Nevertheless, there is clearly some overlap in some of these services. For instance, Mallory states that he conducted bi-monthly inspections of the premises, and that Lawrence conducted weekly inspections. Lawrence conducted "daily bookkeeping" activities, but Mallory "reconciled the checking account" and "tracked an accounting for all funds" "on a monthly basis ..." Lawrence collected the rent monthly, but Mallory collected past due rents "and additional rents due ..." Thus, many of these services were either similar, but performed at different time intervals, or simply represented different aspects of the same general activity (e.g., rent collection). In addition, the allocation of some of these services to Mallory in his capacity as receiver, rather than his capacity as Lawrence's president, is necessarily somewhat arbitrary. For example, he states that as receiver he "performed quarterly audits on all leases to ensure that the management company was properly billing tenants for their rents and for additional rents." It is not clear, however, that he would not have performed similar tasks as Lawrence's president in any event. In sum, the receiver has failed to carry his burden and convince me that all of his activities as receiver were significantly different from the activities of the agent that he had hired to manage the building. Therefore, there is ample basis to reduce the receiver's commission to something less than the statutory maximum of 5%.
I am also not persuaded that RTC should be bound by Columbia's apparent consent to Mallory receiving a 5% commission, and to Lawrence's additional receipt of a 3.5% management fee. First of all, the parties have no capacity to bind the court as to the commission paid to the receiver. The receiver receives his appointment, his orders and his compensation from the court, not the parties. A receiver "is the court's agent, not the parties', and ... he cannot punctuate the completion of his receivership duties with a private compensation arrangement beyond the statute and the glimpse and grasp of the indispensable ultimate principal -- the appointing court." In re Kane, 75 N.Y.2d 511, 515, 554 N.Y.S.2d 457, 553 N.E.2d 1005 (1990) (applying N.Y. Bus. Corp. L. § 1217). Furthermore, it is clear that that agreement was between Columbia and Mallory only. There is no evidence that RTC ever consented to it; in fact, to the extent that RTC has ever taken a position on the issue, it appears that RTC has consistently opposed this fee arrangement. See, e.g., Decision and Order, Jan. 20, 1995 (noting that RTC "argued that any award of compensation to Mallory should be reduced by the amount that he paid to the management company"). Also, Harter, Secrest, never consented to the arrangement, either in its capacity as attorney for RTC or for Columbia. In a letter dated September 9, 1992, Mallory's then-attorney, Bradley P. Kammholz, Esq., stated to Walter Bay, Esq., a Harter, Secrest attorney, that Bay had told him that Bay "was not involved in any discussions or negotiations concerning such commissions and fees ..." Mallory Affidavit (Item 34) Ex. B. Under these circumstances, RTC should not be bound by Columbia's consent. See East Chatham, 26 A.D.2d at 435 (plaintiff, which was assignor of interest in mortgage, had no knowledge of alleged oral consent of attorney for original mortgagee to appointment of managing agent, and therefore was not precluded from objecting to fee for agent's services).
After reviewing the materials submitted in support of the receiver's motion, then, I find that the amounts paid to Lawrence for its management fees were reasonable and justified. Indeed, RTC has not suggested that those fees are themselves excessive; RTC argues only that those fees should be subtracted from Mallory's requested commission.
I also find, however, that Mallory is not entitled to the full 5% commission that he seeks. Although there is some evidence that Mallory and Lawrence performed some separate duties, it does appear that many of the services performed by Lawrence effectively reduced the amount of work that Mallory was required to perform as receiver. Furthermore, as explained above, the divisions and allocations of work between Mallory and Lawrence are to some extent arbitrary and suggest that in fact there was significant overlap in the work performed by each of them.
Based on the record before me, then, I find that Mallory, as receiver, is entitled to a total award of commissions in the amount of $ 15,076.10, which is 3% of the total funds received. Therefore, the balance due Mallory for his commissions is $ 8,076.10.
The motion by the temporary receiver, Shane P. Mallory, to settle the accounts of the temporary receiver and for other relief (Item 21), is granted in part. The court confirms the account of the receiver, discharges him and the surety on the undertaking, and cancels the undertaking. The receiver's commission is fixed at 3% for a total award of $ 15,076.10 and a balance due of $ 8,076.10. The receiver is also awarded $ 10,944 in attorney's fees, plus $ 524.01 in disbursements, with the total amount due to the receiver's attorneys of $ 11,468.01. Upon payment of the above amounts, the receiver is directed to pay any balance remaining in his hands to plaintiff RTC Mortgage Trust 1992-N1.
IT IS SO ORDERED.
DAVID G. LARIMER
UNITED STATES DISTRICT COURT