Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Chapel Ridge Second Investments LLC v. Registered Holders of Greenwich Capital Commercial Funding Corp.

United States District Court, N.D. Indiana, Fort Wayne Division

January 10, 2018

CHAPEL RIDGE SECOND INVESTMENTS, LLC. Plaintiff,
v.
THE REGISTERED HOLDERS OF GREENWICH CAPITAL COMMERCIAL FUNDING CORP., COMMERCIAL MORTGAGE TRUST 2007-GG9, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-GG9; U.S. BANK NATIONAL ASSOCIATION, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS HOLDERS OF GREENWICH CAPITAL COMMERCIAL FUNDING CORP., COMMERCIAL MORTGAGE TRUST 2007-GG9, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-GG9; AND LNR PARTNERS, LLC. Defendants.

          OPINION AND ORDER

          William C. Lee United States Judge

         Despite the complicated caption (which the Court will sift through shortly), this case is a relatively straightforward contract action between a mortgagor and a mortgagee. Presently before the Court is the Defendants' Partial Motion to Dismiss [DE 21] and the Defendants' request for oral argument on that motion [DE 41]. For the following reasons, the Partial Motion to Dismiss will be GRANTED. The request for oral argument will be DENIED.

         PARTIES AND CAUSES OF ACTION

         Before turning to the substance of the Defendants' Partial Motion to Dismiss, it is helpful to clarify both the identity of the proper parties to this suit as well as the causes of action asserted by the plaintiff in this litigation.

         The Plaintiff, Chapel Ridge Second Investments, LLC (hereinafter “Chapel Ridge” or “the Borrower”) owns certain currently vacant commercial property commonly known as 10290, 10550 and 10560 Maysville Road, Fort Wayne, Indiana 46835 (“the Property”). Complaint, ¶9. In December, 2006, Chapel Ridge executed a promissory note in the amount of six million four hundred thousand dollars ($6, 400, 000) (“the Note”) secured by a corresponding mortgage (“the Mortgage”) on the aforementioned properties to Greenwich Capital Financial Products, Inc. (“Greenwich”). The Mortgage granted Greenwich a security interest in the Property, its leases, rents and proceeds, and certain other property as described in the Mortgage.[1]

         By way of certain assignments, both parties acknowledge that Defendant U.S. Bank National Association (“U.S. Bank”) is the current holder of the Loan Documents. Both parties further acknowledge that “The Registered Holders of Greenwich Capital Commercial Funding Corp., Commercial Mortgage Trust 2007-GG9, Commercial Mortgage Pass-Through Certificates, Series 2007-GG9” (“the Registered Holders”) is not a legal entity that is capable of being sued and that the proper identity of the Lender is U.S. Bank. Accordingly, the Registered Holders are DISMISSED from this lawsuit.

         In addition, Plaintiff has named LNR Partners, LLC, (“LNR”) as a defendant who is the loan servicer for the above-referenced loan. LNR is authorized by U.S. Bank to act on its behalf with respect to enforcement of the Loan Documents. Accordingly, despite the lengthy caption, the Plaintiff has, in essence sued U.S Bank and LNR (hereinafter, collectively “the Defendants”).

         Turning now to the causes of action asserted in this suit, in their Motion the Defendants express confusion over the precise nature of the Complaint against them. On their reading of the Complaint, Plaintiff has asserted causes of action for breach of contract, negligence, and tortious interference against them. However, in its response, Chapel Ridge indicates that it has asserted only the following claims: breach of contract and tortious interference with contract against U.S. Bank and claims of negligence and tortious interference with contract against LNR. It asserts no negligence claims against U.S. Bank and no contract claims against LNR. With that clarification, the Defendants' Partial Motion to Dismiss addresses only the claims against LNR and the tortious interference claim against U.S. Bank.

         FACTUAL BACKGROUND

         As noted above, Chapel Ridge entered into a commercial loan agreement for the Property, which operates as a shopping center. At the time it entered into the loan agreement, the shopping center had various tenants, including Marshalls and Office Depot. Through a series of assignments, U.S. Bank is the current holder of the Loan Documents and, as such, is the Lender who is subject to all the terms and conditions of the Loan Document as negotiated by its predecessors.

         Under the terms of the Mortgage, the parties made certain covenants including covenants regarding Chapel Ridge's obligations for leasing the real estate. Under Section 14 of the Mortgage, Chapel Ridge had the right to enter into or modify without the Lender's prior written consent, “any lease of space at the Property now existing or hereafter made which affects less than 5, 000 square feet and provided the term of such lease is less than five (5) years (an ‘Exempt Lease')…” (Complaint, ¶11). Also, under Section 14 of the Mortgage, for leases other than Exempt Leases, the Mortgage required Chapel Ridge to obtain Lender's consent before entering into such leases. The Mortgage further contains a clause which specifically provides a covenant that the Lender's consent “shall not be unreasonably withheld.” (Complaint, ¶12).

         According to the Complaint, on or about March 29, 2016, Chapel Ridge, through its leasing agent Zacher Company (“Zacher”), sent to the predecessor Lender's servicer, Wells Fargo Bank, N.A., (“WFB”) a proposed lease regarding the existing tenant, Office Depot wherein it requested consent to the proposed lease. (Id. at ¶'s13-14). Office Depot's lease was set to expire on November 30, 2016 and Office Depot exercised its first renewal option for an additional five years with some adjustments in the lease terms which required the consent of the lender. The proposed Office Depot lease was in excess of 5, 000 square feet and the term of the lease was for 5 years including additional optional terms. (Id. at ¶13).

         After receiving no response from WFB, on April 13, 2016 Zacher re-sent the request to WFB and inquired if WFB had looked at the request. WFB responded by indicating that it was sending the proposal to its Leasing Team for lender approval. Two days later, WFB requested additional information from Zacher and indicated that the approval request would be forwarded to LNR as a “special servicer” given the size of the tenant's premises. (Complaint, ¶17). Zacher, in turn, provided all the additional information requested.

         On April 20, 2016, LNR contacted Zacher requesting an additional copy of the proposed lease documents along with some additional information, which Zacher supplied on the same day. Additionally, LNR requested a payment of $2, 000.00 from Chapel Ridge as payment to review the proposed lease documents. Chapel Ridge paid the $2, 000.00 requested ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.