Wilmington Trust, National Association v. Pacific Street Property Group LLC et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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WILMINGTON TRUST, NATIONAL
ASSOCIATION, AS TRUSTEE, etc.,
Plaintiff,
- against -
PACIFIC STREET PROPERTY GROUP
LLC et al.,
Defendants.
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MEMORANDUM DECISION AND
ORDER
25-cv-6210 (BMC)
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COGAN, District Judge.
This is a diversity mortgage foreclosure action in which the Court previously appointed a
receiver to take control of the property. Plaintiff has moved for summary judgment. For the
reasons below, plaintiff’s motion is granted.
BACKGROUND
The case arises from a $1,723,000 mortgage loan extended by plaintiff’s predecessor-in-
interest, Sabal Capital II LLC, to defendants for a Brooklyn investment property. The
promissory note for the loan was secured by a duly filed mortgage. The loan has been in default
since January 2025. The balance owed is upwards of $1.6 million, comprised of principal,
accrued interest, and various fees and charges provided by the mortgage. Earlier this year, the
Court appointed a receiver to take control of the property, which currently houses several
tenants. See Wilmington Tr., N.A. v. Pacific St. Prop. Grp. LLC, No. 25-cv-6210, 2026 WL
141905, at *4 (E.D.N.Y. Jan. 20, 2026).
Defendants oppose plaintiff’s motion for summary judgment on essentially the same
grounds presented in opposition to plaintiff’s motion to appoint a receiver. But now that all
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reasonable inferences must be made in their favor, defendants say, those arguments should
prevail. The Court disagrees.
DISCUSSION
I. 	Summary Judgment Standard
Rule 56 provides that summary judgment is warranted where the moving party “shows
that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). The Court must view all facts “in the light most favorable
to the nonmoving party.” Scott v. Harris, 550 U.S. 372, 380 (2007). There is no genuine issue
of material fact “where the record taken as a whole could not lead a rational trier of fact to find
for” defendants. Id. (Defendants “must do more than simply show that there is some
metaphysical doubt as to the material facts” (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986))); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986) (“[T]he mere existence of some alleged factual dispute between the parties will not
defeat a properly supported motion for summary judgment”).
II. 	Standing
“The existence of standing is a question of law[.]” Shain v. Ellison, 356 F.3d 211, 214
(2d Cir. 2004). Although “a defendant may raise the plaintiff’s lack of standing in a motion for
summary judgment, [that] determination . . . is a threshold question of law for the judge, not a
question of fact for the jury.” Multistack LLC v. Arctichill Inc., No. 05-cv-3865, 2006 WL
510506, at *3 (S.D.N.Y. Mar. 1, 2006) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
(1992)).
Here, when ruling on plaintiffs’ motion to appoint a receiver, the Court determined that
plaintiff had standing. See Wilmington, 2026 WL 141905, at *4. Nothing has changed since
then, and the arguments that defendants re-assert on this point remain equally unavailing now.
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III. 	Disputed Facts
Defendants’ last-ditch effort to survive summary judgment is by arguing that there is a
genuine dispute of material fact as to whether plaintiff “prov[ed] default in the note terms” or
“perform[ed] the overt act of accelerating the maturity date of the loan, as modified.”
As to whether there is a genuine dispute that defendants are in default, the answer is
clearly no. Wilmington, 2026 WL 141905, at *1 (“It is undisputed that [defendants] failed to
make the payment due in January 2025 and has not made any payments through at least October
2025.”). The fact that defendants now “dispute” this fact does not change reality. To change
course so drastically, defendants would have needed to offer “concrete evidence from which a
reasonable juror could” agree that they are not in default. See Anderson, 477 U.S. at 247-48.
Defendants could have easily provided bank records on this point if it held any water. That they
did not do so is telling, and dispositive.
Defendants’ next argument is best interpreted as a failure to complete a condition
precedent to filing suit. According to defendants:
As a matter of law, Plaintiff’s lawyers did not have demonstrated authority to
draft and send demand letters to Defendants in August 2025 – especially here,
where Plaintiff’s power of attorney to its servicer is not effective until October
22, 2025 . . . When a plaintiff relies upon formal notices to establish its right to
foreclose, those notices must be legally valid. Under New York law, a notice of
default drafted, signed, and sent by an attorney or agent is ineffective unless the
agent's authority to act on behalf of the principal is established. Siegel v.
Kentucky Fried Chicken of Long Is., Inc., 67 N.Y.2d 792 (1986).
But as the Court already found, the “mortgage agreement here has nothing in common with
Siegal” because, inter alia, “it expressly waives notice of default and acceleration.”
Wilmington, 2026 WL 141905, at *5.
Defendants contend that, despite the unambiguous waiver, because plaintiff elected to
send defendants such a notice anyway, plaintiff effectively bound itself to a new condition
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precedent that it has now breached. The Court is unpersuaded. The notice was not required in
the first place, so plaintiff’s decision to send one was merely “a courtesy and not obligatory.”
Lateral Recovery, LLC v. Capital Merch. Servs., LLC, 632 F. Supp. 3d 402, 456 (S.D.N.Y.
2022); accord Donahue v. United States, 457 F. Supp. 2d 137, 143 (E.D.N.Y. 2006) (“It is true
that in some cases [defendant] did inform the claimant that a claim was insufficient, thus
providing the claimant with an opportunity to cure a defect. However, this was done merely out
of courtesy. [Defendant had] no obligation to [do so].”).
Accordingly, there is no genuine dispute of material fact bearing on this case.
CONCLUSION
Plaintiff’s motion for summary judgment is granted. Plaintiff is directed to submit a
proposed form of foreclosure judgment within seven days.
SO ORDERED.
Dated: 	Brooklyn, New York
U.S.D.J.
March 19, 2026
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