United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. Gerrard United States District Judge
case is before the Court on the defendants' motion to
dismiss or, in the alternative, to change venue. Filing 25.
The Court will deny their motion.
plaintiff, Misle Properties, is a Nebraska LLC that bought a
property interest in a Pennsylvania shopping center and
assumed liability for a promissory note that had been used to
finance the seller's purchase of the property. Filing 17
at 1-3. Defendant "LBUBS 2004-C2 Cranberry Retail GP,
LLC" apparently held the promissory note. Filing 17 at
1, 3-4. Defendant LNR Partners is a Florida LLC engaged in
property and investment management that, according to the
plaintiff, acted as a "special servicer" for the
Pennsylvania property and has "through the creation of
various shell corporations and/or alter egos, assigned and/or
transferred the rights of the parties . . . in such a manner
as to be the real party in interest on behalf of all the
Defendants in this dispute." Filing 17 at 1-2, 4.
plaintiff's allegations regarding the sequence of events
and financial transactions that led to this case are somewhat
hard to follow-but, perhaps that's the point. At some
point, the plaintiff allegedly defaulted on the note and
other obligations under the original debt agreements
associated with the property. Filing 17 at 4. The plaintiff
disputed the default, but continued to receive monthly
statements on the debt and continued to make the monthly
payments. Filing 17 at 4. LNR Partners made its first
appearance at that point, and sent the plaintiff a statement
assessing past-due default interest that the plaintiff
disputed. Filing 17 at 4.
plaintiff then defaulted on its next monthly payment,
allegedly in an effort to invoke "work-out
provisions" of the debt agreements. Filing 17 at 4-5.
LNR Partners refused to cooperate, and according to the
plaintiff, LNR Partners' refusal to provide the plaintiff
with information about the balance of the debt frustrated the
plaintiff's ability to seek refinancing. Filing 17 at 5.
Partners, either for itself or on behalf of LBUBS, sued to
foreclose on the property. Filing 17 at 5. In response, the
plaintiff filed a Chapter 11 petition in the Bankruptcy Court
for the District of Nebraska. Filing 17 at 5. The plaintiff
kept making monthly payments to LNR Partners pursuant to a
protection order. Filing 17 at 5. But according to the
plaintiff, LNR Partners didn't credit those payments to
the plaintiff's debt. Filing 17 at 5-6. Instead, the
plaintiff alleges that LNR Partners "held those funds in
a suspense account without interest, while the underlying
debt continued to accumulate interest, late fees and
penalties." Filing 17 at 6.
plaintiff's bankruptcy proceeding was dismissed, and the
plaintiff kept making monthly payments, but LBUBS again
pursued foreclosure in Pennsylvania. Filing 17 at 6. The
parties tried to mediate the debt and settle the dispute, but
failed. Filing 17 at 6. The plaintiff alleges that LNR
Partners, for itself or on LBUBS' behalf,
"unreasonably delayed the resolution of the
litigation." Filing 17 at 6. Under the debt agreements,
the plaintiff was obligated to pay the legal fees of LBUBS or
LNR Partners in matters relating to enforcement of the
agreements-meaning that, according to the plaintiff, their
dilatory litigation tactics were unreasonably running up the
plaintiff's tab. Seefiling 17 at 6.
plaintiff managed to secure refinancing, and demanded that
LNR Partners account for additional charges it had allegedly
tacked on to the plaintiff's debt. Filing 17 at 7. LNR
Partners refused. Filing 17 at 7. So on June 8, 2016, the
plaintiff, allegedly under "protest and duress, "
paid the amount demanded by LNR Partners for pay-off of the
note. Filing 17 at 7. Then, on June 12, 2018, the plaintiff
filed this action in state court seeking, in essence, to
recover the disputed amounts of its debt. Filing 1-2. The
defendants removed the action to this Court. Filing 1.
plaintiff's operative pleading asserts seven claims, some
of which present multiple theories of recovery:
1) Breach of contract and assumpsit for recovery of payments
the plaintiff made that allegedly weren't credited to its
debt. Filing 17 at 7-8.
2) Breach of contract and assumpsit for alleged overpayment
of the principal amount of the original debt. Filing 17 at 9.
3) Breach of contract and assumpsit for improperly charged
late fees. Filing 17 at 9-10.
4) Breach of contract and assumpsit for improperly charged
legal fees. Filing 17 at 11.
5) Breach of the implied covenant of good faith and fair
dealing in refusing to negotiate in good faith to restructure
the debt or cure the default. Filing 17 at 12.
6) Unjust enrichment as to all alleged overpayments. Filing
17 at 12-13.
7) Accounting for how payments were allocated to the debt.
Filing 17 at 13.
defendants have moved to dismiss the complaint pursuant to
Fed.R.Civ.P. 12(b)(6). Filing 25. In the alternative, they
seek a change of venue to ...