PNC Bank, N.A. v. Presbyterian Retirement Corporation, Inc.
1:14-cv-00461
S.D. Ala.Nov 13, 2014Background
- PNC Bank seeks a receiver for Westminster Village as collateral for Presbyterian’s debt.
- Westminster Village is a 56‑acre campus with independent living units, assisted living, and nursing beds, secured by Presbyterian’s 2005 Mortgage.
- Presbyterian defaulted on debt and balloon payment (> $8 million) after agreeing mortgage terms, triggering lender remedies including foreclosure notices.
- Intercreditor Agreement with Infirmary Health allegedly limits PNC Bank’s remedies and may position Infirmary Health as senior creditor; Infirmary Health intervened opposing a receiver.
- PNC Bank relies on contract (Mortgage § 8.03) and alleged mismanagement of Westminster Village; CMS inspection (2013) suggested mixed care quality, not decisive; court notes evidence shows adequate care and cash flow.
- Court ultimately denies Motion for Appointment of Receiver, citing lack of imminent danger, potential harm to collateral, and competing interests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contractual consent entitles a receiver as a matter of right | PNC Bank argues § 8.03 grants automatic appointment | Presbyterian asserts consent is non‑dispositive in Rule 66 analysis | Consent non‑dispositive; Court weighs equitable factors |
| Whether equitable factors justify appointing a receiver | Need to protect collateral, residents, and public interest; likely success on merits | No imminent danger; mismanagement not proven; harms of receivership outweigh benefits | Not warranted; Court denies appointment based on equities |
| Effect of Intercreditor Agreement and Infirmary Health’s non‑consent | Intercreditor rights do not bar relief | Agreement and non‑consent create seniority and bar unilateral relief | Intercreditor factors complicate, but do not compel; still denial at this stage |
Key Cases Cited
- National Partnership Inv. Corp. v. National Housing Development Corp., 153 F.3d 1289 (11th Cir. 1998) (federal law governs receivership in diversity cases; discretionary remedy)
- Canada Life Assur. Co. v. LaPeter, 563 F.3d 837 (9th Cir. 2009) (receivership is an extraordinary equitable remedy; not automatic from contracts)
- Waag v. Hamm, 10 F. Supp.2d 1191 (D. Colo. 1998) (receivership is an extraordinary equitable remedy; not automatic)
- Sterling Sav. Bank v. Citadel Development Co., 656 F. Supp.2d 1248 (D. Or. 2009) (consent to appointment is a factor, not dispositive; weigh equities)
- Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314 (8th Cir. 1993) (no precise formula; consider multiple factors in appointing a receiver)