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U.S. Bank National Association v. Lighthouse Whitehall

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


September 28, 2012

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN- INTEREST TO BANK OF AMERICA NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-LDP8, PLAINTIFF
v.
LIGHTHOUSE WHITEHALL COMMONS, LLC, DEFENDANT

The opinion of the court was delivered by: James Knoll Gardner United States District Judge

OPINION

This matter is before the court on plaintiff's Motion for Summary Judgment filed February 17, 2012. Defendant, Lighthouse Whitehall Commons, LLC's Response to Motion of Plaintiff, U.S. Bank National Association, as Trustee for Summary Judgment was filed March 9, 2012. On March 19, 2012 plaintiff filed a Reply Brief in Support of Plaintiff's Motion for Summary Judgment. Accordingly, this matter is ripe for disposition.

SUMMARY OF DECISION

For the reasons expressed below, I grant in part, and deny in part, plaintiff's Motion for Summary Judgment.

Specifically, I grant plaintiff's Motion for Summary Judgment to the extent that it requests foreclosure of all right, title, lien and equity of redemption that defendant, and all those claiming by, through or under it has or had in the property located at Three Maryland Circle, Whitehall Township, Lehigh County, Pennsylvania ("Mortgaged Premises"), and requests that such property be sold at foreclosure sale to satisfy the judgment in this case.

I grant partial summary judgment in favor of plaintiff and against defendant in the sum of $4,316,820.31. This represents $4,316,820.31 outstanding principal balance on an August 16, 2006 promissory note from defendant to Eurohypo AG, which was subsequently assigned to plaintiff U.S. Bank National Association; plus $7,216.16 in late fees, a $120.00 miscellaneous fee, and a $345.00 administrative fee.

In addition, defendant shall pay plaintiff $719.47 per diem standard interest from January 11, 2011 through Septem- ber 27, 2012, and $599.56 per diem default interest from February 11, 2011, through September 27, 2012. Defendant shall also pay post-judgment interest at the statutory rate of 0.18 percent to be computed daily, from September 28, 2012 until the judgment is paid in full, which post-judgment interest shall be compounded annually.

I deny plaintiff's motion in all other respects. Specifically, I deny plaintiff's request to apply the contract interest rates from the Loan Agreement to defendant's outstanding principal balance from the date of the entry of judgment, September 28, 2012, until the date of the foreclosure sale of the Mortgaged Premises. However, defendant must pay post-judgment interest at the statutory rate of 0.18 percent to be computed daily, from September 28, 2012 until the judgment is paid in full, and which post-judgment interest shall be compounded annually.

I also deny plaintiff's request to award any payments plaintiff has made toward taxes and insurance premiums for the Mortgaged Premises.

Furthermore, I deny plaintiff's request to award attorneys' fees, taxes, insurance premiums, and other cost disbursements advanced by plaintiff on behalf of defendant during the pendency of this action.

In addition, I deny plaintiff's request for appointment of a receiver to operate, manage, and conduct the foreclosure sale of, the Mortgaged Premises.

In all other respects, plaintiff's Motion for Summary Judgment is denied.

JURISDICTION

This court has jurisdiction in this matter pursuant to

28 U.S.C. § 1332(a)(1) because there is complete diversity between the parties and the amount in controversy exceeds $75,000.00 exclusive of interest and costs. *fn1

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the property that is the subject of this action -- namely, the Mortgaged Premises --- is located in Whitehall Township, Lehigh County, Pennsylvania, which is located in this judicial district. *fn2

PROCEDURAL HISTORY

Plaintiff initiated this action on August 8, 2011 by filing a Complaint in Mortgage Foreclosure against defendant Lighthouse Whitehall Commons, LLC. Plaintiff alleges that defendant defaulted on its mortgage.

Plaintiff filed an Amended Complaint in Mortgage Foreclosure on August 16, 2011. On September 19, 2011 the Answer and Affirmative Defenses of Defendant, Lighthouse Whitehall Commons, LLC to Plaintiff's Amended Complaint was filed.

On September 23, 2011 plaintiff requested appointment of a receiver to manage the Mortgaged Premises during the pendency of this action. I denied Plaintiff's Petition for Appointment of Receiver on December 7, 2011. *fn3

At the Rule 16 Status Conference held by telephone conference call with the undersigned on December 7, 2011, I set a fact discovery deadline of March 30, 2012. *fn4

In correspondence dated January 10, 2012 *fn5 , plaintiff submitted Plaintiff's First Request for Admissions Directed to Defendant Lighthouse Whitehall Commons, LLC. Defendant submitted Lighthouse Whitehall Commons, LLC's Response to Plaintiff's First Request for Admissions to plaintiff in correspondence dated February 9, 2012. *fn6

In defendant's February 9, 2012 response, defendant admitted that it did not make monthly mortgage payments to plaintiff from February 2011, through December 2011, but denied that such payments were required by the August 16, 2006 Promissory Note ("Note").

On February 17, 2012, prior to the close of discovery, plaintiff filed its Motion for Summary Judgment.

Defendant, Lighthouse Whitehall Commons, LLC's Response to Motion of Plaintiff, U.S. Bank National Association, as Trustee for Summary Judgment was filed March 9, 2012. In defendant's response to plaintiff's Motion for Summary Judgment, defendant objected to plaintiff's request for prepayment yield maintenance, as well as to the amount plaintiff claimed in late fees.

After further review of the loan documents, plaintiff, in its Reply Brief in Support of Plaintiff's Motion for Summary Judgment filed by plaintiff on March 19, 2012, withdrew its request for prepayment yield maintenance and decreased the late fees demanded to accord with defendant's contention that late fees cannot be imposed after acceleration of the Note. Plaintiff clarified in its reply brief that it also seeks reimbursement from plaintiff for any tax or insurance premium payments that it makes on behalf of defendant.

On February 17, 2012, approximately one-and-one-half months prior to the March 30, 2012 fact discovery deadline established by my Rule 16 Status Conference Order, plaintiff filed its within Motion for Summary Judgment. Neither party has requested leave to provide supplemental record evidence concerning the pending Motion for Summary Judgment. *fn7

STANDARD OF REVIEW

In considering a motion for summary judgment, the court must determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-2510, 91 L.Ed.2d 202, 211 (1986); Federal Home Loan Mortgage Corporation v. Scottsdale Insurance Company, 316 F.3d 431, 443 (3d Cir. 2003).

Only facts that may affect the outcome of a case are "material". Moreover, all reasonable inferences from the record are drawn in favor of the non-movant. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513, 91 L.Ed.2d at 216.

Although the movant has the initial burden of demonstrating the absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See Watson v. Eastman Kodak Company, 235 F.3d 851, 857-58 (3d Cir. 2000).

Defendants cannot avert summary judgment with speculation or by resting on the allegations in their pleadings, but rather they must present competent evidence from which a jury could reasonably find in their favor. Ridgewood Board of Education v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999); Woods v. Bentsen, 889 F.Supp. 179, 184 (E.D.Pa. 1995).

FACTS

Based upon the pleadings, record papers, exhibits, affidavits, responses to requests for admissions, and the parties' statements of facts, the relevant facts, viewed in the light most favorable to defendant, as required by the forgoing standard of review, are as follows.

Parties

Plaintiff U.S. Bank National Association ("U.S. Bank") is a national banking association and a citizen of Ohio, with its principal place of business in Cincinnati, Ohio. Defendant Lighthouse Whitehall Commons, LLC ("Lighthouse Whitehall") is a Pennsylvania limited liability company with its principal place of business in Fort Lee, New Jersey. *fn8

Agreements

On August 16, 2006, defendant Lighthouse Whitehall entered into a $4,440,000.00 loan agreement with Eurohypo AG, New York Branch ("Eurohypo") as Lender and defendant as Borrower.

Lighthouse Whitehall executed and delivered the Note to Eurohypo on August 16, 2006.

Lighthouse Whitehall executed an Open-End Mortgage and Security Agreement ("Mortgage") in favor of Eurohypo on August 16, 2006 and recorded the Mortgage with the Office of Recorder of Deeds for Lehigh County on August 30, 2006 to secure payment of the sums due under the Note. *fn9 Lighthouse Whitehall used the proceeds of from the loan to purchase 78 condominium units located at Three Maryland Circle, Whitehall Township, Lehigh County, Pennsylvania ("Mortgaged Premises"). *fn10

On August 16, 2006, Lighthouse Whitehall entered into an Assignment of Leases and Rents ("Lease Assignment") with Eurohypo to further secure the payment of the sums due under the Note. The Lease Assignment were recorded with the Office of Recorder of Deeds for Lehigh County on August 30, 2006. *fn11

The Note is also secured by UCC-1 Financing Statements ("UCC-1's") filed with the Secretary of State of the Commonwealth of Pennsylvania on August 25, 2006 and recorded with the Office of Recorder of Deeds for Lehigh County on August 30, 2006. *fn12

Eurohypo assigned the Mortgage, the Lease Assignment, and the UCC-1's to LaSalle Bank National Association ("LaSalle Bank"). The assignment of the UCC-1's to LaSalle Bank was recorded with the Office of Recorder of Deeds for Lehigh County on May 24, 2007. *fn13 The assignments of the Mortgage and the Lease Assignment to LaSalle Bank were recorded with the Office of Recorder of Deeds for Lehigh County on June 11, 2007. *fn14

Bank of America National Association, as successor by merger to LaSalle Bank, assigned the Mortgage, the Lease Assignment, and the UCC-1's to plaintiff U.S. Bank National Association. The assignments of the Mortgage and the Lease Assignment to plaintiff U.S. Bank were recorded with the Office of Recorder of Deeds for Lehigh County on June 27, 2011. *fn15 The assignment of the UCC-1's to plaintiff U.S. Bank were recorded with the Office of Recorder of Deeds for Lehigh County and filed with the Secretary of State of the Commonwealth of Pennsylvania on an unspecified date. *fn16

Non-Payment

Defendant Lighthouse Whitehall is the owner of the Mortgaged Premises. Lighthouse Whitehall did not make monthly loan payments to U.S. Bank from February 2011, through December 2011. U.S. Bank accelerated payments on Lighthouse Whitehall's Mortgage on May 23, 2011. *fn17

DISCUSSION

As specified in the Loan Agreement and undisputed by the parties, the law of the Commonwealth of Pennsylvania governs this action. *fn18 Under Pennsylvania law, a mortgagee may file suit for foreclosure to enforce the terms of the mortgage. United States v. Olayer, 333 Fed.Appx. 669, 671 (3d Cir. 2009)(citing Cunningham v. McWilliams, 714 A.2d 1054, 1056-1057 (Pa.Super. 1998)). If the judgment is not satisfied by a foreclosure sale, the mortgagor remains liable for the remaining balance. Id.

A court may grant summary judgment to a mortgagee-plaintiff in a foreclosure action if there is no issue of material fact as to whether (1) the mortgage is in default;

(2) defendant has failed to pay interest on the mortgage; and

(3) the recorded mortgage is in the amount specified by plaintiff mortgagee. Landau v. Western Pennsylvania National Bank, 445 Pa. 217, 225-226, 282 A.2d 335, 340 (1971).

Mortgage in Default

In Lighthouse Whitehall Commons, LLC's Response to Plaintiff's First Request for Admissions, Lighthouse Whitehall admitted the following:

(1) Exhibit A to U.S. Bank's Amended Complaint in Mortgage Foreclosure is a true and correct copy of the Loan Agreement between Eurohypo and Lighthouse Whitehall;

(2) the signature of Mr. Meyer Orbach, Lighthouse Whitehall's managing member on August 16, 2006, appears on the Loan Agreement;

(3) Exhibit B to U.S. Bank's Amended Complaint in Mortgage Foreclosure is a true and correct copy of the Note for the original principal loan amount of $4,400,000.00, given by Lighthouse Whitehall to Eurohypo;

(4) Meyer Orbach's signature appears on the Note;

(5) Exhibit C to the Amended Complaint in Mortgage Foreclosure is a true and correct copy of the Mortgage dated August 16, 2006 and recorded on August 30, 2006; and

(6) Meyer Orbach's signature appears on the Mortgage. *fn19

In addition to Lighthouse Whitehall's admissions, the documents which U.S. Bank attached to its Amended Complaint in Mortgage Foreclosure demonstrate that payments on the Mortgage were to be made from Lighthouse Whitehall to U.S. Bank beginning January 1, 2011, which was the effective date of the assignments from Bank of America to U.S. Bank. Specifically, exhibits F and G to the Amended Complaint in Mortgage Foreclosure are the assignments of the Mortgage and Lease Assignment from Eurohypo AG to LaSalle Bank. Exhibits H and I are the assignments of the Mortgage and the Lease Assignment from Bank of America National Association, as successor by merger to LaSalle Bank, to plaintiff U.S. Bank.

Pursuant to the Loan Agreement, Lighthouse Whitehall agreed to provide U.S. Bank with monthly payments on the Mortgage on the eleventh day of each calendar month during the term of the loan. *fn20 A sworn, notarized affidavit of Mr. Simon Lau, Vice President and Servicing Officer of U.S. Bank, dated March 19, 2012, was filed with the Reply Brief in Support of Plaintiff's Motion for Summary Judgment. In his affidavit, Mr. Lau stated that defendant has an outstanding principal balance of $4,316,820.31 on the Mortgage, and that defendant failed to make required Mortgage payments to plaintiff beginning February 2011, through December 2011. *fn21

Indeed, Lighthouse Whitehall admits, in its response to Plaintiff's First Requests for Admissions Directed to Defendant Lighthouse Whitehall Commons, LLC, that it did not make monthly payments to U.S. Bank beginning in February 2011, and for each subsequent month, through and including December 2011. *fn22

Defendant denied that these February through December 2011 payments were due to plaintiff under the Note. *fn23 However, defendant does not counter U.S. Bank's supporting affidavit with any affidavit of its own, or any other document supporting its contention that payments were not due to U.S. Bank from February 2011, through December 2011.

The Loan Agreement provides that the Mortgage is considered in default if "any monthly installment of principal and/or interest due under the Note is not paid on or prior to the date on which it is due". *fn24 Mr. Lau's affidavit supports plaintiff's contention that Lighthouse Whitehall has an outstanding balance on the Mortgage and that Lighthouse Whitehall missed at least eleven monthly payments.

In the absence of any record evidence supporting Lighthouse Whitehall's claim that it did not owe U.S. Bank monthly payments from February 2011, through December 2011, I find that there is no disputed genuine issue of material fact as to whether Lighthouse Whitehall defaulted on the Mortgage.

Lighthouse Whitehall's admission that it did not make monthly payments to U.S. Bank from February 2011, through December 2011, together with the affidavits from Mr. Lau stating that Lighthouse Whitehall was obligated to make such payments, demonstrates that there is no dispute of material fact concerning whether Lighthouse Whitehall's Mortgage is in default. See Hearns v. Parisi, 548 F.Supp.2d 132, 142 (M.D.Pa. 2008). Indeed, these undisputed facts demonstrate that defendant Lighthouse Whitehall defaulted on its obligations under the Loan Agreement and Mortgage.

Defendant Failed to Pay Interest For a plaintiff mortgagee to obtain summary judgment in a foreclosure action, the plaintiff must also demonstrate that there is no genuine issue of material fact as to whether the defendant-mortgagor failed to pay interest on the loan. Landau, 445 Pa. at 225-226, 282 A.2d at 340.

According to the Loan Agreement, Lighthouse Whitehall's monthly payments due to U.S. Bank include both the principal and the interest accrued on the Mortgage for the previous month. *fn25

Defendant's admission that it did not make required monthly payments to plaintiff, part of which would have been applied to accruing interest, constitutes an admission that Lighthouse Whitehall failed to pay interest on the loan. Accordingly, the fact that defendant failed to pay interest on the loan is not disputed.

Specified Mortgage Amount

To obtain summary judgment in a mortgage foreclosure action, a plaintiff-mortgagee must also demonstrate that the amount of defendant's recorded Mortgage is not in dispute. Landau, 445 Pa. at 225-26; 282 A.2d at 340.

In its response to Plaintiff's First Requests for Admissions Directed to Defendant Lighthouse Whitehall Commons, LLC, defendant Lighthouse Whitehall admitted that the Promissory Note plaintiff attached to its Amended Complaint in Mortgage Foreclosure is a "true and correct copy" of the Note, and that the Note evidences the original Mortgage of $4,440,000.00. *fn26

Consequently, there is no dispute as to the recorded amount of the Mortgage.

Because Lighthouse Whitehall has failed to establish a genuine issue of fact concerning (1) whether it is in default,

(2) whether it failed to pay interest on the Mortgage, and

(3) the recorded amount of the Mortgage, I grant plaintiff's Motion for Summary Judgment to the extent it requests that plaintiff be permitted to foreclose on the Mortgaged Premises to satisfy a judgment in this case.

Outstanding Balance

It is proper to grant plaintiff summary judgment in a mortgage foreclosure action even if defendant does not admit the amount of its outstanding debt to plaintiff. Wells Fargo Bank, N.A. v. Lofts at the Mill, L.P., 2010 U.S.Dist. LEXIS 33784, at *4 (M.D.Pa. April 6, 2012)(Munley, J.)(citing Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa.Super. 1998); see Landau, 445 Pa. at 225-226, 282 A.2d at 340.

In Landau v. Western Pennsylvania National Bank, the Supreme Court of Pennsylvania stated that defendant-mortgagors are "unquestionably entitled to an accounting, but that accounting is not due until the property is sold at sheriff's sale and distribution of the proceeds is made." 445 Pa. at 226; 282 A.2d at 340 . However, the Landau Court made that statement only after concluding that the homeowner-mortgagors had not raised "any genuine issue as to the amount of damages to be awarded in the mortgage foreclosure action." Id. Here, as discussed below, genuine factual disputes remain concerning the total amount of damages.

Nonetheless, Landau establishes the possibility that, where there is a genuine dispute regarding the amount of damages, the court may grant summary judgment on the foreclosure action, but withhold judgment regarding damages. See Lofts at the Mill, 2010 U.S.Dist. LEXIS 33784, at *5.

Mr. Lau's March 19, 2012 affidavit explains that the $4,540,678.07 in total damages claimed by U.S. Bank include standard interest through August 10, 2011 at the rate of 6 percent per year and default interest through July 30, 2011 at the rate of 5 percent per year. *fn27 U.S. Bank also seeks continuing per diem interest at the standard interest rate from and after August 11, 2011 and per diem interest at the default rate from and after July 31, 2011, both continuing until the Mortgaged Premises is sold. *fn28 Plaintiff also requests all, and continuing, attorneys' fees and "all other amounts advanced by

[p]laintiff during the pendency of this action". *fn29

The only disputed issues concerning the amount of damages claimed by U.S. bank are the amount U.S. Bank paid in taxes and insurance premiums, and the amount of attorneys' fees and any other fees that U.S. Bank has advanced or will advance during the pendency of this action. As explained below, Lighthouse Whitehall has not provided record evidence creating a genuine issue of material fact concerning the outstanding amount of principal balance, standard interest, default interests, late fees, prepayment yield maintenance, or miscellaneous and administrative fees.

Principal Balance

In its Motion for Summary Judgment, plaintiff alleges that defendant has an outstanding principal balance on its Mortgage of $4,316,820.31. *fn30 In its response to plaintiff's motion, defendant denied that it has an outstanding balance in that amount. *fn31 However, defendant has not provided any evidence, such as a counter affidavit or statements showing that defendant has paid down a greater portion of the original $4,400,000 loan secured by the Mortgage, to support its contention that defendant does not have an outstanding balance in this amount. Accordingly, there is no genuine dispute regarding defendant's outstanding principal balance in the amount of $4,316,820.31.

Standard Interest

U.S. Bank asserts, in its Motion for Summary Judgment, that Lighthouse Whitehall owes $152,527.65 in standard interest on the Mortgage through August 10, 2011, as well as continuing per diem interest until the Mortgaged Premises is sold at fore-closure sale. *fn32 In its reply to U.S. Bank's motion, Lighthouse Whitehall denies that it owes this amount in interest, *fn33 but, again, failed to provide any evidence supporting that contention.

Lighthouse Whitehall, in its brief in opposition, contends that plaintiff's calculation of the standard interest due is incorrect. *fn34 Both parties agree that the standard interest rate is six percent per year pursuant to the Loan Agreement. *fn35 The parties also agree as to how the interest is to be calculated and that the standard interest rate amounts to $719.47 per day. *fn36

While the parties agree on the per diem standard interest rate, they dispute the date on which standard interest began to accrue at the rate of $719.47 per day. U.S. Bank contends that the standard interest began accruing on January 11, 2011. *fn37 Lighthouse Whitehall contends that, if any interest is due, it did not begin to accrue until February 1, 2011. *fn38

The terms of the Loan Agreement resolve this dispute. Specifically, the Loan Agreement provides that Lighthouse Whitehall's monthly payments are due to U.S. Bank on the eleventh day of each calendar month. *fn39 The Loan Agreement also specifies that each monthly payment includes "interest accrued with respect to the monthly period ending on the date immediately preceding each Monthly Payment Date [the eleventh day of each month], in arrears [for the previous month], in the amount of the Monthly Debt Service Payment Amount [which includes both principal and interest] on each Monthly Payment Date thereafter to the Maturity Date." *fn40

Pursuant to the above-quoted language, Lighthouse Whitehall's monthly payments include interest which accrued on the principal balance from the eleventh day of the previous month through and including the tenth day of the current month.

Defendant admitted not making payments to plaintiff from February 11, 2011 and for each subsequent month thereafter, through December 11, 2011. *fn41 By not making the monthly payment on February 11, 2011, Lighthouse Whitehall failed to pay U.S. Bank the interest which had accrued from January 11, 2011 through February 10, 2011. By failing to make the required monthly payments to plaintiff since February 11, 2011, defendant is responsible for paying plaintiff interest which began to accrue on January 11, 2011, one month prior to the first admittedly-missed payment.

Because the language of the Loan Agreement is clear with regard to how interest is to be calculated, there is no genuine dispute regarding the amount of standard interest defendant owes plaintiff. Lighthouse Whitehall owes U.S. Bank $719.47 per diem in standard interest from January 11, 2011 through September 27, 2012.

Default Interest

The Loan Agreement stipulates that if defendant defaults on a payment, plaintiff shall collect default interest on the Mortgage, in addition to the standard interest already charged on the principal. *fn42 The parties agree that the interest should be calculated in the same manner as the standard interest, that the default interest rate is five percent per year, which amounts to $599.56 per day. However, again the parties disagree about when default interest began to accrue. *fn43

U.S. Bank claims the default interest began to accrue on February 11, 2011 *fn44 and Lighthouse Whitehall claims that, if default interest is due, it began accruing on February 1, 2011. *fn45

Defendant has not provided a counter-affidavit or any other record evidence to support its contention that default interest would begin accruing on February 1, 2011.

More importantly, the Loan Agreement provides that the outstanding principle on the loan "shall accrue interest at the Default Rate, calculated from the date such payment was due " (emphasis added). *fn46 Defendant's first missed payment was due February 11, 2011. Therefore, default interest began accruing on February 11, 2011 pursuant to the terms of the Loan Agreement. Accordingly, there is no genuine issue of material fact regarding the default interest that defendant owes plaintiff. Defendant owes plaintiff $599.56 per diem in default interest, from February 11, 2011 through September 27, 2012.

Post-Judgment Interest

Plaintiff requests that defendant pay the default interest, in addition to the standard interest rate of six percent, up until the time the Mortgaged Premises is sold at foreclosure sale. *fn47

Under Pennsylvania law, after a judgment is entered, plaintiff is entitled to statutory interest rather than contractual interest unless the contract establishes the parties' intent to maintain the contractual interest rate post-judgment. Standard v. Federal National Mortgage Association, 991 F.2d 1089, 1094-1095 (3d Cir. 1993).

There is no provision in the Loan Agreement establishing the parties' intent to have defendant pay the default interest after a judgment is entered in a foreclosure proceeding. Accordingly, defendant must pay post-judgment interest at the statutory rate.

Post-judgment interest in federal court, even in diversity actions, is governed by 28 U.S.C. § 1961, which provides that a plaintiff shall receive interest from the date of the entry of the judgment at a rate "equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of the Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment." Pierce Associates, Inc. v. The Nemours Foundation, 865 F.2d 530, 548 (3d Cir. 1998). *fn48 Therefore, plaintiff shall receive interest at a rate of 0.18 percent, to be computed daily, until the judgment is paid in full, and shall be compounded annually, as provided by

28 U.S.C. § 1961(b).

Late Fees

The Loan Agreement provides that, in the event defendant does not make a required payment, defendant shall pay plaintiff "the lesser of (a) five percent (5%) of such unpaid sum or (b) the maximum amount permitted by applicable law". *fn49 In its Motion for Summary Judgment, plaintiff alleged that defendant's loan accrued $9,020.20 in late fees, without explaining the calculation that generated that figure. *fn50

After Lighthouse Whitehall pointed out, correctly, in its response and memorandum opposing plaintiff's Motion for Summary Judgment that U.S. Bank may not recover late fees after the acceleration of the Note *fn51 -- acceleration occurred on May 23, 2011 -- plaintiff reduced its claim for late fees to $7,216.16. *fn52 To arrive at this amount, plaintiff alleged that defendant missed monthly payments of $36,080.78 due the months of February, 2011 through May, 2011, and calculated five percent of those four months of missed payments. *fn53

U.S. Bank's reduction in its claim for late fees adequately responded to defendant's contention that late fees may not be charged after the date of acceleration. Because discovery is now complete and defendant has not requested leave to submit a sur-reply to object to the $36,080.78 monthly payment amount which plaintiff used as a basis to compute the late fees charged on payments missed from and including February 2011, through and including May 2011, I consider plaintiff's figure of $36,080.78 to be defendant's true monthly payment due on the eleventh day of February, March, April, and May, 2011. *fn54

Accordingly, there is no dispute regarding the amount of late fees defendant owes plaintiff, and I find that defendant owes plaintiff $7,216.16 in late fees for Lighthouse Whitehall's missed payments in February, March, April, and May, 2011.

Prepayment Yield Maintenance

In its Motion for Summary Judgment, plaintiff requests prepayment yield maintenance --- a prepayment penalty --- in the amount of $906,749.31. *fn55 Defendant contends, in its response to plaintiff's motion, that plaintiff may not recover a prepayment penalty after acceleration of the Note absent an express provision in the Loan Agreement permitting plaintiff to do so. *fn56

In its reply brief, U.S. Bank withdraws its request for prepayment yield maintenance. *fn57 Because plaintiff no longer seeks prepayment yield maintenance, there can be no genuine dispute over that prepayment penalty.

Miscellaneous and Administrative Fees

The Loan Agreement states that if defendant does not make a payment, it shall "reimburse [plaintiff] upon receipt of notice from [plaintiff], for all reasonable costs and expenses...incurred by [plaintiff] in connection with...enforcing any obligations of or collecting any payments due from [defendant] under this Agreement". *fn58 In its Motion for Summary Judgment, plaintiff requests $120.00 for a miscellaneous fee and $345.00 in administrative fees. *fn59

In its response to plaintiff's motion, defendant contends that plaintiff has not demonstrated the reasonableness

of these fees, and that defendant should have an opportunity to complete discovery to determine their reasonableness. *fn60

Mr. Lau responded in his affidavit attached to plaintiff's reply that the $120.00 miscellaneous fee is a charge for a Uniform Commercial Code ("UCC") administration fee, and the $345.00 administrative fees are charges for a demand preparation fee, a trustee fee, a notary fee, and a UCC termination fee. *fn61

Because U.S. Bank has outlined the origin of these fees, and Lighthouse Whitehall has not offered record evidence demonstrating that -- or otherwise explained why -- these charges are unreasonable, I find that the miscellaneous and administrative fees are reasonable and there is no genuine dispute as to their amount or their reasonableness. Accordingly, I conclude that defendant owes plaintiff $120.00 for a miscellaneous fee and $345.00 in administrative fees.

Tax Escrow Balance and Insurance Escrow Balance

The Loan Agreement provides that Lighthouse Whitehall "shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof as the same become due and payable." *fn62 As long as Lighthouse Whitehall is not in default and continues to deposit tax funds into an escrow account as required by the Loan Agreement, *fn63 its

"obligation to directly pay Taxes shall be suspended". *fn64

The same section of the Loan Agreement also provides that U.S. Bank "may pay over any such cash or other security held by [plaintiff] to the claimant entitled thereto at any time when, in the judgment of [plaintiff], the entitlement of such claimant is established." *fn65 Accordingly, if Lighthouse Whitehall failed to deposit tax funds into the escrow account, even though that failure would require Lighthouse Whitehall to pay the taxes directly, U.S. Bank may make the tax payments itself and then require that Lighthouse Whitehall reimburse U.S. Bank for those tax payments.

In addition to paying taxes on the Mortgaged Premises, Lighthouse Whitehall must also "maintain, or cause to be maintained, insurance for Borrower and the Property" that provides a minimum amount of coverage as required by the Loan Agreement. *fn66 As with the tax payment, if Lighthouse Whitehall failed to make insurance premium payments into the escrow account *fn67 and U.S. Bank

is not in receipt of written evidence that all insurance...is in full force and effect, [plaintiff] shall have the right, without notice to [defendant], to take such action as [plaintiff] deems necessary to protect its interest in the Property, including, without limitation, the obtaining of such insurance coverage as [plaintiff] in its sole discretion deems appropriate and all premiums incurred by [plaintiff] in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by [defendant] to [plaintiff] upon demand. *fn68

In other words, if Lighthouse Whitehall fails to make insurance premium payments, U.S. Bank may, without notice, elect to make those payments itself and, if U.S. Bank does so, Lighthouse Whitehall is responsible for reimbursing U.S. Bank for such insurance premium payments.

As mentioned above, the Loan Agreement requires Lighthouse Whitehall to maintain escrow accounts for the deposit of funds for the payment of taxes and insurance premiums. *fn69 In its Motion for Summary Judgment, U.S. Bank states that as of August 1, 2011, Lighthouse Whitehall had a tax escrow balance of $21,956.38 and an insurance escrow balance of $16,319.59, both of which U.S. Bank credited toward Lighthouse Whitehall's mortgage debt. *fn70

Lighthouse Whitehall states, in its response to plaintiff's motion, that U.S. Bank has not set forth any evidence demonstrating the accuracy of these escrow balances. *fn71 Because discovery was not yet complete at the time defendant responded to plaintiff's motion, defendant contended that it should have an opportunity to obtain an itemized statement of its escrow accounts to determine whether the trustee has maintained the accounts in accordance with the Loan Agreement. *fn72

Mr. Lau stated, in his affidavit attached to U.S. Bank's reply brief, that because Lighthouse Whitehall has not deposited any funds into the account reserved for taxes and insurance premiums, there is, as of March 13, 2012, a negative tax escrow balance of $-33,592.47 and an insurance escrow balance of $0. *fn73 Given that Lighthouse Whitehall's escrow balances have both decreased from August 1, 2011 to March 13, 2012, it appears that U.S. Bank has paid taxes and insurance premiums out of the tax and insurance escrow accounts.

As discussed above, plaintiff has a right to perform such actions under the Loan Agreement. In addition, the Loan Agreement states that "upon the occurrence of an Event of Default, [plaintiff] may apply any sums then present in the Reserve Funds to the payment of the Debt in any order in its sole discretion." *fn74

Discovery is now complete. Defendant has not submitted any evidence to support its contention that the amount of money in defendant's tax and insurance escrow accounts as of August 1, 2011 was not the amount stated by plaintiff, or that the account balances as of March 13, 2012, as stated by Mr. Lau in his affidavit, are inaccurate in any respect.

Lighthouse Whitehall went from a positive tax escrow balance of $21,956.38 on August 1, 2011 to a negative tax escrow balance of $-33,592.47 on March 13, 2012, and from a positive insurance escrow balance of $16,319.59 on August 1, 2011 to an insurance escrow balance of $0 on March 13, 2012. Because the negative balance in the tax escrow account appears to have resulted from U.S. Bank's payments for Lighthouse Whitehall's Mortgaged Property's taxes, Lighthouse Whitehall would owe U.S. Bank $33,592.47 for the tax payments U.S. Bank made out of its own funds after Lighthouse Whitehall's tax escrow account reached a zero balance. Lighthouse Whitehall would not owe U.S. Bank any part of the $16,319.59 U.S. Bank spent to cover insurance premium payments because U.S. Bank paid that money out of Lighthouse Whitehall's own escrow account from money that Lighthouse Whitehall had deposited itself.

Given the limited information Mr. Lau provided in his affidavit, I do not know what amount U.S. Bank has spent, if any, on taxes and insurance premiums from March 14, 2011 to the present. Further proceedings are required to determine the total amount of tax and insurance premium reimbursements owed by Lighthouse Whitehall to U.S. Bank.

Attorneys' Fees and Costs

The Loan Agreement provides that if defendant fails to make a payment, defendant shall pay plaintiff "all reasonable costs and expenses (including reasonable attorneys' fees and disbursements and the allocated costs of internal legal services and all actual disbursements of internal counsel) incurred by [plaintiff] in connection with...enforcing any obligations of or collecting any payment due from [defendant] under this Agreement". *fn75

In its Motion for Summary Judgment, plaintiff requests attorneys' fees and costs, as well as any other costs advanced during the pendency of this action. *fn76 However, plaintiff does not provide any evidence stating the amount of attorneys' or additional fees requested, or evidence that the fees being requested are reasonable. Accordingly, plaintiff's Motion for Summary Judgment is denied to the extent that it requests plaintiff's attorneys' fees and other cost disbursements advanced in connection with this foreclosure action.

Appointment of Receiver

Appointment of Receiver

The Motion for Summary Judgment requests that the court appoint a receiver to operate and manage the Mortgaged Premises during the pendency of this action and authorizing the receiver to conduct the foreclosure sale of the Mortgaged Premises pursuant to Chapter 127 of Title 28 of the United States Code,

28 U.S.C. § 2001-2007. *fn77

As noted above, I denied plaintiff's September 23, 2011 Petition for Appointment of Receiver. As explained in my Order dated and filed December 7, 2011, I denied the September 23, 2011 petition because plaintiff's sole argument --- namely, that the Loan Agreement entitled it to have receiver appointed in the event of default -- was not supported by the Loan Agreement itself.

Absent an agreement by the parties, the appointment of a receiver is an extraordinary remedy to be employed where an emergency exists and the receiver is necessary to protect the property interests of the moving party. Comerica Bank v. State Petroleum Distributors, Inc., 2008 WL 2550553, at *3-4 (M.D.Pa. June 2, 2008)(Koskik, J.); Miller v. Frisco, Inc., 376 F.Supp. 468, 470 (E.D.Pa. 1974) (Van Artsdalen, J.); see also Mintzer v. Arthur L. Wright & Co., 263 F.2d 823, 824 (3d Cir. 1959).

The decision whether to appoint a receiver is within the discretion of the court, and the court must consider the circumstances of each case. Miller, 376 F.Supp. at 470.

In deciding whether to appoint a receiver, some relevant factors include:

(1) the probability of the plaintiff's success in the action; (2) the possibility of irreparable injury to the plaintiff's interests in the property; (3) the inadequacy of the security to satisfy the debt; (4) the probability that fraudulent conduct has occurred or will occur to frustrate the plaintiff's claim; (5) the financial position of the debtor; (6) the imminent danger of the property being lost, concealed, injured, diminished in value, or squandered; (7) the inadequacy of available legal remedies; (8) the lack of a less drastic equitable remedy; and (9) the likelihood that appointing a receiver will do more harm than good.

Comerica Bank, 2008 WL 2550553, at *4.

The motion for summary judgment and plaintiff's brief in support do not discuss or explain why appointment of a receiver is necessary to protect its property interests. *fn78 The undisputed facts of this case demonstrate that Lighhouse Whitehall did not make monthly loan payments to U.S. Bank from February 2011, through December 2011, *fn79 and, for the reasons expressed above, U.S. Bank has largely succeeded on the merits of its Motion for Summary Judgment.

However, while U.S. Bank's success on the merits suggests that a receiver could be appropriate in this case, U.S. Bank has not provided the court with additional factual information demonstrating a sufficiently grave and immediate risk to its property interests to support the appointment of a receiver.

Accordingly, I deny plaintiff's Motion for Summary Judgment to the extent it seeks appointment of a receiver to operate and manage the Mortgaged Premises during the pendency of this action and to conduct the foreclosure sale of the Mortgaged Premises.

CONCLUSION

Because defendant is in default on the Mortgage, defendant has failed to pay interests on the Mortgage, and there is no dispute regarding the recorded amount of the Mortgage, I grant plaintiff's Motion for Summary Judgment to the extent it

requests that plaintiff be permitted to foreclose on the Mortgaged Premises.

Moreover, for the reasons expressed in this Opinion, material factual disputes preclude entry of summary judgment for the total sum owed by Lighthouse Whitehall to U.S. Bank. However, it is appropriate to enter partial summary judgment in favor of plaintiff and against defendant in the sum of $4,324,501.47, as follows:

(intentionally left blank)

$4,316,820.31 outstanding principal balance on the

August 16, 2006 Promissory Note to Eurohypo, subsequently assigned to U.S. Bank;

7,216.16 late fees for missed payments in

February, March, April and May, 2011;

120.00 miscellaneous fee (UCC administration fee);

345.00 administrative fees (demand preparation fee, trustee fee, notary fee, UCC termination fee);

$4,324,501.47 TOTAL Partial Summary Judgment;

plus $719.47 per diem standard interest from January 11, 2011 through September 27, 2012, and $599.56 per diem default interest from February 11, 2011 through September 27, 2012.

For the reasons expressed in this Opinion, summary judgment is denied concerning plaintiff's request for the amount of attorney's fees, taxes, insurance premiums, and other cost disbursements that U.S. Bank has advanced from March 14, 2011 to the present, or will advance, on behalf of Lighthouse Whitehall in connection with this foreclosure action. Further proceedings are required to determine the total amount of these items owed by Lighthouse Whitehall to U.S. Bank, to be conducted at the future non-jury trial in this action.

I also deny plaintiff's request to apply the contract interest rates from the Loan Agreement to defendant's outstanding principal balance from the date of the entry of judgment, September 28, 2012, until the date of the foreclosure sale of the Mortgaged Premises. However, defendant must pay the post-judgment interest at the statutory rate of 0.18 percent to be computed daily, from September 28, 2012, until the judgment is paid in full, and which post-judgment interest shall be compounded annually.

In addition, I deny plaintiff's request for appointment of a receiver to operate, manage, and conduct the foreclosure sale of the Mortgaged Premises.

In all other respects, plaintiff's motion for summary judgment is denied.


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