seminary woods complaint

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ELECTRONICALLY FILED

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF KENTUCKY

LOUISVILLE DIVISION

PNC BANK, NATIONAL ASSOCIATION )

Plaintiff )

)

v. ) No. ____________________

)

SEMINARY WOODS, LLC )

)

NORMAN E. RISEN )

)

ANNA J. RISEN )

)

KENT E. RISEN )

)

MARC H. RISEN )

)

LINDA RISEN )

)

LAURENCE N. BENZ )

)

PATRICIA G. BENZ )

)

C. RONALD WISE )

)

JENNIFER S. WISE )

)

ALBERT E. FIORINI )

)

PATRICIA A. FIORINI )

)

SEMINARY WOODS CONDOMINIUMS )

COUNCIL OF CO-OWNERS, LLC )

)

JOYCE ANN BARNES AND WILLIAM )

DAVIS BARNES, TRUSTEES OF THE )

JOYCE ANN BARNES LIVING TRUST )

DATED Dec. 16, 1996 )

)

THOMAS R. RICHARDS )

)

Case 3:13-cv-00297-CRS Document 1 Filed 03/05/13 of 25 PageID #: 1

jsparling

Typewritten Text

3-13-cv-297-H

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CAROL L. RICHARDS )

PAUL ELLIOT MERENBLOOM )

)

CARMINE SCALZITTI )

)

CURTIS L. ROYCE )

)

JOYCE Y. ROYCE )

)

WHITTINGTON REALTY PARTNERS, LLC )

)

MJE REAL ESTATE, LLC )

)

CHRIS EICHBERGER )

)

PAULA EICHBERGER )

)

STEPHEN J. EVANS )

)

GERRY EVANS )

Defendants )

)

COMPLAINT

PNC Bank, National Association (“Bank”), by counsel, for its causes of action herein, states

as follows:

Parties and Jurisdiction

1. The Plaintiff, PNC BANK, NATIONAL ASSOCIATION (“Bank”), is a national

banking association located at 222 Delaware Avenue, Wilmington, New Castle County, Delaware

19899. Bank is a citizen of Delaware for purposes of 28 U.S.C. §1332(a) pursuant to 28 U.S.C.

§1348. Bank is successor to National City Bank and to National City Bank of Kentucky.

2. The Defendant, SEMINARY WOODS, LLC (“Seminary Woods”), is a Kentucky

limited liability company with its principal place of business located at 9520 Ormsby Station Road,


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Suite 300, Louisville, Jefferson County, Kentucky 40223. Seminary Woods is a citizen of Kentucky

for purposes of 28 U.S.C. §1332(a).

3. The Defendant, NORMAN E. RISEN (“N. Risen”), is a Kentucky resident with an

address and domicile of 6515 Gunpowder Lane, Louisville, Jefferson County, Kentucky 40059. N.

Risen is a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

4. The Defendant, ANNA J. RISEN (“A. Risen”), is a Kentucky resident with an address

and domicile of 6515 Gunpowder Lane, Louisville, Jefferson County, Kentucky 40059. A. Risen is

a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

5. The Defendant, KENT E. RISEN (“K. Risen”), is a Kentucky resident with an address

and domicile of 7202 Wyndefair Court, Prospect, Kentucky 40059. K. Risen is a citizen of

Kentucky for purposes of 28 U.S.C. §1332(a).

6. The Defendant, MARC H. RISEN (“M. Risen”), is a Kentucky resident with an

address and domicile of 13033 Settlers Point Trail, Goshen, Kentucky 40026. M. Risen is a citizen

of Kentucky for purposes of 28 U.S.C. §1332(a).

7. The Defendant, LINDA RISEN (“L. Risen”), is a Kentucky resident with an address

and domicile of 13033 Settlers Point Trail, Goshen, Kentucky 40026. L. Risen is a citizen of


8. The Defendant, LAURENCE N. BENZ (“L. Benz”), is a Kentucky resident with an

address and domicile of 14926 Landmark Drive, Louisville, Jefferson County, Kentucky 40245. L.

Benz is a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

9. The Defendant, PATRICIA G. BENZ (“P. Benz”), is a Kentucky resident with an

address and domicile of 14926 Landmark Drive, Louisville, Jefferson County, Kentucky 40245. P.

Benz is a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).


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10. The Defendant, C. RONALD WISE (“R. Wise”), is a Kentucky resident with an

address and domicile of 219 Fairway Drive, Campbellsville, Kentucky 42718. R. Wise is a citizen of


11. The Defendant, JENNIFER S. WISE (“J. Wise”), is a Kentucky resident with an

address and domicile of 219 Fairway Drive, Campbellsville, Kentucky 42718. J. Wise is a citizen of


12. The Defendant, ALBERT E. FIORINI (“A. Fiorini”), is a Kentucky resident with an

address and domicile of 11603 Chapel Hill Road, Prospect, Kentucky 40059. A. Fiorini is a citizen

of Kentucky for purposes of 28 U.S.C. §1332(a).

13. The Defendant, PATRICIA A. FIORINI (“P. Fiorini”), is a Kentucky resident with

an address and domicile of 11603 Chapel Hill Road, Prospect, Kentucky 40059. P. Fiorini is a

citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

14. The Defendant, SEMINARY WOODS CONDOMINIUMS COUNCIL OF CO-

OWNERS, INC. (the “Council”) is a Kentucky corporation (in bad standing and administratively

dissolved by the Kentucky Secretary of State), having a principal office located at 9520 Ormsby

Station Road, Suite 300, Louisville, Kentucky 40223. The Council is a citizen of Kentucky for

purposes of 28 U.S.C. §1332(a).

15. The Defendants, JOYCE ANN BARNES and WILLIAM DAVIS BARNES,

TRUSTEES (the “Trustees”) of the JOYCE ANN BARNES LIVING TRUST DATED DEC. 16,

1996 (the “J. Barnes Living Trust”) are Kentucky residents with an address of P.O. Box 39367,

Louisville, KY 40233 and are citizens of Kentucky citizens for purposes of 28 U.S.C. §1332(a).


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16. The Defendants, THOMAS R. RICHARDS and CAROL L. RICHARDS (the

“Richards”) are Kentucky residents with an address and domicile of 5506 Killimur, Prospect, KY.

The Richards are citizens of Kentucky for purposes of 28 U.S.C. §1332(a).

17. The Defendant, PAUL ELLIOT MERENBLOOM (“Merenbloom”) is a Kentucky

resident with an address and domicile of 2655 Kings Highway, Louisville, KY 40205. Merenbloom

is a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

18. The Defendant, CARMINE SCALZITTI (“Scalzitti”) is a Kentucky resident with an

address and domicile of 5701 Coach Gate Wynde #36, Louisville, Kentucky 40207. Scalzitti is a

citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

19. The Defendants, CURTIS L. ROYCE and JOYCE Y. ROYCE (the “Royces”) are

Kentucky residents with an address and domicile of 13136 Reading Road, Goshen, KY 40026. The

Royces are citizens of Kentucky for purposes of 28 U.S.C. §1332(a).

20. The Defendant, WHITTINGTON REALTY PARTNERS, LLC (“Whittington”) is a

Kentucky limited liability company having a principal office located at 9520 Ormsby Station Road,

Suite 300, Louisville, Kentucky 40223. Whittington is a citizen of Kentucky for purposes of 28

U.S.C. §1332(a).

21. The Defendant, MJE REAL ESTATE, LLC (“MJE Real Estate”) is a Kentucky

limited liability company having an address of 7321 St. Andrews Church Road, Louisville, KY

40214. MJE Real Estate is a citizen of Kentucky for purposes of 28 U.S.C. §1332(a).

22. The Defendants, CHRIS EICHBERGER and PAULA EICHBERGER (the

“Eichbergers“) are Kentucky residents with an address and domicile of 7315 St. Andrews Church

Road, Louisville, KY 40214. The Eichbergers are citizens of Kentucky for purposes of 28 U.S.C.

§1332(a).


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23. The Defendants, STEPHEN J. EVANS and GERRY EVANS (the “Evans“) are

Kentucky residents with an address and domicile of 2706 Alia Circle, Louisville, KY 40222. The

Evans are citizens of Kentucky for purposes of 28 U.S.C. §1332(a).

24. The Trustees, the Richards, Merenbloom, Scalzitti, the Royces, A. Fiorini, R. Wise,

N. Risen, M. Risen, L. Risen, K. Risen, Whittington, MJE Real Estate, the Eichbergers and the

Evans are sometimes referred to herein as “Contract Holders”. The Contract Holders are joined as

defendants in this action in order to require them to assert any interest they may have in the Project.

25. The amount in controversy, without interest and costs, exceeds the sum of

$75,000.00, as specified by 28 U.S.C. §1332(a).

26. This Court has subject matter jurisdiction over this case under 28 U.S.C. §1332(a).

27. Venue is proper in this Court under 28 U.S.C. §1391. A substantial part of the events

giving rise to the cause of action herein occurred in this district, and the Defendants all reside or are

located in this district.

Nature Of The Action

28. This is an action to enforce a mortgage (the “Mortgage”) given to National City Bank

of Kentucky, now by merger known as PNC Bank, National Association, on real property located in

Jefferson County, Kentucky owned by the mortgagor and defendant, Seminary Woods, LLC, which

was developed as a condominium project commonly known as Seminary Woods (the “Project”).

The Bank also seeks a money judgment against Seminary Woods, LLC and guarantors of

indebtedness to the Bank, for their respective obligations, as alleged more fully herein, to repay the

unpaid balance owed on a promissory note, the repayment of which is secured by a mortgage, a

security agreement and personal guarantees. In connection with the development of the Project, N.

Risen, M. Risen and K. Risen incorporated Defendant, Seminary Woods Condominiums Council of


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Co-Owners, Inc. (the “Council”), for the purpose of managing the Project, and the Bank is joining

the Council as a party to this action to obtain appropriate relief concerning its activities in connection

with the enforcement of the Bank’s mortgage.

The Subject Property

29. The Project is a horizontal property regime (a “condominium”) located at 6600

Seminary Woods Place in Jefferson County, Kentucky. The condominium was originally intended to

contain a total of sixty three (63) condominium units and five (5) garage units in one building.

Currently, a total of nineteen (19) condominium units and five (5) garage units have been developed

and/or platted. Forty-four (44) additional units remain to be constructed. Of the 19 constructed

condominium units, fourteen (14) condominium units have been sold to third-parties (being Units

406, 408, 502, 504, 603, 701, 702, 705, 802, 903, 1008, 1101, 1105, and 1202 and five (5) units

(being Units 404, 407, 601, 1005 and 1205 plus Garage Units 1, 2, 3, 4, and 5) are owned by

Seminary Woods, LLC. The current layout of the Project is generally described in that certain

Condominium Plat for Seminary Woods filed in the office of the Clerk of Jefferson County on July

10, 2008, and of record therein in Apartment Ownership Book 124, Pages 97 through 102 in the

Office aforesaid, as amended by plans of record in Apartment Ownership Book 125, Pages 31-32, as

further amended by plans of record in Apartment Ownership Book 125, Pages 46-47, as further

amended by plans of record in Apartment Ownership Book 125, 0, as further amended by

plans of record in Apartment Ownership Book 126, Page 2, as further amended by plans of record in

Apartment Ownership Book 126, Page 3, as further amended by plans of record in Apartment

Ownership Book 126, Page 26, as further amended by plans of record in Apartment Ownership Book

126, Page 27, as further amended by plans of record in Apartment Ownership Book 126, Page 85,

and as further amended by plans of record in Apartment Ownership Book 126, Page 86, as further

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amended by plans of record in Apartment Ownership Book 128, Page 95, as further amended by

plans of record in Apartment Ownership Book 130, Page 11, as further amended by plans of record

in Condominium and Apartment Ownership Book 130, Page 54, as further amended by plans of

record in Condominium and Apartment Ownership Book 130, Page 62, all in the office of the

County Clerk of Jefferson County, Kentucky. The above Condominium Plat for Seminary Woods as

amended is sometimes referred to herein as the “Plans”

30. On July 10, 2008, Defendant, Seminary Woods, LLC, recorded in the Office of the

Clerk of Jefferson County, Kentucky, a certain Declaration of Horizontal Property Regime and

Master Deed Establishing Seminary Woods Condominiums which is of record therein in Deed Book

9255, Page 574 and which subjected the real property described in the Exhibit A attached thereto

(which has herein been referred to the “Condominiums”) to the condominium form of ownership and

use in the manner provided by the Kentucky Horizontal Property Law as set out in KRS Chapter 381

(the “Master Deed”). The Master Deed identified in Paragraph B thereto the following units: Unit

404, Unit 406, Unit 407, Unit 408, Garage Unit 1, Garage Unit 2, Garage Unit 3, Garage Unit 4, and

Garage Unit 5. From time to time thereafter the Master Deed has been amended as follows: by that

certain First Amendment to Master Deed Establishing Seminary Woods Condominiums dated

August 8, 2008, in Deed Book 9272, Page 143, as further amended by that certain Second

Amendment to Master Deed Establishing Seminary Woods Condominiums dated September 3,

2008, in Deed Book 9282, Page 363, as further amended by that certain Third Amendment to Master

Deed Establishing Seminary Woods Condominiums dated September 3, 2008, of record in Deed

Book 9282, Page 388, as further amended by that certain Fourth Amendment to Master Deed

Establishing Seminary Woods Condominiums dated October 2, 2008, of record in Deed Book 9296,

Page 219, as further amended by that certain Fifth Amendment to Master Deed Establishing


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Seminary Woods Condominiums dated November 6, 2008, of record in Deed Book 9312, Page 318,

as further amended by that certain Sixth Amendment to Master Deed Establishing Seminary Woods

Condominiums dated November 6, 2008, of record in Deed Book 9312, Page 322, as further

amended by that certain Seventh Amendment to Master Deed Establishing Seminary Woods

Condominiums dated December 4, 2008, of record in Deed Book 9323, Page 351, as further

amended by that certain Eighth Amendment to Master Deed Establishing Seminary Woods

Condominiums dated December 4, 2008, of record in Deed Book 9323, Page 355, as further

amended by that certain Ninth Amendment to Master Deed Establishing Seminary Woods

Condominiums dated March 16, 2009, of record in Deed Book 9365, Page 650, and as further

amended by that certain Tenth Amendment to Master Deed Establishing Seminary Woods

Condominiums dated March 27, 2009, of record in Deed Book 9371, Page 862, and as further

amended by that certain Eleventh Amendment to Master Deed Establishing Seminary Woods

Condominiums dated September 2, 2010, of record in Deed Book 9612, Page 259, and as further

amended by that certain Twelfth Amendment to Master Deed Establishing Seminary Woods

Condominiums dated July 10, 2012, of record in Deed Book 9913, Page 574, and as further amended

by that certain Thirteenth Amendment to Master Deed Establishing Seminary Woods Condominiums

dated November 19, 2012, of record in Deed Book 9979, Page 167, and further amended by that

certain Amended and Restated Thirteenth Amendment to Master Deed of record in Deed Book

10014, 32; all of record in the Office of the Clerk of Jefferson County Kentucky. The Master

Deed as amended and the Plans constitute the only documents filed of record in the Office of the

Clerk of Jefferson County, Kentucky, which modify, amend or purport to modify or amend the

Master Deed, and the Defendants are called upon to assert any other documents or be forever barred.

31. Seminary Woods, LLC, referred to in the Master Deed as the “Declarant”, has been

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granted and holds certain rights and privileges under the Master Deed with respect to the Project (the

“Development Rights”).

32. On or about December 8, 2005, there was recorded with the Kentucky Secretary of

State certain Articles of Incorporation to incorporate Defendant, Seminary Woods Condominiums

Council Of Co-Owners, Inc. as a non-profit corporation (the “Council”). Upon information and

belief formed after inquiry reasonable under the circumstances, the Council was incorporated as

contemplated by the Master Deed and is controlled by Defendants, N. Risen, M. Risen and K. Risen.

33. By various Deeds of record in the office of the Clerk of Jefferson County, Seminary

Woods, LLC has conveyed to third parties the following 14 units in the Project: Units 406, 408, 502,

504, 603, 701, 702, 705, 802, 903, 1008, 1101, 1105, and 1202 (the “Sold Units”).

34. As of the date of the filing of this Complaint, Seminary Woods, LLC is the owner of

the following five (5) units in the Project: Units 404, 407, 601, 1005 and 1205 plus Garage Units 1,

2, 3, 4 and 5 (the “Unsold Units”).

35. The Unsold Units, the undeveloped portions of the Property comprising the Project,

and the Development Rights relating thereto, are the subject real property against which the Bank

asserts and seeks to enforce its mortgage lien (the “Remaining Mortgaged Property”).

The Bank’s Development Loan

36. On or about April 19, 2006, the Bank, as lender, the Defendant, Seminary Woods,

LLC, as borrower, and the Defendants, R. Wise, J. Wise, L. Benz, P. Benz, A. Fiorini, P. Fiorini, N.

Risen, A. Risen, M. Risen, L. Risen and K. Risen, as guarantors, entered into a Construction Loan

Agreement (the “Loan Agreement”) for the development and construction of the Project. A copy of

the Loan Agreement is attached hereto as Exhibit 1 and incorporated herein by reference.

37. On or about April 19, 2006, Defendant, Seminary Woods, executed and delivered to


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Bank a promissory note (the “Note”) to evidence the loan described in the Loan Agreement, for the

principal sum of $29,220,000.00 (the “Loan”), plus interest as stated therein, a copy of which Note is

attached hereto as Exhibit 2 and incorporated herein by reference.

38. To secure payment of the Note, Defendant, Seminary Woods, executed,

acknowledged, and delivered to Bank a Mortgage, Security Agreement and Fixture Financing

Statement dated April 19, 2006, which was recorded in the Office of the Clerk of Jefferson County,

Kentucky on April 20, 2006 in Mortgage Book 10030, Page 893 (the “Mortgage”). A copy of the

Mortgage is attached hereto as Exhibit 3 and incorporated herein by reference. The Mortgage

encumbers certain real property located at 6600 Seminary Woods Place in Jefferson County,

Kentucky, (previously referred to as 5200 U.S. Highway 42, Louisville, Kentucky 40241) and more

particularly described as follows, together with all structures, fixtures, improvements, easements, and

appurtenances thereto, and all interests of the Mortgagor therein, including development rights (the

“Property”), to wit:

Being all of Tract 1 of the Minor Subdivision Plat prepared by John M. Thomas, PLS

No. 3259 of Birch, Trautwein & Mims, Inc., as approved on October 7, 2004 under

Docket No. 210-04 by the Louisville Metro Planning Commission, the original of

which was attached to and made a part of a deed dated June 28, 2005, and recorded in

Deed Book 8649, Page 82, in the Office of the Clerk of Jefferson County, Kentucky.

Together with the non-exclusive rights to a Private Access & Public Utility Easement

across Tract 2 as shown on the Minor Subdivision Plat prepare by John M. Thomas,

PLS No. 3259 of Birch, Trautwein & Mims, Inc., as approved on October 7, 2004

under Docket No. 210-04 by the Louisville Metro Planning Commission, the original

of which was attached to and made a part of a deed dated June 28, 2005, and recorded

in Deed Book 8649, Page 82, in the Office of the Clerk of Jefferson County, Kentucky.

Being a part of the same property acquired by Seminary Woods, LLC, a Kentucky

limited liability company, by deed dated May 10, 2002, of record in Deed Book 7881,

Page 864, and by Special Warranty Deed dated June 28, 2005 and recorded indeed

Book 8649, Page 82, both in the Office of the Clerk of Jefferson County, Kentucky.


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39. To further secure payment of the Note, Seminary Woods, executed, acknowledged,

and delivered to Bank an Assignment of Rents and Leases dated April 19, 2006 (the “Assignment of

Rents”), which was recorded in the Office of the Clerk of Jefferson County, Kentucky, on April 20,

2006, in Deed Book 8817, Page 308. A copy of the Assignment of Rents is attached hereto as

Exhibit 4 and incorporated herein by reference. The Assignment of Rents encumbers the Property

and assigns to Bank all rents arising from or attributable to the Property.

40. To further secure payment of the Note the security interest granted to Bank in the

Mortgage was properly perfected by filing a financing statement with the Kentucky Secretary of

State on April 21, 2006, as Financing Statement 2006-2163080-68.01 (the “Financing Statement”).

An amendment to the Financing Statement showing the change in name of the secured party was

filed on November 1, 2010 as document 2006-2163080-68.02 and a continuation of the Financing

Statement was filed on November 1, 2010 as document 2006-2163080-68.03. A copy of the

Financing Statement is attached hereto as Exhibit 5 and incorporated herein by reference.

41. To further secure payment of the Note, N. Risen, A. Risen, K. Risen, M. Risen, L.

Risen, L. Benz, P. Benz, R. Wise, J. Wise, A. Fiorini, and P. Fiorini (collectively, “Guarantors”)

executed and delivered to Bank a Guaranty Agreement (the “Guaranty”), whereby Guarantors

personally guaranteed the payment and performance of indebtedness owed by Seminary Woods to

Bank absolutely and unconditionally up to the principal amounts specified therein plus 100% of all

interest, attorney fees and costs and expenses of collection. A copy of the Guaranty is attached hereto

as Exhibit 6 and is incorporated herein by reference.

42. On or about July 10, 2008, the Bank and Seminary Woods entered into that

Amendment to Construction Loan Agreement, Mortgage, Security Agreement and Fixture Financing

Statement, and Assignment of Rents and Leases (“First Amendment to Loan Agreement and


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Mortgage”), of record in Deed Book 9255, Page 606, in the Office of the Jefferson County Clerk, to

reflect that the Property had been converted to a condominium regime and to replace Exhibit “A” to

the mortgage, showing the developed units in the project. A copy of the First Amendment to Loan

Agreement and Mortgage is attached hereto as Exhibit 7, and is incorporated herein by reference.

43. On or about August 8, 2008, the Bank and Seminary Woods entered into a Second


Statement, and Assignment of Rents and Leases (“Second Amendment to Loan Agreement and

Mortgage”), of record in Mortgage Book 11289, Page 329, in the Office of the Jefferson County

Clerk, to reflect the development of an additional unit and to replace Exhibit “A” to the mortgage. A

copy of the Second Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 8,

and is incorporated herein by reference.

44. On or about September 3, 2008, the Bank and Seminary Woods entered into a Third


Statement, and Assignment of Rents and Leases (“Third Amendment to Loan Agreement and


reflect the development of additional units being constructed and to replace Exhibit “A” to the

mortgage. A copy of the Third Amendment to Loan Agreement and Mortgage is attached hereto as

Exhibit 9, and is incorporated herein by reference.

45. On or about September 3, 2008, the Bank and Seminary Woods entered into a Fourth


Statement, and Assignment of Rents and Leases (“Fourth Amendment to Loan Agreement and


reflect the development of an additional unit and to replace Exhibit “A” to the mortgage. A copy of


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the Fourth Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 10, and is

incorporated herein by reference.

46. On or about November 6, 2008, the Bank and Seminary Woods entered into a Fifth


Statement, and Assignment of Rents and Leases (“Fifth Amendment to Loan Agreement and


reflect the development of additional units and to replace Exhibit “A” to the mortgage. A copy of

the Fifth Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 11, and is


47. On or about December 4, 2008, the Bank and Seminary Woods entered into a Sixth


Statement, and Assignment of Rents and Leases (“Sixth Amendment to Loan Agreement and



the Sixth Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 12, and is


48. On or about March 19, 2009, the Bank and Seminary Woods entered into a Seventh


Statement, and Assignment of Rents and Leases (“Seventh Amendment to Loan Agreement and



the Seventh Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 13, and is



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49. On or about March 27, 2009, the Bank and Seminary Woods entered into an Eighth


Statement, and Assignment of Rents and Leases (“Eighth Amendment to Loan Agreement and



the Eighth Amendment to Loan Agreement and Mortgage is attached hereto as Exhibit 14, and is


50. On or about March 27, 2009, the Bank and Seminary Woods entered into a First

Amendment to Note and Ninth Amendment to Construction Loan Agreement, Mortgage, Security

Agreement and Fixture Financing Statement, and Assignment of Rents and Leases (“Note First

Amendment and Ninth Amendment to Loan Agreement and Mortgage”), of record in Deed Book

9408, Page 498, in the Office of the Jefferson County Clerk, in order to amend the maturity date of

the Note and to provide a potential adjustment in the release price of units. A copy of the First

Amendment to Note and Ninth Amendment to Loan Agreement and Mortgage is attached hereto as

Exhibit 15, and is incorporated herein by reference.

51. On or about September 19, 2009, the Bank, Seminary Woods, and the Guarantors

entered into a Second Amendment to Note, Tenth Amendment to Construction Loan Agreement,

First Amendment to Guaranty Agreements and Reaffirmation of Guarantors (“Second Note

Amendment and Tenth Amendment to Loan Agreement”), in order to reflect a reduction in the

amount of the Loan and amount available to be drawn thereunder, to extend the maturity date of the

Loan and modify the interest rate and repayment obligations, to adjust the maximum guaranteed

amounts set forth in the Guaranty, and other amendments. A copy of the Second Note Amendment

and Tenth Amendment to Loan Agreement and is attached hereto as Exhibit 16, and is incorporated


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herein by reference.

52. On or about July 26, 2010, effective as of June 1, 2010, the Bank, Seminary Woods,

and the Guarantors entered into a Third Amendment to Note, Eleventh Amendment to Construction

Loan Agreement and Reaffirmation of Guarantors (“Third Note Amendment and Eleventh

Amendment to Loan Agreement and Guarantor Reaffirmation”), in order to amend the Note to

modify the curtailment period under the Loan Agreement and modify release prices for specific units.

A copy of the Third Note Amendment and Eleventh Amendment to Loan Agreement and Guarantor

Reaffirmation is attached hereto as Exhibit 17, and is incorporated herein by reference.

53. On or about December 18, 2012, the Bank, Seminary Woods, and the Guarantors

entered into an Agreement Regarding Release of Unit 903, a copy of which agreement is attached

hereto as Exhibit 18, and is incorporated herein by reference.

54. On or about January 31, 2013, the Bank and Seminary Woods entered into an

Eleventh Amendment to Mortgage, Security Agreement and Fixture Financing Statement, and

Assignment of Rents and Leases (“Eleventh Amendment to Mortgage”), of record in Mortgage Book

13208, Page 272, in the Office of the Jefferson County Clerk, to reflect the development of an

additional unit and to replace Exhibit “A” to the mortgage. A copy of the Eleventh Amendment to

Mortgage is attached hereto as Exhibit 19, and is incorporated herein by reference.

55. On or about February 12, 2013, the Bank and Seminary Woods entered into an

Amended and Restated Eleventh Amendment to Mortgage, Security Agreement and Fixture

Financing Statement, and Assignment of Rents and Leases (“Amended and Restated Eleventh

Amendment to Mortgage”), of record in Mortgage Book 13224, Page 623, in the Office of the

Jefferson County Clerk, to reflect the development of an additional unit and to replace Exhibit “A” to

the mortgage. A copy of the Amended and Restated Eleventh Amendment to Mortgage is attached


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hereto as Exhibit 20, and is incorporated herein by reference.

56. The documents referred to in paragraphs 36 through 55 above are collectively referred

to as the Loan Documents. Bank is the owner and holder of the Loan Documents and the real and

beneficial interest therein is vested in Bank.

Default Alleged and Relief Sought

57. The Note, as amended and extended, matured and became due and payable in full on

September 30, 2011 and remains unpaid constituting an Event of Default, and the entire balance of

the Loan evidenced by the Note is presently due and payable and Bank by reason of the maturity of

the Loan and other defaults then existing and continuing, has and does declare the Loan to be due

and is entitled to recover same against the obligated Defendants in this action and to enforce its

Mortgage, Security Agreement and Guaranty herein.

58. The amounts due on the Note from Seminary Woods are the principal sum of

$18,483,644.70, plus accrued interest as of February 11, 2013, of $682,360.68, with interest accruing

on the principal balance as provided in the Note at a variable rate of LIBOR plus 3.50 percent per

annum, currently in the amount of $2,310.46 per diem.

59. The amounts due from the Guarantors on the Guaranty as amended by the Second

Note Amendment and Tenth Amendment to Loan Agreement, as follows:

a. From C. Ronald Wise and Jennifer S. Wise, jointly and severally, the sum of

$1,756,563;

b. From Laurence N. Benz and Patricia G. Benz, jointly and severally, the sum of

$3,489,063;

c. From Albert E. Fiorini and Patricia A. Fiorini, jointly and severally, the sum

of $2,406,250;


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d. From Norman E. Risen and Anna J. Risen, jointly and severally, the sum of

$10,948,438;

e. From Marc H. Risen and Linda Risen, jointly and severally, the sum of

$2,743,125;

f. From Kent E. Risen the sum of $2,743,125;

and, in addition, each Guarantor is jointly and severally obligated to Bank for all of the interest due

on the Note and all of the Bank’s costs of this action.

60. Bank has referred this claim to counsel who are not its regularly salaried employees

and, pursuant to the terms of the Note, the Mortgage, the Assignment of Rents, the Guaranty, and

KRS 411.195, is entitled to recover its reasonable attorney fees.

61. Trustees of the J. Barnes Living Trust are joined as parties hereto by reason of having

entered into a purchase contract with the Defendant, Seminary Woods, for the purchase of a unit in

the Project. Said purchase was not consummated and any deposit by said Defendants has been

forfeited. Said Defendants are called upon to enter herein and set forth any claim or interest they

have in the Project or be forever barred.

62. The Richards are joined as parties hereto by reason of having entered into a purchase

contract with the Defendant, Seminary Woods, for the purchase of a unit in the Project. Said

purchase was not consummated and any deposit by said Defendants has been forfeited. Said

Defendants are called upon to enter herein and set forth any claim or interest they have in the Project

or be forever barred.

63. Merenbloom is joined as a party hereto by reason of having entered into a purchase




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Defendants are called upon to enter herein and set forth any claim or interest they may have in the

Project or be forever barred.

64. Scalzitti is joined as a party hereto by reason of having entered into a purchase contract

with the Defendant, Seminary Woods, for the purchase of a unit in the Project. Said purchase was

not consummated and any deposit by said Defendant has been forfeited. Said defendant is called

upon to enter herein and set forth any claim or interest he may have in the Project or be forever

barred.

65. The Royces are joined as parties hereto by reason of having entered into a purchase





66. Whittington is joined as a party hereto by reason of having entered into a purchase

contract with the Defendant, Seminary Woods, or being assignee of the holder of a purchase

contract, for the purchase of a unit in the Project. Said purchase has not been consummated and any

deposit by said Defendant or its assignor, has been forfeited. Said Defendant is called upon to enter

herein and set forth any claim or interest it may have in the Project or be forever barred.

67. Whittington, R. Wise and A. Fiorini are also joined as parties hereto by reason of a

contract interest they may have in Units 1005 and 1007. The purchase has not been consummated

and any deposit by said Defendants or their assignor, should be deemed forfeited and contract rights

voided. Said Defendants are called upon to enter herein and set forth any claim or interest they may

have in the Project or be forever barred.


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68. N. Risen is also joined as a party hereto by reason of a contract interest he may have

in a Unit or Units which were planned to be constructed. Such units have not been constructed, the

purchase has not been consummated and any deposit by said Defendant should be deemed forfeited

and contract rights voided. Said Defendant is called upon to enter herein and set forth any claim or

interest he may have in the Project or be forever barred.

69. M. Risen, L. Risen and K. Risen are also joined as parties hereto by reason of a

contract interest they may have in a Unit or Units which were planned to be constructed. Such units

have not been constructed, the purchase has not been consummated and any deposit made by said

Defendants should be deemed forfeited and contract rights voided. Said Defendants are called upon

to enter herein and set forth any claim or interest they may have in the Project or be forever barred.

70. MJE Real Estate is joined as a party hereto by reason of having entered into a purchase


purchase was not consummated and any deposit by said Defendant has been forfeited. Said

Defendant is called upon to enter herein and set forth any claim or interest it may have in the Project

or be forever barred.

71. The Eichbergers are joined as parties hereto by reason of having entered into a

purchase contract with the Defendant, Seminary Woods, for the purchase of a unit in the Project.

Said purchase was not consummated and any deposit by said Defendants has been forfeited. Said



72. The Evans are joined as parties hereto by reason of having entered into a purchase

contract with the Defendant, Seminary Woods, for the purchase of a Unit in the Project. Said


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73. Bank states that except as set forth herein, there are no other liens or encumbrances

against the Property known to it.

74. On account of the default under its Note and related Loan Documents as alleged

herein, the Bank is entitled to, and hereby seeks to, foreclose its mortgage lien interest in the

Remaining Mortgaged Property, including the Unsold Units (Units 404, 407, 601, 1005 and 1205

plus Garage Units 1, 2, 3, 4 and 5) and the Development Rights in the Property. A correct legal

description of the 19 constructed Units plus the 5 Garage Units and showing the 14 Units released

from the lien of Bank’s Mortgage is attached hereto as Exhibit 21 and incorporated herein by

reference.

75. The mortgage lien of Bank is prior and superior to any and all other liens on the

Remaining Mortgaged Property with the exception of unpaid ad valorem taxes. If the Remaining

Mortgaged Property is ordered sold by this Court in this action, the purchaser should take the

Remaining Mortgaged Property free and clear of any claims, liens, and encumbrances except: (a)

state, metro government, school, and fire taxes not yet due and payable; (b) easements, restrictions

and covenants of record; (c) assessments for public improvements levied against the Property; and

(d) any facts which an inspection and accurate survey of the Property may disclose, and (e) any

applicable rights of tenants pursuant to the federal “Protecting Tenants at Foreclosure Act of 2009”

(Sections 701 through 704 of Pub. L. No. 111-22, 123 Stat. 1632).

76. The individual Unsold Units in the Remaining Mortgaged Property are each

indivisible and cannot be divided without materially impairing the respective value thereof or the

value of Bank’s interest therein. The Remaining Mortgaged Property (other than Unsold Units) is


22

divisible into condominium units upon further development of the Project but said units have not yet

been developed or created of record and the Bank reserves the right to contend that selling it in less

than an entirety will materially impair the value thereof and of the Bank’s interest therein.

77. The lien of Bank on any rents and leases under the Assignment of Rents is prior and

superior to any and all other claims, liens, and interests of any person in and to any of the rents or

other income arising from any lease on the Property.

78. The security interest of Bank in the personal property of Seminary Woods is prior and

superior to any and all other security interests or liens therein.

79. In the event that the Remaining Mortgaged Property is sold pursuant to a judgment

entered herein and Seminary Woods is no longer owner of the Remaining Mortgaged Property, then:

a. Seminary Woods and all of the Guarantors should not be allowed to remain in

control of the Council; and

b. The purchaser of any Development Rights should have control of the Council

as contemplated by, and in accordance with, the Master Deed, as amended, and should be granted

such other relief as concerns the Council as is appropriate to complete the development of the

Project.

80. That PNC has the right under its Mortgage and Assignment of Rents to have a

receiver appointed herein to collect all rents, monies and profits from the Property and to control,

manage and operate the Project and to develop, construct and sell units in the Project and run,

manage and operate the Council.

Demand for Relief


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WHEREFORE, Bank demands judgment as follows:

A. Judgment against the Defendant, Seminary Woods, for the principal sum of

$18,483,644.70, plus accrued interest as of February 11, 2013, of $682,360.68, with interest accruing

thereafter on the principal balance as provided in the Note at the rate of $2,310.46 per diem, until

paid.

B. Judgment against the Defendants, C. Ronald Wise and Jennifer S. Wise, jointly and

severally, for the principal sum of $1,756,563, plus the amounts of the accrued interest and accruing

interest on the Note of Seminary Woods set out in paragraph A. above, plus costs and reasonable

attorney fees.

C. Judgment against the Defendants, Lawrence N. Benz and Patricia G. Benz, jointly

and severally, for the principal sum of $3,489,063, plus the amounts of the accrued interest and

accruing interest on the Note of Seminary Woods set out in paragraph A. above, plus costs and

reasonable attorney fees.

D. Judgment against the Defendants, Albert E. Fiorini and Patricia A. Fiorini, jointly and



attorney fees.

E. Judgment against the Defendants, Norman E. Risen and Anna J. Risen, jointly and



attorney fees.

F. Judgment against the Defendants, Marc H. Risen and Linda Risen, jointly and



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attorney fees.

G. Judgment against the Defendant, Kent E. Risen, for the principal sum of $2,743,125,

plus the amounts of the accrued interest and accruing interest on the Note of Seminary Woods set out

in paragraph A. above, plus costs and reasonable attorney fees.

H. That the judgment be deemed satisfied when the Bank has indefeasibly recovered,

through collection from Seminary Woods, the Guarantors, or any of them, or through sale of the

Remaining Mortgaged Property, the total amount of principal, interest, costs, and fees due under the

Judgment.

I. That Bank be adjudged to have a first mortgage lien on the Remaining Mortgaged

Property prior and superior to all other liens and encumbrances except as set out herein.

J. That the Mortgage be enforced and to that end that the Remaining Mortgaged

Property be sold by the Marshall of this Court, and that the proceeds be first applied to costs and then

to the debt, interest, charges, and costs due Bank, and the balance, if any, be held for the benefit of

the Defendants, subject to further orders of the Court.

K. That the Assignment of Rents, be enforced and to that end an order be entered

directing Seminary Woods and all of its tenants to remit all rents to Bank, to be applied first to the

costs and expenses of operating the Property, then to costs, and then to the debt, interest, charges,

and costs due Bank, and the balance, if any, be held for the benefit of the Defendants, subject to

further orders of the Court.

L. That the security interest granted Bank under the Mortgage be enforced and to that

end that the collateral identified therein be sold and the proceeds applied first to costs and then to the


25

debt, interest, charges, and costs due Bank, and the balance, if any, be held for the benefit of the

Defendants, subject to further orders of the Court.

M. That a receiver be appointed in this action to take control of the Project and manage,

operate same and collect rents therefrom and to develop, construct and sell units in the Project and to

operate and manage the Council.

N. That the Contract Holders be required to enter herein and assert any interest they have

in the Project or be forever barred.

O. Judgment against the Defendant, Seminary Woods and the Guarantors, jointly and

severally for Bank’s costs herein expended and its reasonable attorneys’ fees.

P. For any and all other proper relief to which the Bank may appear entitled.

/s/ John T. McGarvey

John T. McGarvey

Eric M. Jensen

M. Deane Stewart

MORGAN & POTTINGER, PSC

601 West Main Street

Louisville, KY 40202

(502) 560-6754 [email protected]

Counsel for Bank


mailto:[email protected]