01-3384 U.S. v. Tully, et al.

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“The claimants’ Notices of Claims requested that ‘their interests [i.e., alleged equitable liens] in this cause be protected by the [district court].’ However, at the time they filed this collective notice no such ‘interests’ had yet been established. Thus, while the claimants might have, at one time, possessed the ability to obtain equitable liens on Lot 32/33 by filing civil actions against Mallard and the Vauters, they failed to do so. … In any event, this criminal proceeding was not the proper forum for the claimants to have their claims of entitlement to equitable liens considered. The purpose of the district court’s hearing on the government’s motion to disburse funds was to determine whether the claimants’ current interests in the proceeds from the sale of Lot 32/33 were superior to the interest the government possessed as a result of its statutory lien. See LTV Corp. v. Gulf States Steel, Inc. of Ala., 969 F.2d 1050, 1063 (D.C. Cir. 1992) (holding that the Rule 67 procedure ‘provides a place of safekeeping for disputed funds pending the resolution of a legal dispute, but it cannot be used as a means of altering the contractual relationships and legal duties [or rights] of the parties.’) (citations omitted). The district court correctly concluded that the claimants’ promissory notes only provided them with unsecured interests in the property’s sale proceeds.”

Affirmed.

Appeal from the United States District Court for the Northern District of Indiana, Moody, J., Manion, J.