Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Deutsche Bank Trust Co. Americas v. Mountain West Hospitality, LLC

United States District Court, N.D. West Virginia

December 15, 2017

DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE FOR THE REGISTERED HOLDERS OF UBS COMMERCIAL MORTGAGE TRUST 2012-C1, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2012-C1, Plaintiff,
v.
MOUNTAIN WEST HOSPITALITY, LLC, Defendant. and WEST VIRGINIA STATE TAX DEPARTMENT, Intervenor-Plaintiff,
v.
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE FOR THE REGISTERED HOLDERS OF UBS COMMERCIAL MORTGAGE TRUST 2012-C1, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2012-C1; and MOUNTAIN WEST HOSPITALITY, LLC, Intervenor-Defendants.

          MEMORANDUM OPINION IN SUPPORT OF ORDER GRANTING MOTION TO INTERVENE [DKT. NO. 67]

          IRENE M. KEELEY, UNITED STATES DISTRICT JUDGE.

         During an evidentiary hearing on November 28, 2017, the Court GRANTED the Motion to Intervene filed by the West Virginia State Tax Department (“the State”). As indicated in its November 30, 2017, Order Granting Motion to Intervene, this written opinion sets forth the Court's reasoning in support of that decision.

         I. BACKGROUND

         A. Procedural Background

         On May 10, 2017, the plaintiff, Deutsche Bank Trust Company Americas, as Trustee for the Registered Holders of UBS Commercial Mortgage Trust 2012-C1, Commercial Mortgage Pass-Through Certificates, Series 2012-C1 (“Deutsche Bank”), [1] filed a complaint against the defendant, Mountain West Hospitality, LLC (“Mountain West”) (Dkt. No. 1). Deutsche Bank alleged breaches of contract related to a $19, 630, 000 loan made to Mountain West, which is secured by deeds of trust covering the Hilton Garden Inn at 606 Emily Drive, Clarksburg, West Virginia (“Hilton Garden Inn Clarksburg”), and the Hampton Inn at 480 Plantation Drive, Elkins, West Virginia (“Hampton Inn Elkins”) (collectively, “the Property”). According to Deutsche Bank, Mountain West has mismanaged the Property in a variety of way. As relevant to the loan documents, however, Mountain West allegedly triggered “Events of Default” by defaulting under its franchise agreements and failing to pay taxes to the City of Clarksburg. Id. at 7.

         After a brief stay due to Mountain West's unsuccessful pursuit of bankruptcy proceedings (Dkt. Nos. 12; 14), on August 2, 2017, the Court appointed receivers to manage both the Hilton Garden Inn Clarksburg and the Hampton Inn Elkins pending Deutsche Bank's intent to schedule a non-judicial sale of the Property (Dkt. Nos. 25; 26). The substitute trustee initially scheduled sales of the Property on November 8, 2017, but the sales were later postponed to November 30, 2017 (Dkt. No. 52 at 4). On November 27, 2017, three days prior to the scheduled sales, Mountain West moved for a temporary restraining order (“TRO”), as well as a temporary and permanent injunction, to prevent the substitute trustee from carrying out the sales (Dkt. No. 45).[2]

         The Court promptly denied Mountain West's motion for a TRO and scheduled an evidentiary hearing on the remaining request for injunctive relief (Dkt. No. 47). The parties presented evidence, and the Court heard argument on the motion on November 28, 2017, after which it denied Mountain West's motion for injunctive relief, concluding that Mountain West had failed to meet its burden to clearly and convincingly satisfy all four of the factors articulated in Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008), and Real Truth About Obama, Inc. v. Federal Election Com'n, 575 F.3d 342 (4th Cir. 2009), vacated on other grounds and remanded, 559 U.S. 1089 (2010), standard reaffirmed in 607 F.3d 355 (4th Cir. 2010) (Dkt. No. 54).

         On November 29, 2017, again arguing that it would be irreparably harmed by such a sale, Mountain West noticed its interlocutory appeal from this decision (Dkt. No. 57), and moved the Court to stay the case and enjoin the sale of the Property pending appeal (Dkt. No. 55). The Court denied Mountain West's motion “for the reasons it denied Mountain West's motion for a temporary and permanent injunction” (Dkt. No. 62). The Court of Appeals for the Fourth Circuit then denied Mountain West's “emergency motion for injunction pursuant to Rule 8 of the Federal Rules of Appellate Procedure” (Dkt. No. 66).

         B. Motion to Intervene

         Between the Court's appointment of receivers to manage the Property and Mountain West's attempt to prevent non-judicial sale of the Property, the State moved to intervene in this case on November 6, 2017 (Dkt. No. 36). In its motion, the State alleges that, “[s]ince 2015 until the appointment of the receivers, [Mountain West] collected state consumer sales tax from its customers but failed to remit them to the State as required by law.” Under West Virginia law, such taxes are “deemed to be money held in trust for the state of West Virginia.” Id. at 2 (quoting W.Va. Code § 11-10-5j (West 2017)). The State therefore believes that Mountain West “converted at least $720, 000 in collected but unremitted trust taxes, ” or that Deutsche Bank “may have converted or may still be holding some or all of these trust funds either by or through an account or accounts under its exclusive control.” Id. The State sought leave to file a one-count complaint alleging a cause of action for conversion against both Deutsche Bank and Mountain West (Dkt. No. 36-1).

         Although Mountain West did not respond, Deutsche Bank opposed the State's motion. It argued that intervention is inappropriate because the State essentially seeks to intervene as a creditor to collect pre-receivership taxes (Dkt. No. 41 at 1). According to Deutsche Bank, “[t]he State does not have a property interest in Plaintiff's case to support intervention, and the State's collection opportunities are not hindered or impaired in any way if intervention is disallowed.” Id. at 2. Nonetheless, the Court granted the State's motion on November 28, 2017 (Dkt. No. 67).

         II. DISCUSSION

         The Fourth Circuit favors “‘liberal intervention' and preventing the ‘problem of absent interested parties.'” Friend v. REMAC Am., Inc., No. 3:12cv17, 2014 WL 2440438, at *1 (N.D.W.Va. May 30, 2014) (quoting Feller v. Brock, 802 F.3d 722, 729 (4th Cir. 1986)). “Prospective intervenors bear the burden of demonstrating their right to intervene.” In re Monitronics Int'l, Inc., MDL No. 1:13MD2493, 2015 WL 12748330, at *1 (N.D.W.Va. June 3, 2015) (citing Richman v. First Woman's Bank, 104 F.3d 654, 658 (4th Cir. 1997)). Under Fed.R.Civ.P. 24, the Court has discretion to allow intervention either as a matter of right or on a permissive basis. Stuart v. Huff, 706 F.3d 345, 349 (4th Cir. 2013). For the following reasons, the Court finds that the State is entitled to intervene under either standard.

         A. Intervention as of Right

         The Court must grant a timely motion to intervene if the movant “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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.