Wells Fargo Bank, N.A. v. David Herzog LLC

Wells Fargo Bank, N.A. v David Herzog LLC 2026 NY Slip Op 30723(U) February 19, 2026 Supreme Court, New York County Docket Number: Index No. 850222/2025 Judge: Francis A. Kahn III Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

file:///LRB-ALB-FS1/Vol1/ecourts/Process/covers/NYSUP.8502222025.NEW_YORK.001.LBLX000_TO.html[03/10/2026 3:45:55 PM]

!FILED: NEW YORK COUNTY CLERK 02/26/2026 04:38 PM! INDEX NO. 850222/2025 NYSCEF DOC. NO. 105 RECEIVED NYSCEF: 02/26/2026

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. FRANCIS A. KAHN, Ill PART 32 Justice ---------------------------------------------------------------------------------X INDEX NO. 850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS MOTION DATE TRUSTEE, FOR THE BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA² COMMERCIAL MORTGAGE PASSTHROUGH MOTION SEQ. NO. 002 CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER,

Plaintiff,

- V - DECISION + ORDER ON DAVID HERZOG LLC,MICHAEL HERZOG LLC,DAVID HERZOG, MICHAEL HERZOG, CITY OF NEW YORK MOTION DEPARTMENT OF FINANCE, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD , JOHN DOE , JANE DOE, XYZ CORPORATION, ENDEAVOR GUIDANCE , LLC

Defendant. -----------------------------------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 002) 65, 66, 67, 68 , 69 , 70, 71, 72 , 73 , 74, 75, 76, 77 , 78, 79, 80, 81, 82 , 83, 84 , 85 , 86 , 87, 88, 89, 90 , 91 , 92, 93, 94 , 95, 96 , 97, 98, 99, 100, 101, 102, 103 were read on this motion to/for APPOINT - FIDUCIARY

Upon the foregoing documents, the motion is determined as follows :

In this action, Plaintiff seeks to foreclose on an amended, restated and consolidated mortgage, dated November 5, 2020, encumbering a parcel of improved real property located at 57 West 86 th Street, New York, New York. Plaintiff commenced this action wherein it is alleged Defendants defaulted under the loan documents by, inter alia, failing "to make full and timely monthly payments since at least June 2024". Now, Plaintiff moves pursuant to RPL §254[10] and RPAPL §1325[1] for the appointment of a temporary receiver of the rents of the mortgaged premises. Mortgagor and Guarantor Defendants oppose the motion.

Under Real Property Law §254[1 0], the appointment of a receiver in the event of a default is proper where the parties to the mortgage agree to same even without notice or without regard to the sufficiency of security (see ADHY Advisors LLC. v 530 W 152nd St. LLC, 82 AD3d 619 [I⁵ 1 Dept 2011]; 366 Fourth St. Corp. v Foxfire Enters., 149 AD2d 692 [2 nd Dept 1989]). Despite the parties' assent, the appointment is not perfunctory and the Court, in the exercise of its equitable power, retains the discretion to deny the appointment of a receiver (see ADHY Advisors LLC. v 530 W 152nd St. LLC, supra; Nechadim Corp. v Simmons, 171 AD3d 1195, 1197 [2d Dept 2019]).

850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE Page 1 of 5 BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA2 COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER vs. DAVID HERZOG LLC ET AL Motion No. 002

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!FILED: NEW YORK COUNTY CLERK 02/26/2026 04:38 P~ INDEX NO. 850222/2025 NYSCEF DOC. NO. 105 RECEIVED NYSCEF: 02/26/2026

Section l0[a][vii] of the Mortgage provides, in pertinent part, as follows:

(a) Upon the occurrence of any Event of Default, Mortgagee may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Mortgagor and in and to the Mortgaged Property, by Mortgagee itself or otherwise, including the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Mortgagee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Mortgagee:

(vii) apply for the appointment of a trustee, receiver, liquidator or conservator of the Mortgaged Property, without notice and without regard for the adequacy of the security for the Debt and without regard for the solvency of Mortgagor or of any person, firm or other entity liable for the payment of the Debt.

In the present case, it is undisputed that the parties' mortgage provides that Plaintiff may apply for the appointment of a receiver and Plaintiff pied that Defendants, inter alia , defaulted in repayment of the indebtedness, a default event under the loan documents. Accordingly, Plaintiff established its entitlement to the appointment of a receiver of the mortgaged premises (see eg SKW Hillside Bleeker Lender LLC v 145 Bleeker LLC, 217 AD3d 536 [1 st Dept 2023]; CSFB 2004-CJ Bronx Apts LLC v Sinckler, Inc., 96 AD3d 680 [l5t Dept 2012]). In opposition, Defendants have not demonstrated that denial of the appointment of a receiver is an appropriate exercise of the Court' s discretion (see id.; US Bank, NA. v Rufai, 202 AD3d 719, 721 [2d Dept 2022]; Shaw Funding, LP v Bennett, 185 AD3d 857, 858 [2 nd Dept 2020]).

In opposition, Defendants have not demonstrated that denial of the appointment of a receiver is an appropriate exercise of the Court' s discretion (se e id.; US Bank, NA. v Rufai, 202 AD3d 719, 721 [2d Dept 2022]; Shaw Funding, LP v Bennett, 185 AD3d 857, 858 [2 nd Dept 2020]). To the extent Defendants' opposition is based on cases where appointment of a receiver was sought pursuant to CPLR §640 I it is unavailing (see eg Groh v Halloran, 86 AD2d 30 [1 st Dept 1982]). The Appellate Division cases are clear that where, as here, the mortgage contains a provision that a lender may apply for a receiver, the mortgagor may seek such relief "' regardless of proving the necessity for the appointment'" (see GECMC 2007-C 1 Ditmars Lodging, LLC v Mohola, LLC, 84 AD3d 1311 , 1312 [2d Dept 2011 ], citing Naar v. I.J Litwak & Co., 260 AD2d 613 [2d Dept 1999]; see also SKW Hillside Bleeker Lender LLC v 145 Bleeker LLC, supra).

The claim that presently unpled defenses and other purported deficiencies in Plaintiffs action defeat this motion is without merit. A plaintiff "may apply for the appointment of a receiver, without notice and without regard for adequacy of the security for the debt, and without requirement that plaintiff demonstrate more than what is required by Real Property Law § 254(1 0)" (SKW Hillside Bleecker Lender, LLC v 145 Bleecker LLC, 217 AD3d 536, 537 [l st Dept 2023][emphasis added]). Indeed, "[c]ases hold that a receiver may be appointed so long as an action has been commenced" (HSBC Bank USA, NA. v Rubin, 210 AD3d 73 , 83 [2d Dept 2022]).

Accordingly, it is

850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE Page 2 of 5 BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA2 COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER vs. DAVID HERZOG LLC ET AL Motion No. 002

!FILED: NEW YORK COUNTY CLERK 02/26/2026 04:38 P~ INDEX NO. 850222/2025 NYSCEF DOC. NO. 105 RECEIVED NYSCEF: 02/26/2026

!FILED: NEW YORK COUNTY CLERK 02/26/2026 04:38 P~ INDEX NO. 850222/2025 NYSCEF DOC. NO. 105 RECEIVED NYSCEF: 02/26/2026

ORDERED that the Temporary Receiver shall deposit all monies received by her/him into any FDIC-insured bank where she has an account for this purpose and such account shall show the name of this action and the Temporary Receiver shall furnish plaintiff's attorneys with monthly statements of the receipts and expenditures of the Receivership together with a photocopy of the monthly statements received from said depository and no withdrawals shall be made therefrom except as directed by the Court or on a draft or check signed by the Temporary Receiver; and it is further

ORDERED that the Temporary Receiver is authorized from time to time to rent and lease any part of the premises for terms not exceeding five (5) years or such longer terms as may be required by applicable laws or regulations; to keep the premises insured against loss by damage or fire; to pay the taxes, assessments, water rates, sewer rates, vault rents, salaries of employees, supplies and other charges; to comply with all lawful requirements of any municipal department or other authority of the municipality in which the mortgaged premises are situated and to procure such fire, liability and other insurance as may be reasonably necessary; and it is further

ORDERED, that the tenants, licensees or other persons in possession of said premises attorn to the Temporary Receiver and pay over to the Temporary Receiver all rents, license fees, and other charges of such premises now due and unpaid or that may hereafter become due; and that the defendants be enjoined and restrained from collecting the rents, license fees and other charges of said premises from interfering in any manner with the property or its possession; and from transferring, removing or in any way disturbing and of the occupants or employees; and that all tenants, occupants, employees and licensees of the premises and other persons liable for the rents be and hereby are enjoined and restrained from paying any rent or license fees or other charges for such premises to the defendants, their agents, servants or attorneys; and it is further

ORDERED that the Temporary Receiver is prohibited from incurring obligations in excess of the monies in her hands without further Order of this Court or written consent of Plaintiff's attorney and Plaintiff may advance money, which can be recouped in this litigation; and it is further

ORDERED that the Owner turn over to the Temporary Receiver all rents collected from and after the date of this Order; and it is further

ORDERED that all persons now and hereafter in possession of said premises, or any part thereof, and not holding such possession under valid and existing leases or tendencies, do forthwith surrender such possession to the Temporary Receiver, subject to emergency laws, if any, and it is further

ORDERED that the Temporary Receiver after paying the expenses of the management and care of the said premises as above provided retain the balance of the monies which may come into his hands until the sale of the said premises under the judgment to be entered in this action and/or until further Order of this Court, and it is further

ORDERED that the Temporary Receiver, or any party hereto, may at any time, on proper notice to all parties who have appeared in this action, apply to the Court for further and other instructions or powers necessary to enable the Temporary Receiver to properly fulfill her duties or for interim fee payments; and it is further

850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE Page 4 of 5 BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA2 COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER vs. DAVID HERZOG LLC ET AL Motion No. 002

!FILED: NEW YORK COUNTY CLERK 02/26/2026 04:38 P~ INDEX NO. 850222/2025 NYSCEF DOC. NO. 105 RECEIVED NYSCEF: 02/26/2026

Footnotes

[2] of 5 [* 2] ORDERED that the motion for the appointment of a Temporary Receiver is granted; and it is further ORDERED that Michael Besin (FID #986171) is hereby appointed with the usual powers and directions of a Temporary Receiver for the benefit of Plaintiff of all the rents and profits now due and unpaid or become due during the pendency of this action and issuing out the mortgaged property mentioned located at 57 West 86th Street, New York, New York; and it is further ORDERED that the Temporary Receiver is authorized to take charge and enter into possession of the property; and it is further ORDERED that before entering her/his duties, the Temporary Receiver shall be sown to fairly and faithfully discharge the duties committed to him and shall execute to the People of the State of New York and file with the Clerk of the Court an undertaking in the sum of $200,000.00 conditioned for the faithful discharge of the duties of Temporary Receiver; and it is further ORDERED that the Temporary Receiver is hereby directed to demand, collect and receive from the occupants, tenants and licensees in possession of said premises, or other persons liable therefor, inclusive of the mortgagor, all the rents and license fees thereof now due or unpaid or hereafter that become fixed or due and the Temporary Receiver is authorized to institute and carry on all legal proceedings necessary for the protection of said premises or to recover possession of the whole, or any part thereof, and apply to this Court to fix reasonable rental value and license fee value and to compel the tenants and occupants to attorn to the Temporary Receiver; and it is further ORDERED that the Temporary Receiver may institute and prosecute suits for the collection of rent, license fees and other charges now due or hereafter to become due and fixed, and summary proceedings for the removal of any tenants or licensees or other persons therefrom; and it is further ORDERED that pursuant to the General Obligation Law section 7-105 , anybody holding any deposits or advances of rental as security under any lease or license agreement affecting space in the premises affected by this action shall turn same over to said Temporary Receiver within five (5) days after said Temporary Receiver shall be qualified; and thereupon the said Temporary Receiver shall hold such security subject to such disposition thereof as shall be provided in an Order of the Court to be made and entered in this action; and it is further ORDERED that anybody in possession of same shall turn over to said Temporary Receiver all rent lists, orders, unexpired and expired leases, agreements, correspondence, notices and registration statements relating to rental spaces or facilities in the premises; and it is further ORDERED that notwithstanding anything to the contrary contained in this order, the Temporary Receiver shall not, without the further, prior order of this Court, upon prior notice to the plaintiff, make improvements or substantial repairs to the property at a cost in excess of $5,000.00, except that in an emergency, if funds need to be expended in excess of $5,000.00 or would otherwise require Court intervention, no Court approval will be necessary if counsel for plaintiff agrees in writing that the receiver may make such disbursement; and it is further 850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE Page J of 5 BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA2 COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER vs. DAVID HERZOG LLC ET AL Motion No. 002 [* 3] 3 of 5

[4] of 5 [* 4] ORDERED that the appointed named herein shall comply with Section 35a of the Judiciary Law, Sections 6401-6404 of the CPLR, Section 1325 of RP APL and Rule 36 of the Chief Judge; and it is further ORDERED that notwithstanding any other provision of this order, the Temporary Receiver shall not appoint an attorney, managing agent, appraiser, auctioneer or accountant without prior order of this Court, and that the receiver shall apply to the court and file a separate application for appointment of a managing agent, attorney or other managing services pursuant to 36.1 of the Uniform Court Rules. 2/19/2026 DATE FANCIS A. KAHN, Ill, A.J.S.C. CHECK ONE: CASE DISPOSED WO~lrsRAWCIS A. KAHN Ill GRANTED □ DENIED GRANTED IN PART □ OTHJ. S . C . APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF AP PR OP RIA TE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE 850222/2025 WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE Page 5 of 5 BENEFIT OF THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES TRUST 2020-GSA2 COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2020-GSA2, AND THE RR INTEREST OWNER vs. DAVID HERZOG LLC ET AL Motion No. 002

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