Huntington National Bank v. Motel 4 BAPS, Inc.
191 Ohio App. 3d 90
| Ohio Ct. App. | 2010Background
- Motel 4 borrowed $1.8 million from Huntington National Bank in March 2008, secured by a mortgage on the Super 8 Hotel in Strongsville, Ohio, perfected in April 2008 as the first lien.
- Huntington obtained a cognovit judgment and foreclosed; a receiver was appointed and Chartwell Group was retained to market and sell the property.
- The Chartwell Group planned a public auction for November 24, 2009; Motel 4 filed Chapter 11 bankruptcy on the auction day, halting foreclosure.
- Bankruptcy proceedings resulted in an agreement delaying the sale: 80 days no advertising and 60 days no second auction to allow refinancing or a friendly sale.
- A second auction was set for March 18, 2010; Motel 4 moved to stay the auction alleging defective notice under R.C. 2329.26; the auction occurred with a winning bid of $1,273,300 and was subject to court approval.
- On May 4, 2010, the court granted the receiver’s sale; Motel 4 appealed, challenging notice requirements and due process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 2329.26 notice applies to receivership sales | Motel 4 argues notice under R.C. 2329.26 (writs of execution) applies to receivership. | Motel 4 contends receivership notices are governed by Chapter 2735, not §2329.26. | R.C. 2329.26 does not apply to receiverships; no abuse of discretion. |
| Whether due process was violated by lack of notice | Motel 4 argues absence of notice violated due process. | Motel 4 asserts actual notice was lacking. | Due process was not violated; Motel 4 had actual notice of the sale. |
Key Cases Cited
- Castlebrook Ltd. v. Dayton Properties Ltd. Partnership, 78 Ohio App.3d 340 (1992) (receivership orders are equitable and subject to court direction)
- Park Natl. Bank v. Cattani, 187 Ohio App.3d 186 (2010-Ohio-1291) (receivership powers may include selling property under court authorization)
- Celebrezze v. Gibbs, 60 Ohio St.3d 69 (1991) (limits on receiver powers and judicial discretion in Chapter 2735)
- Eastlake Land Dev. Co., 177 Ohio App.3d 379 (2008-Ohio-3013) (due process and notice considerations in relevant context)
- Quill v. Troutman Ents., Inc., 2005-Ohio-2020 (2005) (receiver powers and notice considerations in foreclosure context)
- Doyle v. Yoho Hooker Youngstown Co., 130 Ohio St.400 (1936) (historical view of receiver authority and court control)