United States v. Real Property Located at 41741 National Trails Way, Daggett, California, and Citicorp Mortgage, Inc., Claimant-Appellant

Citicorp Mortgage, Inc. (“Citicorp”) appeals the denial of its request for attorney’s fees and costs expended in protecting its lien in a forfeiture action brought by the United States pursuant to 21 U.S.C. § 881 (a)(7) (1988). In its lienholder claim, Citicorp requested interest, attorney’s fees and costs incurred in defending the forfeiture. The government offered to pay principal and interest to the date of sale but refused to pay attorney’s fees and costs. The district court granted the government’s motion for judgment on the pleadings, holding that Citicorp was not entitled to recover attorney’s fees. We conclude that an innocent lienholder has a right to recover attorney’s fees and costs provided that its right to recover is secured by the mortgage or deed of trust. We vacate and remand for further proceedings.

DISCUSSION

Section 881(a)(7) provides that real property used to facilitate a felony drug transaction shall be forfeited to the United States. The statute contains an innocent owner exception, which provides that “no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act or omission established by that owner…