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Wells Fargo Bank, N.A. v. Lichter Gateway IV LLC

United States District Court, D. New Jersey

December 1, 2017

WELLS FARGO BANK, N.A., as Trustee for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-through Certificates, Series 2006-IQ12, Plaintiff,
v.
LIGHTER GATEWAY IV, LLC, CLAIRE LICHTER, individually and in her capacity as Executrix of the ESTATE OF ALFRED LICHTER, JOSEPH SCHWARTZ, SUZETTE SCHWARTZ, THE ALFRED LICHTER 2000 FAMILY TRUST, AND GATEWAY CONCOURSE ASSOCIATION, INC., Defendants.

          OPINION

          KEVIN MCNULTY. U.S.D.J.

         The plaintiff, Wells Fargo Bank, N.A., as Trustee for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-through Certificates, Series 2006-IQ12 ("Wells Fargo"), brings this action against defendants, Lichter Gateway IV, LLC ("Lichter Gateway"); Claire Lichter, individually and in her capacity as Executrix of the Estate of Alfred Lichter, Joseph Schwartz, Suzette Schwartz, the Alfred Lichter 2000 Family Trust (collectively, "Guarantor", with Lichter Gateway and Guarantor being referred to collectively as "Lichter"); and the Gateway Concourse Association, Inc. ("the Association").

         This is essentially a commercial foreclosure, brought by Wells Fargo as mortgagee against Lichter Gateway as mortgagor, and other parties as guarantors. Lichter Gateway is currently in default to the tune of nearly $57 million in principal that has come due at maturity.

         Wells Fargo moved for the appointment of a receiver to manage the property during the pendency of this litigation. Its primary concern was waste. Most pertinently, Lichter Gateway had failed to make required payments to the Association for the repair and upkeep of common areas in the Gateway complex, and the Association had responded by placing liens on the property. That concern, however, has been allayed. State court litigation brought against Lichter Gateway by the Association was recently settled, and the Association has agreed to vacate its liens. Although Wells Fargo has other concerns, I do not find them sufficiently weighty to justify the drastic remedy of a receiver to manage the property pendente lite.

         Wells Fargo has also moved for the appointment of a rent receiver. As to that request I have a different view. Lichter Gateway has collected rents pursuant to a revocable license from Wells Fargo. Under the terms of the loan documents, that license was automatically revoked as a result of Lichter's default. Under the circumstances, I find that appointment of a rent receiver during the pendency of this litigation is appropriate.

         Finally, Lichter moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss part of Count 6 of the complaint for failure to state a claim upon which relief can be granted. That motion is denied.

         I. Background[1]

         Wells Fargo has succeeded to the position of mortgagee of the $61 million commercial mortgage loan at issue.[2] (Cplt. ¶¶ 21, 26-32) Lichter Gateway is the current owner of the mortgaged premises, Gateway IV, a commercial building located at 100 Mulberry Street in Newark, New Jersey. Id. ¶¶ 2-3. The Association maintains certain common areas in the complex, and assesses building owners for the cost of doing so. (See Id. ¶¶ 47-49.)

         A. The Loan

         On October 24, 2006, Heritage Gateway, LLC ("Heritage"), Marine One Associates III, LLC ("Marine"), Ridgewood 2000 Associates III, LLC ("Ridgewood"), JPG Real Estate III, LLC ("JPG"), and Ivy Gateway, LLC ("Ivy") executed a Promissory Note evidencing a $61 million loan made by LaSalle Bank National Association ("LaSalle") to Heritage, Marine, Ridgewood, JPG, and Ivy (collectively, the "original borrower"). Id. ¶ 10; ECF no. 1-2, Ex. A. The maturity date under the Note was November 1, 2016. Id. ¶ 15; ECF no. 1-2, Ex. B§ 2.3.2.

         On or around October 24, 2006, the original borrower entered into a loan agreement with LaSalle. Id. ¶ 11; ECF no. 1-3, Ex. B. The Note incorporates the terms of that agreement. See ECF no. 1-2, Ex. A.

         A Mortgage and Security Agreement, dated October 25, 2006, was executed by the original borrower, as mortgagor, to LaSalle, as mortgagee. Id. ¶ 16; ECF no. 1-4, Ex. C. An Assignment of Leases and Rents, dated October 25, 2006, was also executed by the original borrower to LaSalle. Id. ¶ 18; ECF no. 1-5, Ex. D.

         In December 2006, LaSalle assigned the loan and loan documents[3] to Wells Fargo. Id. 22. See ECF nos. 1-6, Ex. E; 1-7, Ex. F; 1-8, Ex. G.

         B. Assumption of Loan Documents by Newark 300, LLC

         On or about June 12, 2009, Ivy transferred 24% of its initial 40% ownership interest in Gateway IV to Newark 300, LLC. Id. ¶ 24. Newark 300, LLC "agreed to become jointly and severally liable as tenants-in-common with [the] original borrower under the . . . loan documents." Id. See ECF no. 1-9, Ex. H.

         C. Assumption of Loan Documents by Lichter Gateway

         On or about January 3, 2011, the original borrower and Newark 300, LLC transferred Gateway IV to defendant Lichter Gateway. Id. ¶ 26. Defendants Lichter Gateway, Alfred Lichter, Claire Lichter, Joseph Schwartz, Suzette Schwartz, and the Alfred Lichter 2000 Family Trust "assumed all obligations under the Loan Documents and released the original borrower [Newark 300, LLC], and Original Guarantor from certain obligations pursuant to the Loan Documents, subject to the provisions set forth in the Borrower Assumption Agreement." Id. Wells Fargo, Lichter Gateway, the original borrower, and Newark 300, LLC, "as well as Steven Greenberg, Jeffrey Greenberg, and Ivy . . . (collectively, the 'Original Guarantor')" executed the Borrower Assumption Agreement, dated January 3, 2011. Id. ¶ 27; ECF no. 1-10, Ex. I. In substance, Lichter Gateway stepped into the shoes of the borrower.

         In connection with Lichter Gateway's assumption of the Note, Defendants Alfred Lichter, Claire Lichter, Joseph Schwartz, Suzette Schwartz, and the Alfred Lichter 2000 Family Trust, executed a Guaranty, dated January 3, 2011. Id. ¶ 27; ECF no. 1-11, Ex. J. In substance, those parties stepped into the shoes of the guarantor.

         D. Lichter Gateway's Failure to Pay by Maturity Date

         Lichter Gateway failed to pay all amounts due to Wells Fargo under the loan documents on the maturity date of November 1, 2016. Cplt. ¶¶ 33-34. According to Wells Fargo, Lichter Gateway is in default of its obligations to Wells Fargo under the Note and Mortgage. Id.

         On January 4, 2017, Wells Fargo sent the Lichter defendants a notice of maturity default letter, informing them of their default and demanding payment. Id. ¶ 35; ECF no. 1-14, Ex. M. As of March 28, 2017, the date of the filing of the Complaint, Lichter Gateway had failed to pay all sums due under the loan documents, including $56, 959, 629.12 in principal, and therefore was in default.[4] Id. ¶¶ 36-39.

         E. The Association's Filing of Liens against Gateway IV

         Lichter Gateway is a party to the "Amended and Restated Grant and Agreement, by and among the Association, Third Newark Gateway Urban Renewal Association, Gateway Four Urban Renewal, L.P., Gateway South Urban Renewal Association, and the Prudential Insurance Company of America, " dated December 21, 1999 (the "Concourse Agreement"). Id. ¶ 47. Under the Concourse Agreement, defendant Lichter Gateway is obligated to pay the Association for the Association's "costs for performing its duties to maintain and service certain of the concourses and walkways at or near" Gateway IV. Id. ¶¶ 48-49.

         In December 2012, Lichter Gateway "voluntarily ceased payment" of those cost assessments, thereby defaulting under the Concourse Agreement. Id. ¶¶ 50-51. As a result of that default, the Association filed three liens against Gateway IV. Id. ¶ 52. The first lien was recorded in July 2013, the second in June 2015, and the third in March 2016. Id. The Association commenced an action to compel Lichter Gateway to pay the assessments in the Superior Court of New Jersey, Law Division, Essex County. Gateway Concourse Association, Inc. v. Lichter Gateway IV LLC, ESX-L-001075-16 (the "State Action").[5] Id. ¶ 53.

         Wells Fargo asserts that, as a result of Lichter Gateway's unpaid assessments, the Association "has ceased maintaining the concourses and walkways" at or near Gateway IV. Id. ¶ 54. In particular, an escalator and revolving door which provide access to Gateway IV "are broken and remain unrepaired." Id. ¶ 55. Wells Fargo alleges that, "as a result of deteriorating conditions ... a tenant at [Gateway IV] has declared an event of default against [Lichter Gateway] under the terms of its lease." Id. ¶ 56.

         Wells Fargo says that neither Lichter Gateway nor the Association informed it of the default under the Concourse Agreement or the existence of the liens. Id. ¶ 57. Rather, from 2013 to 2016, Lichter Gateway submitted annual operating statements to Wells Fargo which indicated that Lichter Gateway had paid "association fees." Id. ¶ 58. It also provided budgets to Wells Fargo which included as budgeted costs the payment of the Association assessments. Id. Indeed, Lichter Gateway requested and obtained funds from Wells Fargo to pay those costs. Id. According to Wells Fargo, Lichter Gateway "failed or omitted to notify [Wells Fargo] that [it] was voluntarily withholding payment of the Concourse Assessments, " from which Wells Fargo infers that it "either misappropriated, misapplied, converted, or failed to use such funds for the purpose of paying the Concourse Assessments." Id.

         II. Procedural History

         On March 28, 2017, Wells Fargo filed this action. (Cplt., ECF no. 1) The Complaint asserts six causes of action against Lichter and the Association: (1) mortgage foreclosure; (2) possession; (3) security interest foreclosure; (4) rent receiver; (5) breach of promissory note; and (6) breach of guaranty. (Id. ¶¶ 69-88) Attached to the Complaint are thirteen exhibits. (ECF nos. 1-2 to 1-14).

         On May 5, 2017, Wells Fargo filed the current motion for appointment of a receiver. (ECF no. 6) In support, it submitted a brief (Pl. Br.), and a declaration from Michael Nikula, a Servicing Officer of C-Ill Asset Management LLC, the Special Servicer for Wells Fargo, in support of its motion. (ECF no. 6-1). Fifteen exhibits were attached to the declaration. (ECF nos. 6-2 to 6-16).

         On June 5, 2017, the Association filed an Answer to the Complaint. (ECF no. 14) On that same date, in lieu of an answer, Lichter filed a motion to dismiss part of Count Six of the Complaint. (Def. Br.)

         On June 19, 2017, Wells Fargo filed a brief in opposition to the motion to dismiss. (Pl. Opp.) Also on that date, Lichter filed its brief in opposition to Wells Fargo's motion for appointment of a receiver. (Def. Opp.) In support of that brief, Lichter submitted a declaration from Abraham Schwartz, the manager at Lichter & Lichter, L.P., and a declaration from Steven Greenberg, the principal of Heritage Newark Management Company, the property management company for Gateway IV. (ECF nos. 19-1, 19-4) The declaration of Abraham Schwartz attached two exhibits, and the declaration of Steven Greenberg attached five exhibits. (ECF nos. 19-2 and 19-3; ECF nos. 19-5 to 19-9)

         On June 26, 2017, Lichter filed a reply memorandum of law in further support of its motion to dismiss, in part, Count Six of the Complaint. (Def. Reply) On that same date, the Association submitted a letter in support of Wells Fargo's motion to appoint a receiver, and "in reply to the opposition . . . filed by Lichter." (ECF no. 22) Attached to the letter are the declaration of David L. Menzel, Esq., counsel for the Association, and exhibits related to the State Action. (ECF no. 22-1)

         On that same date, Wells Fargo filed a reply brief in further support of its motion for appointment of a receiver. (Pl. Reply) It also submitted a "reply declaration" from Mr. Nikula with an Exhibit (ECF nos. 23-1, 23-2), and a declaration from James Postell, its proposed receiver (ECF no. 23-3).

         Two days later, on June 28, 2017, Lichter filed a letter requesting permission to respond to the Association's "untimely and reckless" filing.[6] (ECF no. 24 at 3) It argued that the Association's letter should be rejected by this Court pursuant to Local Civil Rule 7.1(d)(7).[7] (ECF no. 24 at 2) The next day, both the Association and Wells Fargo filed their respective responses. (ECF nos. 25, 26)

         On October 19, 2017, I heard oral argument on the motions and reserved decision; among other things, I was awaiting news on the progress of the State Action between the Association and Lichter Gateway IV, which was imminently scheduled for trial. On October 25, 2017, the Association and Lichter Gateway IV reached a settlement in the State Action. (ECF no. 39 at 1)

         Wells Fargo's position at oral argument and in its briefing heavily relied on the existence of the Association dispute and the alleged waste resulting from that dispute. I therefore entered a text order asking each party to submit a letter describing how the resolution of the State Action would bear on the pending application for a receiver. (ECF no. 35) Supplemental letters were filed. (ECF nos. 38 to 40) Lichter's submission attaches a copy of the settlement agreement as Exhibit A. (ECF no. 39, Ex. A) Wells Fargo's submission attaches a copy of March and October 2017 e-mails between Mr. Nikula and Nanette Jerlat of Heritage, which is Lichter Gateway's property management agent. (ECF no. 40, Ex. A)

         In Section III, infra, I address Wells Fargo's motion for appointment of a receiver, and in Section IV, infra, I address the motion to dismiss part of Count 6 of the complaint.

         III. Motion to Appoint Receiver

         A. Applicable Standard

         Federal Rule of Civil Procedure 66 empowers a federal court to appoint a receiver in a pending litigation.[8] The remedy is a drastic one, and the power to appoint a receiver is one that should be exercised with great caution. "Such an appointment . . . should not be made lightly; it is appropriate only in the face of compelling circumstances and in the absence of a less drastic remedy." Leone Indus, v. Associated Packaging, Inc., 795 F.Supp. 117, 120 (D.N.J. 1992). See 12 Wright, Miller, Kane & Marcus, Federal Practice and Procedure, § 2983 (2d ed.) ("The appointment of a receiver is considered to be an extraordinary remedy that should be employed with the utmost caution and granted only in cases of clear necessity to protect plaintiffs interests in the property.") (footnote omitted); Maxwell v. Enter. Wall Paper Mfg. Co., 131 F.2d 400, 403 (3d Cir. 1942) (recognizing that "it has been judicially noted almost innumerable times that the appointment of a receiver is an extraordinary, a drastic ... remedy ... not to be resorted to if milder measures will give the plaintiff, whether creditor or shareholder, adequate protection for his rights.") (internal citations omitted).[9]

         Generally, in federal diversity actions like this one, federal law governs the decision of whether a receiver should be appointed. See 12 Wright, Miller, Kane 65 Marcus, supra, § 2983 ("Whether a federal court should appoint a receiver in a diversity action appears to be a question properly determined on the basis of federal law."); 13-66 Moore's Federal Practice-Civil § 66.09 ("Federal law and federal practice govern the appointment of a federal equity receiver.... [T]o use federal law is not inconsistent with the Erie doctrine ... because the appointment of a receiver does not directly affect the outcome of the case. By definition, the appointment of a receiver is ancillary to the primary relief being sought, so the appointment of a receiver does not directly affect the outcome of a particular action."); but see Mintzer v. Arthur L. Wright & Co., Inc., 263 F.2d 823, 825 (3d Cir.1959) (concluding that federal courts sitting in diversity should apply state law to the appointment of a receiver).

         District courts in the Third Circuit have applied federal law to a motion to appoint a receiver. See Fimbel v. Fimbel Door Corp., No. CV141915FLWDEA, 2016 WL 1379788, at *2 (D.N.J. Apr. 7, 2016) (identifying cases in the Third Circuit that have applied federal law when considering the appointment of a receiver, and applying federal law in its analysis); but see New England Mutual Life Ins. Co. v. Troy Ventures, Ltd., Civ. No. 94-3299, 1994 WL 705411, at *8 (D.N.J. Dec. 14, 1994) (applying Pennsylvania state law standards).

         The parties in this case both cite federal law, and have not identified any significant difference between state and federal standards.[10] Given the weight of the authority, and the parties' evident agreement, I will apply federal standards for the appointment of a receiver. See Section IV.B, infra.

         Although all parties submitted affidavits and exhibits, no party sought an evidentiary hearing in connection with this motion. While the court may require live testimony in an appropriate case, an evidentiary hearing is not needed if "the record discloses sufficient facts to warrant appointment of a receiver." Leone Indus., 795 F.Supp. at 120 n.6 (citation omitted). I think the parties' approach is sound, in that the essential facts may be gleaned from the documents; any disputes that would involve the credibility of witnesses are not essential to my decision. I therefore decide this motion on the papers, as supplemented by oral argument.

         B. Analysis of Motion to Appoint Receiver

         The mortgage loan is in default. Wells Fargo seeks an order appointing a receiver who will 1) collect all rents and income, and 2) operate and manage the property. (Pl. Br. at 8, 13). As will become clear, I do not think that those two aspects of Wells Fargo's motion stand on the same footing.

         When evaluating the appointment of a receiver in the context of a mortgage foreclosure, a district court has ""broad discretion in appointing a receiver... [I]t may consider a host of relevant factors ... [N]o one factor is dispositive."' Wells Fargo Bank, N.A. v. CCC Atl., LLC, 905 F.Supp.2d 604, 614 (D.N.J. 2012) (quoting Canada Life Assurance Co. v. Alfred R. LaPeter, 563 F.3d 837, 845 (9th Cir. 2009)). Courts have generally considered the following six factors: (1) whether "the property is inadequate security for the loan"; (2) whether "the mortgage contract contains a clause granting the mortgagee the right to a receiver"; (3) "the continued default of the mortgagor"; (4) "the probability that foreclosure will be delayed in the future"; (5) "the unstable financial status of the mortgagor"; and (6) "the misuse of project funds by the mortgagor." Id. (quoting United States v. Berk & Berk, 767 F.Supp. 593, 597 (D.N.J. 1991)) (footnote omitted). "The presence of a contractual stipulation to the appointment of a receiver 'is given considerable weight in the court's evaluation of whether a rent receiver should be appointed." In re Inv'rs Warranty of Am., Inc. v. B.W.E. Dev., L.L.C., No. CIV.09-4490, 2010 WL 2557559, at *5 (D.N.J. June 23, 2010)(quoting Barclays Bank, P.L .C. v. Davidson Ave. Assoc, Ltd., 644 A.2d 685, 687 ( N.J.Super.Ct.App.Div. Jul. 8, 1994)).

         The appointment of a managing receiver, as opposed to a mere receiver of rents, is a more drastic remedy that implicates additional concerns. When a moving party seeks a receiver who will manage and operate the mortgaged property pending foreclosure, courts are particularly cautious in appointing a receiver, and therefore consider whether the evidence demonstrates "something more" than just "the doubtful financial standing" of the defendant and the "inadequacy of the security." Wells Fargo Bank, N.A., 905 F.Supp.2d at 614. Accordingly, additional factors may be considered, including

(1) the danger of waste; (2) delays in foreclosure; (3) the defendant's fraudulent conduct; (4) imminent danger that property will be lost, concealed, injured, diminished in value, or squandered; (5) the inadequacy of the available legal remedies; (6) the probability that harm to plaintiff by denial of the appointment would be greater than the injury to the parties opposing appointment; and (7) the plaintiffs probable success in the action and the possibility of irreparable injury to his interests in the property.

Id. at 614-15 (internal quotation marks, brackets, and citation omitted)(quoting Canada Life Assurance Co., 563 F.3d 837 at 845; Chase Manhattan Bank, N.A. v. Turabo Shopping Ctr., Inc., 683 F.2d 25, 26-27 (1st Cir.1982)).[11]

         Here, the parties did not address (5) the inadequacy of the available legal remedies, or (7) Wells Fargo's probable success in the action and the possibility of irreparable injury to its interests in Gateway IV. They did, however, address other relevant factors. I consider them in turn.

         1. Mortgage Agreement

         Wells Fargo stresses that it is entitled to such relief because under the mortgage agreement, Lichter "expressly consented to the appointment of a receiver" in the event of default, "which has indisputably occurred." (Pl. Br. at 9-10).

         Particularly in regard to a managing receiver, as opposed to a rent receiver, Wells Fargo relies on Section 7.1(g) of the mortgage agreement, which provides that in the event of default, as defined by the loan agreement, [12] Wells Fargo

may . . . (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the [Mortgaged Premises], without notice and without regard for the adequacy of the security for the [Loan] and without regard for the solvency of Borrower, any guarantor, indemnitor with respect to the Loan or of any [p]erson liable for the payment of the [Loan]. . .

(ECF No. 1-4, Ex. C, §7.1(g))

         Lichter, as it must, acknowledges this provision, but urges that it falls short of "explicit consent" to the appointment of a receiver. Rather, it authorizes Wells Fargo to "apply for the appointment of a receiver." (Def. Opp. at 17, 33) (emphasis in original, quoting Mortgage Agreement §7.1(g), supra). I eschew Lichter's excessively literal approach, which would reduce this to an illusory promise (after all, anybody can apply for anything). I do accept, however, that it falls short of a full, self-executing consent to appointment of a receiver for any and all purposes upon default. Particularly as to the appointment of a receiver to operate and manage the property, it is relevant but not dispositive. Neither, however, is it Wells Fargo's only argument from the wording of the relevant agreements; additional provisions in the assignments of rents and leases strengthen its hand, at least as to a rent receiver.

         Wells Fargo also points out that under the mortgage agreement and the Assignment of Leases, it possesses equitable title to the income and rents generated by Gateway IV, because Lichter's revocable license to collect the rents has been automatically terminated as a result of its default. Id. at 10 to 11; (ECF. Nos. 6-4, Ex. C, at 4 to 5; 6-5, Ex. D, at 1 to 2)

         In that regard, Wells Fargo relies on Section 1.2 of the mortgage agreement, entitled "ASSIGNMENT OF RENTS." Section 1.2 provides as follows:

Borrower hereby absolutely and unconditionally assigns to Lender all of Borrower's right, title and interest in and to all current and future Leases and Rents; it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of the Assignment of Leases and Section 7.1(h) of this Security Instrument, Lender grants to Borrower a revocable license to collect, receive, use and enjoy the Rents. Borrower shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt, for use in the payment of such sums.

(ECF No. 1-4, Ex. C, §1.2)

         Closely related is the Assignment of Leases, in which Lichter "absolutely and unconditionally" assigned the right to leases and rents of Gateway IV to Wells Fargo, and granted "[t]he right, at [Wells Fargo]'s option upon revocation of the license granted herein, to enter upon [Gateway IV] in person, by agent or by court-appointed receiver, to collect the Rents." (ECF No. 1-5, Ex. D, § 1.1(c), (h)). Under Section 2.1 of that Assignment, Lichter does not possess title to the rents; it enjoys only a revocable license from Wells Fargo to "collect, receive, use and enjoy the Rents, as well as other sums due under the Lease Guaranties." (ECF No. 1-5, Ex. D, §2.1).

         The Assignment of Leases explicitly spells out the consequences of default. Section 3.1 of that Assignment provides that "[u]pon the occurrence of an Event of Default, the license granted to Borrower in Section 2.1 of this Assignment shall automatically be revoked, and Lender shall immediately be entitled to possession of all Rents and sums due under any Lease Guaranties, whether or not Lender enters upon or takes control of the Property." (ECF No. 1-5, Ex. D, §3.1) Moreover, under that Section, Lichter also consents and agrees that Wells Fargo may enter onto the property, eject Lichter, and collect rents:

[Wells Fargo] may, at its option, without waiving such Event of Default, without regard to the adequacy of the security for the Debt, either in person or by agent, nominee or attorney, with or without bringing any action or proceeding, or by a receiver appointed by a court, dispossess Borrower and its agents and servants from the Property, without liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly therefrom, and take possession of the Property and all books, records and accounts relating thereto and have, hold, manage, lease and operate the Property on such terms and for such period of time as [Wells Fargo] may deem proper and either with or without taking possession of the Property in its own name, demand, sue for or otherwise collect and receive all Rents and sums due under all Lease Guaranties, including those past due and unpaid with full power to make from time to time all alterations, renovations, repairs or replacements thereto or thereof as [Wells Fargo] may deem proper . . .

Id.

         Unlike the mortgage agreement, the assignments of rents and leases have rents and leases as their primary focus. As to the right to receive rents, the Assignment of Leases is far clearer than Section 7.1(g) of the mortgage agreement, supra, and it purports to be self-executing on default. According to Wells Fargo, the Assignment of Leases also authorizes it to enter onto the property without invoking legal process, and to manage and operate it. Wells Fargo, however, is not (or at least is not currently) exercising its claimed right to self-help under that Assignment. Understandably, it seeks the protection of a court order (as well as the insulation from liability afforded by a third-party manager). That being the case, however, Wells Fargo must take the bitter with the sweet; to invoke the powers of the Court and the protection of a Court order, it must submit to the ...


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