## F I L E D United States Court of Appeals Tenth Circuit 

### JUL 21 1997 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff - Appellee,

vs. BRADLEY GROVER, Defendant - Appellant. No. 96-1329

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO (D.C. No. 88-CR-61-D)
Richard J. Troberman, Seattle, Washington (Jeralyn E. Merritt, Denver, Colorado, with him on the brief), for Defendant - Appellant. Charlotte J. Mapes, Assistant United States Attorne y, Denver, Colorado (Henry L. Solano, United States Attorney, with her on the bri ef), for Plaintiff - Appellee.
Before EBEL, KELLY, and LUCERO, Circuit Judges.
KELLY, Circuit Judge.

Defendant Bradley Grover appeals from the denial of his Motion for Return- 2 -

of Property pursuant to Fed. R. Crim. P. 41(e). We exercise jurisdiction under 28 U.S.C. § 1291 and affirm.

Background After a federal grand jury indictment in March 1988 , charging him with a variety of drug-related crimes, Mr. Grover pled gui lty to engaging in a continuing criminal enterprise, 21 U.S.C. § 848, and signing atax return that was false as to a material matter, 26 U.S.C. § 7206(1). On the sam e day he entered into the plea agreement, Mr. Grover and the government executed aseparate document entitled “Forfeiture Agreement.” Mr. Grover agreed to sell his residence in Aspen, Colorado, and turn over a portion of the proceeds t o the government. In return, the government agreed not to seek forfeiture of oth er property, including a residence in Honolulu, Hawaii, and a business knownas Lounge Lizards, Inc. Also that same day, Mr. Grover and the government e xecuted an “Addendum to the Forfeiture Agreement,” in which Mr. Grover agre ed to surrender the proceeds of his property sale to the government “for the purpose of bringing a civil narcotics forfeiture action against those proceeds” under 21 U.S.C. § 881, and not to contest the forfeiture. Mr. Grover was sentenced to thirty years in prison on the continuing criminal enterprise charge, with a concurrent five year sentence for the tax- 3 -

violation. He was allowed to market and sell the A spen property, and to keep nearly half of the proceeds to pay his attorneys an d provide for his wife. Just over a year after he was sentenced, Mr. Grover’s co unsel sent the government a certified check in the amount of $286,028.31 from the sale of the property. That same day, Mr. Grover’s counsel and a government rep resentative executed a document entitled “Satisfaction of Forfeiture Agree ment.” The government never initiated a civil forfeiture a gainst those proceeds, however, and on January 16, 1996, Mr. Grover filed a Rule 41(e) Motion for Return of Property, arguing that because the five-y ear statute of limitations on the civil forfeiture had run, the government was no lon ger entitled to keep the money. The district court denied the motion, holding that Rule 41(e) did not contemplate or encompass the return of property under these fac ts, and that even if it did, the equities in the case favored the government. Mr. G rover now appeals.

Discussion Rule 41(e) provides: “A person aggrieved by an unlawful search and seizure or by the deprivation of property may move the district court for the district in which the property was seized for the r eturn of the property on the ground that such person is entitled to lawful posse ssion of the property.” A Rule 41(e) motion is governed by equitable principles, F loyd v. United States , 860 F.2d- 4 -

999, 1002-03 (10th Cir. 1988), and we review the di strict court’s exercise of its equitable jurisdiction and its denial of the motionfor an abuse of discretion. United States v. Deninno , 103 F.3d 82, 84 (10th Cir. 1996); Frazee v. I.R.S

. , 947 F.2d 448, 449 (10th Cir. 1991). Mr. Grover argues that he only surrendered possessi on of the property, and not ownership, and that it was the government’s obl igation to complete the transfer of ownership by instituting a civil forfei ture. Because the limitations period has run, Mr. Grover contends that the government may no longer institute a civil forfeiture, and therefore, legal ownership of the property was never transferred to the government. We agree with Mr. G rover that “nothing vests in the government until some legal step shall be taken ,” United States v. A Parcel of Land , 507 U.S. 111, 125 (1993) (quoting United States v . Grundy , 7 U.S. (3 Cranch) 337, 350-51 (1806)), and that until the gov ernment obtains a judgment of forfeiture, someone else owns the property and may assert defenses unless waived. A Parcel of Land , 507 U.S. at 127. We also agree with Mr. Grover that in this case no forfeiture has yet taken place. Th is does not, however, translate into success for Mr. Grover on the merits of his Ru le 41(e) motion. Rule 41(e) requires that Mr. Grover show he is “ent itled to lawful possession of the property.” Whatever the weakness of the government’s legal entitlement to the property, that alone does not es tablish Mr. Grover’s entitlement- 5 -

to possession. By the terms of the Forfeiture Agre ement, under which he has already received the full benefit of his bargain, M r. Grover relinquished any possessory claim he had to the property. That the agreement still required the government to act in order to secure legal title do es not change this fact. In addition, the equities in this case weigh in fav or of the government’s continued possession of the property. In the Forfe iture Agreement, Mr. Grover agreed not to contest the forfeiture. Thus, he agr eed not to contest the government’s efforts to complete the transfer of le gal title to the property, and, necessarily, not to contest the government’s posses sion of the property. In return, he bargained for and received the government’s prom ise not to seek forfeiture of other pieces of property which were potentially for feitable, as well as the right to market the house and conduct the sale himself, and to keep a portion of the proceeds. Now, in violation of the terms of his ag reement, Mr. Grover is contesting the government’s right to continued poss ession of the property. Mr. Grover asserts the statute of limitations as a grounds for returning the property. The statute of limitations, however, is an affirmative defense—which by definition means the asserter of the defense is contesting the action against him. His Rule 41(e) motion seeks equitable relief, but “he who seeks equity must come into the court with clean hands.” Hocker v. N ew Hampshire Ins. Co. , 922 F.2d 1476, 1486 (10th Cir. 1991) (quotation omitted ). Mr. Grover is asking the- 6 -

court to ignore his own breach of the agreement, wh ile at the same time asking the court to treat the government’s admitted mistak e as if it nullifies any obligations he had under the agreement. To do so w ould unjustly enrich Mr. Grover at the government’s expense—he would receive all the benefits of his bargain as well as the money he agreed to transfer to the government in return for those benefits. Equity cannot be so used. AFFIRMED.