USCA1 Opinion

March 5, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1698
UNITED STATES,
Appellee,
v.
RALPH MALING,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Andrew A. Caffrey, Senior U.S. District Judge]
__________________________
____________________
Before
Breyer, Chief Judge,
___________
Higginbotham,* Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
____________________
Joshua L. Dratel with

whom Gerald B. Lefcourt, P.C., was on br

________________
________________________
for appellant.
Frederick E. Dashiell, Assistant United States Attorney, w
_______________________
whom A. John Pappalardo, United States Attorney, and Paul V. Kel
__________________
___________
Assistant United States Attorney, were on brief for appellee.
____________________
March 5, 1993
____________________
_____________________
*Of the Third Circuit, sitting by designation.

BREYER, Chief Judge.

___________
judgment
crimes.

imposing a

fine

Ralph Maling appeals from a

as partial

punishment for

He argues, in essence, that the court wanted to set

the fine at a level that would credit him with

property to be forfeited.
do so.

drug

And, the

this failure.

He adds that the court failed

Government, he says,

We find the

the value of

is responsible

to
for

district court's determinations

lawful, and we affirm its judgment.

I

Background
__________
The reader

should keep in mind

the following two

sets of background events:

Forfeitures.
___________
Government entered
(and

In

into a

May

1990,

Maling

Plea Agreement, in

and

the

which Maling

several co-defendants) agreed to forfeit property that

would

have a

total value

1990,

Maling

signed

of $2.8
separate

promised

to

forfeit

assets

Appendix

A)

including some

million.
agreement

(listed

in

condominiums

in

the

which

he

agreement's

owned by

& R

a firm

each

On September 20, 1990, the district court

entered

an

initial "Amended

Order

and James

Properties, Inc.,
owned half.

of which he

In September

Taglienti

of Forfeiture,"

which

other properties) as

items

listed the

condominiums (among

subject to
__________

forfeiture (the forfeiture itself

to take place

only

after the

competing

court had

an

opportunity to

claims to the property).

consider any

See 21 U.S.C.
___

853(a),

(p) (providing for assets to be made subject to forfeiture);

853(n)(7) (providing
to

a mechanism for forfeiture

occur); United States v. Schwimmer,

_____________
_________

n.4 (2d Cir.

1992) (interpreting the

actually

968 F.2d 1570, 1576

RICO equivalent of

853(n)(7) as implying that the Government does not take good

title to forfeited property until after competing claims are
determined); Amended Order of Forfeiture,
13,

1990, Taglienti

U.S.C.

filed a

8.

On November

petition objecting,

under 21

853(n), to the forfeiture of the J & R condominiums

on the ground that he (through J & R) owned

a half interest

in

to

them.

The

Government

condominiums

as satisfying

obligation.

And,

on

then
(in

May 26,

refused

part) Maling's
1992,

the

accept

the

forfeiture

district

court

entered a "Final Order of Forfeiture," which forfeited other

property, but which specifically

said that the condominiums

were not forfeited.

___
The Fine.
________
imposed a

In September 1990,

fine of $250,000 as

the district court

partial punishment following

Maling's guilty plea to drug charges.

Maling appealed.

United States
______________

808 (1st

v. Maling,
______

942

-33

F.2d

Cir.

See
___
1991)

("Maling I").
________
that the

He argued that the Plea Agreement had assumed

defendants

forfeitures) than
fine plus

would

pay

$2.8 million

no

more

total.

(in

fines

He added

forfeitures would exceed that amount.

plus

that the
We agreed

that the Plea Agreement did assume a $2.8 million "ceiling,"

but we held that
the district

the Plea Agreement bound the

court.

parties, not

Nonetheless, we concluded

that there

had

been "confusion during the sentencing proceedings about

the

meaning of the Plea

confusion,

we

would "vacate

imposes fines . .
to fines."

Agreement."
the

And,

because of that

sentence

insofar as

. and remand for resentencing

Id. at 811.
___

We said specifically:

Although the Agreement does not bind the

________________________________________
district
court,
we
believe
the
_________________
appellants should now be sentenced with
the district court fully aware of the
Agreement's efforts to impose a $2.8
million cap upon the appellants' total

it

in respect

financial liability.
Id. (emphasis added).
___
On
submissions

remand, the
from

the

hearings.

The

such that

the "total

$2.8 million.

district
parties

court said

and

court received
held

that it wished

three

further

to impose

financial liability" would

The court then

written

fines

amount to

entered judgment imposing

-44

fine

of

judgment.

$634,000

against Maling.

He

now appeals

that

-55

II
The Size of the Gap
___________________
The
objective
to

district

made clear

that

its

-- the gap

forfeited and

the

says the

between the value

$2.8 million

of the assets

Plea Agreement

district court

was mistaken

"ceiling."
in believing

there was such a gap.

In particular, he says, the

filled,

fine,

without

condominiums

the

owned

by J

$300,000,

and 2)

valued at

$335,000.

condominiums;

sixty

& R

The

1)

his

Properties, Inc.,
of property

district court

take its value

expressly left

days so that it

of

valued at

in Westwood,
accept the

Maling forfeited the Westwood

of the $634,000 judgment

be modified to

gap was

forfeiture

Government refuses to

it agrees that

judgment must

by

his forfeiture

property after entry

(The

basic

in assessing a fine in the amount of $634,000 was

fill a gap

Maling

court

and that the

into account.

the judgment

could be modified.)

open for

The Government

disagrees, however, about the value of that property.

The upshot is that the
must pay a fine
not

pay any

Government believes Maling

of $344,000, while Maling believes

fine

at all.

The difference

he need

reflects

the

disagreements about whether the Government must accept the J

& R condominiums (worth $300,000) and about the value of the
-66

Westwood property (the difference in valuations amounting to

$45,000).
Before turning to the

disagreements, we point out

that the district court has broad legal powers to

the amount of

the fine.

Maling I, 942
________

F.2d at

See Fed.
___

determine

R. Crim. P. 11(e)(1)(B);

810 (court not

bound by

sentencing

recommendations derived from Plea Agreement) (citing cases);

21 U.S.C.
for one

848(a)
of the

U.S.S.G.

(authorizing a fine of up

offenses of

5E1.2(c)(4)

which

Maling was

(Sentencing

constrain fines where statute

to $2 million
convicted);

Guidelines

do

not

authorizes fines in excess of

$250,000); United States v. Savoie, No. 92-1920, slip op. at

_____________
______
14-15
imposed

(1st Cir.
by

discretion

the

Feb. 8, 1993)
district

rubric"

compelled to limit

only).

(appellate review

court
The

is

under

court

its fine to the size

it quite reasonably chose

to do so).

was

"an
not

of fines
abuse-oflegally

of the gap (though

Similarly,

the court

was

not legally required to measure the gap precisely or to

engage

in

technical

professional

matters

of

appraisal

or

property law determinations in doing so.

would permit the court to assess

make
The law

its fine on the basis of a

rough estimate of the gap size, or on an assumption that the

Government would

probably, but not definitely, win disputed

________
__________
-77

matters in respect to what was, or what was not, forfeitable

under

the Plea Agreement.

For this reason,

we review the

district court's judgments about "gap size" with a degree of

deference.
a. The J & R Condominiums.
_________________________
that

there is

forfeited

a $300,000

the J & R

the Government

gap, for,

condominiums.

should have
______ ____

accepted

Maling

must concede

in fact,
Rather,

he

has not

he argues that

the condominiums

for

forfeiture, and the district

fine

court should have assessed the

as if the government had done

_____

Government

had to

accept the

"property

and

agreement"
among

assets" to

assets.

from the

the parties will enter into

that "specifically describe[s]"

be

(as we have said)

those

His claim that the

condominiums stems

Plea Agreement, which says that

a "separate agreement"

so.

forfeited.
lists the J

Consequently,

That

"separate

& R condominiums

says

Government, having signed this "separate

the

Maling,

the

agreement," cannot

later reject the assets that it listed.

The Plea Agreement, however, contains an important
qualification.
the "forfeiture"
are

It says

that "physical assets" will satisfy

obligation only if

"without any encumbrances."

assets

This qualification affects

the "separate agreement" subsequently

-88

those physical

made pursuant to

the

Plea Agreement.

Thus,

1990 agreement,
interest

Properties, Inc." (our

(not

conditioned on
forfeited.

Government's September

accepting the forfeiture of

of J & R

condominiums

we read the

merely

the

As we

the

emphasis) in the

"interest"

condominiums' being

"[a]ny and all

_____________

of

unencumbered

have said, after the parties

"separate agreement" and

Maling)

as
when

signed that

after Maling (as J & R's President

and Treasurer) purported to convey the J & R condominiums to

the Government (but before
Maling's J &

R co-owner

with the court, under

forfeiture
interest
court

on

the

in the

to omit

the forfeiture order was final),

James Taglienti

21 U.S.C.
ground

had

The

the condominiums

petition

853(n), objecting

that he

condominiums.

filed a

fifty

to the
percent

Government asked

from its

the

final forfeiture

order because it considered the petition an "encumbrance."

Maling
later-filed
amounts

argues that

state tax

to

an

lien,

neither the
which we

"encumbrance."

Taglienti's petition is without legal

too,

was

involved

in

(or

knew

petition

need not

First,

he

(nor a

consider)
says

that

merit, for Taglienti,

about)

relevant

drug

activities, which involvement would prevent him from

saving

his interests

See 21
___

U.S.C.

in the condominiums from forfeiture.

853(c), (n)(6).

He adds that, even if Taglienti's

-99

petition is otherwise
documents from J

valid, the Government

received title

& R's President and Treasurer

(Maling) in

"good faith," which fact, under Massachusetts law, means the

Government

takes

interests.

title

free

of

Taglienti's

Mass. Gen. L. ch. 155,

asserted

8; ch. 156B,

115; cf.
___

United States v. New Silver Palace Restaurant, Inc., 1992 WL

_____________
__________________________________
404160

(E.D.N.Y.

rights

in respect to

basis for

Nov.

25,

1992)

(finding

corporate assets to

a petition against

shareholders'

be an inadequate

forfeiture under 21

U.S.C.

881).
We

need not

correct about the merits

need the district
"without any
likely

whether or

court have done

namely

not Maling

is

of Taglienti's claim, however, nor

encumbrances" as

read it,

obligation

consider

so.

one who buys

as imposing

to clear up any

the phrase

property would

upon the

conveyer an

asserted legal claims upon that

property prior to transfer, so

the property alone, instead

We read

that the buyer will

receive

of receiving "the property plus

the obligation
the

to fight

lawsuit ultimately

a lawsuit" (regardless
turns out

American Law of Property

________________________
("A pending

to

be unfounded).

See
___

18.84 (A. James Casner ed., 1952)

action assailing a vendor's

an interest therein or

of whether

title or asserting

a lien thereon of which

a purchaser

-1010

has notice is at least a cloud

on the title.

Since a court

will not compel a purchaser to 'buy a lawsuit,' the pendency

of

one

of the

character

(citations omitted).

Such

indicated

is an

encumbrance.")

a reading would

avoid imposing

upon the Government title-clearing obligations

that it does

not wish

harming

potential

to

undertake, without

transferor

property interest
nothing that

(who

(ordinarily)

simply

he previously

would

owned).

retain
Maling

the

whatever
points to

might suggest that this natural reading of the

agreement is incorrect.
Such a
the

merits

of

reading ends the argument.

Taglienti's

proceeding (perhaps a rather

effort to

demonstrate that

claim would

the Government (which

that Taglienti

"good

faith" transferee entitled to

See Mass. Gen.

___

was Maling's

J &

"good faith" for transferee

legal

8; ch.

had long

R co-owner)

was a

clear title in all the

of the merits of

L. ch. 155,

require

complicated one), as would any

known

property, irrespective
____________

To adjudicate

Taglienti's claim.

156B,

115 (requiring

of real estate from corporation

to take free of rights of owners of corporation).

Hence, we

see nothing unlawful about the district court construing the

Plea

Agreement's word

"encumbrance"

as

encompassing

the

Taglienti petition.
-1111

Maling

also

claims

that

the

Government

is

"estopped"

from

refusing

to

accept

the

condominiums.

Estoppel, however, requires a statement or promise or action

that leads to reasonable reliance to one's detriment.
e.g., Restatement (Second) of Contracts
____ __________________________________
promise

which

the

promisor

should

See,
___

90(1) (1981) ("A

reasonably expect

to

induce action or forbearance on the part of the promisee . .

.

and which does induce such action or forbearance is

______________________________________________________

binding if injustice can

be avoided only by enforcement

the promise.") (emphasis added).

of

We cannot find a statement

or action by the Government, in respect to the condominiums,

that led Maling reasonably
Government's keeping the
order

"encumbrance"

entitled it

to rely to his detriment

condominiums despite a

which,

to reject them.

under
The

the

plea

on the

pre-finalagreement,

Government, we

concede,

knew (as, of course, did Maling) that Taglienti was a

____
co-owner

long

before

the

condominiums

"separate agreement" forfeiture list.

no statement

or action

"cloud"

removing

it

Government,

upon
once

for

the

the Government,

responsible for preventing any such

___________

the

property

it arose.
a

on

But, Maling points to

that suggests that

rather than Maling, was

legal

appeared

J & R

time,

We

from

arising,

or

for

also

concede that

the

accepted
-1212

condominium

rents

(presumably
transfer

because

it anticipated

the property

to the

effect, 21 U.S.C.

853(c)).

is

for its

any the

course,

worse

forfeiture would

Government

with retroactive

But, we do not see how Maling

having

that the Government pays

received).

That

is

to

say,

Government's

returning
_________

the

significantly

worse

than

included the
________

off

property on

the first place.

found

that

done so
over to him

we

do

not

property
had

the

of

the rents it
see

how

the

makes

Maling

Government

never

the "separate agreement"

The district court could

no "reliance to

(assuming,

list in

reasonably have

his detriment" on

Maling's part and

strongest argument is

that he wanted to
______

therefore no "estoppel."
Maling's

clear Taglienti's "encumbrance;" indeed, he asked the

to permit him
"good

faith"

to prove that Taglienti

or

innocent

owner

who

court

was not the kind

could

object

of
to

forfeiture of

his own

property.

See
___

Government

told

condominiums,
"moot."
turn

(i.e., Taglienti's) interest

21 U.S.C.
the

853(n)(6).

court

that

the court simply

Maling,

down the

it

did

property

But, once

the

not

the

want

denied Maling's

in essence, asks, "How

as encumbered

in the

request as

can the Government

without letting

me

remove the encumbrance?"

-1313

The short, conclusive answer to this question lies

in
turn

the Plea Agreement itself.

down

encumbered

Government

must

encumbrance.

give

And, we

Agreement, at least, in
an

encumbrance.

Taglienti

It says

property.
Maling

It
a

the Government can

does

chance

will not read

not
to

does not own the

does

not

property.

the

remove

an

such a right into

respect to this kind of

____

Maling

say

offer

to

Rather,

the

removal of
show

that

he wants to

___
intervene

in the

special

Government" proceedings
defeat
21

statutory

to show

"third

that the

party

versus

Government could
_____

Taglienti's interest, if it decided to try to do so.

U.S.C.

special

853(c), (n)(6).

proceedings,

But, the statute creates those

placing

parties to prove that

special

burden on

they have "clean hands," in

third

order to

benefit the Government.

______________

See S. Rep. No. 225, 98th Cong., 2d

___

Sess. 82, 191-92, 208,

reprinted in 1984 U.S.C.C.A.N. 3182,

____________

3265,

(expressing

3374-75,

obstacles
seeking

3391

in the

way of

forfeiture,

of

purposes

federal law
ensuring

of

removing

enforcement agencies
expedition,

and

of

protecting third parties); United States v. Regan, 858 F.2d

______________
_____
115, 121 (2d

Cir. 1988) ("orders directed

are strong medicine

that are adequate

and should not

be used where

and less burdensome on

-1414

at third parties
measures

the third parties

are available.").

They are not

who

to

would

like

see

designed to help defendants

some

other
_____

person's

forfeited, thereby perhaps obtaining credit.

the court

acted lawfully

property

Thus, we think

in denying Maling's

petition for

such a proceeding.
Is this result unfair to Maling?
circumstances
example,

that could

that

the

Taglienti would

path.

On the

circumstances
example,
not

Government,

to the

that

knowing

Suppose, for
full

(or

other hand,

indicate the

that

well

that

(i.e., file a

forfeiture) led Maling

that the Government

object

can imagine

seem so.

likely create an encumbrance

petition objecting
garden

make it

One

down the

one can

easily imagine

contrary.

Suppose, for

assumed that

Maling could

Taglienti would

persuade

him

not

to

object); or, suppose that the Government did not think about
the

matter and Maling simply

saw a fleeting opportunity to

satisfy a portion of his debt with

Regardless, this kind of
Maling would arise out
we

know

little.

Government and

upon Maling.

ultimate fairness or unfairness to

of facts and circumstances

And,

it is

Maling signed

which placed the

someone else's property.

beside

the

of which

point.

The

an Agreement the

language of

and any other,

encumbrance

risk of this,

In all likelihood the

-15-

Government wanted this

15

language so that it would not have to become involved in the

kind of

property law disagreements that

The district court

its

fine

upon

Maling now raises.

so interpreted the Agreement.

that

interpretation.

district court's view is

In

our

It based
view, the

reasonable; and the resulting fine

is therefore lawful.
b. The Westwood Property.
______________________

Maling argues about the

value of his forfeited Westwood property, property which was

not included in the September 1990 "separate agreement" list
and which he offered to forfeit for the first
September 1991.
earlier (before
$335,000.

An

appraisal made about

time in about

seventeen months

the plea agreement) valued

the property at

By late 1991, when Maling offered the property to

the Government,

its value

had declined

Government told

the court

that, for purposes

the

"gap-filling" fine,

it would

to $245,000.

assume the

The

of assessing
property was

worth

$290,000, thereby "splitting

the difference" between

the two evaluations.

Maling argues that he
higher

valuation.

But,

we can

Government that it would do so.

a

promise, we

are aware of

should be credited with the

find

no promise

the

And, in the absence of such

no law that

Government from advising the

by

would prevent the

court that the property should

-1616

be assessed at $290,000 for "gap-filling"

absence of

some specific

purposes.

In the

agreement about valuation

dates,

"splitting the difference" does not seem unreasonable to us;

and we do

not know why

the district

reached a similar conclusion.

court could not

have

-1717

III

Recommending a Fine
___________________
The Plea
to impose a fine,
recommending
____________
Maling says

Agreement, while leaving the

court free

nonetheless prohibits the Government from

a fine.
that

See
___

Maling I,
________

the Government

942 F.2d

at 810-11.

violated this

obligation

when counsel told the district court, for example:

If the Court is entertaining the thought
of a fine, my suggestion in [sic] how
that should be fashioned . . . is that
the Court should issue an order of a
criminal fine in the amount of $634,000.
Taken

out of context, this statement, and a few others like

it, might suggest a not-very-subtle attempt to avoid the "no

recommendation"
960 F.2d

obligation.

263, 269

Cf.
___

(1st Cir. 1992)

United States
_____________

v. Canada,
______

(we will not

allow the

Government to pay "lip service" to a plea agreement and then

do

"end-runs" around it).

But, in context, the statements

are perfectly proper.

The context
already

reveals that

decided to impose a

fine recommendation.
wanted, or could

the district

fine despite the

court had

absence of a

The context makes clear that the court

benefit from, discussion, recommendations,

and argument from all counsel, about the amount of fine that
___
would

keep the

total

monetary liability
-1818

within the

$2.8

million "ceiling."
that

Government counsel, stating specifically

the "U.S. Government is not recommending to this Court

that they [sic]

impose a fine," went

court's request to

help it determine

on to respond

to the

the proper amount

of

the fine that the court independently had decided to impose.

We see no violation of the Plea Agreement.
The judgment of the district court is
Affirmed.
_________

-1919