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IMH Special Asset NT 168 LLC v. Aperion Communities LLLP

United States District Court, D. Arizona

December 20, 2016

IMH Special Asset NT 168 LLC, Plaintiff,
v.
Aperion Communities LLLP, et al., Defendants.

          ORDER

          David G. Campbell United States District Judge.

         Hart Interior Design, LLC 401(k) Profit Sharing Plan, by and through Athena Hart-Kolle, Trustee (“the Plan”), has removed a complex state receivership case from Maricopa County Superior Court to this Court. Doc. 1. The case is IMH Special Asset NT 168, LLC v. Aperion Communities, LLLP, et al., No. CV2010-010990 (“the State Court Action”). Three participants in the State Court Action, IMH Special Asset NT 168, LLC, IMH Special Asset NT 161, LLC, and the Reaves Law Group, P.C. (collectively, the “Movants”), have filed a motion to remand the case to state court. Doc. 11. The motion has been briefed (Docs. 11, 28), and the Court concludes that oral argument is not necessary. For the reasons that follow, the Court will remand this case to state court.

         I. Background.

         The State Court Action began in 2010. IMH Special Asset NT 168, LLC and IMH Special Asset NT 161, LLC (collectively, the “Judgment Creditors”) are wholly owned subsidiaries of IMH Financial Corporation (“IMHFC”). Doc. 11 at 3. IMHFC is an Arizona based real estate lender and investor. Id. Following non-judicial foreclosures on real property in 2010, the Judgement Creditors brought deficiency actions under A.R.S. § 33-814(a) against Aperion Communities, LLLP, Eladio Properties, LLLP, David P. Maniatis, and the DPM-TT Trust (collectively, the “Judgment Debtors”). Id. The deficiency actions were consolidated in the State Court Action, and, on December 21, 2012, the state court entered a multi-million dollar judgment against the Judgment Debtors. Id.

         As Movants note and the Plan does not dispute, “[t]he original complaints did not name the Plan as a party, and the Plan did not participate - at all - in either action.” Id. In post-judgment collection proceedings, the state court appointed two separate receivers over certain of the Judgment Debtors' assets. Id. at 4. Movants summarize the relevant portions of the post-judgment collection proceedings as follows:

First, pursuant to post-judgment negotiations between Maniatis and the Judgment Creditors, Maniatis stipulated to: (i) transfer his and the DPM-TT Trust's shares of stock in closely-held corporations to Stockholder, and (ii) appoint [the Reaves Law Group as] the Stockholder Receiver pursuant to an Order Appointing A Receiver Over Stockholder, LLC dated and filed on June 12, 2013, in the State Court (the “Stockholder Receivership Order”). By virtue of the transfer of stock, Stockholder - an entity created and owned by the Judgment Creditors/IMHFC - took ownership of various closely-held corporations formerly owned by Maniatis and the DPM-TT Trust. These corporations, among other things, manage entities that own land and/or water interests in Sandoval County, NM. The Removing Party invested in some of those entities.
Second, the court appointed MCA Financial Group, Ltd., by and through Keith Bierman (“MCA Receiver”), receiver over all other non-exempt assets owned and controlled by Maniatis and the DPM-TT Trust pursuant to an Order Appointing A Receiver Over the DPM-TT Trust and Property Owned and Controlled by David P. Maniatis dated August 22, 2013, as amended by the Order Amending Order Appointing a Receiver Over the DPM-TT Trust and Property Owned and Controlled by David P. Maniatis dated April 18, 2014 (collectively, the “MCA Receivership Order”).
As part of the administration of their respective receivership estates, the Stockholder Receiver and MCA Receiver (collectively, the “State Court Receivers”) stepped into Maniatis' shoes to manage and, where appropriate, liquidate companies. In addition to the Removing Party, over one-hundred other individual investors (the “Individual Investors”) own limited partnership or limited liability company membership interests in the various companies subject to administration by the State Court Receivers.

Doc. 11 at 5. The Plan does not dispute these facts.

         On December 16, 2013, the Plan filed an Amended Notice of Appearance in the State Court Action. Doc. 11-2 (giving notice of its appearance as a “Party-in-Interest”). The Plan never moved to formally intervene, but it did “file[] objections and appear[] at hearings to oppose relief sought by the Receivers.” Doc. 11 at 5. On May 13, 2014, the state court issued an order establishing procedures and deadlines for submitting claims against the receivership estate. Doc. 28-3. The state court noted that these procedures and deadlines were “in the best interests of the Maniatis Entities, their creditors, interest holders and other parties in interest.” Id. at 3.

         It is undisputed that the Stockholder Receiver controls six entities which each own a 1/6 interest in two exploratory deep groundwater wells in Sandoval County, New Mexico. Doc. 11 at 6. While the Plan contends that Movants have exaggerated the extent of the emergency, Movants argue that these wells are in a serious state of deterioration and actively leaking hazardous contaminants. Id. at 6-7. According to Movants, because the owners did not have money to repair the wells, IMHFC, by and through one of its subsidiaries, lent approximately $50, 000 to fund temporary repairs of the wells in the summer of 2016. Id. at 7. The Plan did not attempt to remove the State Court Action at that time.

         Movants filed an emergency motion with the state court on November 16, 2016 after an alleged increase in the amount of contaminated water leaking from one of the wells (id. at 8), and the state court set a hearing for December 2, 2016 (Doc. 28 at 10). The emergency motion asked the state court to approve a loan from IMHFC to complete needed well repairs. Id. The Plan responded to the emergency motion by filing an objection in state court on November 25, 2016, the deadline set by the state court. Id. The objection raised the issue of complete federal preemption and the prospect of removal. Id. Six days later, and one day before the emergency hearing in state court, the Plan filed its notice of removal. Doc. 1.

         Days after the filing of the emergency motion, the well allegedly suffered a blowout and was discharging large amounts of contaminated water. Doc. 11 at 8. The well has been stopped with emergency but temporary repairs, funded by a good faith advance from IMHFC. Id. at 9. Following the notice of ...


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