Wash. Court of Appeals published opinion — D2 59088-3-II Published Opinion.pdf

Citation: Wash. Court of Appeals published opinion — D2 59088-3-II Published Opinion.pdf
Jurisdiction: Washington (state)
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Original Source: https://www.courts.wa.gov/opinions/pdf/D2%2059088-3-II%20Published%20Opinion.pdf ↗

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There is no record that LGI had a security interest in the form of a deed of trust for the Phase 2
property, despite allocating $450,000 of the $1,621,000 deposit for the Property to Phase 2.

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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 59088-3-II

In January 2019, ECM entered into a loan agreement with Construction Loan Services,

LLC (CLS),3 in which ECM borrowed $3,524,122.22. The loan was secured by the Property in a

Deed of Trust, dated January 31, 2019 (CLS Deed). The CLS Deed provided that in the event of

a default, CLS could apply to the superior court for the appointment of a receiver.4 CLS and ECM

subsequently amended the loan and increased the principal to $4,154,122.22. The loan was set to

mature in March 2020.

In July 2019, LGI and ECM closed on the Phase 1 property. Per the terms of the PSA,

Phase 2 closing was to occur by December 2020.

B. ECM DEFAULT AND SUBSEQUENT RECEIVERSHIP

By March 2020, ECM had failed to make payments to CLS or pay off its loan, thereby

defaulting per the terms of the loan agreement. Then, in May 2020, CLS petitioned the superior

court to appoint a receiver to “ensure to the orderly and efficient liquidation of the Property for the

benefit of all creditors.” CP at 894.

In November 2020, the superior court appointed a general receiver, Pacific Crest Realty

Advisors, LLC (Receiver). The order appointing a receiver stated in part: