WHAT HAPPENS IN SPENARD…
JUDGE RALPH R. BEISTLINE, Senior U.S. District Judge: “Before the Court at Docket 219 is the Government’s motion for issuance of a seizure warrant for repossession of a neon palm tree removed from the Paradise Inn, which property previously was legally forfeited to the United States in accordance with this Court’s order at Docket 217. Bernadette Wilson, d/b/a Denali Disposal, Inc., has opposed the motion. A hearing was held on February 26, 2018.
“At issue is a 22′ tall and 7′ wide, metal-framed, double-sided, neon palm tree (hereinafter “Palm Tree”).”
The federal government has changed its mind: The old neon palm tree sign from the Paradise Inn, now demolished, has value.
Bernadette Wilson, owner of Denali Disposal, was ordered by Judge Ralph Beistline, to tell the government where the palm tree. Wilson rescued the palm tree sign during the clean up of the old disreputable property, which was seized by the federal government after the owner was caught selling meth.
Palm Tree might be a sign that would fit right in in Florida, but in Alaska it was a curiosity and when Wilson told the feds the sign had value and should not be thrown out, the government agreed with her and let her have the sign. The head of forfeiture for the U.S. Marshal told her he considered it a liability.
Now, the federal government says the sign belongs to the feds.
JUDGE BEISTLINE: “Earlier, after the conclusion of the criminal proceedings in this matter, Denali Disposal was contracted by the U.S. Marshals Service to clear away garbage and debris from the forfeited property in order to allow the United States to sell the property.”
JUDGE BEISTLINE: “The current dispute arises from Denali Disposal removing and retaining the Palm Tree, after being mistakenly instructed that it was debris by the Marshals’ coordinating representative.
“As an initial matter, the Court will address the status of the Palm Tree on the property, as the parties disagree whether or not it was a fixture. Having reviewed the three factors under Alaska law for determining whether an item is a fixture, the Court finds that the Palm Tree was indeed a fixture, if not an attachment, to the Paradise Inn property. Therefore, it is forfeited property of the United States under this Court’s Final Order of Forfeiture at Docket 217.”
Wilson says the government clearly told her she could take the sign and that it was not a mistake but that she has a long trail of text messages from government officials telling her to take the sign, text messages that go all the way to the very moment she and her crew were on site and ready to remove it. The feds have simply changed their minds, she said.
WHAT THE GOVERNMENT TAKETH AWAY
JUDGE BEISTLINE: “As the Palm Tree initially was the Government’s property by forfeiture, Denali Disposal’s ownership claim lies with the verbal instructions from the U.S. Marshals’ representative, Shawn Chapman, to dispose of the Palm Tree. Denali Disposal argues that, as the Asset Forfeiture Coordinator for the District of Alaska and the U.S. Marshals’ representative at the Paradise Inn property, Mr. Chapman had ostensible authority to act on the Government’s behalf.
“Mr. Chapman’s designation of the Palm Tree as debris needing disposal, according to Denali Disposal, terminated any ownership interest the Government had in the Palm Tree.
“In essence, Ms. Wilson suggests that the Palm Tree was abandoned garbage that Denali Disposal then reclaimed.”
Wilson is a lifelong Alaskan and the niece of the late Gov. Wally and Ermalee Lee Hickel. She doesn’t dispute that she thought the sign had value. In fact, she says she had repeated conversations with government agents about the historic value of the sign, but was told repeatedly the government had no interest in it.
JUDGE BEISTLINE: “The Court takes issue with Denali Disposal’s ownership claim in three ways. First, Denali Disposal did not actually dispose of the Palm Tree as instructed by Mr. Chapman. Instead, the sign was removed from the Paradise Inn property over two weeks after the U.S. Marshals Service indicates that Denali Disposal’s debris removal was completed, and it apparently was taken directly into Denali Disposal’s possession.
“Second, Denali Disposal was aware that the sign had actual value and was not merely debris. Not only did Denali Disposal have actual knowledge of the Government’s intent to sell the Palm Tree nearly a week before its removal, but, as discussed previously, Denali Disposal had the sign secured, transported, and placed in storage. This all indicates that the Palm Tree was at no time treated as “debris” by Denali Disposal.
“Finally, federal law requires that the forfeited property be auctioned or sold, and therefore it cannot be given away by anyone with either ostensible or even actual authority.
“Allowing a governmental representative to circumvent this requirement by designating an item of value as “debris” and effectively giving it away to a vendor, such as Denali Disposal, would be ripe for abuse and fraud. Forfeited property either is worthless garbage that is actually disposed of, or is valuable property to be sold or auctioned. There appears to be no alternative that allows for a third party to take ownership of government property by virtue of its fortuitous position as a vendor for the Government.
“The Court recognizes that this situation might be different if Denali Disposal actually had disposed of the Palm Tree before being notified of the error by the Government. Were that the case, this entire matter may well have been treated differently. But here, the Palm Tree was secured, transported, and kept in storage, and is available for return to the Government.”
In other words, Palm Tree isn’t trash, because Denali Disposal did not treat it like trash.
Wilson was right, the government was wrong, and now the government wants its neon artifact.
WILL SHE BACK DOWN?
Yet, reasonable people might ask what action the federal government would take against Denali Disposal if the company had, in fact, demolished the sign and hauled it away as debris. Might Wilson be thrown in jail for destruction of government property?
Wilson, who once had a popular Anchorage talk show that featured the Tom Petty and the Heartbreakers’ song “Won’t Back Down,” considers the whole thing to be Orwellian, where the feds are trying to seize something that it called trash, said she is pondering whether she should appeal the decision.
But meanwhile, Palm Tree is in an undisclosed location.