# Opinion

> District Court, E.D. New York · October 15, 2025

URL: https://www.frixlaw.com/law-library/cases/11171485

## Case

- **Full name:** Wells Fargo Bank National Association as Trustee for the Holders of COMM 2014-UBS6 Mortgage Trust Commercial Mortgage Pass-Through Certificates, by and through its Special Servicer, LNR Partners LLC v. 366 Realty LLC; Joshua Mizrahi; Criminal Court of the City of New York; NYC Environmental Control Board; New York City Department of Finance; and Kassin Sabbagh Realty LLC
- **Court:** District Court, E.D. New York
- **Decided:** October 15, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11171485

## How later opinions describe it (automated extraction)

- observing that “the existence of any imminent danger of the diminution of the value of the properties . . . is a critical factor in the analysis of whether to appoint a receiver”
- explaining that a court’s responsibility in assessing the merits of a summary judgment motion is not to try issues of fact, but merely to “determine whether there are issues of fact to be tried.” (quoting Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 244 (2d Cir. 1984)

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------------------X
WELLS FARGO BANK NATIONAL ASSOCIATION
AS TRUSTEE FOR THE HOLDERS OF COMM 2014-
UBS6 MORTGAGE TRUST COMMERCIAL
MORTGAGE PASS-THROUGH CERTIFICATES, BY
AND THROUGH ITS SPECIAL SERVICER, LNR MEMORANDUM &
PARTNERS LLC, ORDER

Plaintiff, 17-CV-3570
(Matsumoto, J.)
v. (Marutollo, M.J.)

366 REALTY LLC; JOSHUA MIZRAHI; CRIMINAL
COURT OF THE CITY OF NEW YORK; NYC
ENVIRONMENTAL CONTROL BOARD; NEW
YORK CITY DEPARTMENT OF FINANCE; and
KASSIN SABBAGH REALTY LLC,

Defendants.
-------------------------------------------------------------------X

JOSEPH A. MARUTOLLO, United States Magistrate Judge:
Plaintiff Wells Fargo Bank National Association, as Trustee for the Holders of COMM
2014-UBS6 Mortgage Trust Commercial Pass-Through Certificates, by and through its special
servicer, LNR Partners LLC (“Plaintiff”) brings this foreclosure action against Defendants 366
Realty LLC (“366 Realty”); Joshua Mizrahi; Criminal Court of the City of New York (the
“Criminal Court”); NYC Environmental Control Board (“ECB”); New York City Department of
Finance (“DOF”); Kassin Sabbagh Realty LLC (“Kassin”); as well as several other defendants
who were thought to possess or claim an interest in or lien upon the real property located at 366
Knickerbocker Avenue, Brooklyn, New York 11237 (the “Property”). See Dkt. No. 1.
On March 16, 2021, the Court granted Plaintiff’s motion for summary judgment against
366 Realty. See Dkt. No. 58; see also Wells Fargo Bank Ass’n v. 366 Realty LLC, 2021 WL
9494173 (E.D.N.Y. Mar. 16, 2021) (Johnson, J.). On September 27, 2025, the undersigned issued
a Report and Recommendation, recommending that default judgment be granted as to the Criminal
Court and the ECB, but denied as to the DOF and Kassin.1 See Dkt. No. 159.
Currently pending before this Court are Mizrahi’s motion for summary judgment on the
issue of his guarantor liability, see Dkt. No. 141 (“Mizrahi’s Motion”), and Plaintiff’s motion for
summary judgment as to Mizrahi’s interest in the Property and his guarantor liability, as well as

for appointment of a receiver, see Dkt. No. 142 (“Plaintiff’s Motion”). Plaintiff, Mizrahi, and 366
Realty have consented to the undersigned’s adjudication of Mizrahi’s Motion and Plaintiff’s
Motion. See Dkt. No. 147.2
For the reasons set forth below, Mizrahi’s Motion is DENIED, and Plaintiff’s Motion is
GRANTED in part and DENIED in part.
I. Background
A. Factual Allegations
The following facts, taken from the parties’ Local Civil Rule 56.1 (“Rule 56.1”) statements,
the materials submitted in connection with Mizrahi’s Motion (Dkt. Nos. 141, 150) and Plaintiff’s

Motion (Dkt. Nos. 142, 143, 149, 151) and the Second Amended Complaint (Dkt. No. 121)
(“SAC”), are undisputed unless otherwise noted.3

1 Plaintiff’s motion for default judgment, Dkt. No. 148, was denied as moot as to Kassin because judgment
had already been entered as to it. See Dkt. No. 159 at 2 n.3; see also September 19, 2025 Order.

2 Plaintiff’s Motion, as it pertains to appointment of a receiver for the Property, is not dispositive. See Fed.
Nat’l Mortg. Ass’n v. 1488 Bushwick, LLC, No. 23-CV-4030 (RPK) (TAM), 2024 WL 4728666, at *1 n.2
(E.D.N.Y. Nov. 8, 2024). (collecting cases). Accordingly, the parties need not have consented to the
undersigned’s adjudication of the same. Further, the consent of the Criminal Court, the ECB, the DOF, and
Kassin to magistrate judge jurisdiction here is unnecessary, given that Mizrahi’s Motion and Plaintiff’s
Motion relate only to the interests of the appearing parties—Plaintiff, Mizrahi, and 366 Realty.

3 As noted in Su v. Top Notch Home Designs Corp.,

Under Local Rule 56.1, a party moving for summary judgment must submit a “separate,
short and concise statement, in numbered paragraphs, of the material facts as to which the
On November 6, 2014, 366 Realty executed a loan agreement (the “Loan Agreement”)
obtaining a loan (the “Loan”) for $2,200,000 from Cantor Commercial Real Estate Lending, L.P.
(the “Original Lender”). Dkt. Nos. 38 ¶ 6; 121 ¶¶ 13-14; 121-3. Defendant 366 Realty signed and
delivered an Amended, Restated, and Consolidated Promissory Note (the “Note”). Dkt. Nos. 38
¶ 7; 121 ¶ 15; 121-4. The indebtedness owed under the Note is secured by the Property, as outlined

in the Mortgage Security Agreement and Assignment of Leases and Rents (“Original Mortgage”).
Dkt. Nos. 38 ¶ 9; 121 ¶ 16; Dkt. No. 121-5.
After numerous assignments, the indebtedness owed under the Note was further secured
by the Property, as evidenced by the Amended, Restated and Consolidated Mortgage, Assignment
of Leases and Rents, Security Agreement and Fixture Filing, dated November 6, 2014 (the
“Amended Mortgage”). Dkt. Nos. 38 ¶ 12; 121 ¶¶ 17-22. The Amended Mortgage, which restated,

moving party contends there is no genuine issue to be tried.” Local Rule 56.1(a). The
opposing party must submit a statement responding to each numbered paragraph, and can
include additional paragraphs “to which it is contended that there exists a genuine issue to
be tried.” Local Rule 56.1(b). Statements by each party “must be followed by citation to
evidence which would be admissible” under Fed. R. Civ. P. 56(c). Local Rules 56.1(d).
“Where . . . the record does not support the assertions in a 56.1 statement, those assertions
should be disregarded, and the record viewed independently” because “a Local Rule 56.1
statement is not itself a vehicle for making factual assertions that are otherwise unsupported
in the record.” Holtz v. Rockefeller & Co., 258 F.3d 62, 74 (2d Cir. 2001).

No. 20-CV-5087 (GRB) (JMW), 2023 WL 8878553, at *3 (E.D.N.Y. Dec. 22, 2023). “A party may not
rest on a mere denial without citing supporting admissible evidence.” Ward v. Nassau Cnty., No. 15-CV-
4309 (GRB) (LGD), 2023 WL 5417329, at *1 (E.D.N.Y. Aug. 22, 2023) (“Merely denying certain
statements in the moving party’s statement of undisputed material facts without stating the factual basis for
such denial and without disclosing where in the record is the evidence relied upon in making such denial
does not constitute a ‘separate, short, and concise statement of the material facts as to which it is contended
that there exists a genuine issue to be tried’—as is required to controvert the moving party’s statement of
undisputed material facts.”) (citing Covelli v. Nat’l Fuel Gas Distrib. Corp., No. 99-CV-0500, 2001 WL
1823584, at *1 (W.D.N.Y. Dec. 6, 2001), aff’d, 49 F. App’x 356 (2d Cir. 2002). “Where [] a party opposing
summary judgment fails to properly controvert a movant’s statement of material fact, such statement will
be deemed admitted for the purposes of the motion.” Cemetery Workers Supplemental Pension Fund by
Alladeen v. Lutheran All Faiths Cemetery, No. 19-CV-6897 (RPK) (RML), 2021 WL 7908022, at *1 n.1
(E.D.N.Y. Sept. 9, 2021) (citation and quotation marks omitted).
amended, and consolidated the Original Mortgage, granted the Original Lender a first-priority lien
on the Property. Dkt. Nos. 38 ¶¶ 13-14; 121 ¶¶ 23-25; 121-8.
As a further source of repayment for the obligations owed by 366 Realty, including its
obligations under the Note, 366 Realty executed an Assignment of Leases and Rents (the “ALR”).
Dkt. Nos. 38 ¶ 15; 121 ¶ 27; Dkt. No. 121-9. Mizrahi also allegedly guaranteed repayment of the

Loan pursuant to a Guaranty of Recourse Obligations, dated November 6, 2014 (the “Guaranty”).
Dkt. Nos. 38 ¶ 16; 121 ¶ 29; Dkt. No. 121-10.
In December 2014, the Original Lender assigned and transferred all rights, title, and interest
in the Loan Agreement, Note, ALR, Guaranty, and Amended Mortgage (collectively, the “Loan
Documents”) to Plaintiff. Dkt. Nos. 38 ¶ 17-18; 121 ¶ 30; Dkt. No. 121-11.
The Amended Mortgage provides for appointment of a receiver. See Dkt. No. 142-15
§ 7.1(g) (Upon 366 Realty’s default, Plaintiff may “apply for the appointment of a receiver . . . of
the Property, without notice and without regard for the adequacy of the security for the Debt and
without regard for the solvency of [366 Realty], any guarantor or indemnitor with respect to the

Loan . . . .”).
There is no dispute between the parties that 366 Realty has been in default under the Loan
Documents since 2017. See Dkt. No. 38 ¶ 31. Indeed, Plaintiff notified 366 Realty numerous
times that it was in default under the terms of the Loan Documents. See Dkt. Nos. 58 at 7; 4 121
¶¶ 37-41; 121-13 – 121-17. Plaintiff thereafter accelerated the Note on April 3, 2017. See Dkt.
Nos. 58 at 7; 121 ¶¶ 42-43; 121-18; 150 at 5. Defendant 366 Realty admits that it has not cured
the defaults and remains in default under the Loan Documents. See Dkt. No. 38 ¶ 31 (“31.

4 Citations are to ECF file-stamped pages unless otherwise noted.
Borrower has failed to cure the defaults and remains in default under the Loan Documents.[]
Response: Not disputed with clarification of defense as to amounts and notice[.]”).
B. Relevant Procedural History
In light of the lengthy litigation history here, the Court presumes familiarity with the bulk
of the procedural history of this case. See, e.g., Dkt. Nos. 118 at 8-9, 110 at 4-6, 101 at 5, 95 at 3-

4, 58 at 2-4.
As noted above, on March 16, 2021, the Court granted Plaintiff’s motion for summary
judgment against 366 Realty. See Dkt. No. 58; see also Wells Fargo Bank Ass’n v. 366 Realty
LLC, 2021 WL 9494173 (E.D.N.Y. Mar. 16, 2021) (Johnson, J.). In doing so, the Court held that
Plaintiff had standing to proceed in this action as the holder and assignee of the Note. See Dkt.
No. 58 at 5. In the same motion, Judge Johnson denied Plaintiff’s motion to appoint a receiver,
stating that “this Court is not going to appoint a receiver without more information.” Id. at 11.
Litigation then continued, which included Plaintiff’s filing of its First Amended Complaint
on April 19, 2023. See Dkt. No. 70.

On March 26, 2024, Judge Matsumoto adopted in full the undersigned’s report and
recommendation, see Dkt. No. 95, granting in part and denying in part Plaintiff’s motion to fix
indebtedness. See Dkt. Nos. 87, 101. In total, the Court awarded to Plaintiff $3,603,179.68 plus
interest accruing at a daily rate of $622.58 from July 31, 2023 through the entry of Judgement of
Foreclosure. Dkt. Nos. 95 at 20; 101 at 4.
On February 3, 2025, Plaintiff filed a letter-motion seeking leave to move for appointment
of a rent receiver for the Property. Dkt. No. 116. Defendant 366 Realty filed a letter in opposition
on February 10, 2025. Dkt. No. 117.
On February 28, 2025, Plaintiff filed a Second Amended Complaint. Dkt. No. 121. 366
Realty and Mizrahi answered the Second Amended Complaint on March 10, 2025. Dkt. No. 128.
On March 18, 2025, the undersigned held a status conference after which the parties were
granted leave to file respective motions for summary judgment, and Plaintiff was granted leave to
file a motion to appoint a receiver. See March 18, 2025 Minute Entry; March 22, 2025 Scheduling

Order. The parties also consented to the jurisdiction of the undersigned to adjudicate these
motions. Dkt. No. 147; supra note 2.
Mizrahi’s Motion for summary judgment on the issue of his potential liability under the
Guaranty was filed on April 28, 2025. Dkt. No. 141. Plaintiff’s Motion for summary judgment
on the issues of Mizrahi’s potential liability under the Guaranty, and for appointment of a rent
receiver for the Property was filed the same day. Dkt. No. 142. Mizrahi filed his opposition to
Plaintiff’s Motion on May 15, 2025. Dkt. No. 149. On May 15, 2025, Plaintiff filed its opposition
to Mizrahi’s Motion. Dkt. No. 150. Also on May 15, 2025, Plaintiff filed a motion for default
judgment against the Criminal Court, the ECB, and the DOF. Dkt. No. 148. On May 21, 2025,

Plaintiff filed a reply in further support of its Motion. Dkt. No. 151.
On September 19, 2025, with regard to Mizrahi’s Motion, the Court directed the parties to
file supplemental letter-briefs by September 26, 2025 addressing the issue of “whether the claims
asserted in [] the First Amended Complaint against Defendant Mizrahi for a deficiency liability as
a guarantor ‘relate back’ to the conduct set forth in [] the [original] complaint. See Fed R. Civ. P.
15(c)(1).” September 19, 2025 Text Order (italics added). Plaintiff filed its letter-brief on
September 25, 2025. Dkt. No. 156.
Mizrahi did not file his letter-brief by the Court-ordered deadline. On September 27, 2025,
the Court directed Mizrahi to file his letter-brief by 5 p.m. on September 29, 2025 “in accordance
with the Court's September 19, 2025 Order, or the same will be deemed waived.” September 27,
2025 Text Order.
Also on September 27, 2025, the undersigned issued a Report and Recommendation,
recommending that Plaintiff’s motion for default judgment be granted as to the Criminal Court
and the ECB but denied as to the DOF and to Kassin. Dkt. No. 159.

On October 3, 2025, Mizrahi filed its letter-brief, without explanation as to its tardiness or
addressing the Court’s statement regarding waiver. Dkt. No. 161.
II. Discussion
A. Mizrahi’s Guaranty
i. Standard of Review
Under Rule 56(a) of the Federal Rules of Civil Procedure, “[t]he court shall grant summary
judgment if the movant 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). “An issue of fact is
genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving

party.” Frost v. N.Y.C. Police Dep’t, 980 F.3d 231, 242 (2d Cir. 2020) (citation omitted). “There
is ‘no genuine dispute as to any material fact’ where (1) the parties agree on all facts (that is, there
are no disputed facts); (2) the parties disagree on some or all facts, but a reasonable fact-finder
could never accept the nonmoving party’s version of the facts (that is, there are no genuinely
disputed facts); or (3) the parties disagree on some or all facts, but even on the nonmoving party’s
version of the facts, the moving party would win as a matter of law (that is, none of the factual
disputes are material).” Lange v. Dep’t of Educ. of City of New York, No. 17-CV-3443 (SLT),
2018 WL 4636986, at *2 (S.D.N.Y. Sept. 26, 2018) (Sullivan, J.) (citations omitted). The movant
bears the burden of “demonstrat[ing] the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
In determining whether a fact is genuinely disputed, the court “is not to weigh the evidence
but is instead required to view the evidence in the light most favorable to the party opposing
summary judgment, to draw all reasonable inferences in favor of that party, and to eschew
credibility assessments.” Weyant v. Okst, 101 F.3d 845, 854 (2d Cir. 1996); Sutera v. Schering

Corp., 73 F.3d 13, 15-16 (2d Cir. 1995) (explaining that a court’s responsibility in assessing the
merits of a summary judgment motion is not to try issues of fact, but merely to “determine whether
there are issues of fact to be tried.” (quoting Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238,
244 (2d Cir. 1984)).
Nevertheless, to show a genuine dispute, the nonmoving party must provide “hard
evidence,” D’Amico v. City of N.Y., 132 F.3d 145, 149 (2d Cir. 1998), “from which a reasonable
inference in [its] favor may be drawn,” Binder & Binder PC v. Barnhart, 481 F.3d 141, 148 (2d
Cir. 2007) (internal quotation marks omitted). “Conclusory allegations, conjecture, and
speculation,” Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir. 1998), or the existence of a mere

“scintilla of evidence in support of the [nonmoving party’s] position,” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986), are insufficient to create a genuinely disputed fact.
“A nonmoving party can survive summary judgment only if there is sufficient evidence to
permit a rational trier of fact to find in that party’s favor.” Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986); see Liberty Lobby, Inc., 477 U.S. at 251. “In other
words, ‘[t]he litigant opposing summary judgment . . . may not rest upon mere conclusory
allegations or denials as a vehicle for obtaining a trial.’” Jimenez v. City of New York, No. 21-CV-
6133 (RPK) (JRC), 2024 WL 198319, at *4 (E.D.N.Y. Jan. 18, 2024) (quoting Quinn v. Syracuse
Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980)).
ii. The Parties’ Positions
Defendant Mizrahi seeks summary judgment dismissing any claim asserted against him
regarding the Guaranty “on the ground that Plaintiff failed to timely assert such claim and is now
time-barred under New York Law from doing so.” Dkt. No. 141-1 ¶ 2. Specifically, Mizrahi
argues that, because the Note was due and payable when accelerated on April 3, 2017, see id. ¶¶

7, 9, 17, and because Plaintiff only added specific language indicating a desire to seek a deficiency
judgment against Mizrahi (and not only 366 Realty) under the Guaranty in its First Amended
Complaint, filed April 19, 2023, see Dkt. Nos. 141-2 at 11; 70 at 12, such claim is time-barred
under New York law as not having been asserted within six years of acceleration. See Dkt. No.
141-2 at 12. Because the statute of limitations ran on April 2, 2023, Mizrahi contends he is not
liable under the Guaranty, including for a deficiency judgment. See Dkt. No. 141-1 ¶ 18.
Mizrahi admits that he executed the Guaranty on November 6, 2014 and raises no other
defense to its enforcement. Dkt. Nos. 38 ¶ 16; 141-1 ¶ 5.
Mizrahi argues that “[t]he statute of limitations for the contract herein, the Guaranty, began

to run on April 3, 2017, the date on which the debt was accelerated, creating a Guarantor obligation
for the entire debt.” Dkt. No. 141-2 at 6, 10-11. Mizrahi alleges that the “unconditional” nature
of the Guaranty compels the conclusion that Plaintiff had six years to reserve the right to a
deficiency judgment against Mizrahi, which Plaintiff failed to do. Id. at 12-13. Mizrahi also
contends that the statute authorizing enforcement of deficiency judgments, R.P.A.P.L. § 1371 is
in derogation of New York common law and must be strictly construed. Id. at 7.
In his supplemental letter-brief,5 Mizrahi contends that the claims asserted in the First
Amended Complaint against Mizrahi for deficiency liability as a guarantor do not “relate back” to
the conduct outlined in the Complaint, as set forth in Fed R. Civ. P. 15(c)(1). Dkt. No. 161.
Mizrahi admits that he was named in the Complaint as a “a party defendant [] based upon his status
as guarantor of the loan having or claiming an interest in or lien upon the premises described in

the Complaint[.]” Id. at 1 (citing Dkt. No. 1 ¶ 3). Mizrahi, however, alleges that these allegations
were only sufficient to put Mizrahi on notice to assert, “whatever interest [he has] or may claim to
have in the Property[,] and not of any potential personal liability regarding the debt. Id. at 2.
Mizrahi does not dispute that the “relation back” doctrine of Fed. R. Civ. P. 15(c)(1) is to
be “liberally construed as to transactions alleged in the initial pleading.” Id. 3. Mizrahi contends
that, though he was named in the Complaint, specifically in the context of the Guaranty, the fact
that he was absent from the Complaint’s language regarding a deficiency judgment (which
mentioned only 366 Realty), see Dkt. No. 1 at 16, it was “wholly rational” for him to believe that
Plaintiff would not seek to enforce the Guaranty against him for a deficiency judgment. Dkt. No.

161 at 2. Mizrahi adds that this presumption was bolstered by his belief that, at the time of
initiation of this action, Plaintiff likely “anticipated that the assets of [366 Realty] would suffice
to cure the default upon foreclosure.” Id.
Plaintiff contends, alternatively, that the Guaranty is not time-barred because of the
forward-looking nature of its terms, and that the statute of limitation runs from each new breach
of the Guaranty by Mizrahi. See Dkt. No. 150. Plaintiff states that the Guaranty is not a “simple

5 As noted above, Mizrahi filed his supplemental letter brief one week after the Court’s initial deadline, and
four days after the Court’s sua sponte extension of this deadline, despite admonitions that failure to timely
file his letter would result in Mizrahi’s waiver of any arguments therein. See September 19, 2025 Text
Order; September 27, 2025 Text Order; Dkt. No. 161. Nevertheless, the Court considers Mizrahi’s
arguments.
unconditional payment guaranty” whereby acceleration of the loan would render the unpaid
amounts immediately due, but instead that Mizrahi’s obligations under the Guaranty were
triggered by Mizrahi’s “bad acts,” and Plaintiff’s demand of payment. Id. at 11. Moreover,
Plaintiff contends that the Guaranty’s language, which describes itself as “an irrevocable, absolute,
and continuing guaranty of payment and performance and not a guaranty of collection[,]” Dkt. No.

121-10 § 1.3, as well as the Guaranty’s reference to future obligations, such as liability for failure
to pay taxes, maintain insurance policies, or misappropriating rent from the Property, reinforces
the continuing nature of the obligations. See Dkt. No. 150 at 11-12; see also Dkt. No. 121-10 §
1.2(a). Accordingly, Plaintiff asserts that every time 366 Realty fails to pay insurance costs, taxes,
water and sewer costs or other charges in violation of the Loan Documents, new liability is
triggered, and a new cause of action accrues under the “continuing wrong doctrine.” See Dkt. No.
150 at 12-13.
Plaintiff asserts that the cases cited by Mizrahi are inapposite and do not address the issue
of the continuing nature of the Guaranty and alleged continuing wrongful acts committed by 366

Realty, such that Plaintiff can proceed against Mizrahi under the Guaranty for any deficiency
accruing as far back as April 19, 2017. See id. at 15. Plaintiff also acknowledges that it proceeded
in equity by foreclosing on the Property and not suing on the Note and Guaranty, but disputes that
this has rendered untimely Plaintiff’s deficiency claim against Mizrahi. Id. at 14.
In its supplemental letter-brief, Plaintiff states that notes that the Complaint contained
“explicit references to [] Mizrahi in his position as a ‘guarantor’ of the defaulted loan and included
a copy of the Guaranty itself, setting forth all of the terms of his liability.” Dkt. No. 158 at 1; see
also Dkt. No. 1 ¶¶ 2-3, 37, 60. Plaintiff states that, while the First Amended Complaint “was
revised for several reasons unrelated to the Guarantor,” it added allegations regarding Mizrahi’s
liability under the Guaranty. Dkt. No. 158 at 1; see also Dkt. No. 70 ¶¶ 53, 55, and “Wherefore”
clause. Plaintiff contends that the claims in the First Amended Complaint “relate back” to the
claims in the Complaint under Fed. R. Civ. P. 15(c)(1)(A) because C.P.L.R. § 203(f) allows for it,
so long as the original pleading gave “notice of the transactions, occurrences, or series of
transactions or occurrences, to be proved pursuant to the amended pleading[,]” which Plaintiff

asserts it did. See Dkt. No. 158 at 3 (quoting C.P.L.R. § 203(f)). Plaintiff also alleges that “relation
back” is also merited under Fed. R. Civ. P. 15(c)(1)(B) because the claims in the First Amended
Complaint “arose out of the conduct, transaction, or occurrence set out—or attempted to be set
out—in the original pleading.” Id. at 4 (quoting Fed. R. Civ. P. 15(c)(1)(B)).
At bottom, Plaintiff states that the Complaint put Mizrahi on notice from the beginning of
the possibility of personal liability under the Guaranty, otherwise, “[t]here was no reason to attach
the Guaranty to the original Complaint” and that Mizrahi “can claim neither prejudice nor
surprise[.]” Id.
iii. Denial of Mizrahi’s Motion is Warranted

Because Plaintiff’s claims against Mizrahi under the Guaranty in the First Amended
Complaint “relate back” to the claims in the Complaint under Fed. R. Civ. P. 15(c)(1)(A),
Mizrahi’s Motion is denied. Additionally, because Mizrahi admits to having executed the
Guaranty, Dkt. Nos. 38 ¶ 16; 141-1 ¶ 5, and raises no other defense besides timeliness, the Court
grants Plaintiff’s Motion as to the validity of the Guaranty, including Plaintiff’s right to seek a
post-foreclosure sale deficiency judgment against Mizrahi, and as to extinguish Mizrahi’s interest
in the Property.6

6 The Court also grants Plaintiff’s Motion seeking summary judgment as to Mizrahi’s interest in the
Property, which Mizrahi did not oppose, besides raising the timeliness issue of the Guaranty. See Dkt. Nos.
149-1; 151 at 6 n.3 (“[Mizrahi] has not opposed the portion of [Plaintiff’s] Motion that seeks to extinguish
Neither Plaintiff nor Mizrahi disputes that Fed. R. Civ. P. 15(c) is to be interpreted broadly,
and with the purpose of providing “maximum opportunity for each claim to be decided on its
merits rather than on procedural technicalities.” Slayton v. American Exp. Co., 460 F.3d 215, 228
(2d Cir. 2006)); see also Dkt. Nos. 158 at 3; 161 at 3. Nor do they dispute that the six-year statute
of limitations enumerated in N.Y. C.P.L.R. 213 applies to this foreclosure action. See Dkt. Nos.

141-2 at 6-7; Dkt. 158 at 3 n.2; See 53rd St., LLC v. U.S. Bank Nat’l Ass’n, 8 F.4th 74, 78 (2d Cir.
2021) (“an action to foreclose on a mortgage is subject to a six-year statute of limitations.”) (citing
C.P.L.R. § 213(4)).
Under Fed. R. Civ. P. 15(c)(1)(A), “‘if the applicable statute of limitations is determined
by state law . . . courts should assess both the state and federal relation back doctrines and apply
whichever law is more generous.’” Vuksanovich v. Airbus Americas, Inc., 608 F. Supp. 3d 92, 110
(S.D.N.Y. 2022) (quoting Liverpool v. Davis, 442 F. Supp. 3d 714, 725 (S.D.N.Y. 2020)); see also
Anderson v. City of Mount Vernon, No. 09-CV-7082 (ER) (PED), 2014 WL 1877092, at *2
(S.D.N.Y. Mar. 28, 2014). Put differently, “[u]nder federal law, if a claim ‘arises under state

law, . . . relation back is to be determined by whichever procedural rule gives the most favorable
result to the plaintiff.’” EverHome Mortg. Co. v. Charter Oak Fire Ins. Co., 07-CV-98 (RRM)
(RML), 2012 WL 868961, at *9 (E.D.N.Y. Mar. 14, 2012) (quoting Smith v. Rochester Tel. Bus.
Mktg. Corp., 786 F. Supp. 293, 309 (W.D.N.Y. 1992), aff’d, 40 F.3d 1236 (2d Cir. 1994)).

[Mizrahi’s] interests in the Mortgaged Property.”). “[W]here a party refers to an issue in only a perfunctory
manner, unaccompanied by any effort at developed argumentation, it must be deemed waived—or, more
precisely, forfeited.” O’Sullivan v. PHH Mortg. Corp., No. 22-CV-4420 (NJC) (ARL), 2025 WL 1835926,
at *16 (E.D.N.Y. July 3, 2025) (citing In re Demetriades, 58 F.4th 37, 54 (2d Cir. 2023)); Tolbert v. Queens
Coll., 242 F.3d 58, 75 (2d Cir. 2001) (“It is a settled appellate rule that issues adverted to in a perfunctory
manner, unaccompanied by some effort at developed argumentation, are deemed [waived or forfeited].”)
(internal quotation marks omitted); Palmieri v. Lynch, 392 F.3d 73, 87 (2d Cir. 2004) (considering an
argument “waived” because the plaintiff failed to “raise this argument in his opposition to summary
judgement”).
“[C]ourts in this District consistently find the New York State relation back rule more generous
than the federal provision.” Jiminez v. Hartford, No. 21-CV-1039 (NSR), 2022 WL 1567701, at
*4 (S.D.N.Y. May 17, 2022) (collecting cases).
Here, N.Y. C.P.L.R. 203(f) provides for relation back, “unless the original pleading does
not give notice of the transactions, occurrences, or series of transactions or occurrences, to be

proved pursuant to the amended pleading.” C.P.L.R. 203(f). However, “[a] court should not
relate-back a claim under N.Y. C.P.L.R. 203(f) ‘where to do so would increase the measure of
liability to which the defendants are exposed.’” Jiminez, 2022 WL 1567701, at *11 (quoting Fazio
Masonry, Inc. v. Barry, Bette & Led Duke, Inc., 23 A.D.3d 748, 749 (3d Dep’t 2005)).
Here, the Complaint provided ample notice to Mizrahi of the “transactions, occurrences,
or series of transactions or occurrences” concerning Plaintiff’s foreclosure upon the Property,
including Mizrahi’s potential liability under the Guaranty, which was attached to the Complaint.
See Dkt. Nos. 1; 1-10; C.P.L.R. 203(f). Mizrahi was also explicitly named in the Complaint as a
guarantor for liability under the Loan Documents. See Dkt. No. 1 ¶¶ 2-3, 37, 60. The Court rejects

Mizrahi’s baseless contention that it was “wholly rational” for him to believe that Plaintiff would
not seek to enforce the Guaranty against him. Dkt. No. 161 at 2. Indeed, the addition of explicit
language regarding Plaintiff’s right to seek a deficiency judgment against Mizrahi “does not allege
a new claim but [instead] renders prior allegations more definite and precise.” Slayton, 460 F.3d
at 228 (citing Stevelman v. Alias Research Inc., 174 F.3d 79, 87 (2d Cir.1999)). Mizrahi cites In
re Enron Creditors Recovery Corp., 370 B.R. 90 (S.D.N.Y. 2007), for the proposition that
attachment of a guarantee to a bankruptcy proof of claim without seeking relief under it was
insufficient to allow relation back under Fed. R. Civ. P. 15 (c). But in Enron, that Bankruptcy
Court applied Fed. R. Civ. P. 15 (c) “by analogy” to a creditor’s amendment request, pursuant to
the court’s discretion under Bankruptcy Rule 9014(c). See id. at 95. Enron is further
distinguishable as it involves adding to the dispute not only a claim under a guarantee, but also the
party that executed the guarantee that was not named in the proof of claim before the limitations
period expired, as contemplated by Fed. R. Civ. P. 15 (c)(1)(C), and not (c)(1)(A) or (c)(1)(B),
which are at issue here. See id. at 95-96. Here, Mizrahi was a party to this action from its inception

and had full notice of the potential claim against him under the Guaranty.
Indeed, Plaintiff’s additional assertions in the First Amended Complaint expressly seeking
relief under the Guaranty as to Mizrahi, including a possible deficiency judgment, “merely add[]”
to claims “arising out of a transaction or occurrence already in litigation” and do not conflict with
the purposes of statutes of limitations, which include fairness to defendants, finality, and judicial
economy. Duffy v. Horton Mem’l Hosp., 66 N.Y.2d 473, 477-78 (1985) (“We have emphasized
that the primary purpose of a limitations period is fairness to a defendant . . . .[] There is also the
need to protect the judicial system from the burden of adjudicating stale and groundless claims.”)
(citations omitted). There is nothing unfair or prejudicial about holding Mizrahi to the Guaranty,

which he does not dispute executing. See Dkt. Nos. 38 ¶ 16; 141-1 ¶ 5; see also 358 & 360 Atl.
Ave. Holdings, LLC v. 358 Atl. Realty LLC, No. 21-CV-168 (DG)(PK), 2023 WL 2969297, at *6
(E.D.N.Y. Mar. 1, 2023) (“by naming [the guarantor] in this action, Plaintiff has preserved its right
to seek a deficiency judgment against [the guarantor] after the foreclosure sale”); Letchworth
Realty, LLC v. LLHC Realty, LLC, No. 15-CV-6680 (FPG), 2020 WL 5361666, at *3 (W.D.N.Y.
Sept. 8, 2020) (“New York law required the Lender to include the Guarantors in the foreclosure
action if it wanted a deficiency judgment against them.”); Minin v. 2494 Amsterdam Ave. LLC,
No. 111122/10, 2011 N.Y. Slip Op. 32879(U), 2011 WL 5295204 (N.Y. Sup. Ct., N.Y. Cnty., Oct.
27, 2011) (“[A]n individual must be named as a defendant in the foreclosure action if the plaintiff
intends to hold that individual liable for any deficiency judgment obtained after the foreclosure
judgment and sale.”). Nor does allowing “relation back” and enforcement of the Guaranty against
Mizrahi “increase the measure of liability to which the [he is] exposed.’” EverHome Mortg. Co.,
2012 WL 868961, at *11. Instead, it holds Mizrahi to the original liability for which he contracted
(and was put on notice of by the Complaint); holding otherwise would countenance a windfall to

him based on a technicality.
Because this Court finds that Plaintiff’s First Amended Complaint relates back to the filing
of the Complaint under New York state law, it need not evaluate whether relation back would also
be appropriate under federal law.7 See Desir v. Austin, No. 13-CV-912 (VMS), 2016 WL 1700386,
at *6 (E.D.N.Y. Apr. 27, 2016) (citing Laureano v. Goord, 2007 WL 2826649, at *5-6 (S.D.N.Y.
Sept. 4, 2007) (“Whether a claim relates back should be analyzed under both federal and state law,
and whichever law that affords a more forgiving principle of relation back should be utilized.”)
(internal quotations omitted), report and recommendation adopted, 2007 WL 2852770 (S.D.N.Y.
Sept. 28, 2007).

In light of the above, the Court need not address Plaintiff’s arguments regarding the alleged
“bad boy” nature of the Guaranty, the continuing wrong doctrine, or any equitable tolling of the
statute of limitations. See Dkt. No. 150 at 11-13; see also Dkt. No. 121-10 § 1.2(a).
In sum, in consideration of the parties’ submission and the totality of the record, the Court
denies Mizrahi’s Motion for summary judgment and dismissal of claims against him under the

7 Nevertheless, the Court also concludes that, if Plaintiff’s claims against Mizrahi under the Guaranty
alleged in the First Amended Complaint were analyzed under the federal standard, such claims would relate
back to the filing of the Complaint under Fed. R. Civ. P. 15(c)(1)(B). See Slayton, 460 F.3d at 228
(collecting cases in which relation back was permitted under federal standard because the “basic claim [had]
arisen out of the conduct set forth in the original pleading.”) (quoting Tho Dinh Tran v. Alphonse Hotel
Corp., 281 F.3d 23, 34 (2d Cir. 2002) (overruled by Slayton on other grounds)).
Guaranty on the basis of untimeliness, and grants Plaintiff’s Motion for summary judgment as to
Mizrahi’s interest in the Property, and as to Mizrahi’s liability under the Guaranty.
B. Plaintiff’s Motion to Appoint a Receiver
i. Standard of Review

Federal Rule of Civil Procedure 66 “govern[s] an action in which the appointment of a
receiver is sought.” Fed. R. Civ. P. 66; see also Bristol Oaks, L.P. v. Werczberger, No. 95 CV
3973 (FB), 1996 WL 19207, at *1 (E.D.N.Y. Jan. 2, 1996) (“The appointment of a receiver in a
diversity case is a procedural matter governed by federal law and federal equitable principles.”);
see also Greystone Bank v. Tavarez, No. 09-CV-5192 (SLT) (JMA), 2010 WL 11651639, at *1
(E.D.N.Y. Apr. 26, 2010) (collecting cases discussing how federal law applies to receivership
inquiries).
“[R]eceivership is ‘traditionally used to protect the value of an asset that is the subject of
litigation.” Federal Nat’l Mortg. Ass’n v. KRCM Astoria Portfolio Corporation, No. 25-CV-1401
(NGG) (TAM), 2025 WL 2793646, at *3 (E.D.N.Y. Oct. 1, 2025) (internal quotation marks and

citations omitted). Appointment of a receiver in equity pursuant to Rule 66 in a diversity case is a
remedy ancillary to the primary relief sought, the typical example of which is a plaintiff bringing
a foreclosure action and requesting appointment of a temporary receiver pending foreclosure. See
U.S. Bank Nat’l Ass’n v. Nesbitt Bellevue Prop. LLC, 866 F. Supp. 2d 247, 255 (S.D.N.Y. 2012)
(citations omitted). “Appointing a receiver constitutes an ‘extraordinary remedy and . . . should
be employed cautiously and granted only when clearly necessary to protect plaintiff's interests in
the property.’” 1488 Bushwick, LLC, 2024 WL 4728666, at *2 (quoting Rosen v. Siegel, 106 F.3d
28, 34 (2d Cir. 1997)).
In deciding whether in deciding whether appointment of a receiver is merited, Courts
consider the following non-exclusive factors:
[1] Fraudulent conduct on the part of defendant; [2] the imminent
danger of the property being lost, concealed, injured, diminished in
value, or squandered; [3] the inadequacy of the available legal
remedies; [4] the probability that harm to plaintiff by denial of the
appointment would be greater than the injury to the parties opposing
appointment; and, in more general terms, [5] plaintiff’s probable
success in the action and [6] the possibility of irreparable injury to
his interests in the property.

Nesbitt Bellevue Prop. LLC, 866 F. Supp. 2d at 249-50 (quoting Varsames v. Palazzolo, 96 F.
Supp. 2d 361, 365 (S.D.N.Y. 2000)); see also 12 Fed. Prac. & Proc. Civ. § 2983. Courts may also
consider whether the property is inadequate security for the outstanding debt and the financial
status of the debtor, but these two factors alone are insufficient to show that the appointment of a
receiver is appropriate. See Miss Jones LLC v. Stiles, No. 17-CV-1450 (NSR), 2019 WL 3034906,
at *2 (S.D.N.Y. July 10, 2019).
“A court weighing an applicant’s request for a receivership should also consider whether
there exists a contractual provision authorizing the appointment of a receiver.” Wilmington PT
Corp. v. Tiwana, No. 19-CV-2035 (DLI), 2020 WL 13158288, at *2-*3 (E.D.N.Y. Mar. 25, 2020)
(citing Greystone Bank, 2010 WL 11651639, at *2). Indeed, “[T]he existence of a provision
authorizing the application for a receiver in the event of a default, ‘strongly supports the
appointment of a receiver’ when there is a default.” Nesbitt Bellevue Prop. LLC, 866 F. Supp. 2d
at 250 (quoting Citibank, N.A. v. Nyland (CF8) Ltd., 839 F.2d 93, 97 (2d Cir. 1988)); see also D.B.
Zwirn Special Opportunities Fund v. Tama Broad., Inc., 550 F. Supp. 2d 481, 490-91 (S.D.N.Y.
2008). Where such a provision exists, “and the mortgag[or] has consented to such appointment
and repeatedly defaulted on conditions of the mortgage, the mortgag[or] ‘bears the burden of
demonstrating why a receiver should not be appointed.’” Federal Nat’l Mortg. Ass’n v. 204 Ellery
St., LLC, No. 23-CV-5343 (ENV) (RML), 2024 WL 2939179, at *3 (E.D.N.Y. Apr. 23, 2024)
(quoting D.B. Zwirn Special Opportunities Fund, L.P., 550 F. Supp. 2d at 491), report and
recommendation adopted, 2024 WL 3716031 (Aug. 8, 2024). The existence of such a contractual
provision, however, is not dispositive, and the appointment of a receiver is within a court’s
discretion. See 1488 Bushwick, LLC, 2024 WL 4728666, at *3 (citing D.B. Zwirn Special

Opportunities Fund, 550 F. Supp. 2d at 491 and Miss Jones, 2019 WL 3034906, at *2).
ii. The Parties’ Positions
In support of its motion to appoint a receiver, Plaintiff contends that the Loan Documents
expressly authorize appointment of a rent receiver in case of 366 Realty’s default. See Dkt. No.
142-30 at 28. Specifically, the Mortgage authorizes Plaintiff to
apply for the appointment of a receiver . . . of the Property, without
notice and without regard for the adequacy of the security for the
Debt and without regard for the solvency of Borrower, any
guarantor or indemnitor with respect to the Loan or any Person
otherwise liable for the payment of the Debt or any part thereof[.]

Id. at 29 (quoting Dkt. No. 142-15 § 7.1(g)). Plaintiff notes that the ALR also expressly
contemplates that a court-appointed receiver may enter the Property to collect rents or “dispossess
Borrower and its agents and servants from the Property . . . and take possession of the Property
and all books, records and accounts relating thereto . . . .” Id. (citing Dkt. No 142-16 § 1.1(g) and
quoting § 3.1). Plaintiff asserts that the existence of such provisions favors its entitlement to
appointment of a receiver. Id. at 29-30.
Further, Plaintiff contends that 366 Realty has failed to pay real estate taxes on the
Property, property insurance premiums, and water, sewer, and other charges related to the
Property—which has caused Plaintiff to advance hundreds of thousands of dollars for the same,
while the Borrower misappropriates rental income from the Property, which Plaintiff estimates to
be in excess of $1,500,000 since May 2017. Id. at 30; see also Dkt. Nos. 142-11 ¶¶ 28-33; 142-
21 – 142-25. Additionally, Plaintiff contends that 366 Realty’s water and sewer charge
delinquencies have resulted in the Property being listed on the “New York City lien sale list,”
which may result in a third-party lien purchaser foreclosing on the Property and impacting
Plaintiff’s recovery. See Dkt. No. 142-30 at 30 (citing Dkt. Nos. 142-24; 142-25). Plaintiff

contends that 366 Realty’s actions are damaging Plaintiff’s interests in the Property, creating an
imminent danger that the Property will be lost, injured or otherwise lessened in value, and that
refusal to appoint a receiver would work greater prejudice to Plaintiff than doing so would to 366
Realty. Id. at 30-31. Indeed, according to Plaintiff, any such hardship to 366 Realty is mitigated
by the fact that the Loan Documents explicitly contemplated remitting to Plaintiff all post-default
rental income from the Property. See Dkt. No. 151 at 6.
Plaintiff further alleges that the financial status of 366 Realty is “seriously in question[,]”
that there is likely to be a substantial post-foreclosure deficiency, and that legal remedies available
to Plaintiff are inadequate. Dkt. No. 142-30 at 32. Plaintiff states that appointment of a receiver

would be beneficial for tenants as well, provide transparency and regular monthly reporting, which
would help maintain the Property’s value. Plaintiff requests that the Court appoint Sanjay Gandhi
of Besen Partners to be the rent receiver and in support, attaches a PowerPoint presentation
providing information regarding Mr. Gandhi and Besen Partners. Id. at 33; Dkt. No. 142-29.
In opposition, 366 Realty and Mizrahi assert that Plaintiff fails to prove that appointing a
receiver is necessary to protect Plaintiff’s interest in the Property or to meet the exacting federal
standard for such relief. See Dkt. No. 149-1. Specifically, 366 Realty and Mizrahi state that the
burden is on Plaintiff to demonstrate the necessity of a receiver, and that Plaintiff has not done so,
nor provided evidence of the likelihood of a post-foreclosure sale deficiency or deterioration of
the Property. Id. at 4, 5. Instead, 366 Realty and Mizrahi state that Mizrahi is diligent in his
maintenance of the Property, and that he has made various repairs to the Property’s boilers,
residential units, and exterior, often at his own expense. See Dkt. No. 149-2 ¶¶ 11-14.
366 Realty and Mizrahi also contend that Plaintiff has not provided adequate evidence of
the qualifications of its proposed receiver, Sanjay Gandhi of Besen Partners. Id. at 6. Further,

they allege that Plaintiff’s proposed order appointing a receiver is overly broad and onerous in
light of the Property’s size, that such demands for remittance by 366 Realty of security deposits
and other funds and documents are premature, prior to the Court’s qualification of any receiver,
and that any claim to rents is limited to those due after default. Id. at 7; see also Dkt. No. 142-1.
366 Realty and Mizrahi state that, while Fed. R. Civ. P. 66 applies to motions to appoint a receiver
in federal court, the Court must apply specific New York statutes regarding receivership, including
R.P.A.P.L. §1325 and the requirements set forth therein. Id. at 7-8.
iii. Appointment of a Receiver is Proper
Here, in consideration of the relevant factors, the Court determines that appointment of a

receiver is “clearly necessary to protect [P]laintiff’s interests in the property.” Nesbitt Bellevue
Prop. LLC, 866 F. Supp. 2d at 254 (quoting Nyland, 839 F.2d at 97). Each equitable factor will
be addressed in turn.
a. Fraudulent Conduct by the Defendant
Plaintiff does not contend that 366 Realty or Mizrahi have committed fraudulent conduct.
Nevertheless, “courts have ‘appointed receivers even where there was no evidence of fraud.’”
Nesbitt Bellevue Prop. LLC, 866 F. Supp. 2d at 250 (quoting D.B. Zwirn Special Opportunities
Fund, 550 F.Supp.2d at 491 & n. 64); see also U.S. Bank Nat’l Ass’n as Trustee for Registered
Holders of Wells Fargo Com. Mortg. Sec., Inc. v. 1078 Whillmore LLC, 740 F. Supp. 3d 157, 177
(E.D.N.Y. 2024) (appointing receiver despite no allegations of fraud); United States v. Trusty
Capital, Inc., No. 06-CV-8170 (KMK), 2007 WL 44015, at *8 (S.D.N.Y. Jan. 5, 2007)). “The
lack of evidence of fraud does not provide a basis for denying relief; rather, this factor does not
weigh for or against Plaintiff’s motion.” KRCM Astoria Portfolio Corporation, 2025 WL
2793646, at *5.

b. Imminent Danger to the Property and Inadequacy of Available
Legal Remedies

“Factors two and three require the Court to examine any imminent danger to the property
and whether the available legal remedies are adequate.” KRCM Astoria Portfolio Corporation,
2025 WL 2793646, at *6 (citing 1488 Bushwick, LLC, 2024 WL 4728666, at *4); see also Nesbitt
Bellevue Prop., 866 F. Supp. 2d at 250 (observing that “the existence of any imminent danger of
the diminution of the value of the properties . . . is a critical factor in the analysis of whether to
appoint a receiver”).
Here, Plaintiff asserts that the Property is in imminent of danger of being diminished in
value because of 366 Realty’s failure to pay real estate taxes on the Property, property insurance
premiums, and water, sewer, and other Property-related charges, such as municipal violations from
the ECB. Dkt. No. 148. See Dkt. Nos. 142-30 at 20, 30-31; 121-3 § 8.1(a) (“Event of Default”);
see also 142-11 ¶¶ 28-33; 142-21 – 142-25. To prevent financial harm to the Property and
diminution of Plaintiff’s interest therein, Plaintiff has been covering many of the Property’s
operating costs since 366 Realty’s default. For instance, this Court determined that Plaintiff had
been forced to pay $107,020.78 in the Property’s real estate taxes, as of July 2023. See Dkt. No.
95 at 16; see also Dkt. No. 142-21. Plaintiff had also paid $10,736.58 in insurance premiums, as
of July 2023, to prevent a lapse in coverage for the Property. See Dkt. No. 95 at 16; see also Dkt.
No. 142-21. Since July 2023, Plaintiff has advanced at least an additional $51,411.84 in real estate
taxes and 33,304.25 in insurance premiums on 366 Realty’s behalf. See Dkt. No. 142-11 ¶¶ 29,
31; see also 142-22, 142-23. Under the Loan Agreement, Plaintiff is entitled to reimbursement of
these costs, which are ordinarily borne by 366 Realty. See Dkt. No. 121-3 §§ 1.1, 9.3. Moreover,
in spite of the 366 Realty’s post-default obligation to turn over rents to Plaintiff, see Dkt. Nos.
121-8 § 7.1(h); 121-9 § 3.1, 366 Realty has failed to do so, nor has it paid the basic expenses

described above.
“Plaintiff’s concerns that Defendants will continue to endanger the Property are
compelling, particularly given the number of violations from a myriad of government agencies.”
KRCM Astoria Portfolio Corporation, 2025 WL 2793646, at *6; see also 1078 Whillmore LLC,
740 F. Supp. 3d at 177-78 (finding danger to the property and the plaintiff's limited ability to
recover supported receivership where the property was subject to two ECB judgments and six
DOB violations); 1488 Bushwick, LLC, 2024 WL 4728666, at *4 (finding 73 open HPD violations
and 17 ECB judgments against the property supported receivership).
In consideration of Plaintiff’s advancement of funds for the Property’s operating costs, and

the substantial number of municipal violations accrued under 366 Realty’s watch, as more fully
detailed in the undersigned’s September 27, 2025 Report and Recommendation, see Dkt. No. 159,
Plaintiff’s legal remedies, including reimbursement of these costs from 366 Realty or Mizrahi,
may be limited. See KRCM Astoria Portfolio Corporation, 2025 WL 2793646, at *7. Indeed, the
existence of the equitable remedy of foreclosure is inadequate to prevent such harms to Plaintiff’s
interest in the Property.
Accordingly, these factors weigh in favor of receivership.
c. Balance of Harms

Here, the balance of harms favors appointment of a receiver. See Sovereign Bank v. 347
East 173 LLC, No. 11-CV-1061 (LBS), 2011 WL 2693525, at *3 (S.D.N.Y. June 29, 2011)
(granting motion to appoint a receiver where “Borrowers’ continued management will irreparably
harm Plaintiff’s interest in the Mortgaged Properties”).
Significantly, the Amended Mortgage explicitly provides for appointment of a receiver.
See Dkt. No. 142-15 § 7.1(g) (Upon 366 Realty’s default, Plaintiff may “apply for the appointment
of a receiver . . . of the Property, without notice and without regard for the adequacy of the security
for the Debt and without regard for the solvency of [366 Realty], any guarantor or indemnitor with
respect to the Loan . . . .”). It is also undisputed that 366 Realty has been in default under the Loan
Documents since 2017. See Dkt. No. 38 ¶ 31. The Second Circuit has noted that “[i]t is entirely
appropriate for a mortgage holder to seek the appointment of a receiver where the mortgage
authorizes such appointment, and the mortgagee has repeatedly defaulted on conditions of the
mortgage which constitute one or more events of default.” Nyland, 839 F.2d at 97. Indeed, “[366

Realty] contractually consented to the appointment of a receiver in the mortgage agreement and
‘[t]here is little hardship in enforcing the terms of the parties’ bargain.’” Greystone Bank, 2010
WL 11651639, at *2 (quoting New York Life Ins. Co. v. Watt W. Inv. Corp., 755 F. Supp. 287, 293
(E.D. Cal. 1991)); see also Sovereign Bank v. 347 E. 173 LLC, No. 11-CV-1061 (LBS), 2011 WL
2693525, at *3 (S.D.N.Y. June 29, 2011) (“It is undisputed that several events of default have
occurred, including non-payment of monthly installments and failure to pay real estate taxes,
which “strongly supports the appointment of a receiver.”) (quoting Nyland, 839 F.2d at 97); see
also N.Y. Real Prop. Law § 254(10); Greystone Bank, 2010 WL 11651639, at *2 (granting motion
to appoint a receiver, where same permitted by mortgage, and borrower defaulted, failed to pay
real estate tax and insurance costs, and misappropriated building rental income).
This factor thus also weighs in favor of receivership.
d. Plaintiff’s Probable Success
Plaintiff has also demonstrated a probability of success on the merits. Defendant 366

Realty admitted that it is in default and has not cured the same, see Dkt. No. 38 ¶ 31, and this Court
granted summary judgment against 366 Realty in 2021, see Dkt. No. 58. Plaintiff has accordingly
“proffered sufficient evidence to illustrate its ‘probable success in the action.’” KRCM Astoria
Portfolio Corporation, 2025 WL 2793646, at *7 (quoting Nesbitt Bellevue Prop., 866 F. Supp. 2d
at 250 (quotation marks omitted)). Indeed, “[a] receiver is needed to safeguard [Plaintiff’s] interest
in the [P]roperty during the pendency of this foreclosure action and to ensure that the rental income
paid by the tenants in the building is applied to the principal and interest due in accordance with
the provisions of the mortgage agreement.” Greystone Bank, 2010 WL 11651639, at *2.
This factor thus weighs in favor of receivership as well.

e. Possibility of Irreparable Injury to Plaintiff’s Property Interests

In light of the totality of circumstances, this Court holds that Plaintiff’s interest in the
Property may be irreparably injured unless a receiver is appointed. As noted above, Plaintiff has
alleged that 366 Realty is unable failed to take basic care of the Property, including failure to pay
real estate taxes, property insurance premiums, and water, sewer, and other Property-related
charges. 366 Realty’s mismanagement of the Property led to two Criminal Court judgments being
entered against it, see Dkt. No. 121-19, as well as multiple municipal violations from the ECB, see
Dkt. No. 121-20. See also Dkt. Nos. 142-30 at 20, 30-31; 142-11 ¶¶ 28-33; 142-21 – 142-25.
Further weighing in favor of appointment of a receiver is the fact that 366 Realty allowed
the aforementioned water and sewer charges to go unpaid for so long and accrue to such a point
that the Property was listed on a “New York City lien sale list,” whereby the debt would be sold
to a third party, and potentially further diminishing Plaintiff’s interest in the Property. See Dkt.
Nos. 142-24; 142-25). It is clear that 366 Realty and Mizrahi’s management of the Property has

left it in “imminent danger of the diminution of the value” of the same. Nesbitt Bellevue Prop.
LLC, 866 F. Supp. 2d at 250; see also Melnick v. Press, No. 06-CV-6686 (JFB) (ARL), 2007 WL
2769490, at *1 (E.D.N.Y. Sept. 21, 2007).
***
In sum, in consideration of the explicit receivership provisions in the Loan Documents,
366 Realty’s acknowledgment of its default, and the balance of equitable factors weighing in favor
of receivership, the Court finds that appointment of a receiver is warranted.
iv. Appointment of Sanjay Ghandi of Besen Partners as Receiver

While the Court grants Plaintiff’s Motion insofar as the request to appoint a receiver, it
declines to enter Plaintiff’s proposed order, see Dkt. No. 142-1, and finds insufficient the
information Plaintiff has supplied regarding its proposed receiver of Mr. Gandhi of Besen Partners.
See Dkt. No. 142-29. By October 22, 2025, Plaintiff shall file a letter containing further details
regarding the qualifications of Mr. Gandhi, including how his proposed role as a receiver is
consistent with the requirements of federal receiverships and New York law, and support for the
reasonableness of any fees charged by him. See 204 Ellery St., 2024 WL 2939179, at *4
(describing parameters for an appointed receiver). Plaintiff shall also address Mr. Gandhi’s
involvement (if any) in other lawsuits in this Circuit and how such lawsuits impact his ability to
serve as a receiver herein. See, e.g., U.S. Bank, Nat’l Ass’n for Registered Holders of WAMU Com.
Mortg. Sec. Tr. 2007-SL2, Com. Mortg. Pass-Through Certificates, Series 2007-SL2 v. R N R
Mgmt., LLC, No. 12-CV-1899 (SLT) (VMS), 2016 WL 11395003, at *5 (E.D.N.Y. Jan. 5, 2016),
report and recommendation adopted, 2016 WL 3020868 (E.D.N.Y. May 24, 2016); Nesbeth v.
New York City Mgmt. LLC, No. 17-CV-8650 (JGK), 2019 WL 110953, at *1 (S.D.N.Y. Jan. 4,
2019). Defendants 366 Realty and Mizrahi shall respond to Plaintiff’s letter by October 29, 2025.

Additionally, Plaintiff and Defendants 366 Realty and Mizrahi are directed to meet and
confer in good faith and file a letter by October 29, 2025, proposing a sensible and expedient
transition of management of the Property from 366 Realty and Mizrahi to such receiver as the
Court shall duly appoint, including any pertinent details noted in Plaintiff’s proposed order, see
Dkt. No. 142-1.
III. Conclusion
For the foregoing reasons, Mizrahi’s Motion is DENIED and Plaintiff’s Motion is
GRANTED in part and DENIED in part.
Dated: Brooklyn, New York
October 15, 2025 SO ORDERED.

/s/ Joseph A. Marutollo
JOSEPH A. MARUTOLLO
United States Magistrate Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11171485. Public record. Not legal advice.