In the Matter of a Mail Dispute Between

CALSTAR, LLC

         and

LASALLE BANK NATIONAL ASSOCIATION

P.S. Docket No. MD 01-49

APPEARANCE FOR DISPUTANT
CALSTAR, LLC:
Stephanie Pearce Alexander, Esq.
Federico, Castelan, Sayre
450 Newport Center Drive, Suite 650
Newport Beach, CA 92660-7610

APPEARANCE FOR DISPUTANT
LASALLE BANK NATIONAL ASSOCIATION:
James M. McGee, Esq.
Akin, Gump, Strauss, Hauer & Feld
1700 Pacific Avenue, Suite 4100
Dallas, TX 75201-4675

This mail dispute has been docketed pursuant to Postal Operations Manual (POM 8, July 16, 1998 (with Revisions through November 30, 2000)), Section 616.21, which requires the Chief Field Counsel to forward certain unresolved mail disputes to the Judicial Officer for resolution. The mail in dispute is that addressed to GREEN OAKS, GREEN OAKS HOTEL, AND GREEN OAKS PARK HOTEL, at P.O. Box 121279, Fort Worth, TX 76116-1279, and 6901 West Freeway, Fort Worth, TX 76116-1725. The Fort Worth postmaster is currently holding the mail.

Both parties filed sworn statements of corporate officers, as required by 39 C.F.R. §965.5, along with supporting documents. The following findings of fact are based on all the material submitted by the parties, including the material forwarded by the United States Postal Service Law Department, Southwest Office.

1. In September 1998, Calstar, LLC acquired the Green Oaks Hotel. To obtain the loan necessary to purchase the property, Calstar signed a promissory note and entered into a security agreement with Capital Company of America on September 3, 1998. (Law Department submission, Tabs 1-3; LaSalle submission, Tabs A, B and E; Kennedy Declaration, found in Tab 7 to Calstar submission).

2. The transaction between Calstar and Capital Company included documents titled "Deed of Trust," "Assignment of Leases and Rents," and "Assignment of Agreements, Licenses, Permits and Contracts," all signed by Sailor Kennedy as President of Calstar. These documents gave Capital Company the right to take possession of the property if Calstar defaulted on the loan. The security agreement covered all tangible and intangible property, including trade names. (Law Department submission, Tabs 3-5; LaSalle submission, Tabs B (pp. 4, 13), C and D).

3. On March 25, 1999, Capital Company assigned all its rights and interests under the above documents to LaSalle National Bank.¹ (Law Department submission, Tab 6; LaSalle submission, Tab F; Kennedy Declaration).

4. On October 16, 2000, LaSalle, as Trustee under the Deed of Trust, gave notice that Calstar was in default under the promissory note and Deed of Trust, and that a foreclosure sale would be held on November 7, 2000, if Calstar did not pay all amounts due by that date. (Law Department submission, Tabs 7-8; LaSalle submission, Tab G).

5. On November 3, 2000, Timothy O'Brien, a Calstar officer, submitted three change-of-address orders (PS Form 3575) to the Fort Worth Post Office, directing that mail addressed to "Green Oaks," "Green Oaks Hotel," and "Green Oaks Park Hotel" be forwarded to 27779 Homestead Road, Laguna Niguel, CA 92677. On November 6, 2000, Calstar closed Green Oaks Hotel. (Calstar submission, Tab 5; Kennedy Declaration).²

6. On November 7, 2000, LaSalle foreclosed on the loan and purchased the property, including the hotel, at a public sale at the Tarrant County Courthouse. (Law Department submission, Tabs 9-10; LaSalle submission, Tab H).

7. On December 6, 2000, LaSalle applied for, and received from the Tarrant County Clerk, "Assumed Name" certificates, entitling the holder to do business as Green Oaks Hotel and Green Oaks Park Hotel. (Law Department submission, Tab 11; LaSalle submission, Tab J).

8. On December 8, 2000, LaSalle's attorney wrote to the Fort Worth Postmaster, asking that mail addressed to Green Oaks Hotel be delivered as addressed. The postmaster complied with that request, Calstar's attorney protested, and this mail dispute arose.

LaSalle argues that it is the undisputed owner of Green Oaks Hotel and is entitled to continue to use that name and, therefore, is entitled to mail addressed to that property. LaSalle also argues that, under the security agreement, it is entitled to collect the accounts receivable that were generated before the foreclosure, those receivables being what precipitated this mail dispute.

Calstar does not contest the fact that LaSalle is the owner of the property, but argues that LaSalle is guilty of various financial misdeeds both before and after the foreclosure and that some of the mail addressed to the disputed addresses is intended for Calstar, as payment for services performed by Calstar before Calstar ceased to operate the hotel.³

Calstar's assertions raise an issue about the ultimate ownership of the contents of some of the mail, but do not support its claim to delivery of the mail.

Resolution of this dispute is governed by Section D042.1 of the Domestic Mail Manual which reads as follows:

All mail addressed to a governmental or
nongovernmental organization or to an individual
by name or title at the address of the organization
is delivered to the organization, as is similarly
addressed mail for former officials, employees,
contractors, agents, etc. If disagreement arises
where any such mail should be delivered, it must
be delivered under the order of the organization’s
president or equivalent official.⁴

As the undisputed owner of the Green Oaks property, LaSalle is entitled to delivery of mail addressed to that property. This decision deals only with delivery of the mail. It does not attempt to decide underlying financial disputes or any other dispute between the parties. If either party obtains a court order directing delivery of the mail, postal regulations provide that the mail will be delivered according to such an order. POM §616.3.

The Judicial Officer should issue an order to the Fort Worth Postmaster directing that the disputed mail be delivered as addressed or as directed by LaSalle Bank National Association.

Bruce R. Houston
Chief Administrative Law Judge

¹ LaSalle National Bank later became known as LaSalle Bank National Association.

² Calstar also submitted PS Forms 3575 for mail addressed to Calstar, LLC, and Calstar Properties, but LaSalle has made no claim to that mail and mail so addressed is not in dispute.

³ Calstar also proposes that the postmaster deliver the mail to an independent third party appointed by the Postal Service, who would then open and distribute mail to the appropriate party. A neutral receiver is often a workable solution and was suggested by the postmaster in his letter to both parties on January 5, 2001. As was made clear in that letter, however, this is something the parties must agree to. Neither a postmaster, nor the presiding officer in a case brought under 39 C.F.R. Part 965, has authority to appoint a third party receiver.

⁴ This same provision is found in Section 614.1 of the Postal Operations Manual (POM Issue 8, July 16, 1998).