Rahmi v. Sovereign Bank, 11-1667
| Decision Date | 03 May 2013 |
| Docket Number | No. 11-1667,11-1667 |
| Parties | Alex D. Rahmi, Petitioner, Petitioner v. Sovereign Bank, Respondent, Respondent |
| Court | West Virginia Supreme Court |
Petitioner Alex D. Rahmi, pro se, appeals two orders of the Circuit Court of Jefferson County. In its August 30, 2011 order, the circuit court denied petitioner's request for a preliminary injunction. In a subsequent order entered October 31, 2011, the circuit court denied petitioner's motion to amend/emergency petition for a temporary restraining order. Respondent Sovereign Bank, by Christopher K. Robertson, its attorney, filed a response to which petitioner filed a reply.
The Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate Procedure.
Petitioner is the sole member of Universal Enterprises of West Virginia, LLC ("Universal"). On or about August 8, 2006, respondent made a loan to Universal in the principal amount of $2,100,000. The loan was secured by a deed of trust on real estate owned by Universal generally known as 1 Chevrolet Drive, Charles Town, West Virginia, 25414 ("the property"). Petitioner and Alex Chevrolet, Inc.1 guaranteed the loan.
Although the events preceding this dispute are lengthy, the facts pertinent to petitioner's appeal are brief. Petitioner never challenged the Maryland court judgment respondent obtained against him after Universal defaulted on the loan. The amount of the judgment was $2,321,461.44 plus contractual attorney's fees of $348,219.22.
Petitioner never challenged respondent's domestication of its Maryland court judgment in the State of West Virginia. Petitioner's only challenge is to the adequacy of the price respondent obtained for the property at the September 2, 2010 foreclosure sale.
At the foreclosure sale, respondent sold the property to PBE Companies, LLC 2 for $1,600,000. After accounting for $10,968.56 in expenses incurred in the sale, respondent applied the net proceeds ($1,589,031.44) to the loan, which left a balance of $1,336,425.56.
Thomas Motta, a licensed certified real estate appraiser, valued the property numerous times at respondent's request. In July of 2006, Mr. Motta appraised the property as having a value of $4,260,000. As Mr. Motta explained at an August 19, 2011, hearing, however, this appraisal occurred before the downturn in the real estate market, the fall out of the automobile industry, and petitioner's loss of his Chevrolet franchise. On July 20, 2009, Mr. Motta appraised the property at $3,000,000. On May 19, 2010, Mr. Motta valued the property at $2,700,000.
On March 7, 2011, Mr. Motta appraised the property as having a value of $2,050,000. On March 18, 2011, Mr. Motta provided a retrospective appraisal of the property's value during September of 2010, the approximate date of the foreclosure sell. Mr. Motto's retrospective appraisal also valued the property at $2,050,000.
On May 13, 2011, petitioner filed a request for a preliminary injunction and a memorandum of law in support of the injunction. In the memorandum of law, petitioner argued that a foreclosure sale can be challenged and set aside, and alleged fraud and civil conspiracy on respondent's part. As relief, petitioner requested "a Preliminary Injunction to prevent [respondent] from obtaining any assets belonging to [petitioner] including and not limited to Bon Air funds."
Petitioner is a partner in the Bon-Air Partnership ("Bon-Air") which is in bankruptcy. Respondent served a suggestion upon the bankruptcy trustee that the funds representing petitioner's partnership interest were subject to its judgment lien. The bankruptcy trustee answered respondent's suggestion by indicating that he would pay the funds representing petitioner's partnership interest over to it once he completed his duties as trustee.
Petitioner's request for a preliminary injunction came on for a hearing on August 19, 2011. The circuit court took the testimony of Mr. Motta and heard the arguments of the parties.
In an order entered August 31, 2011, the circuit court denied petitioner's request on both procedural and substantive grounds. The circuit court found the following procedural shortcomings with petitioner's request: (1) petitioner failed to serve respondent with a copy of his request for a preliminary injunction;3 (2) although petitioner requested a preliminary injunction, he filed no complaint or other pleading seeking more permanent relief; and (3) petitioner wouldnot be able to post a bond in the amount necessary for an injunction to go into effect, citing State ex rel. Lloyd's Inc. v. Facemire, 224 W.Va. 558, 687 S.E.2d 341 (2009) ().4
On the substantive issues, the circuit court noted that it reviewed the various appraisals conducted by Mr. Motta and found that "[t]hey contradict [petitioner]'s contention regarding the value of the [property] when it was foreclosed upon by [respondent]." The circuit court noted "Mr. Motta's expertise and candor in responding to questions posed by [petitioner], [respondent's counsel], and the Court" and found that Mr. Motta's testimony was "very credible."
Mr. Motta opined that at the time of the foreclosure sale, the property had a value of $2,050,000. The property was purchased for 78% of that value ($1,600,000). Accordingly, the circuit court found that "the Universal foreclosure sale was regular and proper and that the price obtained was close to the fair market value of the real estate and does not shock the conscience or support a claim of fraud," citing Smith v. Rusmisell, 205 W.Va. 261, 517 S.E.2d 494 (1999) (). The circuit court further found that the public interest weighed against granting a preliminary injunction because the effect of an injunction "would be essentially to require the Trustee of the Bon-Air Bankruptcy Estate to pay funds to [petitioner] despite [respondent]、's lien on those funds and notwithstanding the substantial risk that [petitioner] may divert those funds from [respondent]'s valid collection efforts."
The circuit court denied petitioner's request made during oral argument that he be allowed a continuance to have his own appraiser assess the property because, inter alia, "the Court believes that even if it were to give [petitioner] additional time to obtain an appraisal of the [property], [petitioner] would still be unable to sustain the burden of proof required for the award of a preliminary injunction."5 In denying petitioner injunctive relief, the circuit court ordered that the case was to be kept open only to the extent necessary to allow respondent to continue with...
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