Wilmington Trust, N.A. v. Stradtman Park, LLC

Wilmington Trust, N.A. v Stradtman Park, LLC 2026 NY Slip Op 05883 October 9, 2026 Appellate Division, Fourth Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF JPMBB COMMERCIAL MORTGAGE SECURITIES TRUST 2014-C24, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2014-C24, BY AND THROUGH ITS SPECIAL SERVICER, LNR PARTNERS, LLC, PLAINTIFF-APPELLANT, v STRADTMAN PARK, LLC, DEFENDANT-RESPONDENT, ET AL., DEFENDANTS. Supreme Court of the State of New York, Appellate Division, Fourth Judicial Department Decided on October 9, 2026 643 CA 25-01133 Present: Lindley, J.P., Curran, Ogden, Delconte, And Hannah, JJ. MCCARTER & ENGLISH, LLP, NEW YORK CITY (GREGORY J. MASCITTI OF COUNSEL), FOR PLAINTIFF-APPELLANT. THE SAGE LAW FIRM GROUP PLLC, BUFFALO (KATHRYN FRIEDMAN OF COUNSEL), FOR DEFENDANT-RESPONDENT. Appeal from an amended order and judgment of the Supreme Court, Erie County (Emilio Colaiacovo, J.), entered May 21, 2025, in a mortgage foreclosure action. The amended order and judgment, inter alia, granted plaintiff money damages. [*1] It is hereby ORDERED that the amended order and judgment so appealed from is unanimously affirmed without costs. Memorandum: In July 2014, defendant Stradtman Park, LLC (defendant) executed a loan agreement, promissory note, and mortgage and various other documents (loan documents) with nonparty KeyBank National Association (KeyBank) pursuant to which defendant obtained a $3.6 million loan on a commercial property valued at approximately $7 million. The loan documents permitted KeyBank to reassign the loan and to permit securitization through a commercial mortgage-backed security (CMBS) and required defendant to make certain modifications to the loan as required to facilitate the securitization. In October 2014, KeyBank assigned the loan to plaintiff, Wilmington Trust, National Association, as Trustee for the benefit of the registered holders of JPMBB Commercial Mortgage Securities Trust 2014-C24, Commercial Mortgage Pass-Through Certificates, Series 2014-C24 (plaintiff), which placed the loan into a CMBS pursuant to a pooling and servicing agreement (PSA). It is undisputed that defendant was not a signatory to the PSA, and defendant asserts that it was not provided a copy of that document until after this litigation commenced. Pursuant to the PSA, LNR Partners, LLC (LNR) was to act as the special servicer of the loan in the event that defendant's loan became distressed or in default. From 2014 through early 2020, defendant paid all amounts required by the loan documents. Specifically, defendant was required to pay principal and interest in the amount of $18,779.30 per month and reserve account payments, which were funds for taxes, insurance, maintenance, repairs, etc., in the amount of $20,300.39 per month, for a monthly total payment of $39,079.69. At some point in 2019, defendant requested approval for lease renewals, expansions, contractor repair payments, and other relief required to be paid from the reserve accounts [*2]pursuant to the loan documents. Although the loan was neither distressed nor in default, LNR became the contact entity for such requests. According to defendant, LNR was dilatory and obstructionist with all of defendant's legitimate requests and, as a result, defendant was forced to pay certain amounts itself, despite having ample reserve funds to make those payments. Defendant began paying only the principal and interest on the loan in May 2020 and withheld the reserve amounts, directing that its monthly payments of $18,779.30 be applied toward principal and interest only. Plaintiff or LNR, however, spread those payments over principal, interest, and reserve payments, resulting in defendant's default. In November 2020, defendant stopped remitting the rental payment proceeds required by the loan documents to plaintiff, which later commenced this action seeking, inter alia, to foreclose on the mortgage. Supreme Court granted plaintiff's motion for partial summary judgment with respect to the first and third causes of action, i.e., mortgage foreclosure and entitlement to rents. That order is not challenged on appeal. Questioning many of the fees sought to be recovered by plaintiff, the court directed a hearing on damages. Plaintiff appeals from the subsequent amended order and judgment, contending that the court erred in its determinations with respect to certain damages and fees. We now affirm. At hearings or inquests regarding damages, "the plaintiff bears the burden of setting forth a prima facie case as to damages" (Bobbo Prop. Mgt., Inc. v Faulkner, 235 AD3d 615, 615 [2d Dept 2025]; see Wilmington Sav. Fund Socy., FSB v Moriarty-Gentile, 242 AD3d 1150, 1152 [2d Dept 2025]), and, on an appeal from a nonjury hearing or trial, "this Court 'has authority . . . as broad as that of the trial court . . . and . . . may render the judgment it finds warranted by the facts' . . . 'Nonetheless, the decision of the fact-finding court should not be disturbed upon appeal unless it is obvious that the court's conclusions could not be reached under any fair interpretation of the evidence' " (DiMarco Constructors, LLC v Top Capital of N.Y. Brockport, LLC, 236 AD3d 1342, 1343 [4th Dept 2025]; see Estate of Sonnelitter v Estate of White [appeal No. 2], 115 AD3d 1160, 1162 [4th Dept 2014]). Although there is a " 'sound rule in the construction of contracts, that where the language is clear, unequivocal and unambiguous, the contract is to be interpreted by its own language' " (R/S Assoc. v New York Job Dev. Auth., 98 NY2d 29, 32 [2002], quoting Springsteen v Samson, 32 NY 703, 706 [1865]), we note that " '[a] foreclosure action is equitable in nature and triggers the equitable powers of the court' . . . '[O]nce equity is invoked, the court's power is as broad as equity and justice require' " (Meadowlands Portfolio, LLC v Manton, 118 AD3d 1439, 1440 [4th Dept 2014]; see U.S. Bank N.A. v Losner, 145 AD3d 935, 938 [2d Dept 2016]). Here, plaintiff contends that the court erred in denying it recovery of note rate interest in the amount of $120,882.59, in addition to the default rate interest of $583,938.25 awarded by the court. Contrary to plaintiff's contention, it was not entitled to both note rate interest and default rate interest inasmuch as the default rate was set at five percent above the note rate and the court awarded plaintiff the exact amount of default rate interest it requested. Because plaintiff did not establish with documentary evidence how the default rate interest it requested was calculated, we conclude that the court's determination that it would be duplicative to award both default rate interest and note rate interest is supported by a fair interpretation of the evidence. We reject plaintiff's further contention that the court abused its discretion in determining the amount of the attorneys' fees awarded. Defendant did not dispute that plaintiff and LNR were entitled to attorneys' fees, but it contested the reasonableness of the requested fees, relying on expert testimony regarding reasonable fees for commercial mortgage foreclosure actions in Western New York. Defendant's expert opined that a "customary, reasonable" fee for an experienced attorney in commercial foreclosure proceedings in Western New York would range from $350 to $450 an hour. Plaintiff's sole witness testified that LNR was paying between $650-800 an hour for the services of law firm partners and between $350-575 an hour for associates. None of the attorney invoices submitted by plaintiff delineated the rate for each charge. Plaintiff requested approximately $588,000 in attorneys' fees, but the court awarded only $250,000, finding that the rates requested by plaintiff were unreasonable and that numerous charges were "duplicative and exaggerated." Indeed, the court noted that plaintiff had come "perilously close" to having the entire judgment vacated due to its exorbitant request for attorneys' fees. An award of attorneys' fees, even if permitted by contract, " 'may only be enforced to the extent that the amount is reasonable and warranted for the services actually rendered' " (SO/Bluestar, LLC v Canarsie Hotel Corp., 33 AD3d 986, 987 [2d Dept 2006]). Such a determination involves a review of the number of hours spent on the case, the hourly rate that was being charged, and the customary fees charged for services by lawyers in the community with like experience and reputation (see Matakov v Kel-Tech Constr. Inc., 84 AD3d 677, 678 [1st Dept 2011]; Wells v Crosson, 210 AD2d 932, 932 [4th Dept 1994]; Getty Petroleum Corp. v G.M. Triple S. Corp., 187 AD2d 483, 483-484 [2d Dept 1992]). We conclude that the court's determination to award $250,000 was not an abuse of discretion and should not be disturbed. We have reviewed plaintiff's remaining challenges to the court's determinations with respect to the awards of damages and fees and conclude that all the challenged determinations are based on a fair interpretation of the evidence and that none of those challenges warrants modification or reversal of the amended order and judgment. Entered: October 9, 2026 Ann Dillon Flynn Clerk of the Court