U.S. Bank National Association, as Trustee for the Registered Holders of CFCRE Commercial Mortgage Trust 2011-C2 Commercial Mortgage Pass-Through Certificates, Series 2011-C2, Acting By and Through it v. Dearborn Venture Capital LLC et al

Filing 38

OPINION AND ORDER denying without prejudice 26 Motion to Appoint Receiver; and denying 28 Motion to Dismiss. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

U.S. BANK NATIONAL ASSOCIATION,
Case No. 14-13921
Plaintiff,
Honorable John Corbett O’Meara
v.
DEARBORN VENTURE CAPITAL, L.L.C., and
SAM HAMAME,
Defendants.
/
OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS AND
DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR RECEIVER
This matter came before the court on Plaintiff’s January 22, 2015 motion to appoint a receiver
and Defendants’ February 5, 2015 motion to dismiss. The issues were fully briefed; and oral
argument was heard March 26, 2015. At the hearing the parties advised the court they would
attempt, for the third time, to have Plaintiff intervene in an ongoing state court action. They have
recently advised the court that Plaintiff is not seeking to intervene in that action; therefore, this court
now will rule on the pending motions in this case.
BACKGROUND FACTS
Defendant Dearborn Venture Capital (“DVC” or “Borrower”), whose sole member is codefendant Sam Hamame, obtained a loan from plaintiff U.S. Bank National Association (“U.S.
Bank” or “Lender”) in the amount of $4,030,000 in November 2011. The note is secured by a
mortgage on commercial real property located in Dearborn, Michigan. Beginning in March 2014,
Borrower stopped making monthly payments. Lender’s counsel sent Borrower a letter, notifying

Borrower that the maturity date of the note had been accelerated and requesting payment of all
amounts due and owing under the Loan Agreement.
The loans and properties at issue here involve many parties. In March 2013, April Fakhoury
and Chase Capital Ventures filed a complaint against Sam Hamame and others in Wayne County
Circuit Court (“the State Court Action”). Lender was not named as a party in the State Court Action
and was not aware of that case for some time, as Borrower violated the Loan Agreement by failing
to give Lender prompt notice of that litigation.
Still unbeknownst to Lender, on March 14, 2014, the state court appointed a receiver over the
various entities and properties, including the real property that is subject to Lender’s security
interest. On May 28, 2014, Lender became aware of the State Court Action for the first time and
filed a motion to intervene. Oral argument was heard on the motion June 27, 2014; however, no
order was issued. Lender filed a renewed motion to intervene July 18, 2014. The parties then asked
the state court for time to negotiate a settlement; and before the state court ruled on the renewed
motion to intervene, Lender withdrew its motion and filed this case in federal court.
Borrower currently is in default on the loan; and the outstanding amount is now in excess of
$4,964,270. Lender’s complaint alleges the following causes of action: Count I, breach of contract
of the loan agreement; Count II, mortgage foreclosure; and Count III, breach of the guaranty
agreement.
LAW AND ANALYSIS
Defendants argue that Plaintiff’s federal lawsuit is barred by the Rooker-Feldman doctrine to
the extent it seeks appellate review of the rulings in the State Court Action appointing a receiver,
closing the case, and retaining jurisdiction after settlement. The United States Supreme Court has

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“held Rooker-Feldman inapplicable where the party against whom the doctrine is invoked was not
a party to the underlying state-court proceeding.” Lance v. Dennis, 546 U.S. 459, 464 (2006). The
United States Court of Appeals for the Sixth Circuit has explained,
A person who was not a party in the state court action did not have an opportunity
to litigate its claims. That person must be allowed to bring an action in federal court
to attempt to vindicate its perceived rights, otherwise it will have no chance to do so.
A party has no obligation to attempt to intervene in a state court action when it is not
named in the suit in order to preserve its rights. Because the [federal plaintiff] was
not a party in the state court action in this case . . . the district court properly
exercised its jurisdiction.
United States v. Owens, 54 F.3d 271, 274 (6th Cir. 1995).
In this case Plaintiff moved to intervene in the State Court Action. However, because the case
was complicated, had been pending a long time, and was near completion via settlement of the
parties, the state court did not rule on Plaintiff’s initial motion to intervene. Plaintiff later filed a
renewed motion to intervene. The second motion was noticed for hearing, but before the hearing
Plaintiff withdrew the motion and filed this case in federal court.
Defendants contend that Plaintiff was a “de facto party” in the State Court Action because
Plaintiff filed motions in that lawsuit, was heard on the record, and participated in some settlement
negotiations. However, because Plaintiff was not a party in that suit, it was not allowed to litigate
its claims fully. Therefore, Rooker-Feldman does not apply; and this court must deny Defendants’
motion to dismiss.
Plaintiff’s January 22, 2015 motion for appointment of receiver and for preliminary injunctive
relief has been misconstrued by Defendants. Plaintiff seeks appointment of a receiver only after the
current receiver in the State Court Action is relieved of his duties. As recently as February 5, 2015,
the state court opined that Frank Simon, the current receiver, would be discharged “soon.” Because

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Mr. Simon is still the receiver and has not yet been terminated, Plaintiff’s motion is premature. The
court will deny the motion without prejudice.
ORDER
It is hereby ORDERED that Defendants’ February 5, 2015 motion to dismiss is DENIED.
It is further ORDERED that Plaintiff’s January 22, 2015 motion for appointment of a receiver
is DENIED WITHOUT PREJUDICE.

s/John Corbett O'Meara
United States District Judge

Date: September 15, 2015

I hereby certify that a copy of the foregoing document was served upon counsel of record on
this date, September 15, 2015, using the ECF system.

s/William Barkholz
Case Manager

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