The Union Labor Life Insurance Co. v. Isle of Capri Assoc., L.P. ~ Appeal of: Isle of Capri Assoc., L.P.
202 A.3d 845
Pa. Commw. Ct.2019Background
- IOC developed Waterfront Square Condominium and, as declarant, had the special right to grant parking licenses for the development’s parking garage (a common element).
- IOC and related entity IOC‑Reef financed construction with mortgages from Lender; loans defaulted and Lender obtained consent judgments and a receivership over the mortgaged property in December 2011.
- The receivership order placed all “mortgaged property” (including interests in the condominium declarations, common elements, and licenses) under the Receiver and enjoined IOC from managing or selling mortgaged property without court permission.
- On May 15, 2012 (before the June 5 sheriff’s sale), IOC sold 91 parking licenses to Gior; IOC‑Reef later sold additional licenses after the sheriff’s sale.
- Lender/assignee Waterfront and the Receiver moved in the receivership proceeding to void IOC’s May 2012 sale as contrary to the receivership; the Receivership Court granted the motion and IOC appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 91 parking licenses were part of the mortgaged property and subject to the receivership | IOC: licenses were declarant-granted rights to unit owners and not separately mortgaged; receivership ended at sheriff’s sale so Receiver lacked authority | Lender/Receiver: mortgage and exhibit A expressly encumbered common elements, parking garage, licenses, and declarant rights; receivership order covered such mortgaged property | Held: Licenses and IOC’s right to issue them were mortgaged property and subject to the receivership; IOC’s sale without court approval violated the receivership order |
| Whether laches or estoppel barred Lender/Receiver from voiding the May 2012 transfer | IOC: defendants waited ~4 years and acquiesced (not listing licenses in sale notices), so equitable defenses apply | Lender/Receiver: inaction does not establish estoppel; litigation by Gior delayed proceedings; no prejudice shown to invoke laches | Held: Doctrines of laches and estoppel do not bar the challenge; litigation timeline and lack of prejudice defeat IOC’s defenses |
| Whether the Settlement Agreement release precluded Lender/Receiver from seeking voiding relief | IOC: Settlement release barred post‑foreclosure claims by Lender against IOC/IOC‑Reef | Lender/Receiver: release applies only if IOC/IOC‑Reef “fully cooperate”; IOC failed to fully cooperate, so release does not apply | Held: Settlement release did not bar Lender/Receiver because IOC did not meet the cooperation condition |
Key Cases Cited
- Lewistown Trust Company v. Nestler, 167 A. 354 (Pa. 1933) (receiver acts as agent of the court; receiver’s authorized acts are court acts)
- Farmers Trust Company v. Bomberger, 523 A.2d 790 (Pa. Super. 1987) (mere silence or inaction generally does not create estoppel)
- Buffalo v. Jones, 813 A.2d 659 (Pa. 2002) (abandonment requires intent plus external acts manifesting relinquishment)
- Sprague v. Casey, 550 A.2d 184 (Pa. 1988) (elements and standards for laches: delay and prejudice)
- Fulton v. Fulton, 106 A.3d 127 (Pa. Super. 2014) (party asserting laches must show prejudice from delay)