Court Confirms Special Referee Decision

On January 23, 2024, Justice Margaret A. Chan of the New York County Commercial Division, issued a decision in Wells Fargo Bank, National Association v. 555 Retail Owner LLC, Index No. 850277/2021, granting the plaintiff’s unopposed motion to confirm the Report and Recommendation issued by the Special Referee calculating the damages and interest owed on a defaulted mortgage and recommending that the mortgage premises be sold in a single parcel. The Court explained:

CPLR 4403 permits a court to confirm or reject a referee's report, in whole or in part. "It is well settled that where questions of fact are submitted to a referee, it is the function of the referee to determine the issues presented, as well as to resolve conflicting testimony and matters of credibility" (Herman v Gi11, 61 AD3d 433 [1^st Dept 2009] [internal citation and quotation omitted]). "The recommendations of a special referee are entitled to great weight because, as the trier of fact, [the referee] has an opportunity to see and hear the witnesses and to observe their demeanor" (Poster v Poster, 4 AD3d 145, 145 [1st Dept 2004]).

The court grants plaintiffs unopposed motion to confirm the Report. The Special Referee clearly defined the issues to be considered, namely, (i) the amount due under the Loan and secured by the Mortgage, and (ii) whether the mortgage Premises should be sold in one or more parcels (NYSCEF # 45 at 1). In resolving the issues, the Special Referee examined the record, including documentary evidence of the Loan and the Mortgage (NYSCEF # 45 at 2). Defendants have not appeared or submitted any conflicting testimony. The record supports the Special Referee's determination that (i) the total amount owed under the Loan as of February 6, 2023 is $23,404,677.60 (with interest accruing at rate of$4,962.23 per day), which includes total principal, interest, late fees, and other costs and expenses, less credits for reserve funds and lockbox funds (NYSCEF # 46 at 8) and (ii) the Premises should be sold in one parcel (id at 9).

As such, the court sees no basis to disturb the Special Referee's findings (see Galasso, Langione & Batter, LLP v Galasso, 89 AD3d 897, 898 [1st Dept 2011] ["[allthough the court is entitled to reject the report of a referee and make new findings, the report and recommendations of a referee should be confirmed if his or her findings are supported by the record"]).

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning the use of Special Referees in litigation or confirming the report and recommendation of a Special Referee