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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DIVISION II
CONSTRUCTION LOAN SERVICES II, LLC, No. 59088-3-II
a Washington limited liability company in its
capacity as servicer and agent for BUILDERS
CAPITAL OPPORTUNITY FUND, LLC, a
Washington limited liability company,

Appellant,

v.

ECM RIVERSIDE LLC, an Oregon limited PUBLISHED OPINION
liability company,

Respondent.

LEE, J. — Construction Loan Services II, LLC (CLS) appeals the superior court’s order

granting the Receiver’s motion to administer claims and determine claim priority and the superior

court’s denial of CLS’s motion to reconsider that order. Specifically, CLS argues that the superior

court erred when it determined (1) that a deposit made by LGI Homes – Washington LLC (LGI)

pursuant to a subsequently rejected purchase and sale agreement is not part of the receivership

estate and (2) that LGI was entitled to return of the deposit prior to distribution of the receivership

estate assets to secured creditors.

Because Washington’s receivership statute, chapter 7.60 RCW, provides that a receiver’s

rejection of an executory contract constitutes a breach of contract occurring immediately prior to

the receiver’s appointment, we hold that the superior court did not err when it determined that

LGI’s deposit was not part of the receivership estate. However, because there were no funds
For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 59088-3-II

available prior to the Receiver’s appointment and the only funds currently available to return the

deposit are funds generated after the establishment of the receivership estate, LGI’s entitlement to

return of its deposit amounts to an unsecured claim against the receivership estate. Based on the