Windward Bora, LLC v. Montour

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WINDWARD BORA LLC, Plaintiff, v. JUNIA MONTOUR; NORTH AMERICAN PARTNERS IN ANESTHESIA; CAPITAL ONE BANK USA, NA; “JOHN DOE” AND “JANE DOE”, last two said names being fictitious, said parties intended being tenants or occupants, if any, having or claiming an interest in, or lien upon, the premises described in the complaint, Defendants.

No. 2:23-cv-03654-EK-LGD

United States District Court, E.D. New York

August 30, 2024

REPORT AND RECOMMENDATION

LEE G DUNST UNITED STATES MAGISTRATE JUDGE

Presently before the Court is Plaintiff Windward Bora LLC's (“Windward Bora” or “Plaintiff”) motion for default judgement and other relief (the “Motion”) pursuant to Federal Rule of Civil Procedure 55(b)(2), including a judgement of foreclosure and sale pursuant to New York Real Property Actions and Proceedings Law (“RPAPL”) § 1301, et seq. See Electronic Case File Number (“ECF No.”) 20. This is Plaintiff's third attempt at this motion. On October 2, 2023, the undersigned issued a Report and Recommendation granting Plaintiff's first motion for default judgment (see ECF No. 11) in part as to liability and denying default judgment in part as to foreclosure and sale and other damages. See Oct. 2 2023 Order. On November 17, 2023, while that Report and Recommendation was pending before Judge Komitee, Plaintiff filed its second motion for default judgment, which was referred to the undersigned on November 22, 2023. See ECF No. 17; Nov. 22, 2023 Order. On November 28 2023, the undersigned issued a Report and Recommendation denying Plaintiff's second motion for default judgment as “premature.” See Nov. 28, 2023 Order. Subsequently, on March 15, 2024, District Judge Eric R. Komitee adopted both Reports and Recommendations in their entirety. See Nov. 28, 2023 Order; ECF No. 19.

On March 29, 2024, Plaintiff filed its third motion for default judgment, which is presently before the Court. ECF No. 20. On April 3, 2024, Judge Komitee referred that motion to the undersigned for an Report and Recommendation. Apr. 3, 2024 Order. For the following reasons, the undersigned respectfully recommends that the Motion be granted.

I. FACTUAL BACKGROUND^[1]

On or about February 16, 2007, Defendant Junia Montour (“Montour”) obtained a loan for $96,000.00 from CitiGroup/Consumer Finance, Inc. ECF No. 1 ¶ 10. The loan was evidenced by a note (ECF No. 1-4 at 1) which was secured by a mortgage (ECF No. 1-5 at 2) on the property at 498 Duryea Avenue in Uniondale, New York (“the Subject Property”) on March 29, 2007. ECF No. 1 ¶ 11; ECF No. 1-5 at 1. On February 19, 2021, the note was transferred and assigned to Windward Bora. ECF No. 1-6 at 9. On January 31, 2022, the loan was modified by agreement with a new principal balance of $167,483.66, and an annual fixed interest rate of 10.00%. ECF No. 1-7 at 1-3.

Montour defaulted on the terms of the note and mortgage by failing to make timely payments. ECF No. 1 ¶ 16. On February 7, 2023, Windward Bora provided Montour with a 30-day default notice advising Montour of possible acceleration of the loan and continuing default, in compliance with the provisions of the note and mortgage. ECF No. 1 ¶ 17. Plaintiff submitted documentation in support of its request for $222,858.02 in unpaid principal, interest, and fees. ECF No. 20 ¶ 10. This amount would be obtained through the selling of the property as one parcel at a public auction held on the courthouse steps outside of the United States District Courthouse located at 100 Federal Plaza, Central Islip, New York. Id. ¶¶ 10-12.

Additionally, on February 7, 2023, Plaintiff mailed ninety-day notices to Borrower at her last known addresses pursuant to RPAPL § 1304(1) (the “90-Day Notices”). ECF No. 21 at 1-2. Pursuant to RPAPL § 1306, Plaintiff submitted requisited information to the Superintendent of the New York State Department of Financial Services. Id.

II. PROCEDURAL BACKGROUND

On May 16, 2023, Plaintiff filed the Complaint against Defendants Montour, Capital One Bank USA, NA (“Capital One”), North American Partners in Anesthesia (“NAPA”), John Doe and Jane Doe. See ECF No. 1. Capital One and NAPA are subordinate creditors as to the Subject Property, who may have “potential unpaid New York State Real Estate Taxes on the underlying loan.” ECF No. 1 ¶¶ 4-5, 24. Defendants John and Jane Doe are potential unidentified additional parties, being the “tenants, occupants, persons, or corporation, if any, having or claiming an interest in or lien upon the [Subject] Property,” added pursuant to RPAPL §§ 1311-1313. ECF No. 1 ¶ 6.

After Defendants failed to appear to defend against Plaintiff's motion, the Clerk of the Court entered default against Defendants on July 19, 2023. On October 2, 2023, the undersigned issued a Report and Recommendation that Plaintiff's first motion for default judgment be granted in part as to liability and denied without prejudice as to foreclosure and sale and other damages with leave to renew in a new motion. Oct. 2, 2023 Order. The undersigned also recommended that Plaintiff's motion for a default judgment against Defendants Capital One and NAPA be granted and their interests in the Subject Property extinguished. Id. On November 17, 2023, Plaintiff submitted a second motion for default judgment, providing further evidence that was requested by the undersigned on November 17, 2023. ECF No. 17 ¶ 9. The undersigned recommended that denied this motion be denied as premature. ECF No. 18 ¶ 17 (“Pursuant to the 11/22/2023 referral order from Judge Komittee, the undersigned recommends that the Second Motion be denied without prejudice as premature.”). On March 15, 2024, Judge Komitee adopted both Reports and Recommendations in their entirety, finding that Plaintiff had established enough evidence for liability, but needed to provide backup documentation to support the requested damages as to the foreclosure and other related costs. See Mar. 15, 2024 Order. Subsequently, on March 29, 2024, Plaintiff the instant Motion. ECF No. 20. On April 3, 2024, Judge Komitee referred that motion to the undersigned for an Report and Recommendation. Apr. 3, 2024 Order.

On May 20, 2024, the undersigned directed Plaintiff to submit copies of notice of service to defendants under RPAPL §1304 (which required Windward Bora to mail a 90 Day Notice to Borrower), as well as proof of filing statement pursuant to RPAPL §1306 (which requires each lender, assignee, or mortgage loan servicer to file notice with the Superintendent of New York State Department of Financial Services within three business days). See RPAPL § 1304; RPAPL § 1306. On May 29, 2024, Windward Bora submitted such proof to the Court. ECF No. 21.

Additionally, on August 6, 2024, the undersigned ordered Plaintiff to supplement its motion with “copies of contemporaneous time records regarding its request for attorney's fees.” Aug. 6, 2024 Order. On August 12, 2024, Plaintiff filed copies of the requested time records. ECF No. 22.

III. LEGAL STANDARDS

A. Default Judgment

Rule 55 of the Federal Rules of Civil Procedures sets a two-step process for obtaining a default judgment. See Shariff v. Beach 90th St. Realty Corp., No. 11-CV-2551, 2013 WL 6835157, at *3 (E.D.N.Y. Dec. 20, 2013) (adopting report and recommendation). First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Second, after default has been entered, and the defendant fails to appear or move to set aside the default under Rule 55(c), the Court may, on plaintiff's motion, enter a default judgment against that defendant. Id. R. 55(b)(2). If a default is granted, the factual allegations of the well-pleaded are deemed true. See Windward Bora LLC v. Thomas, No. 20-CV-6046, 2022 WL 5114489, at *3 (E.D.N.Y. Sept. 30, 2022). The Court, however, has the responsibility “to ensure that the factual allegations, accepted as true, provide a proper basis for liability and relief.” Id. (internal citation omitted). “Accordingly, prior to entering a default judgment, the court must determine whether the plaintiff's allegations establish the defendant's liability ‘as a matter of law.'” Id. (quoting Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC, 779 F.3d 182, 187 (2d Cir. 2015)).

“While a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.” Id. at 189 (internal quotation marks and alterations omitted). Instead, the plaintiff must establish to a “reasonable certainty” entitlement to the relief requested. See Freedom Mortg. Corp. v. Habeeb, No. 19-cv-05881 (JMA) (JMW), 2024 U.S. Dist. LEXIS 116806, at *5-6 (E.D.N.Y. July 2, 2024) (quoting Cement & Concrete Workers Dist. Council Welfare Fund, Pension Fund, Annuity Fund, Educ. & Training Fund & Other Funds v. Metro Found. Contractors Inc., 699 F.3d 230, 234 (2d Cir. 2012).

B. Foreclosure

A plaintiff seeking foreclosure must show (1) the existence of the mortgage and mortgage note, (2) ownership of said mortgage, and (3) the defendants' default on the loan secured by the mortgage. See Wilmington PT Corp. v Tiwana, 19-CV-2035, 2023 WL 4673777, at *7 (E.D.N.Y. June 12, 2023) 2023 WL 4673777, at *7 (E.D.N.Y. June 12, 2023) (citing Gustavia Home, LLC v. Bent, 321 F.Supp.3d 409, 414 (E.D.N.Y. 2018)). For a plaintiff to establish a prima facie entitlement to judgment they must submit the mortgage, the unpaid note, and evidence of the default. Id. Upon that showing, the burden then shifts to defendants to rebut the plaintiff's evidence and can only be overcome by an affirmative showing by the...