Rush, C.J.
Civil forfeiture laws have been around since before our country’s founding. But they are broader and far more widespread today, providing law enforcement with a “highly profitable” tool that allows the State to seize property involved in criminal activity—particularly drug offenses. [Footnote omitted.] This tool has broad remedial characteristics, such as creating an economic disincentive to continue engaging in illegal drug activity and permitting law enforcement to defray expenses incurred in the battle against drugs. But it also has significant criminal and punitive characteristics, such as permitting the seizure of property absent a criminal charge and punishing those whose property is confiscated. As a result, there is an inherent tension between the State’s use of civil forfeiture and citizens’ rights and interests. And so, to ensure a proper balance, civil forfeiture actions must strictly comply with the laws our Legislature has carefully crafted. [Footnote omitted.]
Here, the State seized $11,180 found during a search of Dylan Williams’s apartment. The State then initiated forfeiture proceedings against the money. Williams did not answer the State’s complaint, but his aunt successfully moved to intervene and filed an answer asserting that she owned the money and that it was not tied to any criminal activity. Following a hearing, the trial court entered judgment for the State.
We reverse and remand. In reaching that decision, we clarify the procedural framework for when the State seeks forfeiture of money and who constitutes an “owner.” We then apply that framework and hold that the State’s evidence fails to support the trial court’s forfeiture order. And we hold that the money must be returned to the aunt because she alone claimed ownership, she presented uncontradicted evidence establishing the $11,180 belongs to her, and the trial court neither concluded she was not the owner nor made any findings or statements questioning her credibility.
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I. In a contested action, the State’s burden depends on the alleged criminal offense that subjects the money to forfeiture.
The parties dispute the State’s burden at a contested hearing. In the State’s view, there is “no need” for a trial court “to address the merits of the forfeiture” if an intervenor fails to establish that they own the money. In Smith’s view, the State must always establish the money is subject to forfeiture, and the court need only determine ownership if the State doesn’t meet its burden. Analyzing the relevant statutes confirms Smith is correct.
When bringing a forfeiture action, the State must timely file a complaint “in the jurisdiction where the seizure occurred.” I.C. § 34-24-1- 3(a). At that point, an “owner” or “any person whose right, title, or interest is of record” has twenty days to file an answer. Id. § -3(d). If, after that time, “there is no answer on file,” then the court on the State’s motion “shall enter judgment” in the State’s favor and order the money distributed according to law. Id. § -3(e). But when there is an answer on file, a hearing is triggered at which the contesting party “may appear.” Id. § -3(d). And at that hearing, the State “must show by a preponderance of the evidence that the” money is “subject to seizure.” Id. § -4(a). But how this burden is met turns on the statute the State relied on in its complaint.
One statute, Section 34-24-1-1(a)(2), allows the State to seize money if it was (1) “furnished or intended to be furnished by any person in exchange for an act that is in violation of a criminal statute,” (2) “used to facilitate any violation of a criminal statute,” or (3) “traceable as proceeds of the violation of a criminal statute.” Id. § -1(a)(2). This “violation of a criminal statute” language implicates a broad array of offenses, including low-level drug offenses… At a hearing in a forfeiture action invoking Section 34-24-1-1(a)(2), the State must identify the applicable criminal statute that was violated and establish a substantial connection between the seized money and that crime… And if the trial court finds the State has made these showings by a preponderance of the evidence, the court enters judgment for the State and orders the money distributed accordingly. I.C. § 34-24-1-4(c).
The other statute, Section 34-24-1-1(d), creates a rebuttable presumption that money is subject to forfeiture if it was “found near or on a person who is committing, attempting to commit, or conspiring to commit” one of sixteen listed drug offenses… At a hearing in an action invoking this statute, the State must identify the listed offense and establish that the seized money was found either near or on a person committing, attempting to commit, or conspiring to commit that crime. At that point, the money “is presumed forfeitable—period.” Lipscomb, 857 N.E.2d at 428 (quoting Caudill v. State, 613 N.E.2d 433, 438 (Ind. Ct. App. 1993)). The burden then shifts to the contesting party to rebut the State’s showing. And if the trial court finds the party failed to rebut that showing, the court enters judgment for the State and orders the money distributed accordingly. I.C. § 34-24-1-4(c).
The preceding two paragraphs raise a question—what happens to the money if the State fails to meet its burden? In that event, the “court shall order the property released to the owner.”…
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And so, when the State fails to meet its burden at a forfeiture hearing, the trial court must order the money released to the person to whom it belongs. When the money was seized from the person contesting the forfeiture, the court will release the money to that person. But when someone else contests the forfeiture, that party must produce evidence showing the money belongs to them. The court must then determine whether that person has established ownership. If so, the court must order the money returned to that person. But if that person has not established ownership, the court must order the money returned to the person from whom the money was seized.
With this procedural framework in hand, we now determine its effect on this forfeiture action.
II. The State failed to establish the requisite substantial connection, and Smith established the money belongs to her.
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In reviewing that decision, we first conclude that the State neither specifically identified an applicable criminal statute that was violated nor established a substantial connection between that crime and the money. We thus hold that the forfeiture order must be reversed. And we then hold that the money must be released to Smith. As the only person to claim ownership, she presented uncontradicted evidence that the money belongs to her. And the trial court neither concluded she was not the owner nor made any findings or statements questioning her credibility.
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Conclusion
For the reasons articulated above, we reverse the trial court’s forfeiture order and remand for the court to order the money released to Smith.
Massa, Slaughter, Goff, and Molter, JJ., concur.