Session May 16, 2017
from the Chancery Court for Davidson County No. 14-1831-I
Claudia Bonnyman, Chancellor
Tennessee Department of Safety and Homeland Security
forfeited a finance company's interest in a vehicle after
determining that the finance company failed to timely file a
claim to contest the forfeiture after receiving notice. The
finance company thereafter filed a petition for judicial
review. The trial court reversed the forfeiture on the basis
that the Tennessee Department of Safety and Homeland Security
failed to prove that it sent proper notice to the finance
company. We vacate the judgment of the trial court and remand
for further proceedings before the administrative agency.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Vacated and Remanded
Herbert H. Slatery, III, Attorney General and Reporter;
Andrée S. Blumstein, Solicitor General, Linda D.
Kirklen, Assistant Attorney General, for the appellant,
Tennessee Department of Safety and Homeland Security.
H. Hancock, Nashville, Tennessee, for the appellee, Ally
Steven Stafford, P.J., W.S., delivered the opinion of the
court, in which Arnold B. Goldin, and Brandon O. Gibson, JJ.,
STEVEN STAFFORD, JUDGE
March 18, 2014, the Shelby County Multi Agency Gang Unit
("MAGU") seized a 2008 Dodge Challenger CS8
("the vehicle") from its owner, Jacqueline
Chambers, as drug-related proceeds subject to forfeiture
under Tennessee Code Annotated section
53-11-451. Petitioner/Appellee Ally Financial
("Ally") was listed as lienholder on the
vehicle's certificate of title. Ally's address
displayed on the certificate of title was "P.O. Box
8116, Cockeysville, MD 21030, " the same address shown
on a database printout containing the vehicle's
registration information dated March 25, 2014.
detective obtained a forfeiture warrant for the vehicle on
March 25, 2014, based upon allegations that the vehicle was
used by Ms. Chambers and her co-conspirators in a series of
robberies and drug sales. According to the
Respondent/Appellant Tennessee Department of Safety and
Homeland Security ("the Department"), notice of the
seizure and forfeiture warrant was sent the following day via
certified mail to "Ally Financial, ATTN Legal
Advisor" at the P.O. Box listed on the vehicle's
certificate of title. The notice stated that a forfeiture
warrant had issued and the vehicle "will be forfeited .
. . after thirty . . . days from receipt of this notice
unless the secured party shall file with the Department . . .
a copy of the title (front and back) and the security
agreement encumbering the seized vehicle." The record
contains a return receipt indicating that the certified mail
was delivered on March 31, 2014. A scanned portion of the
green card was returned to the Department noting that
"Gaylord Wilson" signed for the certified mail and
handwrote his address as "PO Box 8100."
October 23, 2014, Ally sent a letter to the Department
ostensibly to contest the forfeiture of its interest in the
vehicle. The letter explained that while the notice was
"mailed to Ally's post office box in Maryland,
" this post office box was "merely a call station,
rather than Ally's legal offices[, ] which are located in
Lewisville, Texas." Ally therefore claimed that that its
delay in responding to the notice was "a direct result
of the incorrect mailing." The letter requested a
hearing on the forfeiture of Ally's interest in the
vehicle. Enclosed with Ally's letter was the
vehicle's certificate of title and retail installment
contract establishing its interest in the vehicle. Ally sent
a second letter on November 14, 2014, again requesting that a
hearing be held and requesting various documents.
November 17, 2014, the Department responded to Ally's
letter by denying Ally's request for a hearing. In
explanation, the Department stated that Ally's request
was untimely because it had not been filed within the
requisite statutory thirty-day period. Specifically, the
letter noted that the Department's records indicated that
Ally "received notification of the confiscation of the
subject property on March 31, 2014" and that no claim
had been filed for more than six months after the
notification. As such, Ally's "interest in the
[vehicle] has not been protected." The Department
ordered Ally's interest forfeited on December 2, 2014,
and sent the Order of Delegation and Forfeiture to Ally with
instructions for appealing.
timely filed a petition for judicial review in the Davidson
County Chancery Court. In the petition, Ally stated that the
Department, "[b]y letter dated March 26, 2014, . . .
[the Department] forwarded notice to Ally that a forfeiture
warrant had been issued" and that "the forfeiture
warrant was not properly obtained[.]" Both parties filed
pretrial briefs. In Ally's brief, it admitted that
"the Department sent a Notice of Seizure . . . to Ally
at Post Office Box 8116 in Cockeysville, Maryland 21030,
" which Ally characterized as "Ally's
Lockbox." Ally asserted, however, that the notice was
defective because it was delivered to an incorrect address.
Ally further asserted that the notice, if delivered, was
defective because it did not contain any supporting evidence
or alleged wrongful conduct by Ally that would make its
interest subject to forfeiture.
trial court held a hearing on the petition on March 29, 2016.
No evidence was presented during this hearing. Ally
essentially argued that the time for filing its claim had not
expired because the notice of forfeiture was either mailed or
delivered to the wrong post office, P.O. Box 8100, rather
than P.O. Box 8116, pointing to the discrepancy between the
address printed on the certified receipt (P.O. Box 8100) and
the address on the Department's notice letter (P.O. Box
8116). As such, Ally argued that the
knew or should have known that the notice was delivered to
the wrong address and that the Department's failure to
take additional steps to correct the mistake meant that it
had not met its burden of proving when Ally received the
notice. Ally's counsel was unable to explain how Ally
eventually received the notice letter and was unsure whether
the person who signed the certified receipt worked for Ally.
April 19, 2016, the trial court, citing State v.
Sprunger, 458 S.W.3d 482 (Tenn. 2015), found that the
Department had "the burden of proof to show by a
preponderance of the evidence that notice was in fact
delivered to Ally on March 31, 2014 or on some other date
that would preclude Ally from effecting compliance with its
duty to provide proof of its security interest." The
trial court ruled, however, that the Department failed to
"show that it gave notice on Ally [on] any particular
date" because "the only delivery of notice
contained in the record was to a post office box that is not
connected to Ally and was to a person who is not shown to be
connected to Ally in any way." The trial court also
found that Ally met its statutory duty required to protect
its interest. Consequently, the trial court reversed the
Order of Delegation and Forfeiture and remanded the case for
entry of a forfeiture order subject to Ally's security
Department filed a motion to alter or amend or for remand to
the administrative agency for hearing on May 17, 2016.
Specifically, the Department alleged that new factual issues
required that the trial court reconsider its decision. In
support, the Department cited a pleading in which Ally
admitted to receiving a notice sent to a different post
office box than the two at issue in this case. A hearing on
the motion to alter or amend occurred on July 8, 2016. During
the hearing, the Department's counsel asserted that Ally
was the owner of several post office boxes in Cockeysville,
Maryland, including both P.O. Box 8116 and P.O. Box 8100.
Counsel for the Department also argued that the difference in
the address handwritten on the return receipt was
insufficient to defeat its notice, as any recipient could
write an improper address when certified mail was delivered,
thereby negating any notice that would otherwise have been
achieved on the recipient. The trial court subsequently
denied the Department's motion to alter or amend on
August 9, 2016.
Department raises a single issue, which we restate: Whether
the trial court erred in reversing the Department's Order
of Delegation and Forfeiture based on the Department's
failure to prove notice to Ally. Based upon our review, we
vacate the ...