Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bank of America, N.A. v. P.T.A. Realty, LLC

Supreme Court of Rhode Island

February 19, 2016

Bank of America, N.A.
v.
P.T.A. Realty, LLC, et al.

Providence County Superior Court No. PB 12-5438, Associate Justice Michael A. Silverstein

For Petitioners: Richard L. Gemma, Esq. Kelly A. Carden, Esq.

For Respondents: Barry J. Kusinitz, Esq. Christopher J. Zangari, Esq.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Gilbert V. Indeglia, Associate Justice

The petitioners, NMLM Realty, LLC (NMLM) and Liberty Title & Escrow Company (Liberty), appeal from a final judgment entered in this receivership action. The dispute centers on the receiver's sale of commercial property owned by P.T.A. Realty, LLC (P.T.A.) to NMLM, in which NMLM's agent, Liberty, mistakenly failed to list all the municipal taxes owed on the property, resulting in an overpayment of funds to Bank of America, N.A. (the bank). This matter came before the Supreme Court on January 26, 2016, pursuant to an order directing the parties to appear and show cause why the issues raised should not be summarily decided. After hearing the arguments of counsel and reviewing the memoranda submitted on behalf of the parties, we are satisfied that cause has not been shown. Accordingly, we shall decide the matters at this time without further briefing or argument. For the reasons set forth herein, we affirm the judgment of the Superior Court.

I

Facts and Travel

The facts underlying the hassle between the parties are largely undisputed. In November 2012, at the bank's request, P.T.A. was placed under receivership by the Providence County Superior Court. The receiver took possession of P.T.A.'s real property located at 10 Rosario Drive, Providence, Rhode Island, along with another "contiguous" parcel located in Cranston (collectively, the property). At that time, the bank had a properly recorded first-position mortgage on the property to secure a loan in excess of $492, 000.

On December 5, 2012, the bank filed a motion in the receivership action to approve its secured claim, listing the claim against P.T.A. for the loan on the property and asking "the [r]eceiver to turn over to [the b]ank * * * all monies collected * * * by the [r]eceiver which constitute a part of and/or proceeds of [the b]ank's collateral * * *" less reasonable fees and expenses, which were attributable to the sale of the property. In exchange for the proceeds of the sale, which amount was uncertain at the time, the bank agreed to discharge its mortgage on the property and write off its losses on its secured claim.

On September 30, 2013, the Superior Court entered an order approving the sale of the property to NMLM for $400, 000. Per the purchase and sales agreement, the receiver was required to convey his title to the property free and clear of all liens and "claims for municipal real estate or tangible property taxes." NMLM, as purchaser, was required to pay all municipal taxes from the purchase price. The order approving the purchase and sales agreement also stated, "[a]ll claims, interests, liens, mortgages, and encumbrances asserted against the [p]roperty are released and discharged" upon the sale of the property.

NMLM hired Liberty to, among other things, prepare the settlement statement, calculate outstanding taxes, disburse funds from the closing, pay any taxes due on the property, and purchase title insurance. Following the sale on October 17, 2013, and, importantly, based on the settlement statement prepared by Liberty, the receiver collected proceeds amounting to approximately $293, 982.[1] A receiver's deed reflecting the transaction was recorded on October 18, 2013. In accordance with its agreement, the bank had discharged its mortgage on the property on October 11, 2013. The bank initially received $255, 000 in proceeds from the sale of the property. Two months later, in December 2013, it received an additional $4, 418, for a total of $259, 418, to offset its secured claim on the property. Ultimately, the bank wrote off the balance of its claim, an amount in excess of $188, 000.

It appears, however, that Liberty improperly prepared the settlement statement and failed to list substantial taxes-approximately $80, 000-that were due and owing on that portion of the property located in Providence. Thus, in response to the receiver's first and final report and request for fees filed in February 2014 (some four months after the closing), NMLM filed a motion which asserted, inter alia, that the receiver should be held in contempt, that the bank had been unjustly enriched, and that the court should order the bank to return the "excess funds, " namely, the approximately $80, 000 that should have been used to pay the taxes owed on the property at closing. The hearing justice denied NMLM's contempt motion, but NMLM pressed on and filed a further petition in the receivership action for restitution against the bank, which Liberty incorporated in its own petition for restitution against the bank. It is these petitions that are the subject of the present appeal.

At the hearing on the petitions, the bank argued that, as a third-party creditor not aware of Liberty's error in calculating the taxes, it was not obligated to return any funds disbursed to it by the receiver following the sale of the property. NMLM argued that the bank was not an innocent third party because the court order approving the purchase and sales agreement required that the property be conveyed free and clear of any liens and the bank knew it was only entitled to the net proceeds of the sale after any liens and taxes had been paid. Furthermore, NMLM argued that the bank did not change its position based on the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.