), in which the
government represented that it had a '"pattern of
practice of always paying'" forfeited property
accrued taxes, "regardless of whether a taxing authority
files a claim asserting its interest under 21 U.S.C. §
853(n)." Id. at 679. Bertman argues that the I
government's position in Hall should apply to
all forfeiture proceedings. (Docket Entry No. 674 at 3).
government argues that the relation-back doctrine does not
automatically vest and perfect title to property in the
United States. (Docket Entry No. 675 at 2). It argues that
title to the property has not been perfected and that taxes
continued to accrue because there was no final order of
forfeiture. The government recognizes the taxing
authorities' superior interest under § 853(n)(6)(A)
"because the Taxing Authorities' continuing lien
renews annually and always runs with the land." (Docket
Entry No. 675 at 4).
court ordered forfeiture on October 28, 2015, (Docket Entry
No. 470), and amended the order to include the Wickford
property on October 30, 2015, (Docket Entry No. 471). The
relation-back statute provides that "[a]ll right, title,
and interest in [forfeited property] vests in the United
States upon the commission of the act giving rise to
forfeiture under this section." 21 U.S.C. § 853(c).
The government's interest in the Wickford property vested
before 2013, when Fisch committed the acts giving rise to the
forfeiture. But the government's interest in the Wickford
property is not undivided. When Bertman petitioned the court
for a hearing to adjudicate the validity of her interest in
the property, the government did not dispute that she had a