United States District Court, D. Maine
U.S. BANK NATIONAL ASSOCIATION, Plaintiff
SRA AUGUSTA SPE, LLC, et al., Defendants
MEMORANDUM OF DECISION ON MOTION FOR
C. Nivison U.S. Magistrate Judge
removed action, Plaintiff U.S. Bank, N.A., asserts that
Defendants, five special purpose entities,  breached a
promissory note currently held by Plaintiff by failing to pay
the balance of the note on or before its December 11, 2015,
maturity date. The note is secured by a commercial mortgage
trust and security instrument property located at Key Plaza,
286 Water Street, Augusta, Maine. The matter is before the
Court on Defendants' request for reconsideration (ECF No.
1-8) of the Maine Superior Court's order (ECF No. 1-6)
appointing a receiver to manage the property.
a review of the motion and related filings, and after
consideration of the parties' arguments, the motion is
granted in part. The order of appointment will continue in
effect. The Court, however, will convene a telephonic
conference to discuss whether the terms of the order should
filed suit in Maine Superior Court, Kennebec County, on July
13, 2016. (State Court Docket, ECF No. 10-1; see also
Verified Complaint, ECF No. 1-3.) With its complaint,
Plaintiff filed a motion for appointment of receiver, a draft
order appointing a receiver, and a request for expedited
consideration of the motion. (Expedited Motion to Appoint
Receiver, ECF No. 1-4.) The state docket reflects service on
Defendants on July 21, 2016. On July 29, 2016, the Superior
Court granted the motion and signed the draft order. (Order
Appointing Receiver, ECF No. 1-6.)
August 8, 2016, Defendants filed their answer to the
complaint (ECF No. 1-7), and a combined opposition to the
motion for appointment of receiver and motion for
reconsideration of the order appointing receiver (ECF No.
1-8). On August 11, 2016, Defendants filed their notice of
removal (ECF No. 1), in which notice they invoked this
Court's diversity jurisdiction.
action arises from, inter alia, Plaintiff's efforts to
collect the balance on a promissory note in the principal sum
of 7.2 million dollars, which note Plaintiff currently holds
through a series of allonges. The note is secured by a mortgage
and security agreement pledging as collateral the
borrowers' interest in certain real property located at
286 Water Street, Augusta, Maine, which mortgage and security
interest Plaintiff now holds through a series of assignments.
The original instruments were executed on December 1, 2005.
(Verified Complaint ¶¶ 7 - 12.)
about January 12, 2016, Plaintiff provided Defendants with a
notice of default, acceleration and demand for payment.
(Id. ¶ 16.) Plaintiff cites as the basis of the
default Defendants' failure to tender payment of the
outstanding obligation on or before December 11, 2015, the
maturity date of the promissory note. (Id. ¶
III of the mortgage specifies Plaintiff's remedies in the
event of default. In addition to foreclosure, the remedies
include acceleration, entry on the property, and collection
of rents and profits. Subsection 3.1(d) of the remedies
provision also authorized the appointment of a receiver.
Upon, or at any time prior or after, initiating the exercise
of any power of sale, instituting any judicial foreclosure
… or any other legal proceedings hereunder, ...
[Mortgagee may] make application to a court of competent
jurisdiction for appointment of a receiver for all or any
part of the Property, as a matter of strict right and without
notice to Mortgagor and without regard to the adequacy of the
Property for the repayment of the indebtedness secured hereby
..., and Mortgagor does hereby irrevocably consent to such
appointment, waives any and all notices of and defenses to
such appointment and agrees not to oppose any application
therefor by Mortgagee .... Any such receiver shall have all
of the usual powers and duties of receivers in similar cases,
including, without limitation, the full power to hold,
develop, rent, lease, manage, maintain, operate and otherwise
use or permit the use of the Property upon such terms and
conditions as said receiver may deem to be prudent and
reasonable under the circumstances as more fully set forth in
Section 3.3 below. Such receivership shall, at the option of
Mortgagee, continue until full payment of all the
indebtedness secured hereby or until title to the Property
shall have passed by foreclosure sale under the Mortgage or
deed in lieu of foreclosure.
(Mortgage ¶ 3.1(d).)
opposition to the motion for appointment of a receiver,
Defendants filed an affidavit of Peter Hanson (ECF No. 1-8),
Defendants' agent. According to Mr. Hanson, Defendants
obtained commitment for new lending and “will
close” within 60 days of his August 8, 2016, affidavit.
(Hanson Aff. ¶¶ 4 - 5.) Mr. Hanson suggests that
appointment of a receiver could prevent Defendants from
acquiring refinancing, (Id. ¶ 6), and that
Plaintiff's interest in the property is adequately
secured without a receiver because Plaintiff controls all
rents and income generated by the property, and because the
monthly rents exceed Defendants' monthly payment
obligation by almost $100, 000. (Id. ¶¶ 9
- 10.) Mr. Hanson further reports that Defendants have been
paying the expenses associated with the property, have
adequately maintained the property, have leased the property
to capacity, and have provided to the proposed receiver all
necessary record and access to the property. The proposed
receiver is already serving as the property superintendent.
(Id. ¶¶ 11 - 24.)
September 2016, Mr. Hanson asserted that refinancing appears
likely. (Second Hanson Aff. ¶¶ 5, 8.) Mr. Hanson
states that the existing receivership order will potentially
interfere with closing because it precludes Defendants from
pledging the property ...