CRESTVIEW II, LTD., ETC., MARSOL ONE LLC, ETC., AND MARCIAL SOLIS, APPELLANTS,
v.
TOTALBANK, ETC., APPELLEE
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Crestview II, Ltd. and related entities appealed a trial court order appointing a receiver over their real estate development property following default on a $32 million loan from TotalBank. The Florida appellate court affirmed the appointment, holding that the receiver's designated powers were authorized by the loan documents and consistent with the bank's contractual rights.
The trial court properly appointed the receiver with the designated powers because those powers were authorized by the loan documents and mortgages executed by Crestview and were properly within the receiver's purview to preserve the property's value and maintain the status quo during foreclosure.
[1] A mortgage provision consenting to the appointment of a receiver upon default is entitled to due weight.
[2] The powers granted to a receiver in a mortgage foreclosure proceeding may align with duties previously designated to the mortgagee in loan documents.
Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the authority of the receiver, as referred to in the order appointing receiver, in effect, are one and the same as the duties already having been designated to TotalBank in the agreed-to notes, mortgages, and construction loan agreements themselves and were properly within the purview of the appointed receiver, related to keeping the value of the property from declining and to preserving the status quo”
This statement articulates the court's central holding that the receiver's powers were authorized by the underlying loan documents and constituted proper receivership functions.
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Join FLexlaw to unlock all legal intelligenceTotalBank loaned approximately $32 million to Crestview, a real estate developer, for a residential development project. Crestview defaulted on its pr…
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Crestview II, Ltd., Marsol One LLC, and Marcial Solis (“Crestview”) appeal a non-final order granting an amended order to appoint receiver in favor of TotalBank. We have jurisdiction. Fla. R.App. P. 9.130(a)(3)(D); Interdevco, Inc., v. Brickellbanc Savs. Ass’n, 524 So.2d 1087 (Fla. 3d DCA 1988). We affirm the non-final order below appointing receiver as the order complies with the authority given To-talBank in the loan documents executed by Crestview.
TotalBank loaned approximately $32,000,000 to Crestview, a real estate developer, for a residential development. The promissory note executed by Crest-view in favor of TotalBank incorporated other loan documents and instruments including a construction loan agreement and amendment. The construction loan agreement provided that TotalBank had the right to complete construction in the event of default, including the right to perform all work and labor to complete improvements, to employ contractors and subcontractors and to apply for permits. Crest-view defaulted on its obligation under the promissory notes and mortgages. Total-Bank sued Crestview for breach of promissory notes, guarantees and the assignment of rents, and to foreclose its security interests.
In accord with the mortgages, which provided for appointment of a receiver and assignment of rents in favor of TotalBank, on August 9, 2010, TotalBank served an amended verified motion to appoint receiver and for turnover of rents. In seeking the appointment of the receiver, TotalBank relied upon paragraph 2.05 of the Crest-view mortgages, which provided that, in the event of default, “[mjortgagee shall be entitled, as a matter of right and without regard to the value or occupancy of the security, to have a receiver appointed to enter upon and take possession of the Mortgaged Property, collect the rents and profits therefrom and apply the same as the court may direct, such receiver to have all the rights and powers permitted under the laws of Florida.”
At the evidentiary hearing on the appointment of receiver which followed, the *12evidence revealed that the fair market value of the Crestview property was significantly less than the outstanding indebtedness owed to TotalBank; that Crestview failed to pay the real estate taxes for the property since 2008; that there was some physical damage and neglect to the property; that there were outstanding federal tax liens against the property; and that the Crestview property consisted of homes that were approximately 80% complete and eight lots upon which slabs had been constructed. The trial court granted Total-Bank’s motion to appoint receiver for the reasons stated in its order. Paragraphs 9, 10(c), (h), (j), (l) and (m) of the order are the subject of this appeal.1
*13On appeal, Crestview challenges the authority of the trial court to appoint the receiver with powers designated in paragraphs 9, 10(e), (h), (j), © and (m) of the trial court’s order. It contends that these powers exceed the scope of a receiver’s authority in a mortgage foreclosure proceeding. We do not agree. We find that the authority of the receiver, as referred to in the order appointing receiver, in effect, are one and the same as the duties already having been designated to TotalBank in the agreed-to notes, mortgages, and construction loan agreements themselves and were properly within the purview of the appointed receiver, related to keeping the value of the property from declining and to preserving the status quo. See Interdevco, Inc. v. Brickellbanc Sav. Ass’n, 524 So.2d at 1087. We therefore affirm the .trial court’s order.2
Affirmed.
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- Carolina Portland Cement Co. v. Baumgartner, 99 Fla. 987 (Fla. 1930)
- Interdevco, Inc. v. Brickellbanc Sav. Ass'n & Hollywood Fed. Sav. & Loan Ass'n, 524 So. 2d 1087 (Fla. 3d DCA 1988)