US BANK NATIONAL ASSOCIATION v. NG 104 N MAIN LLC et al
Filing
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ORDER ON PLAINTIFFS EX PARTE MOTION FOR ORDER TO SHOW CAUSE WHY PAYMENTS SHOULD NOT BE MADE DURING PENDENCY OF MORTGAGE OF FORECLOSURE ACTION; PLAINTIFFS EX PARTE MOTION FOR ORDER TO SHOW CAUSE WHY FINAL JUDGMENT OF FORECLOSURE SH OULD NOT BE ENTERED; PLAINTIFFS MOTION FOR ASSIGNMENT OF RENTS;PLAINTIFFS VERIFIED EMERGENCY MOTION TO APPOINT RECEIVER; AND PLAINTIFFS MOTION FOR LEAVE TO REPLY TO DEFENDANTS MEMORANDA - motion hearing set for 8/23/2013 at 10:00 AM in U.S. Co urthouse Gainesville before JUDGE MARK E WALKER re motions 6 , 7 , 8 , and 9 (responses to motions 8 and 9 due by 8/19/2013); 16 Motion for Leave to File a Reply is GRANTED - reply due by 8/19/2013; signed by JUDGE MARK E WALKER on 8/8/13. (tss)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF FLORIDA
GAINESVILLE DIVISION
U.S. BANK, NATIONAL
ASSOCIATION, in its capacity as
Trustee for the registered holders of
LB-UBS Commercial Mortgage
Trust 2007-C7, Commercial
Mortgage Pass-Through
Certificates, Series 2007-C7,
Plaintiff,
v.
CASE NO. 1:13-cv-140-MW/GRJ
NG 104 N. Main LLC,
ELCHONON SCHWARTZ, and
SIMON SINGER,
Defendants.
____________________________________/
ORDER ON PLAINTIFF’S EX PARTE MOTION FOR ORDER TO SHOW
CAUSE WHY PAYMENTS SHOULD NOT BE MADE DURING
PENDENCY OF MORTGAGE OF FORECLOSURE ACTION;
PLAINTIFF’S EX PARTE MOTION FOR ORDER TO SHOW CAUSE
WHY FINAL JUDGMENT OF FORECLOSURE SHOULD NOT BE
ENTERED; PLAINTIFF’S MOTION FOR ASSIGNMENT OF RENTS;
PLAINTIFF’S VERIFIED EMERGENCY MOTION TO APPOINT
RECEIVER; AND PLAINTIFF’S MOTION FOR LEAVE TO
REPLY TO DEFENDANTS’ MEMORANDA
Before this Court are five motions filed by the Plaintiff, U.S. Bank, National
Association, as successor-in-interest to Bank of America, National Association, as
successor by merger to LaSalle Bank National Association, as trustee for the
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registered holders of LBUBS Commercial Mortgage Trust 2007-C7, Commercial
Mortgage Pass-Through Certificates, Series 2007-C7 (“Trust”):
Plaintiff’s Ex Parte Motion for Order to Show Cause Why Payments
Should Not be Made During Pendency of Mortgage Foreclosure Action,
ECF No. 6.
Plaintiff’s Ex Parte Motion for Order to Show Cause Why Final
Judgment of Foreclosure Should Not Be Entered, ECF No. 7
Plaintiff’s Motion for Assignment of Rents, ECF No. 8.
Plaintiff’s Verified Emergency Motion to Appoint Receiver, ECF No. 9.
Plaintiff’s Motion for Leave to Reply to Defendant’s Memoranda, ECF
No. 16.
This Court has reviewed the Defendant’s, NG 104 N. Main LLC, (“NG
104”), responses to the Trusts’ motions for an order to show cause, including
NG’s Memorandum in Opposition to US Bank’s Motion for a Show Cause Order
Regarding Payments, ECF No. 12, and NG’s Memorandum in Opposition to US
Bank’s Motion for a Show Cause Order Regarding Judgment, ECF No. 13.
Trust’s Motions for Orders to Show Cause, ECF No. 6 and 7.
The Trust moves this Court to issue orders to show cause why final
judgment should not be entered under section 702.10(1), Florida Statutes, ECF No.
7, and why payments should not be made during pendency of mortgage foreclosure
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actions under section 702.10(2), ECF No. 6. In so doing, the Trust urges this Court
to issue orders to show cause that substantially conform with the various
provisions of section 702.10 which itemize what information must be included in
the orders and the timeline for when the hearing must be conducted.
In their responses, NG 104 argues for various reasons that (1) the state
court’s orders to show cause are still in full force after removal unless and until this
Court dissolves or modifies them;1 (2) they have already filed a response to the
state court’s orders to show cause in the form of affidavits with this Court, see ECF
No. 3, entitled “Notice of Filing Affidavits (Show Cause Orders)”; (3) This Court
does not need to set a hearing on the orders to show cause because the record and
NG 104’s filings demonstrate sufficient “cause” in response to the show cause
orders such that this Court may not grant the motions for Trust.
This Court takes no issue with NG 104’s request to rely upon the state
court’s orders to show cause. However, in so doing, this Court observes that any
error, procedural or otherwise, contained within or relating to the state court’s
orders to show cause has been waived by NG 104 for the purposes of appeal under
the invited error doctrine. See Thunderbird, Ltd. v. First Federal Sav. and Loan
Ass’n of Jacksonville, 908 F.2d 787, 794 (11th Cir. 1990); Francois v. Wainwright,
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The State Court issued orders to show cause and set them for a hearing on July 26, 2013. This
action was removed to this Court prior to the date of the hearings. Thus, while the orders to
show cause were issued by the state court, no hearing was conducted.
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741 F.2d 1275, 1282 (11th Cir. 1984). Further, this Court takes no issue with NG
104’s implicit position that this Court shall consider its previous filing, ECF No. 3,
as well as the instant filings as response to the State Court’s motions to show
cause.
However, NG 104’s argument that a hearing need not take place is
unpersuasive. This Court notes that a hearing was not conducted in state court
prior to the removal of this action to this Court. Further, although this Court is not
deciding or relying upon this point, this Court notes that the Florida Supreme Court
has held that section 702.10(2) and its procedural requirements are substantive in
nature. Caple v. Tuttle’s Design-Build, Inc., 753 So. 2d 49 (Fla. 2000). This Court
is cognizant that this is a diversity jurisdiction case and that federal procedural
laws govern over state procedural laws, see Erie, as well as Local Rule 7.1(d)’s
provision that “Motions shall generally be determined without oral argument.”
However, nothing precludes this Court from conducting a hearing on the four
pending motions.
Specifically, with respect to NG 104’s Memorandum in Opposition to U.S.
Bank’s Motion for a Show Cause Order Regarding Payments, ECF No. 12, the
provision relied upon by NG 104 in section 702.10(2)(d) does not dispense with
the hearing requirement contained within 702.10(2). That provision merely sets
forth what needs to be proven in order for the Court to grant the order to make
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payments.
The statute requires a hearing, and NG 104’s argument has not
convinced this Court otherwise.
With respect to NG 104’s Memorandum in Opposition to U.S. Bank’s
Motion for A Show Cause Order Regarding Judgment, ECF No 13, NG 14’s
reasoning is flawed for the same reasons as set forth in the above paragraph.
Additionally, Laws of Florida, Chapter 2013-137, section 6, changed the quoted
portion of 702.10(1)(a)3 relied upon by NG 104. That section no longer provides
that cause sufficient enough for a court not to enter final foreclosure judgment is
merely the filing of defenses by motion or by verified or sworn answer at or before
the hearing. The amendment clarifies that such filings must “raise a genuine issue
of material fact which would preclude the entry of summary judgment or otherwise
constitute a legal defense to foreclosure.” Such determination is for this Court to
make at the hearing. What NG 104 seeks would run afoul of the statute. Section
702.10(1) specifically provides that if papers are filed by the defendant before the
hearing, then the hearing time is to be used to hear and consider whether the
defendant’s papers raise a genuine issue of material fact which would preclude the
entry of summary judgment or otherwise constitute a legal defense to foreclosure.
Further, this Court notes that a hearing is needed in Trusts’ other two
pending motions, ECF No. 8 and 9, and this Court sees no reason not to entertain
arguments on the orders to show cause issues at the same hearing.
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Accordingly, it is ordered that the parties appear at a hearing to address the
motions for and responses to orders to show cause pursuant to 702.10(1) & (2)
before this Court at the United States Courthouse, 401 SE First Avenue,
Gainesville, FL 32601 on Friday, August 23, 2013, at 10:00 a.m. Finally, this
Court notes that by virtue of the time lapse from the issuance of the state court’s
order to show cause, that the 20 day notice requirement contained within the
statute has been complied with.
Trusts’ Motions for Appointment of Receiver, ECF No. 9, and for Assignment of
Rents, ECF No. 8
Before this Court is Plaintiff’s Motion for Assignment of Rents, ECF No. 8,
and Plaintiff’s Verified Emergency Motion to Appoint Receiver, ECF No. 9. This
Court will conduct a hearing at the United States Courthouse, 401 SE First
Avenue, Gainesville, FL, 32601 on Friday, August 23, 2013, at 10:00 a.m. The
parties are advised that this hearing will be conducted in combination with the
hearings on the state court’s orders to show cause. Defendants shall file their
responses to ECF Nos. 8 & 9 with this Court on or before August 19, 2013.
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Trusts’ Motion for Leave to File a Reply, ECF No. 16
Trusts’ Motion for Leave to File a Reply, ECF No. 16, is GRANTED for
the purposes of this Court’s consideration at the hearing. The Reply shall be
filed on or before August 19, 2013.
SO ORDERED on August 8, 2013.
s/Mark E. Walker
United States District Judge
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