* After examining the briefs and appellate record, th is panel has determined

unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). T he case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines o f law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. 

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

### FEB 9 2001 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

STEVEN J. KADONSKY,

Plaintiff-Appellant,

v. UNITED STATES OF AMERICA,

Defendant-Appellee. No. 00-4062 (D.C. No. 98-CV-852) (D. Utah)

ORDER AND JUDGMENT *

Before EBEL , KELLY , and LUCERO , Circuit Judges.

Plaintiff-appellant Steven J. Kadonsky, proceeding pro se, appeals from the district court’s order denying his request for the return of forfeited currency in the amount of $300,000. That money was the proceed s from a sale of real1 Property subject to forfeiture includes “[a]ll mone ys, negotiable

instruments, securities, or other things of value f urnished or intended to be furnished by any person in exchange for a controlle d substance” and also “all proceeds traceable to such an exchange.” 21 U .S.C. § 881(a)(6). -2- property in Park City, Utah. We exercise jurisdict ion under 28 U.S.C. § 1291 and remand for further proceedings consistent with this order and judgment.

I. Kadonsky performed money-laundering services, among other things, for a drug-trafficking organization run by Howard Weinthal. Pursuant to a plea agreement which required him to provide the governm ent with information on Weinthal’s organization, Kadonsky pled guilty to drug-related crimes. Beginning in October 1993, government agents interviewed Kado nsky concerning ownership interests in property purchased with drug-trafficki ng proceeds. Kadonsky also testified before the grand jury in the District of Arizona in February 1994. Kadonsky detailed the purchase of real property in Park City, Utah. According to a government agent, Kadonsky was informed that the government intended to bring forfeiture proceedings against th e property as proceeds traceable to drug purchases. 1 Kadonsky denies being told the government’s intention. Kadonsky testified to the grand jury that, at Weint hal’s request, he had arranged for the purchase of property with $220,000 in laundered money in the2 According to Kadonsky, the partnership name was reg istered, but no other

paperwork filed. In Utah, a limited partnership is not formed until a certificate of limited partnership is executed and filed with t he Division of Corporations and Commercial Code of the Utah Department of Comme rce. Utah Code Ann. § 48-2a-201. -3- name of Park City Development Limited Partnership. 2The money was all Weinthal’s drug money. He told an agent, however, that he had a 15% inter est in the partnership and Weinthal had an 85% interest. At the time of Kadonsky’s testimony, the county rec order’s office did not show Park City Development Limited Partnership as the owner of the property. A warranty deed, filed March 17, 1992, evidenced We inthal’s conveyance of the property from Park City Development Limited Partner ship to Comanche Nation Ltd. Partnership, an entity controlled by Weinthal and another individual. In an effort to counteract the conveyance, Kadonsky fileda “Notice of Interest” on August 3, 1992. The notice stated that Kadonsky “c laims an interest” in the Park City property “by virtue of being the sole owner an d general partner of Park City Development Limited Partnership, an unregistered li mited partnership.” (Appellee’s App. at 64.) The filing purported to “ give[] notice that except for [Kadonsky], no individuals have been authorized to convey title.” ( Id. ) Notwithstanding the 1992 filing of the notice, Kado nsky contends that he learned of his ownership of the property only afterhis 1994 grand jury testimony. He states that Weinthal told him that “all of the f unds used to purchase the Park-4-

City property were, in fact, Kadonsky’s earnings fr om various activities,” and therefore Kadonsky was the 100% owner of Park City Development Limited Partnership and the property. (Appellant’s Br. at 5.) According to Kadonsky, he informed a government agent of his newly-acquired knowledge and the agent responded that the government already knew that Kad onsky owned the property. The government denies that any such conversation to ok place. Less than a month after his grand jury testimony, K adonsky, from his place of incarceration, arranged for a Utah attorney to r epresent him in the sale of the property. A buyer was found for the contract sales price of $395,000. To convey clear title, Kadonsky obtained Weinthal’s cooperati on by agreeing to give him a share of the proceeds. Park City Ltd. Partnershi p, under Kadonsky’s signature, quitclaimed its interests to Comanche Nation Ltd. P artnership which then conveyed the property to the buyer by warranty deed

. Closing was scheduled for June 1, 1994, at which ti me the seller, Comanche Nation, was to receive $35,765.52 and Kado nsky was to receive $300,000. The title company issued a trust accountcheck to the order of “Steve Kadonsky” in the amount of $300,000. (Appellant’s App. at 20.) At closing, the government seized the $300,000 check. Notice of se izure was sent to Weinthal,3 Administrative forfeiture of property valued at $50 0,000 or less, furnished

or obtained in exchange for a controlled substance, is authorized by statute. The government is required to send written notice of fo rfeiture proceedings to each party who may have an interest in the seized property and to publish notice of its intent to seize the property once a week for three consecutive weeks. A potential claimant then has twenty days in which to file a claim and to post a bond. See 19 U.S.C. §§ 1607(a), 1608. -5- but not to Kadonsky at his place of incarceration. The currency was declared forfeited on September 22, 1994. 3 On December 7 of that year, the government commence d a judicial forfeiture action in the United States District Cou rt for the District of Arizona naming Kadonsky and Park City Development Limited P artnership as two of the defendants. Default judgment was entered on June 27, 1995, dec laring that Kadonsky had forfeited all rights in Park City Deve lopment Limited Partnership. Kadonsky unsuccessfully attempted to set aside the default and recover the $300,000. In that action, the government responded to Kadons ky’s pleading by stating that the complaint include[d] real property in Colorado and Vermont on ly. Neither the real property nor any interest in the net sales pro ceeds from the liquidation of the real property in Utah was a defe ndant in this action. No arrest warrant has been served upon the sales proceeds described in Kadonsky’s pleading. This court has n o jurisdiction over the res forfeited by the administrative action in Utah. (Id. at 137.) The district court refused to re-open th e case and consider Kadonsky’s claim for return of the currency. Later , Kadonsky filed pleadings-6-

regarding the return of the currency in still anoth er judicial forfeiture action, filed in the Northern District of Texas, that began in Au gust 1997. Kadonsky initiated the instant action in December 1 998 requesting return of the currency on the grounds that his due process ri ght to challenge the administrative forfeiture was violated by the failu re to provide him with notice of seizure. The parties filed cross motions for su mmary judgment. In its order granting the government’s motion, the district court determined that Kadonsky could own the property only through his rights in P ark City Development Limited Partnership and that those rights were extinguishedin the Arizona forfeiture action. The district court therefore entered judgment in favor of the government. This appeal followed.

II. Before reaching the merits of this appeal we must f irst address the government’s argument that Kadonsky lacks standing to challenge the forfeiture of the $300,000 in currency. Whether a party has s tanding to claim property in a forfeiture action is a question of law to be reviewed de novo. See United States v. 5 S 351 Tuthill Rd. , 233 F.3d 1017, 1021 (7th Cir. 2000). A claimant must be able to show a “facially colorable” interest in the proceedings sufficient to satisfy Article III standing; otherwise, no constitutional case or controversy exists capable of federal court adjudication. See, e.g. , United States v. 1998 BMW “I”-7-

Convertible , 235 F.3d 397, 399 (8th Cir. 2000); Kadonsky v. United States , 216 F.3d 499, 508 (5th Cir. 2000); United States v. U.S. Currency, $81,000 , 189 F.3d 28, 35 (1st Cir. 1999). To contest a civil forfeiture, “the claimant need n ot prove the full merits of [his] underlying claim.” U.S. Currency, $81,000 , 189 F.3d at 35 (quotation and citation omitted). Usually, “an allegation of owne rship and some evidence of ownership are together sufficient to establish standing.” Id. “An ownership interest is evidenced in a number of ways including showings of actual possession, control, title and financial stake.” 1998 BMW “I” Convertible , 235 F.3d at 397 (quotations and citations omitted). The government argues that there are three reasons why Kadonsky lacks standing in this action: (1) Kadonsky’s ownership in the Park City property, if any, was through Park City Development Limited P artnership, and his interest in the partnership was forfeited in the Arizona act ion; (2) Comanche Nation was the record owner of the property; and (3) Kadonsky denied ownership in the Park City property. These arguments share a common flaw . The forfeited property here was a check made out to the plaintiff; it was not the real property or a partnership interest. The payee of a seized check necessarily suffers an injury4 We have dealt with the government’s attack on the v alidity of Kadonsky’s

ownership rights in the currency strictly in the co ntext in which they were raised–standing. This court “will not craft” an argument for a party. Perry v. Woodward , 199 F.3d 1126, 1141 n.13 (10th Cir. 1999), cert. denied , 120 S. Ct. 1964 (2000). -8- that can be redressed by reimbursement for the amou nt of the check. Kadonsky has standing to contest the forfeiture. 4
III. The government is required to give notice to all pe rsons who have or claim an interest in property that is subject to administrative forfeiture. United States v. Clark , 84 F.3d 378, 380 (10th Cir. 1996); see also 19 U.S.C. § 1607 (providing that “[w]ritten notice of seizure together with inf ormation on the applicable procedures shall be sent to each party who appears to have an interest in the seized article”). Notwithstanding the confusion inrecord title and the conflict in Kadonsky’s statements, it is clear that Kadonsky , at a minimum, “appear[ed] to have an interest” in the check made out in his n ame. Therefore, under § 1607, he was entitled to receive notice of seizure. It i s uncontested that the government did not provide Kadonsky with notice. The question before us, however, is not whether the government failed to follow the statute. In order to make out a valid claim for return of property a claimant must show the deprivation of an actual pro perty interest, not just the appearance of a property interest. “[F]ederal ques tion jurisdiction pursuant to 28-9-

U.S.C. § 1331 is available for the limited purpose of considering collateral due process attacks; that is, deciding whether the forf eiture offended due process rights.” United States v. Deninno , 103 F.3d 82, 85 (10th Cir. 1996). “Proceedings surrounding the motion for return of p roperty seized in a criminal case are civil in nature,” United States v. Maez , 915 F.2d 1466, 1468 (10th Cir. 1990), and based on equitable principles, see United States v. Madden , 95 F.3d 38, 40 (10th Cir. 1996). Generally, we rev iew a district court’s denial of a motion for return of forfeited property for an abuse of discretion. See Deninno , 103 F.3d at 84. However, a de novo standard of rev iew applies to the ultimate conclusion on whether a claimant’s due process rights have been violated. See United States v. One Parcel of Real Prop. Describedas Lot 41, Berryhill Farm
Estates , 128 F.3d 1386, 1391 (10th Cir. 1997). The district court determined that Kadonsky had no property rights because the Texas forfeiture action had stripped him of his interests in the real property and the partnership. The Texas matter, however, wa s filed after the sale of the property, after the seizure of the check, and afterthe forfeiture. Moreover, it is apparent from the government’s filings and the court’s rulings in the Texas case that the later action had no effect on the property at issue in this case. The district court erred in determining that the judgme nt entered in the Texas action remedied defects in the administrative forfeiture o f the $300,000 check.-10-

The government essentially concedes the district co urt’s error and argues that the ruling should be upheld on other grounds: Kadonsky was equitably estopped from asserting ownership or, alternatively , that the doctrine of laches bars Kadonsky’s suit. These affirmative defenses are potentially valid theories, but their applicability cannot be determined at thi s procedural juncture. Summary judgment is appropriate only “if the pleadi ngs, depositions, answers to interrogatories, and admissions on file, together w ith the affidavits, if any, show that there is no genuine issue as to any material f act and that the moving party is entitled to a judgment as a matter of law.” Fed. R . Civ. P. 56(c). “‘When reviewing cross-motions for summary judgment, ‘our review of the record requires that we construe all inferences in favor o f the party against whom the motion under consideration is made.’” Pirkheim v. First Unum Life Ins. , 229 F.3d 1008, 1010 (10th Cir. 2000) (quoting Andersen v. Chrysler Corp. , 99 F.3d 846, 856 (7th Cir. 1996)). The theory of equitable estoppel has been applied i n a forfeiture action,

see United States v. 8136 S. Dobson St. , 125 F.3d 1076, 1082 (7th Cir. 1997), and is particularly appropriate in an action for re turn of property, which sounds in5 The related theory of “[j]udicial estoppel bars a p arty from adopting

inconsistent positions in the same or related litig ation. However, this circuit has expressly rejected the principle of judicial estoppel.” United States v. 162 MegaMania Gambling Devices , 231 F.3d 713, 726 (10th Cir. 2000) (quotations and citations omitted). -11- equity, see Madden , 95 F.3d at 40. 5 For equitable estoppel to apply, the party asserting the defense must show that (1) the party to be estopped must know the facts; ( 2) the party to be estopped must intend that his conduct will be actedupon or must so act that the party asserting the estoppel has the r ight to believe that it was so intended; (3) the party asserting the estopp el must be ignorant of the true facts; and (4) the party asserting the estoppel must rely on the other party’s conduct to his injury. N. Tex. Prod. Credit Ass’n v. McCurtain County Nat’l Bank , 222 F.3d 800, 811 (10th Cir. 2000) (quoting Penny v. Giuffrida , 897 F.2d 1543, 1545-46 (10th Cir. 1990)). In the instant case, the materials submitted by the parties provide sharply conflicting versions of the facts relevant to each of the four elements. These issues of material fact preclude summary judgment i n favor of the government on an estoppel theory. It is therefore necessary to r emand the matter to the district court for further proceedings and findings on this issue. If the district court determines that the government has failed to make an adequate showing on the defense of equitable estopp el, it must then reach the government’s assertion of a laches defense. The li mitations provision for6 The Clymore holding is applicable to the instant case. Congre ss,

however, has significantly amended the civil forfei ture statutes for proceedings commenced after August 23, 2000. See Civil Asset Forfeiture Reform Act of 2000, Pub. L. No. 106-185, § 2, 114 Stat. 202, 208 (2000). Forfeitures judicially set aside for lack of notice may now be refiled. Id. -12- forfeiture proceedings requires the commencement of proceedings “within five years after the time the alleged offense was discov ered.” 19 U.S.C. § 1621. “Where obvious statute of limitations problems exis t,” a forfeiture void for lack of notice “should be vacated and the statute of lim itations allowed to operate, subject, of course, to any available government arguments against it.” Clymore v. United States , 164 F.3d 569, 574 (10th Cir. 1999). 6At the latest, Kadonsky’s crimes were discovered in October 1993. “[A]bsent the application of laches or equitable tolling principles,” the limitations peri od has expired to prevent the filing of a new forfeiture proceeding. United States v. Marolf , 173 F.3d 1213, 1218 (9th Cir. 1999). “‘Laches consists of two elements: (1) inexcusable delay in instituting a suit; and (2) resulting prejudice to defendant from such delay.’” Trustees of the Centennial State Carpenters’ Pension Trust Fund v. Centric Corp. (In re Centric Corp.) , 901 F.2d 1514, 1519 (10th Cir. 1990) (quoting Brunswick Corp. v. Spinit Reel Co. , 832 F.2d 513, 523 (10th Cir. 1987)). Because the laches defense raises7 Kadonsky contends that in the event the $300,000 incurrency is returned to

him, he is entitled to pre-judgment interest. We h ave recently rejected this argument. In United States v. 30,006.25 in U.S. Currency , No. 00-5046, 2000 WL 1879124, at *3 (10th Cir. Dec. 28, 2000), we held that, in forfeiture cases commenced prior to August 23, 2000, “sovereign immu nity prohibits the award of interest on currency” returned to a forfeiture clai mant. For cases filed on or after that date, however, the Civil Asset Forfeiture Refo rm Act of 2000, “has now waived sovereign immunity with respect to interest on returned currency, negotiable instruments and proceeds.” Id. (citing Pub. L. No. 106-185, § 4(a), 114 Stat. 202, 211-13 (2000) (codified at 28 U.S.C. § 2465(b)(1)(C))). -13- considerations similar to those of the equitable es toppel, we leave any determination on the issue to the district court on remand. 7

IV. For the reasons stated above, the judgment of the d istrict court is REVERSED and REMANDED for further proceedings co nsistent with this opinion.

Entered for the Court

Carlos F. Lucero Circuit Judge