MDFC Loan Corp. v. Greenbrier Plaza Partners

Plaintiff MDFC Loan Corporation appeals from that portion of an order terminating a receivership directing the receiver to disburse the remaining funds in his possession to defendant Greenbrier Plaza Partners. These funds represent income received from commercial real property after Greenbrier defaulted on the underlying debt and plaintiff had a receiver appointed to assume control of the property. Plaintiff contends it has a perfected interest in the monies via an assignment of rents, and contrary to defendants’ claim, the proscriptions against deficiency judgments do not bar its recovery of the funds.

Facts

Greenbrier is a general partnership consisting of the Doan Trust and E & G Associates. In July 1988, plaintiff loaned Greenbrier $9.5 million to purchase a commercial office building known as Greenbrier Plaza.

As security for the loan, plaintiff received an assignment of leases, a $1.8 million standby letter of credit and a recorded deed of trust containing an assignment of rents. Paragraph 1.18 of the trust deed provided: “Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the income ... of the Property, whether now due, past…