On September 9, 2016, the United States Court of Appeals for the Sixth Circuit issued a decision that parties in foreclosure proceedings should read carefully. In MSCI 2007-IQ16 Granville Retail, LLC v. UHA Corporation, LLC, Case No. 15-3524, the court addressed whether the sale of foreclosed property during the pendency of an appeal moots the appeal. The court’s answer? Yes, at least under the facts of this case.
MSCI obtains a judgment
Plaintiff MSCI 2007-IQ16 Granville Retail, LLC (“MSCI”) obtained summary judgment in this commercial foreclosure case that was filed in federal court because of diversity of citizenship between the parties and the fact that the four commercial properties at issue were located in three different counties. The United States District Court for the Southern District of Ohio (the “District Court”) issued an in rem judgment entry and decree in foreclosure, finding that Defendant UHA Corporation, LLC (“UHA”) owed MSCI more than $13 million on the defaulted loan at issue. UHA timely appealed, alleging a number of errors by the District Court.
The properties are sold
During the pendency of the appeal—because UHA failed to move for a stay of execution on the judgment in the District Court—the …