Oxford Street Properties, LLC v. Rehabilitation Associates, LLC

Third party claimant Citibank, N.A. (Citibank), appeals from a judgment denying its petition to levy on deposit account funds held by City National Bank (CNB) and Provident Title (Provident) in the name of Downtown Lofts, LP, in which Citibank claims a security interest. Plaintiff Oxford Street Properties, LLC (Oxford), and defendant Rehabilitation Associates, LLC (Rehab), formed a partnership known as Downtown Lofts, LP, in 2003 to develop downtown loft property; Rehab bought out Oxford’s partnership interest in Downtown Lofts in 2007 with proceeds from a refinance of the property by Citibank. As part of the refinance, Citibank took a trust deed and security interest in the partnership’s real and personal property and later foreclosed on these interests. However, due to certain *299 conditions placed on the sale of Oxford’s partnership interest in Downtown Lofts, some of the Citibank loan proceeds were never disbursed to Oxford; Citibank claimed a security interest in the funds and sought to levy on them.

At the same time, due to numerous defalcations by Rehab and its principal in their dealings with Oxford in connection with the partnership, the matter proceeded to…