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Value Manufactured Homes, LLC v. Key Bank, N.A.

United States District Court, W.D. New York

January 28, 2013

VALUE MANUFACTURED HOMES, LLC, Lake Villa Mobile Home Sales Corp., Plaintiffs,
v.
KEY BANK, N.A., Josephine Wisniewski, in her official and individual capacity; Joel Brown, in his official and individual capacity; Maria, last name unknown at this time; John and Jane does, 1-5, jointly and severally, Defendants.

Page 304

[Copyrighted Material Omitted]

Page 305

Harold E. Lucas, Lucas & Associates, Richboro, PA, for Plaintiffs.

Maureen T. Bass, Buchanan Ingersoll & Rooney, PC, Buffalo, NY, Peter S. Russ, Buchanan Ingersoll & Rooney PC, Pittsburgh, PA, Lisa L. Shrewsberry, Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, NY, for Defendants.

DECISION AND ORDER

DAVID G. LARIMER, District Judge.

INTRODUCTION AND BACKGROUND

Pending before the Court are defendants' motions to dismiss, stay or transfer this action. Defendants— Key Bank, N.A. (" Key Bank" ) and Josephine Wisniewski (collectively " Key Bank defendants" ), and Joel Brown— seek relief because this action is directly related to actions already pending in state and federal courts in Michigan. For the reasons that follow, defendants' motions are granted, the claims against Joel Brown are dismissed, and the remaining claims are stayed.

All these actions have their genesis in a mortgage foreclosure and receivership proceeding, Key Bank Nat'l Ass'n v. Lake Villa Oxford Associates, LLC, No.2012-126588 (" Michigan State Court action" ), which is currently pending in the Michigan Circuit Court, Oakland County (" Michigan State Court" ).

Key Bank is the mortgagee on Lake Villa Mobile Home Park (" Lake Villa" ), a mobile home park in Michigan. Lake Villa is owned by Lake Villa Oxford Associates, LLC (" LVOA" ), which is also the mortgagor on the Key Bank loan. Amended Complaint (" AC" ) ¶ 28.

Plaintiffs in this action, Value Manufactured Homes, LLC and Lake Villa Mobile Home Sales Corp., allege that they owned 128 mobile homes in Lake Villa. All of those homes have been sold by plaintiffs to third parties, either on installment loan contracts or lease-option contracts. AC ¶ 27. Plaintiffs allege that they have sold 79 of those homes to LVOA. AC ¶ 28. The remaining 49 have been sold to other third parties, but were subject to plaintiffs' rights under the installment and lease-option contracts. AC ¶ 29 Plaintiffs contend that the 79 units sold to LVOA were subject to the lien held by Key Bank pursuant to the mortgage, but that the other 49 were not subject to that lien. AC ¶¶ 28, 29.

The loan advanced by Key Bank to LVOA was apparently in arrears, and on April 30, 2012, Key Bank commenced foreclosure proceedings in state court, seeking, in addition to other relief, the appointment of a receiver. That request was granted, and on May 30, 2012, the Michigan State Court entered an order appointing Newbury Management Services, LLC (" Newbury" ) as receiver, with broad powers to manage and preserve the subject property, including the collection of income generated from the property. In addition, the court specifically prohibited suits by anyone against the receiver, absent prior leave from that court. See Amended Complaint Ex. A (Dkt. # 9-2) § 12.1. It is the actions of the receiver that are at the heart of the disputes in Michigan and in this Court.

Plaintiffs in this action in the Western District of New York are defendants in the Michigan State Court action. (For the sake of convenience and clarity, ...


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