JPMCC 2004-CIBC10 7th St. Office, L.L.C. v. URS Tower, L.L.C.
2013 Ohio 796
Ohio Ct. App.2013Background
- Foreclosure action where Lender seeks appointment of a receiver under a Mortgage encumbering URS Tower's downtown Cincinnati property.
- Lender holds two promissory notes ($16.5M and $1.05M) and the Mortgage securing them; Lender asserts default and requests foreclosure.
- Magistrate denied the receivership, finding no grounds under RC 2735.01 and no show of irreparable harm or likely insufficiency to discharge debt.
- Trial court later sustained objections to the magistrate, finding URS Tower contractually agreed to a receiver and remanding for a new ruling on appointment.
- In April 2012, the trial court granted the receiver appointment and the matter proceeded, prompting URS Tower to appeal.
- This appeal challenges (1) the propriety of appointing a receiver and (2) the scope that may be granted to a receiver to sell free and clear of liens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion in appointing a receiver. | Lender contends Section 3.1(d) of the Mortgage authorizes a receiver as a matter of right, without notice, upon default. | URS Tower argues equity and RC 2735.01 standards require additional showing and balancing of harms; the contract should not waive due process. | No abuse; contract authorized appointment; waiver of notice may apply; appointment affirmed. |
| Whether the order allowing sale of the property free and clear of liens is ripe for review. | The order contemplates future sales terms approved by court, preserving rights and procedures. | The provision could affect redemption rights, and review should occur now rather than in the future. | Not ripe for review; contingent future action prevents immediate determination. |
Key Cases Cited
- Harajli Mgmt. & Inv., Inc. v. A&M Inv. Strategies, Inc., 167 Ohio App.3d 546 (6th Dist. 2006) (equitable appointment requires irreparable harm or preservation of rights)
- Forest City Invest. Co. v. Haas, 143 N.E.2d 549 (Ohio Supreme Court 1924) (receiverships exist where substantial rights are at stake)
- Metropolitan Sav. Bank v. Papadelis, 1995 Ohio App. LEXIS 4038 (9th Dist.) (contractual waiver of value-evidence defenses may be enforceable in foreclosure receivership)
- U.S. Bank Natl. Assn. v. Minnillo, 14 N.E.3d 202 (8th Dist. 2016) (courts may enforce contractual consent to appointment of a receiver upon default)
- City Natl. Bank v. WBP Invests., LLC, 2011-Ohio-6129 (10th Dist.) (not ripe review of sale-free-of-liens provision where contingent)