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Even after a proper petition and motion for a preliminary injunction, Cal. Penal Code § 186.11 does not typically allow the People to seize the defendant's assets. Rather, it allows the trial court to enjoin the defendant against transferring or disposing of his or her assets. Cal. Penal Code § 186.11(f)(1). Admittedly, it also allows any other protective relief necessary to preserve the property or assets. Cal. Penal Code § 186.11(e)(2). Nevertheless, plainly it does not authorize a pretrial seizure at least until the trial court finds that an injunction would be inadequate to protect the victims. It is the "Freeze and Seize Law" because it provides for freezing the defendant's assets before trial, and seizing them only after he or she has been found guilty.
The People seized certain assets of defendant Douglas Green pursuant to a search warrant. Later, however, the People asserted a right to retain the assets pursuant to section 186.11. Meanwhile, Green gave his then-attorney, Lawrence Buckley, a security interest in the same assets for unpaid attorney fees. The most valuable assets, however, were vehicles and cash; as long as these assets were in the hands of the People, Buckley could not perfect his security interest in them. After Green was convicted, the trial court ruled that, under section 186.11, Buckley had priority over the victims only to the extent that he had perfected his security interest. Buckley appealed. He contended that section 186.11 did not apply because the People never filed a petition and never filed a motion for a preliminary injunction under that section.
Did Section 186.11 authorize a pretrial seizure?
The court held that the People's notice did not substantially comply with § 186.11 because it did not result in a preliminary injunction, which was a statutory precondition to a levy. Section 186.11 did not authorize a pretrial seizure at least until the trial court found that an injunction would be inadequate to protect the victims. The trial court thus had no statutory authority to sell the property or to distribute the proceeds as restitution. The secured party's secured interest was valid because the trial court specifically found insufficient evidence that the property had been purchased with stolen funds. Because the victims were unsecured creditors, the trial court should have awarded all of the proceeds to the secured party.