United States District Court, D. Maine
MEMORANDUM OF DECISION ON MOTION TO APPOINT A
C. NIVISON U.S. MAGISTRATE JUDGE
matter is before the Court on Plaintiff's Motion to
Appoint a Receiver. (Motion, ECF No. 11.) Through the motion,
Plaintiff asks the Court to appoint a receiver to oversee the
location and the recovery of vehicles it leased to Defendant.
did not respond to Plaintiff's complaint, nor did
Defendant respond to the motion. Upon Plaintiff's
request, the Court entered a default against Defendant on the
complaint. (Order, ECF No. 8.)
a review of the record and after consideration of
Plaintiff's arguments, the Court grants Plaintiff's
motion for the appointment of a receiver.
the entry of default, Plaintiff's allegations against
Defendant are “taken as true and … considered
established as a matter of law.” Libertad v.
Sanchez, 215 F.3d 206, 208 (1st Cir. 2000) (quoting
Brockton Sav. Bank v. Peat, Marwick, Mitchell &
Co., 771 F.2d 5, 13 (1st Cir. 1985)); see also In re
Home Rests., Inc., 285 F.3d 111, 114 (1st Cir. 2002) (a
party “who defaults is taken to have conceded the truth
of the factual allegations in the complaint as establishing
the grounds for liability ….”).
and Defendant entered into a Master Equity Lease Agreement
effective December 6, 2012 (the Agreement). (Complaint ¶
6, ECF No. 1.) Under the Agreement, Defendant leased
vehicles from Plaintiff. (Id., ¶ 7.) Defendant
was obligated to pay rent for the vehicles. (Id.
¶ 9.) On or about April 23, 2019, Defendant's April
rent check was returned for insufficient funds. (Id.
¶ 10.) Defendant failed to remedy its missed rent
payment within ten days, as required by the Agreement.
(Id. ¶ 11.) Defendant's failure to remedy
the missed rent payment constituted a default under the terms
of the Agreement. (Id. ¶ 14.)
Agreement provides that in the event of a default, Plaintiff
is entitled to terminate the Agreement demand the return of
the vehicles. (Id. ¶ 16.) On May 7, 2019,
Plaintiff terminated the Agreement and demanded return of the
vehicles. (Id., ¶ 17.)Upon such demand, the terms
of the Agreement required Defendant to return the vehicles to
Plaintiff immediately. (Id., ¶ 16.) Defendant
returned some of the leased vehicles to Plaintiff; seventeen
vehicles remain unreturned. (Declaration of B. Jurich, ¶
8, ECF No. 10-2). Over the course of the next several months,
Plaintiff and Defendant were in contact regarding the
vehicles and outstanding payments due under the terms of the
Agreement. (Declaration of B. Jurich ¶¶ 4-31, ECF
complaint, Plaintiff requested, among other things, specific
performance of Defendant's obligation to return the
vehicles. (Complaint ¶¶ 9-10.) Plaintiff emailed
Defendant's president, Kevin Pomerleau, on August 30,
2019, and stated, “Our efforts to reclaim [the
vehicles] seem to have stalled. It is necessary to now have
all of the vehicles reported as stolen and added to the
stolen vehicle database.” (Declaration B. Jurich ¶
26.) Plaintiff allowed Defendant until September 3, 2019 to
contact Plaintiff for instructions on returning the vehicles.
(Id.) Defendant eventually returned some of the
vehicles to Plaintiff; seventeen vehicles remain unreturned.
(Id. ¶ 31.)
seeks the appointment of a receiver to assist in the recovery
of the vehicles.
Rule of Civil Procedure 66 governs “an action in which
the appointment of a receiver is sought or a receiver sues or
is sued.” This Court also has inherent equitable power
to appoint a receiver to manage or preserve property.
United States v. Quintana-Aguayo, 235 F.3d 682, 686
& n.8 (1st Cir. 2000). “[T]he decision to appoint a
receiver … lies within the discretion of the
court.” Consol. Rail Corp. v. Fore River Ry.
Co., 861 F.2d 322, 326 (1st Cir. 1988). Some of the
factors a court may consider include whether the defendant is
alleged to have engaged in fraudulent conduct, whether the
property is in imminent danger, whether the available legal
remedies are adequate, whether the harm to the plaintiff
caused by the denial of the appointment would exceed the harm
to the defendant and others opposed to the appointment,
whether the plaintiff is likely to succeed in the action,
whether the plaintiff's interests in the property might
be susceptible to irreparable injury, and whether the
interests of the plaintiff and others sought to be protected
will be well served by the receivership. Id. at 326
default has been entered against Defendant and thus Plaintiff
has established Defendant's liability. Defendant has
breached the terms of the Agreement and is required to return
to Plaintiff the vehicles. Plaintiff's interest in the
vehicles is at risk as Plaintiff has no ability to control
the maintenance or use of the vehicles.
Plaintiff's past unsuccessful attempts to recover the
vehicles from Defendant, given that Defendant has failed to
provide any assurance that it has secured the vehicles for
Plaintiff, and given the uncertainty as to the current
location of the vehicles, a receiver would assist Plaintiff
in its efforts to ...