Opinion
No. 89-S-86481.
Decided April 24, 1990.
Robert L. Becker, prosecuting attorney, and Kenneth W. Oswalt, assistant prosecuting attorney, for plaintiff Licking County.
Harvey Shapiro, Assistant City Solicitor, for plaintiff city of Heath.
Michael Radabaugh, City Law Director, for plaintiff city of Newark.
Larry Arnold, for defendant.
This matter comes before the court on the plaintiffs' motion for summary judgment. The defendant has filed a response to that motion and a request for findings of fact and conclusions of law. This entry shall constitute the ruling on the motion for summary judgment and the court's response to the request for findings of fact and conclusions of law.
Facts
This case arose as a result of a civil action filed by plaintiffs, Licking County, the city of Heath, and, the city of Newark, on behalf of their respective law enforcement agencies, the Licking County Sheriff's Office, the Heath Police Department, and the Newark Police Department. The defendant, Wayne L. Maharg, is a convicted drug trafficker currently in prison on criminal charges related to the facts underlying the instant action.
The plaintiffs, in the portions of the complaint pertinent hereto, allege that as a part of the joint investigation into illicit drug trafficking they employed an informant to make purchases of drugs from the defendant on three separate occasions. These expenditures totaled $5,600. The plaintiffs now seek to recover the $5,600 given to the defendant in these purchases.
During the period from May 1988 to November 1988, the Newark Police Department, the Heath Police Department and the Licking County Sheriff's Office were involved in a joint investigation into drug trafficking. As a part of that investigation they jointly employed an informant to make drug purchases from the defendant.
As a result of the activities of the informant these agencies successfully purchased a quantity of marijuana from the defendant on June 13, 1988 for $2,000. Another purchase of marijuana was made using the same informant on June 15, 1988 for an additional $2,000. A third and final purchase of illegal drugs was made from the defendant by this same informant on June 16 and 17, 1988. This final purchase was of cocaine for $1,600.
The money used to make the purchases of drugs from the defendant came from funds maintained by the respective law enforcement agencies, commonly known as "Furtherance of Justice" funds ("FOJ"). The defendant thereafter was indicted and convicted in the Court of Common Pleas of Licking County of aggravated trafficking in drugs as a result of his sale of the cocaine. The defendant has never been charged with any crimes as a result of the marijuana purchases as a result of an agreement by federal authorities not to prosecute the defendant should he plead guilty to the state charge concerning the cocaine.
As originally filed, the civil complaint set forth three causes of action. Only the first and second causes of action are relevant to the $5,600 at issue herein. In the first cause of action the plaintiffs couched their claims in terms of the forfeiture statute, R.C. 2933.41 et seq. Upon a prior motion to dismiss, this court dismissed that cause of action based upon the fact that the money which was conveyed to the defendant in the drug purchases could not be specifically identified nor was it in the custody of the law enforcement agencies; thus, the forfeiture statute as written was not applicable.
The second cause of action, which is the subject of the instant summary judgment motion, seeks recovery from the defendant of the $5,600 based upon an allegation that an illegal contract was entered into; and since the parties were not equally at fault in the eyes of the law, the plaintiffs should be entitled to recover the money obtained by the defendant as a result of his illegal activities.
Legal Conclusions and Reasoning
The standard a court must be concerned with in ruling upon a motion for summary judgment is clearly stated in Civ.R. 56(C):
"* * * Summary judgment shall be rendered forthwith if the * * * [evidence] show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. * * * A summary judgment shall not be rendered unless it appears from * * * [the] evidence or stipulation * * * that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made * * *." (Emphasis added.)
Based upon the affidavits filed by the plaintiffs in support of the summary judgment motion, and the fact that no evidence has been offered by the defendant to controvert the facts set out therein, this court finds that there is no issue of fact, let alone a "genuine" issue of "material" fact. Indeed, as a factual matter this case is undisputed. Instead, this case comes down to a legal issue: Can law enforcement agencies who expend money to purchase illegal contraband from an individual in furtherance of lawful investigations recover that money from the person through a civil action?
Based upon the facts set forth above, as supported by the affidavits, this court has no trouble concluding that the informant was working in an agency capacity for the plaintiffs, making the plaintiffs principals to any contract formed with the defendant. Likewise, the court has no trouble concluding that contracts were formed between the plaintiffs and the defendant and that the contracts, being for the purchase of contraband, involved an illegal subject matter. See R.C. Chapter 2925.
As conceded by the plaintiffs, generally, when an agreement is founded upon an illegal consideration, a court will leave the parties where it finds them and will not enforce the contract or permit rescission. 17 Ohio Jurisprudence 3d (1980) 575, Contracts, Section 125 et seq. There are, however, exceptions to this rule. Id. at Section 126.
The parties have not cited any authority for either allowing or disallowing recovery of money in a similar factual setting. While the general rule is as set out above, courts have allowed recovery, even on an illegal contract, when the parties are not equally at fault. Id. When parties to a contract are not in pari delicto courts will allow rescission or other recovery to the party with less fault.
In Suburban Home Mortgage Co. v. Hopwood (App. 1947), 47 Ohio Law Abs. 596, 597-598, 73 N.E.2d 519, 520, the court, quoting from 12 American Jurisprudence (1938) 734, Contracts, Section 217, noted:
"`In many cases of illegal agreements or transactions the parties are not deemed to be in equal fault, since there are degrees of crime and wrong. A distinction has been made between those illegal agreements, both parties to which are equally culpable, and those in which, although both have participated in the illegal act, the guilt rests chiefly upon one. * * * Unless * * * the parties are in pari delicto as well as participes criminis, the courts, although the agreement is illegal, will afford relief, where equity requires it, to the more innocent party even after the agreement has been executd [ sic]. * * *'" See, also, generally, Federica v. Murray (C.P. 1950), 66 Ohio Law Abs. 164, 45 O.O. 473, 101 N.E.2d 813; First Fed. S. L. Assn. v. Ansell (1941), 68 Ohio App. 369, 23 O.O. 63, 41 N.E.2d 420; and, Glyco v. Schultz (1972), 35 Ohio Misc. 25, 62 O.O.2d 459, 289 N.E.2d 919.
Recovery on an illegal contract has been granted where the parties are not in equal fault and where the purposes of the law will be better served by granting the relief requested. See William J. Davis, Inc. v. Slade (D.C.App. 1970), 271 A.2d 412, 415. See, also, Hiltpold v. T-Shirts Plus, Inc. (App. 1980), 98 Wis.2d 711, 716-717, 298 N.W.2d 217, 220; Loewenstein v. Midwestern Investment Co. (1967), 181 Neb. 547, 551, 149 N.W.2d 512, 514; Contractor Industries v. Zerr (1976), 241 Pa. Super. 92, 96, 359 A.2d 803, 804-805, at fn. 4; Capo v. Century Life Ins. Co. (1980), 94 N.M. 373, 376-377, 610 P.2d 1202, 1205-1206.
Based upon the undisputed facts in this case, the defendant's conduct violated the provisions of the drug laws set forth in R.C. Chapter 2925. Indeed, he has been convicted of a violation of that chapter. On the other hand, since a law enforcement officer can lawfully present a defendant with the opportunity to commit a crime, the actions of the respective law enforcement agencies and their informant appears to be entirely lawful and nothing has been suggested to the contrary. See, generally, State v. Dotson (1987), 35 Ohio App.3d 135, 138-139, 520 N.E.2d 240, 244-245.
Will the law now allow the defendant to benefit by that illegal conduct and allow him to retain $5,600 in ill-gotten gains? For the answer to that question one need only consult the age-old adage "crime does not pay." To not allow the recovery sought, this court would be suggesting that crime may pay after all. Allowing the plaintiffs to recover the funds they expended would not only show the defendant that he can not benefit from his criminal actions, but also make available to the plaintiffs additional funds to use in new investigations into drug trafficking.
The defendant suggests that the plaintiffs cannot recover because they would be, in essence, undoing only half of the contract since the plaintiffs certainly will not be required to return the contraband to the defendant. While this may be true, such is the price the defendant must pay for his illegal conduct. This is a direct result of the fact the parties to this contract are not equally at fault. Moreover, should the court determine that the parties were equally at fault, or otherwise did not come into court with "clean hands," there is authority for the position that should public policy warrant it, recovery could still be had. See Dahms v. Swinburne (1929), 31 Ohio App. 512, 167 N.E. 486.
The defendant further argues that the plaintiffs cannot recover because they failed to "mitigate" their damages by arresting the defendant after the first sale, recovering their money and thereby eliminating the need for money to be spent for a second and third sale. This court is aware of the practice of law enforcement officers in the area of drug investigations to allow money to "walk" in order to prevent the exposure of an informant which would result from an immediate arrest of the target of the investigation with the intention of filing charges at a later date. This may very well be a necessary practice to encourage people to work as informants. In any event, since the defendant was a willing party to the additional sales, no increase in "damages" resulted from the second and third sales except by the defendant's own choosing.
Likewise, the court finds that the forfeiture statutes were not intended to be the sole remedy for seizing ill-gotten gains. This is especially true when the ill-gotten gains belong to the public. The interest of the public in the effective enforcement of the laws and the recovery of monies spent by law enforcement agencies to that end clearly warrant the recovery sought. As noted by the court in Young v. Bazetta Twp. Trustees (Jan. 29, 1988), Trumbull App. No. 3682, unreported, at page 4, 1988 WL 10123, "It is against public policy to permit a criminal to retain the illegally obtained fruits of his crime." This court agrees.
Based upon the facts and reasons stated above, the court hereby grants the plaintiffs' motion for summary judgment and hereby orders judgment in favor of the plaintiffs in the amount of $5,600 plus interest from the date of this entry. Costs shall be taxed to the defendant.
Reporter's Note: No appeal was filed in this cause, and the defendant paid the judgment.