STATE OF WEST VIRGINIA
 

SUPREME COURT OF APPEALS
 

FILED Keyser House Bonds, LLC, February 14, 2014 Plaintiff Below, Petitioner released at 3:00 p.m.
 

RORY L. PERRY II, CLERK
 

SUPREME COURT OF APPEALS
 vs) No. 12-1505 (Mineral County 12-C-62) OF WEST VIRGINIA 

Keyserhouse Associates, LTD Partnership, and 

the City of Keyser, 

Defendants Below, Respondents 

MEMORANDUM DECISION 

Petitioner herein and plaintiff below, Keyser House Bonds, LLC, (“Plaintiff 

Bondholder”), appeals an order entered by the Circuit Court of Mineral County on 

November 13, 2012. All parties to this appeal agree that Plaintiff Bondholder is owed 

approximately $650,000.00 for municipal bonds it holds that matured on April 24, 2012. 

The parties set forth the terms of the agreement governing the municipal bonds in an 

Indenture of Trust. Respondents, Keyserhouse Associates, LTD Partnership 

(“Respondent Partnership”) and the City of Keyser (“Respondent City”), argue that 

Plaintiff Bondholder did not follow the proper procedure contained in the Indenture of 

Trust to collect payment once the bonds reached maturity. Respondents concede, 

however, that Plaintiff Bondholder is entitled to full payment on the municipal bonds. 

The circuit court’s order enjoined Plaintiff Bondholder from taking any action to collect 

its debt on the bonds, including foreclosing on the encumbered property, because of its 

finding that “Plaintiff has failed to offer any evidence or proof that it complied with the 

pre-foreclosure notice and right to cure procedures contained in the Indenture.” By 

counsel, Kenneth E. Webb, Jr., and Patrick C. Timony, Plaintiff Bondholder appeals the 

circuit court’s order. Respondent Partnership, by counsel Nelson M. Michael and David 

Collins, and Respondent City, by counsel Lee Murray Hall and Arnold J. Janicker, assert 

that the circuit court’s order should be affirmed. 

Upon consideration of the standard of review, the parties’ briefs, the record 

presented, and the oral arguments, this Court finds that the circuit court committed 

reversible error. We hereby reverse the November 13, 2012, order of the circuit court 

enjoining Plaintiff Bondholder from foreclosing on the Keyserhouse. This case presents 

no new or significant questions of law. Furthermore, for the reasons set forth herein, this 

case satisfies the “limited circumstance” requirement of Rule 21(d) of the Rules of 

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Appellate Procedure and is appropriate for the Court to issue a memorandum decision 

rather than an opinion. 

On June 1, 1981, Respondent City and Respondent Partnership entered into 

two separate agreements related to the building of a low-income housing project, the 

Keyserhouse. The first agreement consisted of Respondent Partnership conveying two 

parcels of real property to Respondent City upon which the Keyserhouse was to be built. 

The second agreement, an Indenture of Trust, secured the revenue bonds Respondent City 

issued to finance the construction of the Keyserhouse. The Indenture of Trust required 

Respondent Partnership to make monthly payments to the bondholder in an amount 

sufficient to pay the bonds in full by July 10, 2011.1 Plaintiff Bondholder holds a one 

hundred percent interest in these bonds. 

Respondent Partnership began experiencing financial difficulties in 2000 

and was unable to make the monthly payments to the bondholders. Respondent 

Partnership subsequently filed for bankruptcy and the bankruptcy court entered a 

reorganization plan on January 23, 2002, requiring Respondent Partnership to make 

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Respondent City issued two thirty-year bonds to finance the construction of the 

Keyserhouse. These two bonds were issued in the aggregate amount of $1,505,000.00. 

In its brief to this Court, Respondent City described the bond agreement between the 

parties as follows: 

The Bonds are secured by an Indenture of Trust, which 

encumbers the Keyserhouse, and an assignment of rents in 

favor of a Trustee created by Indenture. The Bonds are a 

special obligation of the City of Keyser and payable only 

from revenues and receipts derived from the leasing or sale of 

the Keyserhouse. The Bonds are not a debt of the City of 

Keyser, and are not payable from, or are a charge against the 

general revenue of the City of Keyser. The Bonds provide 

that holders or their assigns are scheduled to receive monthly 

payments of principal and interest on the Bonds from the 

revenue generated by the Keyserhouse in an amount 

sufficient to pay the Principal and Interest in full on July 10, 

2011. 

The City, in turn, leased back to KAP (Partnership) the 

real property that KAP (Partnership) had conveyed to it. KAP 

(Partnership) built the Keyserhouse upon the real property. 

The Lease between the City and KAP (Partnership) was for 

an original term of thirty years, the end of which coincided 

with the date final payment was scheduled to be made on the 

Bonds. 

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monthly payments2 to the municipal bondholder over the course of ten years. The 

reorganization plan called for the bondholder to be paid in full on or before April 24, 

2012. 

The bonds reached maturity on April 24, 2012, at which time Respondent 

Partnership failed to pay Plaintiff Bondholder the remaining debt owed on the bonds, 

approximately $650,000.00. After failing to receive payment, Plaintiff Bondholder 

sought relief from the Trustee, Huntington National Bank. Plaintiff Bondholder asserts 

that the Trustee failed to act promptly after being notified of Respondent Partnership’s 

failure to pay its remaining debt on the bonds. 

In addition to Respondent Partnership’s failure to pay its outstanding debt, 

Plaintiff Bondholder alleges that Respondent Partnership had allowed the Keyserhouse to 

lapse into a state of dilapidation. The United States Department of Housing and Urban 

Development (HUD) issued numerous citations to Respondent Partnership between 2007 

and 2012 for failing to provide its tenants with affordable, safe and sanitary housing. 

Plaintiff Bondholder asserts that HUD twice threatened to suspend its subsidy payments 

and to relocate the residents due to Respondent Partnership’s failure to maintain the 

Keyserhouse. 

On May 30, 2012, Plaintiff Bondholder filed an action in the circuit court 

requesting a declaratory judgment and a preliminary injunction based on Respondent 

Partnership’s failure to pay its outstanding debt on the bonds and its alleged failure to 

maintain the Keyserhouse in a habitable condition. Plaintiff Bondholder states that it 

filed the action in circuit court because (1) a month had passed since the bonds matured 

and it had not received payment; (2) the Trustee failed to take prompt action to resolve 

the issue as it should have under the terms of the Indenture of Trust; and (3) their security 

interest in the Keyserhouse was diminishing as a result of Respondent Partnership’s 

failure to maintain the Keyserhouse in a habitable condition. In its complaint, Plaintiff 

Bondholder requested that the circuit court determine the duties, rights and obligations of 

the parties under the Indenture of Trust. 

In response to Plaintiff Bondholder’s lawsuit, Respondents acknowledged 

that the bonds required full payment upon maturity and that the bonds were past due. 

However, Respondents argued that Plaintiff Bondholder failed to provide sufficient 

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The reorganization plan described the amount of the monthly payments as 

follows: 

Class 2 claim, in the amount of $1,060,000.00 will be 

paid out over 10 years in monthly payments, at an interest 

rate of 5% per annum, with the debt balance due at the 

expiration of ten years. 

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notice of the default and did not provide Respondent Partnership with an opportunity to 

cure. Respondents argued that the right to cure provision in the Indenture of Trust 

provided Respondent Partnership with ninety days to cure the default. 

The circuit court held a hearing on September 19, 2012. The parties 

discussed the physical condition of the Keyserhouse and informed the circuit court that 

HUD funding could be jeopardized if the Keyserhouse remained in a state of dilapidation. 

Both Plaintiff Bondholder and Respondent Partnership informed the court that they had 

management companies in place to take over the day-to-day operation of the 

Keyserhouse in an effort to remedy the HUD related problems. 

Additionally, Plaintiff Bondholder argued during this hearing that the bonds 

matured on April 24, 2012, and that Respondent Partnership had failed to pay the 

remaining $650,000.00 owed on the bonds. Further, Plaintiff Bondholder asserted that 

the Indenture of Trust gave it an unconditional right to enforce payment once the bonds 

reached maturity, including the right to foreclose on the property if payment was not 

received.3 

Respondents did not dispute (1) that the bonds had matured, (2) that 

Respondent Partnership failed to pay, or that (3) the Indenture of Trust allowed Plaintiff 

Bondholder to foreclose on the property. Rather, Respondents argued that Plaintiff 

Bondholder could not foreclose until it provided Respondents with notice of the default 

and ninety days to cure.4 In addition to the procedural arguments Respondents raised, 

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An issue that arose at the September hearing was whether Plaintiff Bondholder’s 

proposed foreclosure would result in the residents of the Keyserhouse having to relocate. 

Counsel for Plaintiff Bondholder told the circuit court that “the bondholders are doing 

everything they can to insure that the citizens do not have to move from their homes. 

They’ve been in contact with HUD . . . HUD’s approved TM Associates (Plaintiff 

Bondholder’s proposed management company) to manage the property immediately and 

that will stop the abatement process.” 

Counsel for Plaintiff Bondholder repeated this statement at the October 22, 2012, 

status conference: “Since I’ve been asking for an injunction some five, six months ago, 

we’ve had an approved management company in place. We’ve had an agreement with 

HUD. It would take place immediately and the tenants will not be moved.” (Emphasis 

added.) 

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In support of this argument, Respondents cited Article VI, section 4 of the 

Indenture of Trust, which states: 

Whenever an event of default shall occur, the Lessee shall 

have the right to remedy such default within ninety days after 

notification of the occurrence thereof, provided that the 

Lessee shall pay all expenses incurred in the exercise of right 

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they informed the circuit court that they were attempting to sell the Keyserhouse and had 

a potential buyer in place. Respondents stated that a sale of the Keyserhouse would result 

in sufficient monies to satisfy the outstanding debt owed to Plaintiff Bondholder. 

Following this hearing, the circuit court ruled that (1) Respondent 

Partnership could enter into an agreement with their proposed management company, 

RLJ Management Company, to take over the day-to-day operation of the Keyserhouse; 

(2) Respondent Partnership and Respondent City could immediately enter into 

negotiations to sell the Keyserhouse to the interested buyer (Buckeye Community Hope 

Foundation); (3) it would not consider Plaintiff Bondholder’s motion for an injunction to 

take over control and management of the Keyserhouse; and (4) RLJ Management 

Company or Respondent Partnership were to pay Plaintiff Bondholder $5,000.00 per 

month to be applied to the $650,000.00 outstanding debt owed to Plaintiff Bondholder. 

In making this ruling, the circuit court did not take evidence or hear 

testimony from either Respondent Partnership’s proposed management company (RLJ 

Management Company) or from Plaintiff Bondholder’s proposed management company 

(TM Associates). It is unclear, based on the record before us, why the circuit court 

ordered Respondent Partnership’s management company to take over control of the 

Keyserhouse without allowing both sides to present evidence and testimony on this issue. 

Further, in arriving at the $5,000.00 per month amount payable to Plaintiff Bondholder, 

the circuit court did not provide the parties with an opportunity to brief this issue or 

present evidence to the circuit court. Instead, the circuit court stated that “I’m just going 

to pull a number out of the air that seems reasonable.”5 

Following this ruling, the Trustee6 reviewed the Indenture of Trust and 

determined that it permitted Plaintiff Bondholder to initiate foreclosure proceedings on 

the Keyserhouse. On October 22, 2012, Plaintiff Bondholder and the Trustee notified 

Respondents of their intention to declare the bonds mature and unpaid, declare the 

outstanding debt immediately due and, if not paid, invoke the power under the Indenture 

of Trust to foreclose on the Keyserhouse. Plaintiff Bondholder, in conjunction with the 

or remedies hereunder and all expenses of remedying such 

default. The Trustee covenants and agrees promptly to notify 

in writing the Issuer and the Lessee of any other default in the 

Indenture brought to its attention. 

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Plaintiff Bondholder states that $5,000.00 per month is insufficient to pay the 

interest on the outstanding bonds. 

6

Huntington National Bank resigned its role as Trustee in August 2012. However, 

Huntington National Bank withdrew its resignation on October 23, 2012, and attempted 

to resume its role as Trustee. 

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Trustee, subsequently published a notice of a foreclosure sale. After this notice was 

published, Respondents removed the Trustee and noticed a status conference in the 

circuit court for October 29, 2012. 

At the October status conference, Respondents argued that Plaintiff 

Bondholder and the Trustee violated the court’s September order by initiating foreclosure 

proceedings. Further, Respondents informed the court that a contract to sell the 

Keyserhouse had been agreed to with Buckeye Community Hope Foundation. By 

contrast, Plaintiff Bondholder argued that it initiated foreclosure proceedings with the 

Trustee pursuant to the terms of the Indenture of Trust and that the court’s September 

order did not preclude this action. After this hearing, the circuit court entered an order on 

November 13, 2012, ruling that (1) Plaintiff Bondholder is enjoined from foreclosing on 

the Keyserhouse and may not proceed with a foreclosure sale “without further order of 

this Court”; (2) Plaintiff Bondholder may not interfere with a purchase agreement 

between Respondents and a potential purchaser; and (3) “Huntington bank is removed as 

trustee herein[.]” 

The circuit court’s ruling was based, in large part, on Respondent 

Partnership’s statement at the October hearing that “we have a purchase agreement 

between Keyserhouse Associates (Respondent Partnership) and the city (Respondent 

City) with Buckeye (Community Hope Foundation) for the sale of the property.” The 

circuit court’s order states: 

The public interest, as well as the interest of the citizens of 

Keyser living in the Keyserhouse, will be promoted by 

proceeding by [sic] the sale of the Keyserhouse to Buckeye as 

anticipated. . . . The Court also notes that the interests of the 

parties and interest of justice will be served by said sale and 

payment of the bonds with sale proceeds. 

Similarly, at the September hearing, the circuit court told counsel for Plaintiff 

Bondholder, “I mean, if this sale goes through, you’re going to get everything that’s 

owed to you[.]” In an update provided to this Court, Respondent City reports that the 

sale to Buckeye Community Hope Foundation did not take place. The Keyserhouse 

remains unsold and the $650,000.00 bond payment that was due to Plaintiff Bondholder 

on April 24, 2012, remains unpaid. 

After entry of the circuit court’s November 13, 2012, order, Plaintiff 

Bondholder filed the present appeal. 

Our standard of review is set forth in Syllabus Point 1 of McCormick v. 

Allstate Ins. Co., 197 W.Va. 415, 475 S.E.2d 507 (1996): 

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When this Court reviews challenges to the findings 

and conclusions of the circuit court, a two-prong deferential 

standard of review is applied. We review the final order and 

the ultimate disposition under an abuse of discretion standard, 

and we review the circuit court’s underlying factual findings 

under a clearly erroneous standard. 

We begin our analysis by noting three undisputed facts: (1) the bonds 

reached maturity on April 24, 2012; (2) the bonds were not paid in full on April 24, 2012, 

and (3) all parties to this appeal agree that Plaintiff Bondholder is owed approximately 

$650,000.00. 

Plaintiff Bondholder contends that the circuit court erred by enjoining it 

from foreclosing on the Keyserhouse. Plaintiff Bondholder states that the Indenture of 

Trust gives it an unconditional right to enforce the agreement once the bonds have 

matured and full payment has not been made. The circuit court enjoined Plaintiff 

Bondholder from foreclosing based on its determination that Plaintiff Bondholder “failed 

to offer any evidence or proof that it complied with the pre-foreclosure notice and right to 

cure procedures contained in the Indenture.” The issue before us is whether Plaintiff 

Bondholder was required to provide notice and a right to cure to Respondents after the 

bonds reached maturity and were not paid. 

Plaintiff Bondholder argues that under the plain language of the Indenture 

of Trust, it was not required to provide notice and a right to cure prior to initiating 

foreclosure proceedings after the bonds had reached maturity and full payment was not 

made. We agree. Article VI, section thirteen of the Indenture of Trust gives Plaintiff 

Bondholder a clear, unequivocal right to enforce the payment of the bonds once they 

have reached maturity: 

It is expressly covenanted and agreed, and the Bonds 

issued hereunder are subject to the condition that the holders 

of the Bonds shall not be entitled to institute any suit, action 

or proceeding at law or in equity to enforce any rights or 

remedies granted by this Indenture unless and until the 

Trustee shall have refused or, for ten days following delivery 

to it of a written demand therefor, signed by the holders of not 

less than 60% of the Bonds, shall have failed to take 

appropriate remedial action authorized by the Indenture upon 

the happening of one or more events of default specified in 

Section 1 of this Article. Such demand shall specify and 

describe the default. 

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Nothing in the Indenture contained shall, however, 

affect or impair the right of the holders of the Bonds to 

enforce the payment of the principal of and interest on the 

Bonds at and after maturity thereof, or the obligation of the 

Issuer to pay the principal of an interest of the Bonds to the 

holders thereof at the time, place, from the source and in the 

manner in the Bonds expressed. 

(Emphasis added.) 

In construing a written instrument, this Court has previously held “[w]here 

the terms of a contract are clear and unambiguous, they must be applied and not 

construed.” Syllabus Point 3, in part, Waddy v. Riggleman, 216 W.Va. 250, 606 S.E.2d 

222 (2004). Further, “[i]t is the safest and best mode of construction to give words, free 

from ambiguity, their plain and ordinary meaning.” Syllabus Point 3, in part, Bennett v. 

Dove, 166 W.Va. 772, 277 S.E.2d 617 (1981). We also note that “[a] valid written 

instrument which expresses the intent of the parties in plain and unambiguous language is 

not subject to judicial construction or interpretation but will be applied and enforced 

according to such intent.” Syllabus Point 1, Cotiga Development. Co. v. United Fuel Gas 

Co., 147 W.Va. 484, 128 S.E.2d 626 (1962). 

The circuit court enjoined Plaintiff Bondholder from taking any action to 

collect its debt on the bonds because of its finding that Plaintiff bondholder failed to 

follow the notice and right to cure provisions contained in the Indenture of Trust. The 

circuit court’s order failed to address the above “nothing shall affect” clause. The circuit 

court did not cite the specific notice and right to cure language it relied upon, nor did the 

circuit court set forth a finding that the above “nothing shall affect” clause was subject to 

any notice or right to cure language contained in the Indenture of Trust. 

We find that the plain language of the Indenture of Trust gives Plaintiff 

Bondholder an absolute right to enforce payment of the bonds once they have matured. 

Allowing the notice and right to cure provisions cited by Respondents to eviscerate 

Plaintiff Bondholder’s right to enforce payment after the bonds have reached maturity 

would be contrary to the “nothing shall affect” clause. By its clear, unambiguous terms, 

the “nothing shall affect” clause gives Plaintiff Bondholder an absolute right to enforce 

payment after the bonds have reached maturity. As this Court stated in Syllabus Point 3, 

in part, of Dunbar Fraternal Order of Police, Lodge No. 119 v. City of Dunbar, 218 

W.Va. 239, 624 S.E.2d 586 (2005), “[s]pecific words or clauses of an agreement are not 

to be treated as meaningless, or to be discarded, if any reasonable meaning can be given 

them consistent with the whole contract.” In the present case, the “nothing shall affect” 

clause cannot be treated as meaningless or discarded. Instead, we find that the clause 

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gives Plaintiff Bondholder an absolute right to enforce payment once the bonds have 

reached maturity. 

Moreover, the record establishes that Respondents had actual notice that the 

bonds had matured and were in default. Respondents do not dispute that the present 

lawsuit was filed on May 30, 2012, and that they received notice of and are parties to this 

action. Assuming arguendo that Respondents were entitled to ninety days to cure the 

default after receiving notice, Respondents had the opportunity to cure after receiving 

notice of this lawsuit. This lawsuit was filed over twenty months ago and Respondents 

have yet to cure the default. Further, Respondent Partnership entered into a bankruptcy 

reorganization plan in 2002 that required it to make full payment to Plaintiff Bondholder 

within ten years (April 24, 2012). Since Respondent Partnership entered into this 

agreement setting forth a fixed date upon which the bonds were to be paid, Respondent 

Partnership cannot reasonably claim that it failed to make the remaining $650,000.00 

payment to Plaintiff Bondholder due to lack of notice. 

Based on all of the foregoing, we find that the circuit court abused its 

discretion by enjoining Plaintiff Bondholder from enforcing its right to full payment on 

the bonds once they reached maturity. The circuit court’s order was based, in significant 

part, on Respondents’ statement at the October 2012 hearing that a sale of the 

Keyserhouse was eminent and that the sale would produce sufficient funds to pay the 

debt owed to Plaintiff Bondholder. That sale did not occur and Plaintiff Bondholder still 

holds bonds that matured on April 24, 2012, for which it has not been paid. Plaintiff 

Bondholder is entitled to seek payment on the bonds through means, including 

foreclosure, set forth in the Indenture of Trust. We therefore reverse the circuit court’s 

November 13, 2012, order enjoining Plaintiff Bondholder from foreclosing on the 

Keyserhouse. 

Reversed. 

ISSUED: February 14, 2014 

CONCURRED IN BY: 

Chief Justice Robin Jean Davis 

Justice Brent D. Benjamin 

Justice Margaret L. Workman 

Justice Menis E. Ketchum 

Justice Allen H. Loughry II 

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