15‐3852‐cv Sherry v. U.S. Bank National Association UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 7th day of October, two thousand sixteen.
PRESENT: DENNY CHIN, SUSAN L. CARNEY, Circuit Judges, RICHARD M. BERMAN, District Judge.*
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DENNIS J. SHERRY, Receiver‐Appellant,
JDM LONG ISLAND LLC, Plaintiff,
PEOPLE OF THE STATE OF NEW YORK, JDM LONG ISLAND LLC, BAGNATO REALTY SERVICES, LLC, DBA NAI LONG ISLAND, JOHN DOE, PEOPLE OF THE STATE OF NEW YORK, VILLAGE OF HEMPSTEAD,
* Judge Richard M. Berman, of the United States District Court for the Southern District of New York, sitting by designation. MARY ROE, EAST COAST PETROLEUM, INC., XYZ CORPORATION, Counter‐Defendants,
v. 15‐3852‐cv
U.S. BANK NATIONAL ASSOCIATION, as Trustee, as successor‐in‐interest to Bank of America, N.A, as successor trustee for the registered holders of LBUBS Commercial Mortgage Trust 2006C7, Commercial Mortgage PassThrough, AKA Bank of America, N.A., Defendant‐Counter‐Claimant‐Appellee.
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FOR RECEIVER‐APPELLANT: RICHARD JORDAN EISENBERG, Meyer, Suozzi, English & Klein, P.C., Garden City, New York.
FOR DEFENDANT‐COUNTER‐ CHRISTOPHER COSTELLO, Winston & CLAIMANT‐APPELLEE: Strawn LLP, New York, New York.
Appeal from the United States District Court for the Eastern District of
New York (Seybert, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the memorandum and order of the district court is
AFFIRMED.
Receiver‐appellant Dennis J. Sherry appeals from a November 2, 2015
memorandum and order of the United States District Court for the Eastern District of
New York denying his application for payment of commissions for his work as receiver
in a commercial property foreclosure. We assume the partiesʹ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
2 The district court appointed Sherry receiver on May 18, 2011 in this
foreclosure of an office building in Hempstead, New York. The court entered judgment
in favor of U.S. Bank on its foreclosure claim, the remaining claims were settled, the
property was sold, and, on October 20, 2015, the court confirmed and ratified the sale.
The district court terminated the receivership by order entered October 4,
2013, and Sherry filed an application for commissions on December 10, 2013, seeking
some $454,435 in compensation. The application was opposed, and lengthy
proceedings ensued over the course of almost the next two years, including a two‐day
evidentiary hearing, that culminated in the district courtʹs decision denying Sherryʹs
application in its entirety.
Section 8004(a) of the New York Civil Practice Law and Rules (ʺCPLRʺ)
entitles a receiver to ʺsuch commissions, not exceeding five per cent upon the sums
received and disbursed by him, as the court by which he is appointed allows.ʺ N.Y.
C.P.L.R. § 8004(a).1 Where there are no funds remaining in the receiverʹs hands at the
termination of the receivership, the court ʺmay fix the compensation of the receiver and
the fees of his attorney, in accordance with the respective services rendered, and may
direct the party who moved for the appointment of the receiver to pay such sums.ʺ
N.Y. C.P.L.R. § 8004(b). ʺIt is fundamental law that a receiver is required to render
1 Both parties applied New York law in their briefs before the district court and again on appeal. Such ʺimplied consent . . . is sufficient to establish choice of law.ʺ Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 138 (2d Cir. 2000) (quoting Tehran–Berkeley Civil & Environmental Engʹrs v. Tippetts–Abbett–McCarthy–Stratton, 888 F.2d 239, 242 (2d Cir. 1989)).
3 services in order to earn his commissions,ʺ and ʺ[i]t is the receiverʹs burden to justify his
account.ʺ Indep. Props. Co. v. Mast Prop. Invʹrs, Inc., 539 N.Y.S.2d 121, 122 (3d Depʹt
1989).
The award of commissions and fees pursuant to Section 8004 of the CPLR
and the amount of any such award are subject to the appointing courtʹs discretion. See
Kaufman Props. & Assocs., LLC v. 2 Court St., LLC, 858 N.Y.S.2d 419, 420 (3d Depʹt 2008)
(concluding that New York Supreme Court did not abuse its discretion by approving
receiverʹs accounting); Key Bank of New York v. Anton, 659 N.Y.S.2d 895, 896 (2d Depʹt
1997) (ʺA receiver is not entitled to the statutory maximum as of right; the court has
discretion to award a lower percentage.ʺ).
We review discretionary determinations of the district court for abuse of
discretion. See Zervos v. Verizon New York, Inc., 252 F.3d 163, 168‐69 (2d Cir. 2001)
(ʺWhen a district court is vested with discretion as to a certain matter, it is not required
by law to make a particular decision. Rather, the district court is empowered to make a
decision ‐‐ of its choosing ‐‐ that falls within a range of permissible decisions.ʺ). ʺAn
abuse of discretion may consist of an erroneous view of the law, a clearly erroneous
assessment of the facts, or a decision that cannot be located with the range of
permissible decisions.ʺ Grullon v. City of New Haven, 720 F.3d 133, 140 (2d Cir. 2013)
(quoting Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012)).
4 On appeal, Sherry argues that the district court erred by (1) failing to take
into account the complete record of his efforts as receiver and (2) concluding that his
specific actions with regard to the property justified the denial of a commission. We
disagree. As discussed below, the district court properly considered the record and did
not abuse its discretion when it declined to award Sherry a commission.
First, there is no evidence that the district court disregarded the record in
making its determination. In fact, the district court gave Sherry multiple opportunities
to supplement his application and considered the additional information that Sherry
provided in its ultimate decision to deny him a commission. The district court denied,
without prejudice, Sherryʹs first commission application because he failed to file
required monthly reports detailing his activities. Sherry renewed his motion for a
commission after filing the requisite monthly reports. Upon review of those reports, the
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15‐3852‐cv Sherry v. U.S. Bank National Association UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 7th day of October, two thousand sixteen.
PRESENT: DENNY CHIN, SUSAN L. CARNEY, Circuit Judges, RICHARD M. BERMAN, District Judge.*
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
DENNIS J. SHERRY, Receiver‐Appellant,
JDM LONG ISLAND LLC, Plaintiff,
PEOPLE OF THE STATE OF NEW YORK, JDM LONG ISLAND LLC, BAGNATO REALTY SERVICES, LLC, DBA NAI LONG ISLAND, JOHN DOE, PEOPLE OF THE STATE OF NEW YORK, VILLAGE OF HEMPSTEAD,
* Judge Richard M. Berman, of the United States District Court for the Southern District of New York, sitting by designation. MARY ROE, EAST COAST PETROLEUM, INC., XYZ CORPORATION, Counter‐Defendants,
v. 15‐3852‐cv
U.S. BANK NATIONAL ASSOCIATION, as Trustee, as successor‐in‐interest to Bank of America, N.A, as successor trustee for the registered holders of LBUBS Commercial Mortgage Trust 2006C7, Commercial Mortgage PassThrough, AKA Bank of America, N.A., Defendant‐Counter‐Claimant‐Appellee.
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FOR RECEIVER‐APPELLANT: RICHARD JORDAN EISENBERG, Meyer, Suozzi, English & Klein, P.C., Garden City, New York.
FOR DEFENDANT‐COUNTER‐ CHRISTOPHER COSTELLO, Winston & CLAIMANT‐APPELLEE: Strawn LLP, New York, New York.
Appeal from the United States District Court for the Eastern District of
New York (Seybert, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the memorandum and order of the district court is
AFFIRMED.
Receiver‐appellant Dennis J. Sherry appeals from a November 2, 2015
memorandum and order of the United States District Court for the Eastern District of
New York denying his application for payment of commissions for his work as receiver
in a commercial property foreclosure. We assume the partiesʹ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
2 The district court appointed Sherry receiver on May 18, 2011 in this
foreclosure of an office building in Hempstead, New York. The court entered judgment
in favor of U.S. Bank on its foreclosure claim, the remaining claims were settled, the
property was sold, and, on October 20, 2015, the court confirmed and ratified the sale.
The district court terminated the receivership by order entered October 4,
2013, and Sherry filed an application for commissions on December 10, 2013, seeking
some $454,435 in compensation. The application was opposed, and lengthy
proceedings ensued over the course of almost the next two years, including a two‐day
evidentiary hearing, that culminated in the district courtʹs decision denying Sherryʹs
application in its entirety.
Section 8004(a) of the New York Civil Practice Law and Rules (ʺCPLRʺ)
entitles a receiver to ʺsuch commissions, not exceeding five per cent upon the sums
received and disbursed by him, as the court by which he is appointed allows.ʺ N.Y.
C.P.L.R. § 8004(a).1 Where there are no funds remaining in the receiverʹs hands at the
termination of the receivership, the court ʺmay fix the compensation of the receiver and
the fees of his attorney, in accordance with the respective services rendered, and may
direct the party who moved for the appointment of the receiver to pay such sums.ʺ
N.Y. C.P.L.R. § 8004(b). ʺIt is fundamental law that a receiver is required to render
1 Both parties applied New York law in their briefs before the district court and again on appeal. Such ʺimplied consent . . . is sufficient to establish choice of law.ʺ Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 138 (2d Cir. 2000) (quoting Tehran–Berkeley Civil & Environmental Engʹrs v. Tippetts–Abbett–McCarthy–Stratton, 888 F.2d 239, 242 (2d Cir. 1989)).
3 services in order to earn his commissions,ʺ and ʺ[i]t is the receiverʹs burden to justify his
account.ʺ Indep. Props. Co. v. Mast Prop. Invʹrs, Inc., 539 N.Y.S.2d 121, 122 (3d Depʹt
1989).
The award of commissions and fees pursuant to Section 8004 of the CPLR
and the amount of any such award are subject to the appointing courtʹs discretion. See
Kaufman Props. & Assocs., LLC v. 2 Court St., LLC, 858 N.Y.S.2d 419, 420 (3d Depʹt 2008)
(concluding that New York Supreme Court did not abuse its discretion by approving
receiverʹs accounting); Key Bank of New York v. Anton, 659 N.Y.S.2d 895, 896 (2d Depʹt
1997) (ʺA receiver is not entitled to the statutory maximum as of right; the court has
discretion to award a lower percentage.ʺ).
We review discretionary determinations of the district court for abuse of
discretion. See Zervos v. Verizon New York, Inc., 252 F.3d 163, 168‐69 (2d Cir. 2001)
(ʺWhen a district court is vested with discretion as to a certain matter, it is not required
by law to make a particular decision. Rather, the district court is empowered to make a
decision ‐‐ of its choosing ‐‐ that falls within a range of permissible decisions.ʺ). ʺAn
abuse of discretion may consist of an erroneous view of the law, a clearly erroneous
assessment of the facts, or a decision that cannot be located with the range of
permissible decisions.ʺ Grullon v. City of New Haven, 720 F.3d 133, 140 (2d Cir. 2013)
(quoting Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012)).
4 On appeal, Sherry argues that the district court erred by (1) failing to take
into account the complete record of his efforts as receiver and (2) concluding that his
specific actions with regard to the property justified the denial of a commission. We
disagree. As discussed below, the district court properly considered the record and did
not abuse its discretion when it declined to award Sherry a commission.
First, there is no evidence that the district court disregarded the record in
making its determination. In fact, the district court gave Sherry multiple opportunities
to supplement his application and considered the additional information that Sherry
provided in its ultimate decision to deny him a commission. The district court denied,
without prejudice, Sherryʹs first commission application because he failed to file
required monthly reports detailing his activities. Sherry renewed his motion for a
commission after filing the requisite monthly reports. Upon review of those reports, the
district court determined in a detailed memorandum and order issued November 21,
2014 that the records submitted with the application were ʺtoo sparse,ʺ and
subsequently held a two‐day hearing to determine whether certain services provided by
the managing agent CBRE Group Inc. (ʺCBREʺ), Sherryʹs former employer, were
duplicative of Sherryʹs and whether Sherry violated a provision of his appointment
order that prohibited him from ʺincurring obligations in excess of the monies in his
hands without further order of the court or written consent of the Lender.ʺ Supp. App.
at 116, 119. Following the hearing, the district court gave both parties the opportunity
5 to file post‐hearing briefs. Accordingly, it is clear from the record that the district court
afforded Sherry ample opportunity to justify his requested commissions, and the
district courtʹs decision to deny his motion was the result of careful consideration of the
record before it.
Second, we find no abuse of discretion in the district courtʹs well‐reasoned
conclusion that Sherry was not entitled to a commission, whether Sherryʹs entitlement is
analyzed under Section 8004(a) or 8004(b) of the CPLR. The district courtʹs decision was
based principally on three findings made by the district court following the hearing.
To begin, the district court found that Sherry approved, without district
court authorization, the payment of salaries to individual employees of CBRE totaling
$455,039.01. The district court found their services to be duplicative of services that
CBRE was to provide for a court‐authorized fixed fee, pursuant to the district courtʹs
order appointing CBRE managing agent.
Further, the district court found that Sherry incurred ʺobligations in excess
of the monies in his hands without further order of the Court or written consent of the
Lender,ʺ in violation of his appointment order, when he entered into a contract with a
construction company to perform tenant‐requested improvements on the property.
App. at 26; Special App. at 12‐13. These factual findings were not clearly erroneous and
were well supported by evidence presented at the hearing.
6 Finally, the district court found that Sherry failed to meet his burden to
justify a commission because he ʺstruggled to articulate his role as the Receiverʺ and his
purported responsibilities were also duplicative of work provided by CBRE. Special
App. at 13. This conclusion was based, in part, on the district courtʹs assessment of
Sherryʹs testimony regarding his role.
Based on our review of the record, we conclude that the district court
acted well within its discretion when it determined that Sherry was not entitled to any
compensation.
We have considered all of Sherryʹs additional arguments and find them to
be without merit. For the reasons stated herein, the memorandum and order of the
district court is AFFIRMED.
FOR THE COURT: Catherine OʹHagan Wolfe, Clerk