Opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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FEDERAL HOME LOAN MORTGAGE :

CORPORATION, :

: MEMORANDUM DECISION AND

Plaintiff, : ORDER

:

- against - : 26-cv-407 (BMC)

:

GW REAL ESTATE PARTNERS, LLC; :

JAMES D. PERRONE; NEW YORK CITY :

ENVIRONMENTAL CONTROL BOARD; :

JANE DOE; and JOHN DOE, :

:

Defendants. :

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COGAN, District Judge.

In this commercial foreclosure action, plaintiff Federal Home Loan Mortgage

Corporation moves for summary judgment. For the reasons that follow, the motion is granted.

BACKGROUND

On March 25, 2020, CPC Mortgage Company LLC (the “Original Lender”) made a loan

to defendant GW Real Estate Partners, LLC (“GW”) in the principal amount of $3,867,000.00

(the “Loan”), secured by real property located at 113 Richardson Street, Brooklyn, New York

11211. The Loan is evidenced by a same-dated note (the “Note”) in the principal amount of

$3,867,000.00, executed by GW in favor of the Original Lender and endorsed to plaintiff without

recourse. The Note is secured by a same-dated mortgage, which was recorded in the New York

City Register on March 31, 2020, as CRFN 2020000112800 (the “Mortgage”). In addition,

defendant James D. Perrone executed a same-dated guaranty through which he absolutely,

unconditionally, and irrevocably guaranteed to the Original Lender, and its successors and

assigns, the payment and performance of the obligations under the loan documents (the

“Guaranty”).

Also on March 25, 2020, the Original Lender executed a document purporting to assign

the Note and Mortgage to plaintiff (“the Assignment”). The Assignment was recorded in the

New York City Register on March 31, 2020 as CRFN 2020000112801. As a result of both the

Note’s endorsement to plaintiff and the Assignment, plaintiff maintains that it was the owner and

holder of the Note at the time that this action was commenced. Defendants disagree for reasons

explained infra.

In a March 27, 2025 letter, plaintiff agreed to temporarily refrain from exercising its right

to demand full payment of the Loan during a deferral period of April 1, 2025, to June 1, 2025.

On June 1, 2025, the deferred maturity date, GW failed to make the required payment, which

constituted an event of default under the loan documents. Plaintiff’s counsel notified defendants

of the default on July 9, 2025, and requested immediate payment.1 However, defendants still did

not pay.

The mortgage loan is serviced for plaintiff by The Community Preservation Corporation.

Late charges and default interest accrued because GW’s payments were not received or were

received late. The account is delinquent by 13 payments, including receivables from June 2025

through June 2026. As of July 20, 2026, the unpaid principal of $3,479,166.90 and accrued

1 Defendants assert in their responsive Local Rule 56.1 statement that the demand is defective because it came from

attorneys, not plaintiff. However, they admit that they received the notification of default and request for payment.

Besides, defendants provide no explanation as to why a demand by plaintiff’s attorneys, clearly done on plaintiff’s

behalf, would be defective.

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interest, default interest, late charges, advances, escrow deficiency, and other fees and costs

remain due and owing under the loan documents.2

DISCUSSION

I. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment is

warranted where 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). The court must

view all facts in the light most favorable to the nonmoving party. See Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986) (citing Adickes v. S. H. Kress & Co., 398 U.S. 144,

158-59 (1970)). 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 the non-moving party.” Lovejoy-Wilson v.

NOCO Motor Fuel, Inc., 263 F.3d 208, 212 (2d Cir. 2001) (citing Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

A party may not defeat a motion for summary judgment solely through “unsupported

assertions” or conjecture. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d

2 Defendants dispute the facts in this paragraph on the basis that the documents upon which plaintiff relies are from

The Community Preservation Corporation and are therefore inadmissible hearsay. Defendants are wrong. Federal

Rule of Evidence 803(6) provides a “business records exception” to the rule against hearsay and allows the

admission of records “kept in the course of a regularly conducted activity.” “So long as the records are both

integrated into a company’s records and relied on in that company’s day-to-day activities, then ‘[e]ven if the

document is originally created by another entity, its creator need not testify when the document has been

incorporated into the business records of the testifying entity.’” U.S. Bank Nat’l Ass’n v. 1078 Whillmore LLC, 740

F. Supp. 3d 157, 174 (E.D.N.Y. 2024) (quoting United States v. Jakobetz, 955 F.2d 786, 801 (2d Cir. 1992)). Scott

D. Lynn, Director of plaintiff’s Multifamily Asset Management Team, states in his declaration that “[i]n the

ordinary course of [plaintiff’s] business, [plaintiff] receives, maintains, incorporates, and relies upon servicing

records concerning the loan, including the monthly billing statements and payment history,” and that the servicing

records “are maintained in [plaintiff’s] loan file and are relied upon by [plaintiff] in connection with its business

operations.” Accordingly, the Lynn declaration lays a proper foundation for the exhibits to be introduced as

business records under Federal Rule of Evidence 803(6).

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Cir. 1995). Rather, “‘[t]he nonmoving party must come forward with specific facts showing that

there is a genuine issue for trial.’” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002)

(quoting Matsushita, 475 U.S. at 586-87); see also Scott v. Coughlin, 344 F.3d 282, 287 (2d Cir.

2003) (“Conclusory allegations or denials are ordinarily not sufficient to defeat a motion for

summary judgment when the moving party has set out a documentary case.”); Rexnord

Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994). Indeed, the non-moving party

must offer “concrete evidence from which a reasonable juror could return a verdict in [her]

favor.” Anderson, 477 U.S. at 256.

II. Analysis

“Under New York law, a plaintiff in a foreclosure action establishes prima facie

entitlement to summary judgment ‘by producing evidence of the mortgage, the unpaid note, and

the defendant’s default.’” CIT Bank N.A. v. Donovan, 856 F. App’x 335, 336 (2d Cir. 2021)

(quoting Wells Fargo Bank, N.A. v. Walker, 141 A.D.3d 986, 35 N.Y.S.3d 591, 592 (3rd Dep’t

2016)). Additionally, “[w]here, as here, the defendant contests standing to foreclose, ‘the

plaintiff must prove its standing as part of its prima facie showing.’” Id. (quoting JPMorgan

Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 37 N.Y.S.3d 286, 288 (2nd Dep’t 2016)). “If

the plaintiff establishes a prima facie case, ‘[t]he burden then shifts to the defendant to

demonstrate the existence of a triable issue of fact as to a bona fide defense to the action, such as

waiver, estoppel, bad faith, fraud, or oppressive or unconscionable conduct on the part of the

plaintiff.’” Id. at 336-37 (quoting Capstone Bus. Credit, LLC v. Imperia Family Realty, LLC, 70

A.D.3d 882, 895 N.Y.S.2d 199, 201 (2nd Dep’t 2010)).

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A. Standing

Under New York law, “a plaintiff establishes its standing in a mortgage foreclosure action

by demonstrating that, when the action was commenced, it was either the holder or assignee of

the underlying note.” OneWest Bank, N.A. v. Melina, 827 F.3d 214, 222 (2d Cir. 2016) (quoting

Wells Fargo Bank, N.A. v. Rooney, 132 A.D.3d 980, 981, 19 N.Y.S.3d 543 (2nd Dep’t 2015)).

“[A] plaintiff can establish standing by attaching a properly endorsed note to the complaint when

commencing the action.” Star201, LLC v. Duran, 233 A.D.3d 726, 727, 223 N.Y.S.3d 206 (2nd

Dep’t 2024) (citations omitted). “As relevant here, the [e]ndorsement must be on the instrument

or on a paper so firmly affixed thereto as to become a part thereof.” Id. (internal quotation marks

and citations omitted; alterations adopted).

Defendants raise two challenges to standing: first, that plaintiff has failed to establish that

the allonge upon which it relies was firmly affixed to the Note prior to commencement of the

action; and second, that the Assignment was defective.

Defendants’ argument about the allonge is odd because there is no allonge, nor was one

necessary: plaintiff’s ownership was clearly recorded in the Note itself. At the bottom left corner

of every page of the Note is the same document identification number, “01653035;1,” and the

same document title, “Note Fixed Rate – SBL.” At the bottom right corner of every page of the

Note is a page number, and the pages are all sequentially ordered. The signed endorsement page,

which says “PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE

CORPORATION WITHOUT RECOURSE,” is no exception. The endorsement page has the

same document identification number and document title as every other page in the Note. The

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endorsement page also adheres to the sequential pagination: it is numbered “S-2” and appears

directly after “S-1” (where Perrone signed the Note on behalf of GW) and directly before

“Schedule 1, Page 1.” On balance, there is nothing about the endorsement that suggests that it

was merely attached to the Note. Rather, the evidence supports no conclusion other than that the

endorsement was incorporated into the Note.

Further, plaintiff clearly had physical possession of the Note when it commenced this

action. In support, plaintiff provides the declaration of Scott D. Lynn, Director of plaintiff’s

Multifamily Asset Management Team, who is “familiar with [plaintiff’s] processes, procedures,

and systems and [] familiar with how the business records of [plaintiff] are created and

maintained,” and who affirms that the loan documents in this case are plaintiff’s business

records. Lynn declares that plaintiff “was the owner and holder of the Note at the time this

action was commenced ... and remains in possession of the original Note.” This is enough to

establish plaintiff’s physical possession. See OneWest Bank, N.A. v. Melina, 827 F.3d 214, 223

(2d Cir. 2016) (“[P]roof of physical possession – such as the affidavits of [plaintiff’s] corporate

representative and counsel in this case – is sufficient on its own to prove a plaintiff’s standing to

foreclose on the mortgage associated with the note.”).

Thus, whether the Assignment was defective is irrelevant because “the note trumps the

mortgage in determining standing.” E. Sav., FSB v. Thompson, No. 12-cv-1197, 2016 WL

2977268, at *3 (E.D.N.Y. May 19, 2016) (citing E. Sav. Bank, FSB v. Thompson, 631 Fed.

App’x 13, 15 (2d Cir. 2015)); see also Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361,

12 N.Y.S.3d 612, 615 (2015) (“[T]he note, and not the mortgage, is the dispositive instrument

that conveys standing to foreclose under New York law.”).

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Accordingly, plaintiff has standing to bring this foreclosure action.

B. Mortgage, Unpaid Note, and GW’s Default

As is necessary to make its prima facie case, plaintiff has submitted the Mortgage and the

Note, as well as evidence of nonpayment and default. However, defendants counter that plaintiff

has failed to establish GW’s default.

Defendants’ challenge makes no sense. Defendants admit that the Loan maturity date

was June 1, 2025; they thus concede that June 1, 2025 was the date on which GW was supposed

to pay off the Loan. In addition, Perrone admitted in his May 11, 2026 affidavit that “[t]he

current loan with Plaintiff has a payoff amount of around $3,900,000” and that they were

“working to refinance [their] loan so that [they] can pay off the Plaintiff.” The only possible

conclusion from these admissions is that GW failed to pay the Loan at maturity, which means

that GW is in default. And, of course, plaintiff’s business records reflect that GW’s account is

delinquent by 13 payments.

C. Defenses

The Court previously deferred ruling on plaintiff’s motion to strike defendants’

affirmative defenses of no standing, breach of the duty of good faith and fair dealing, and

unclean hands. As set forth above, defendants’ standing challenge fails. Defendants have not

raised their later two affirmative defenses in their opposition to summary judgment, so the Court

considers them abandoned. In any event, those defenses fail as a matter of law.

In support of their breach of the duty of good faith and fair dealing and unclean hands

defenses, defendants previously argued that they made three timely mortgage payments that

plaintiff failed to properly account for – and for which plaintiff improperly assessed default

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interest charges – which affected GW’s ability to refinance the loan and to repay the loan at the

time of maturity. That defendants may owe plaintiff less money than plaintiff claims is not a

defense to foreclosure. See HANDL Cap. 531, LLC v. New Generation Holdings, LLC, No. 25-

cv-6318, 2026 WL 440558, at *4 (E.D.N.Y. Feb. 17, 2026) (a dispute regarding amounts owed

does not constitute a defense to a foreclosure action); Nissan Motor Acceptance Corp. v. Nemet

Motors, LLC, No. 19-cv-3284, 2022 WL 4651667, at *5 (E.D.N.Y. Sept. 29, 2022) (same); see

also CIT Bank, N.A. v. Nwanganga, 328 F. Supp. 3d 189, 199 (S.D.N.Y. 2018) (“[F]ailure to

mitigate damages is not an affirmative defense to a foreclosure action.”). Besides, defendants

have not proffered any evidence, beyond Perrone’s speculation, that but for the unaccounted-for

mortgage payments and improper default interest charges, GW would have been able to repay

the Loan at maturity.

Moreover, even if defendants’ theory was supported evidence, such facts would not

support defendants’ affirmative defenses. A breach of the duty of good faith and fair dealing

requires facts showing that plaintiff “sought to prevent performance of the contract or to

withhold its benefits.” See Liberty Cap. Grp. v. Oppenheimer Holdings Inc., 802 F. Supp. 3d

701, 714 (S.D.N.Y. 2025) (citation omitted). Unclean hands requires facts showing that plaintiff

engaged in “predatory or discriminatory lending practices.” See E. Sav. Bank, FSB v. Johnson,

No. 13-cv-6070, 2022 WL 877781, at *7 (E.D.N.Y. Jan. 31, 2022). But defendants do not allege,

let alone offer any evidence of, any obstructive intent or predatory behavior on plaintiff’s part.

D. Guaranty

To establish a claim for breach of an unconditional guaranty, a plaintiff must prove

“(1) an agreement, (2) adequate performance by the plaintiff, (3) breach by the defendant, and

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(4) damages.” See Wells Fargo Bank, N.A. v. 840 Westchester Ave. NMA, LLC, 786 F. Supp. 3d

586, 598 (S.D.N.Y. 2025) (citations omitted). Plaintiff has established each of these elements,

and defendants have waived any possible defense to them by not addressing the Guaranty in their

opposition.

To induce the Original Lender to issue the Loan to GW, Perrone executed the Guaranty,

by which he “absolutely, unconditionally, and irrevocably guarantee[d]” the “full and prompt

payment when due, whether at the Maturity Date or earlier, by reason of acceleration or

otherwise, of all amounts for which Borrower is personally liable” under the Loan. The

Guaranty further provided that “[Perrone’s] obligations under this Guaranty constitute[d] an

unconditional guaranty of payment and performance and not merely a guaranty of collection.”

As established above, GW defaulted, which means that Perrone was required to pay off the Loan.

Because Perrone has not paid off the Loan, he breached the Guaranty.

E. Attorneys’ Fees

Finally, plaintiff has moved for attorneys’ fees incurred in connection with this matter. In

essence, the Mortgage provides that plaintiff “may collect all costs and expenses allowed by New

York law, including Attorneys’ Fees and Costs.” The Note similarly provides that “Lender will

have the right to be paid back by Borrower for Lender’s entire costs and expenses, including

Attorneys’ Fees and Costs, resulting from any default under this Note or in connection with

efforts to collect any amount due under this Note, or to enforce the provisions of any of the other

Loan Documents, including those costs and expenses incurred in post-judgment collection

efforts.”

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Because the actual value of attorneys’ fees can be determined at the time

of foreclosure and added to the delinquent balance, the Court finds it more appropriate to leave

this issue to the mortgage referee. See Secured Asset Mgmt., LLC v. Cong. Beth Joseph Zwi

Dushinsky, No. 17-cv-5588, 2023 WL 2429689, at *2 (E.D.N.Y. Mar. 9, 2023) (appointing

“referee ... to: (1) compute the amounts due[,] including the total amount owed in default ... and

attorneys’ fees and costs, and (2) conduct a foreclosure sale[.]”). Accordingly, plaintiff’s motion

for attorneys’ fees relating to the foreclosure is denied without prejudice.

CONCLUSION

For the foregoing reasons, plaintiff’s motion for summary judgment against GW and

Perrone is granted. Because plaintiff failed to serve defendants John Doe, Jane Doe, and New

York City Environmental Control Board within 90 days of filing the complaint, they are

dismissed. See Fed. R. Civ. P. 4(m). Within seven days of this Order, plaintiff is directed to file

a proposed judgment of foreclosure.

SO ORDERED.

Fan Cogan

U.S.D.J.

Dated: Brooklyn, New York

August 17, 2026

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