W. Coast 2014-7, LLC v. Colliard
| Decision Date | 17 August 2020 |
| Docket Number | 1:19-cv-05334-MKB-ST |
| Parties | WEST COAST 2014-7, LLC, Plaintiff, v. GEORGE COLLIARD, JR., LASHAWNA WORTHAM A/K/A/ LASHAWNA L. COLLIARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
REPORT AND RECOMMENDATION
Plaintiff West Coast 2014-7, LLC. ("Plaintiff" or "West Coast") commenced an action on September 19, 2019, against defendants George Colliard, Jr. ("Defendant Colliard"), Lashawna Wortham also known as Lashawna L. Colliard ("Defendant Wortham") and the New York City Parking Violations Bureau ("PVB"), to foreclose on a mortgage encumbering a property located 115-44 Marsden Street, Jamaica, NY 11434 (the "Property") pursuant to New York Real Property Actions and Proceedings Law ("RPAPL") §§ 1301 et seq. See generally Complaint ("Compl."), ECF No. 1. Plaintiff West Coast requested a certificate of default against all Defendants on October 30, 2019 (ECF No. 11), and the Clerk of the Court entered defaults against all Defendants on November 6, 2019. Clerk's Entry of Default, ECF No. 12. On November 25, 2019, Plaintiff filed a Motion for Default Judgment. Mot. for Default J., ECF No. 13. The Honorable Judge Margo K. Brodie referred this motion to me for a Report and Recommendation on December 3, 2019. See Minute Entry, No. 19-cv-5334 (E.D.N.Y. Dec. 3, 2019). For the following reasons, I respectfully recommend that this Court GRANT the Plaintiff's Motion for Default Judgment against all Defendants and award damages.
Unless otherwise specified, the following background facts are based on the allegations in the Plaintiff's Complaint, Motion for Default Judgment, and accompanying exhibits. Plaintiff West Coast brought this action to foreclose on a mortgage encumbering the Property, located at 115-44 Marsden Street, Jamaica, NY 11434 l ("Property"). On August 25, 2006, Defendants Colliard and Wortham executed and delivered a mortgage agreement to Countrywide Home Loans, Inc. ("Mortgage") and executed a Balloon Note ("Note") under the Mortgage securing a loan in the amount of $96,000.00, plus interest. See generally Compl. Ex. B ("Mortgage") at 6, ECF No. 1-1; Ex. C ("Note") at 18, ECF No. 1-1. On October 10, 2018, Mortgage Electronic Registration Systems, Inc. ("MERS"), as the nominee of Countrywide Home Loans, Inc. (see Note at 7), assigned the Mortgage to West Coast Realty Services in a properly-fixed allonge which was recorded on October 19, 2018. Compl. Ex. C at 21; Ex. D at 24, see ACRIS, CRFN 2018101700877001. On February 25, 2019, West Coast Realty Services assigned the mortgage to Plaintiff West Coast 2014-7, LLC, which was recorded on February 27, 2019. Compl. Ex. C at 22; Ex. D at 26; see ACRIS, CRFN 2019022501226001.
The Note obligates Defendants George Colliard, Jr. and Lashawna Wortham (collectively, "Borrowers") to pay a principal amount of $96,000.00 plus interest at a yearly rate of 9.875%. See Compl. Ex. C, ECF No. 1-1. Borrowers were obligated to pay the principal and the interest by making monthly payments of $833.61 on the first day of the month beginning on October 2006. If the Borrowers failed to pay off the principal and the interest of the note, in full, by September 1, 2021, they were obligated to pay the remaining balance of the principal and the interest on that date. Id. The Note stated that the Borrowers would be in default if they failed to make a full payment of each monthly payment on time, and failed to remedy the nonpayment by a date specified in a written notice of nonpayment. Id. The date specified was to be at least ten (10) days after the lender mailed or delivered the notice of nonpayment to the Borrowers. Id. If the borrower defaulted, the Note stated that the lender may exercise the right to force immediate payment of the full amount of the principal that had not been paid plus the interest. Id. Even if the lender does not immediately demand payment upon the Borrowers' default, the Note allows the lender to exercise its right to demand payment a later time. Id. The Note also provided that a 2% late fee would be assessed if the Borrowers failed to make a payment within fifteen (15) days of the due date. Id.
Defendants Colliard and Wortham failed to make the monthly payment that was due on January 1, 2014. See Compl. ¶ 14. Thereafter, on May 13, 2019, Plaintiff sent Borrowers a Notice of Default. Compl. ¶ 15; see Compl., Ex. E ("Notice of Default"), ECF No. 1-1 at 30. The Notice stated that the total amount in arrears was $56,101.81, and Defendants Colliard and Wortham were required to correct the default by June 12, 2019. Id. at 31. The Notice further stated that a failure to correct the default could result in the acceleration of the loan. The Notice stated, "Upon acceleration, the total amount of the debt will be immediately due and payable without further demand and a lawsuit to foreclose the mortgage may be commenced." Id. Plaintiff also issued a 90-day notice provided by RPAPL 1304(1) to the Borrowers and has submitted proof of mailing a registration to this Court. Compl. Ex. E at 35-36, ECF No. 1-1.
On September 19, 2019, Plaintiff filed this Complaint. See Compl. Plaintiff is a corporation organized under the laws of California and is a citizen of the States of California and Colorado. Compl. ¶ 2. Defendants George Colliard, Jr. and Lashawna Wortham are citizens of New York and owners of the Property. Compl. ¶¶ 3-4, see ACRIS, CRFN 2006000562692. New York City Parking Violations Bureau ("PVB") is an administrative tribunal in the New York City Department of Finance and has multiple judgments against Defendants Colliard and Wortham or their Property which are subordinate to Plaintiff's mortgage. Compl. ¶ 5; Compl. Ex. F. Defendants were duly served with a copy of the Summons and Complaint. Summonses Returned Executed, ECF Nos. 8-10. Defendants did not file an answer to the Complaint. On November 6, 2019 the Clerk of Court entered default against Defendants (Entry of Default, ECF No. 12), and on November 25, 2019, Plaintiff moved for default judgment. Mot. Default J., ECF No. 13. In support of the motion, Plaintiff filed several documents, including a Declaration and Memorandum of Law in Support of Default Judgment of Foreclosure and Sale, proposed Judgment of Foreclosure and Sale Order, Affidavit of Service, and evidence. Id. Plaintiff requests that the Court appoint a Referee to sell the mortgage premises and that this Court ascertain and compute the amount due to Plaintiff for principal and interest. Declaration of Attorney Weinreb ("Decl. Weinreb"), ECF No. 13-1. No opposition has been filed to date.
A. Default Judgment Standard
The Federal Rules of Civil Procedure prescribe a two-step process for a plaintiff to obtain a default judgment. 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 a default has been entered against the defendant, and the defendant fails to appear to move or set aside the default under Rule 55(c), the court may, on a plaintiff's motion, enter a default judgment. Fed. R. Civ. P. 55(b)(2).
Once a defendant is found to be in default, he or she is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, a court retains the discretion to determine whether a final default judgment is appropriate. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993); see also Taylor v. 312 Grand St. LLC, 2016 WL 1122027, at *3 (E.D.N.Y. Mar. 22, 2016) () (internal quotation marks and citations omitted). In light of the Second Circuit's "oft-stated preference for resolving disputes on the merits," default judgments are "generally disfavored." Enron, 10 F.3d at 95-96.
Thus, despite a defendant's default, the plaintiff bears the burden of demonstrating that the unchallenged allegations and all reasonable inferences drawn from the evidence provided establish the defendant's liability on each asserted cause of action. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). "In other words, 'after default . . . it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit conclusions of law.'" A. & R. Lobosco, Inc. v. Superior Trading, Inc., 2016 WL 5723982, at *2 (E.D.N.Y. Sept. 14, 2016) (citation omitted), adopted by, 2016 WL 5719720 (E.D.N.Y. Oct. 3, 2016).
If liability is established as to a defaulting defendant, then the Court must conduct an analysis to establish damages to a "reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999).
"Plaintiff can establish standing either by producing a valid written assignment of the Note or by demonstrating the physical delivery of the Note prior to the commencement of the foreclosure action." W. Coast 2014-7, LLC v. Tolson, No. 15-cv-6306(ADS)(GRB), 2017 U.S. Dist. LEXIS 125266, at *13-14 (E.D.N.Y. Aug. 7, 2017) (internal citations and quotations omitted) ("[i]t is well-settled that standing exists where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff.). Here, since the Complaint and accompanying materials support that Plaintiff possessed the Note prior to the commencement of this action, standing is sufficiently established. See Mot. for Default J., Ex. C (Affidavit of...
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