A New York appellate court has ruled in favor of R4 RE, LLC, allowing the company to proceed with a mortgage foreclosure against Franklin Washington, Inc. and its sole shareholder, Bertha Applewhite. The ruling, issued on August 5, 2026, confirms the lower court's decision to sell the property located in Brooklyn, which is significant for both the plaintiff and the defendants involved.
This case, identified as R4 RE, LLC v. Franklin Wash., Inc. (Docket No. 2024-09932), highlights the complexities of mortgage foreclosures and the rights of property owners. The ruling affects the defendants, who now face the loss of their property, and underscores the importance of adhering to mortgage agreements.
The parties involved in this case are R4 RE, LLC, a real estate company that initiated the foreclosure action, and Franklin Washington, Inc., the borrower, along with Applewhite, who is the sole shareholder of the company. The dispute arose when R4 RE, LLC claimed that Franklin Washington, Inc. failed to meet its mortgage obligations, prompting the foreclosure action.
The case began in June 2023 when R4 RE, LLC filed a lawsuit to foreclose on a mortgage tied to a property in Brooklyn. The defendants, Franklin Washington, Inc. and Applewhite, contested the foreclosure, leading to a series of legal proceedings. In January 2024, the Supreme Court granted R4 RE, LLC's motion for summary judgment, which allowed the plaintiff to move forward with the foreclosure process.
On July 17, 2024, the Supreme Court issued an order and judgment of foreclosure and sale, confirming a referee's report that detailed the amount owed on the mortgage and recommended the sale of the property. The defendants opposed this ruling, arguing that the referee's findings were not justified.
The Appellate Division, Second Department, reviewed the case and ultimately affirmed the lower court's decision. The court stated, "The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility." The court found that the referee's calculations regarding the mortgage amount were adequately supported by the evidence presented.
The judges involved in this ruling included Justice Colleen D. Duffy, along with Justices Paul Wooten, Janice A. Taylor, and Phillip Hom. They collectively agreed that the Supreme Court acted appropriately in confirming the referee's report and allowing the foreclosure to proceed.
This ruling has significant implications for both R4 RE, LLC and the defendants. For the plaintiff, it means the ability to recover the debt owed through the sale of the property. For Franklin Washington, Inc. and Applewhite, it represents a loss of their property and a potential setback in their financial situation.
The court's decision also reinforces the legal principle that defendants in foreclosure cases have the opportunity to present evidence and challenge the findings made by referees. The ruling indicates that as long as the referee's report is well-supported, the court may accept it without requiring a hearing.
Looking ahead, the ruling sets a precedent for similar foreclosure cases in New York. It emphasizes the importance of thorough documentation and evidence in mortgage disputes. The decision may influence how future cases are handled, particularly regarding the roles of referees and the evidence required to support foreclosure actions.
Details were not available in the court filing regarding whether the defendants plan to appeal this decision. However, given the nature of foreclosure cases, it is possible that they may seek further legal options to contest the ruling or explore alternative resolutions.