Wilmington Trust v. Stradtman Park, LLC: Fourth Department Upholds Trial Court's Cut to CMBS Special Servicer's Foreclosure Fees and Interest

Lending & Foreclosure Ruling Issued
Date
October 9, 2026
Added to tracker
October 13, 2026
Court or forum
New York Supreme Court, Appellate Division, Fourth Department
State
New York
Presiding judge
Emilio Colaiacovo
Amount / scale
$3.6 million CMBS loan; $588,000 fee request cut to $250,000
Parties
Plaintiff-Appellant (Lender/Trustee): Wilmington Trust, National Association, as Trustee for the benefit of the registered holders of JPMBB Commercial Mortgage Securities Trust 2014-C24, Commercial Mortgage Pass-Through Certificates, Series 2014-C24Special Servicer: LNR Partners, LLCDefendant-Respondent (Borrower): Stradtman Park, LLCOriginal Lender (nonparty): KeyBank National Association

On October 9, 2026, New York's Appellate Division, Fourth Department unanimously affirmed an Erie County damages judgment in a commercial mortgage foreclosure brought by the trustee of the JPMBB Commercial Mortgage Securities Trust 2014-C24, acting through special servicer LNR Partners, LLC, against borrower Stradtman Park, LLC. The trust had asked for roughly $588,000 in attorneys' fees and got $250,000, and it was refused note-rate interest of $120,882.59 on top of $583,938.25 in default-rate interest. The appellate panel found both rulings supported by a fair interpretation of the evidence.

Why it matters

The decision is a reminder that a foreclosure is an equitable proceeding, so contractual fee and interest provisions in CMBS loan documents are enforced only to the extent a court finds them reasonable and proven. Special servicers that bill out-of-market rates or stack default interest on top of note-rate interest without documenting the math risk a substantial haircut. Borrowers in smaller markets gain a template: local expert testimony on customary foreclosure rates can cap what a securitized lender recovers.

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The loan dates to July 2014, when Stradtman Park, LLC borrowed $3.6 million from KeyBank National Association against a commercial property that the court described as worth about $7 million. The loan documents allowed KeyBank to assign and securitize the loan, and in October 2014 it was assigned to Wilmington Trust, National Association, as trustee for the holders of JPMBB Commercial Mortgage Securities Trust 2014-C24, and pooled into a commercial mortgage-backed security under a pooling and servicing agreement. The borrower never signed that agreement. LNR Partners, LLC was designated special servicer for the loan if it became distressed or defaulted.

Case timeline · 6 entries Latest: October 9, 2026 — Appellate Division, Fourth Department unanimously affirms

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