Westvue NPL Trust v. Kattula et al

Filing 13

ORDER GRANTING MOTION TO INTERVENE FILED BY GREEN LAKE EQUITIES, LLC 11 . Signed by District Judge Judith E. Levy. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Westvue NPL Trust,
Plaintiff,
v.

Case No. 16-cv-12813
Judith E. Levy
United States District Judge

Maria C. Kattula, et al.,
Mag. Judge Anthony P. Patti
Defendants.
________________________________/
ORDER GRANTING MOTION TO INTERVENE FILED BY
GREEN LAKE EQUITIES, LLC [11]
Relevant to this motion, plaintiff Westvue NPL Trust filed a
complaint alleging that defendant TAJ Graphics Enterprises, LLC’s
interest in certain real property should be determined to be junior and
subject to plaintiff’s mortgage. (See Dkt. 1 at 14-15.)
Green Lake Equities, LLC, filed a motion to intervene on
September 12, 2016, alleging that it is the successor in interest to
defendant TAJ Graphics, because defendant TAJ Graphics assigned
Green Lake the loans secured by defendant TAJ Graphics’ mortgage.
(Dkt. 11 at 2.) Green Lake seeks to intervene as of right under Fed. R.

Civ. P. 24(a), to intervene with the Court’s permission under Rule 24(b),
or to substitute itself for defendant TAJ Graphics under Rule 25(c).
Plaintiff objects to Green Lake’s motion, arguing that Green Lake
fails to establish that it has a right to intervene, fails to show that there
are common questions of law or fact for permissive intervention, and
failed to show that defendant TAJ Graphics’ mortgage was transferred
to Green Leaf for substitution of parties. (Dkt. 12 at 17-23.)
Rule 24(a)(2) provides that “[o]n timely motion,” the Court “must
permit anyone to intervene who . . . claims an interest relating to the
property or transaction that is the subject of the action, and is so
situated that disposing of the action may as a practical matter impair or
impede the movant’s ability to protect its interest, unless existing
parties adequately represent that interest.” Fed. R. Civ. P. 24(a)(2); see
United States v. City of Detroit, 712 F.3d 925, 930 (6th Cir. 2013).
Plaintiff does not argue that the motion is untimely, so the Court need
only determine whether Green Lake has established an interest
relating to property, whether disposing of the action would impair
Green Lake’s ability to protect its interest, and whether other
defendants adequately represent Green Lake’s interest.
2

Plaintiff argues that Green Lake “has no interest in the subject
matter of the pending litigation.”

(Dkt. 12 at 17.)

Plaintiff

acknowledges the affidavit provided by Green Lake, in which the affiant
declares that “TAJ assigned the TAJ loans to Green Lake.” (Dkt. 12 at
17-18; see Dkt. 11 at 15.) But plaintiff argues that the declaration “is
given in direct contradiction to previous testimony made by [the affiant]
under the penalty of perjury.” (Dkt. 12 at 18-19.)
But when determining whether intervention should be allowed,
the court “must accept as true the non-conclusory allegations of the
motion.” Lake Inv’rs Dev. Group v. Egidi Dev. Group, 715 F.2d 1256,
1258 (7th Cir. 1983); see Horrigan v. Thompson, No. 96-4138, 1998 U.S.
App. LEXIS 9506, at *5-6 (6th Cir. May 7, 1998) (quoting Lake Inv’rs
Dev. Group, 715 F.2d at 1258). Here, even setting aside the purported
factual issue, Green Lake alleged in its motion that it “is the successor
in interest to TAJ, because it was assigned by TAJ the loans secured by”
the mortgage that plaintiff alleges “should be determined to be junior
and subject to plaintiff’s mortgage.” (Dkt. 11 at 2.) Thus Green Lake
has sufficiently “claim[ed] an interest relating to the property or
transaction that is the subject of the action.” See Fed. R. Civ. P 24(a)(2).
3

Plaintiff also argues that Green Lake’s “purported interest will
not be impaired by the pending litigation.”

According to plaintiff,

defendant TAJ Graphics’ mortgage “has always been junior to
[p]laintiff’s mortgage interest.” (Dkt. 12 at 19.) Plaintiff asserts that
“the fact that [Green Lake] may have extended additional credit to TAJ”
in reliance on the allegedly erroneous discharge of plaintiff’s mortgage
“is completely irrelevant to whether [Green Lake]’s purported [] interest
in the TAJ mortgage could be impaired by the pending litigation.” (Id.
at 20.)
Plaintiff’s argument has no merit. Count I of plaintiff’s complaint
is for declaratory relief to reinstate its mortgage, which plaintiff alleges
was discharged erroneously, and plaintiff seeks to have this Court
determine Green Lake’s interest “to be junior and subject to” plaintiff’s
discharged mortgage. (Id. at 15.) Resolution of plaintiff’s claim would
directly impact Green Lake’s ability to protect its interest.
Finally, plaintiff argues that Green Lake’s “purported interest is
adequately protected by the existing parties to the pending litigation.”
(Id. at 20.) According to plaintiff, the defendants already named have
filed an answer denying the plaintiff’s mortgage was erroneously
4

discharged.

(Id. at 21.)

Moreover, plaintiff notes that counsel for

defendants Maria C. Kattula, Robert Kattula, and Maria C. Kattula
Living Trust “is the same as that for [Green Lake],” and thus Green
Lake “is adequately protected by the existing parties to the litigation.”
(Id.)
But those defendants do not have a current interest in the
mortgage previously held by TAJ Graphics. And plaintiff glosses over
the fact that it has a pending motion for default judgment as to
defendant TAJ Graphics.

(Dkt. 8.)

At best, it is disingenuous to

suggest that Green Lake is adequately represented regarding its
interest in the mortgage it was assigned by TAJ Graphics, for which no
appearance has been filed in this case, when at the same time plaintiff
seeks a default judgment that the TAJ Graphics mortgage is junior to
plaintiff’s. (Id. at 7.) Green Lake has sufficiently shown that it has an
interest relating to the property that is the subject of the action, that
disposing of the action may impair its ability to protect its interest, and
that it would otherwise not be adequately represented. Green Lake is
thus entitled to intervene under Rule 24(a)(2).

5

Even if Green Lake were not entitled to intervene as of right, the
Court would in its discretion grant Green Lake’s motion for permissive
intervention. “A motion for permissive intervention under Rule 24(b) is
directed to the sound discretion of the district judge.” Sec’y of Dep’t of
Labor v. King, 775 F.2d 666, 668 (6th Cir. 1985) (quoting Meyer
Goldberg, Inc. v. Goldberg, 717 F.2d 290, 294 (6th Cir. 1983)). Rule
24(b) provides that the Court “may permit anyone to intervene who . . .
has a claim or defense that shares with the main action a common
question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B).
Green Lake argues that there are common questions of law and
fact as to whether plaintiff is entitled to reinstatement of its mortgage
interest and enforcement of the mortgage, whether plaintiff in fact
holds the mortgage, whether the discharge of the mortgage was in
error, and whether Green Lake relied upon that discharge in extending
credit to TAJ Graphics. (Dkt. 11 at 10-11.) Plaintiff argues that Green
Lake is not a party to the mortgage plaintiff alleges was erroneously
discharged and thus lacks standing to challenge whether plaintiff in
fact holds the mortgage interest or whether the discharge was made in
error. (Id. at 22.) Plaintiff also argues that the question whether Green
6

Lake relied upon the discharge to extend additional credit to TAJ
Graphics “is not a common question of fact in the pending litigation.”
(Id.)
But as set forth above, plaintiff seeks a declaration that the
mortgage previously held by TAJ Graphics is junior to plaintiff’s
mortgage. Plaintiff cannot seek to have such a declaration at the same
time as arguing that the current holder of said mortgage lacks standing
to intervene in the case.
Accordingly, Green Lake Equities, LLC’s motion to intervene (Dkt.
11) is GRANTED.
IT IS SO ORDERED.
Dated: October 21, 2016
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on October 21, 2016.
s/Felicia M. Moses
FELICIA M. MOSES
Case Manager
7