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Waynesburg Holdings, LLC v. Wells Fargo Bank, N.A.

Court of Appeals of Ohio, Fifth District, Stark

November 18, 2019

WAYNESBURG HOLDINGS, LLC, Intervenor - Appellant
v.
WELLS FARGO BANK, N.A., Defendant-Appellee

          Appeal from the Stark County Court of Common Pleas, Case No. 2012 CV 1294

          For Intervenor-Appellant ROBERT B. PRESTON III WHITNEY L. WILLITS

          For Appellees James S. Giannneli and Staci Jo Woolf JAMES T. ROBERTSON

          For Plaintiff JAMES L. ALLEN SCOTT LESSER Miller Canfield Paddock and Stone, P.L.C.

          For Receiver The Hayman Company, LLC ROBERT STEFANCIN Witmer & Ehrman, LLC

          JUDGES: Hon. William B. Hoffman, P.J. Hon. Craig R. Baldwin, J. Hon. Earle E. Wise, J.

          OPINION

          Baldwin, J.

         {¶1} Appellant Waynesburg Holdings, LLC appeals from the January 2, 2019 and January 18, 2019 Judgment Entries of the Stark County Court of Common Pleas.

         STATEMENT OF THE FACTS AND CASE

         {¶2} On April 24, 2012, appellee Wells Fargo Bank, N.A. filed a complaint seeking foreclosure of its leasehold mortgage on commercial property. The property was a retail strip mall. Appellee, in its complaint requested judgment against Waynesburg Centre, Ltd. and its owner, Galen Oakes, on his personal guarantee. In addition, appellee, as the first lien holder on the 99 year ground lease at issue, sought foreclosure of the same. On April 24, 2012, appellee also filed a motion for the appointment of a receiver pursuant to the authority granted in the mortgage. An Order appointing The Hayman Company of Ohio as the receiver was filed on April 30, 2012. However, after Waynesburg Centre, Ltd. filed a motion seeking a stay of the appointment of a receiver, the appointment was stayed and a hearing was scheduled for June 4, 2012.

         {¶3} Waynesburg Centre, Ltd. filed an answer to the complaint on May 21, 2012 and Galen Oakes filed an answer on May 21, 2012. As memorialized in an Order filed on June 18, 2012, the trial court vacated the stay and ordered that the receivership be effective as of June 19, 2012.

         {¶4} Appellee filed a Motion for Summary Judgment. Galen Oakes filed a response to the Motion for Summary Judgment on September 4, 2012. Galen Oakes was dismissed from the action on July 18, 2013 pursuant to a Dismissal Entry. An Agreed Judgment Entry and Decree of Foreclosure was filed on the same date, granting judgment to appellee against Waynesburg Centre, Ltd. On January 20, 2017, a joint motion was filed to amend the order appointing the receiver and extend the existing receivership over certain adjacent additional property. The motion was granted pursuant to an Order filed on February 6, 2017. The February 6, 2017 Order was vacated on February 13, 2017.

         {¶5} On October 18, 2017, the Receiver moved the trial court for authority to sell the receivership property by public auction free and clear of all claims, liens, encumbrances and other interests and also to approve procedures for such sale, schedule an auction, set bid deadlines and establish notice procedures An Order approving auction sale procedures and establishing notice procedures was filed on November 2, 2017. The Order provided the Receiver with authority to sell the property at auction without the need for approval from the ground lessors.

         {¶6} The auction was conducted by Zeta Bid and Resolve Commercial, LLC was the successful bidder. On May 23, 2018, the Receiver filed a motion for an order confirming the sale of the receivership property to Resolve Commercial, LLC for $200, 000.00 and the motion was granted on June 7, 2018. However, after Resolve Commercial, LLC did not close the sale, the Receiver, on August 27, 2018, filed a motion to hold Resolve Commercial, LLC in contempt.

         {¶7} The Receiver, as approved by the trial court, notified other bidders from the auction that the Receivership Property was still for sale.

         {¶8} On November 1, 2018, counsel for the ground lessors, who were Staci Jo Wolf and James Gianelli, filed a motion for an oral hearing to consider offers to purchase the receivership property and the interest of the ground lessors. A hearing was scheduled for December 19, 2018. Thereafter, on November 13, 2018, the Receiver filed a motion for an order approving the sale of the receivership property to appellant Waynesburg Holdings, LLC, the "bidder with the highest and best offer on the resale of the Receivership Property." The Receiver, in such motion, stated, in relevant part, as follows:

         {¶9} "As an initial offer, the Purchaser proposed to pay the receivership estate $200, 000 as consideration for the purchase of the Receivership Property, subject to due diligence. After due diligence was performed, the Purchaser lowered its bid to $50, 000 based upon the condition of the property and other considerations. Based upon the Purchaser's due diligence and in consideration of the factors presented by the ...


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