Wilmington Savings Fund Society, FSB v. Asadsaif

• Decision Date: 09 June 2021
• Docket Number: 19-cv-5966 (DRH)(SIL)
• Parties: WILMINGTON SAVINGS FUND SOCITY, FSB, doing business as CHRISTIANA TRUST, not individually but as trustee for PRETIUM MORTGAGE ACQUISITION TRUST, Plaintiff, v. MIR A. ASADSAIF, MIR N. KHAN, FARZANA SAIF, and MATS GROUP, INC., Defendants.
• Court: U.S. District Court — Eastern District of New York

WILMINGTON SAVINGS FUND SOCITY, FSB, doing business as CHRISTIANA TRUST,not individually but as trustee for PRETIUM MORTGAGE ACQUISITION TRUST,Plaintiff, v. MIR A. ASADSAIF, MIR N. KHAN, FARZANA

SAIF, and MATS GROUP, INC., Defendants.

19-cv-5966 (DRH)(SIL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

June 9, 2021

REPORT AND RECOMMENDATION

STEVEN I. LOCKE, United States Magistrate Judge:

Presently before the Court in this diversity-breach of contract and real estate foreclosure action, on referral from the Honorable Denis R. Hurley for Report and Recommendation, is Plaintiff Wilmington Savings Fund Society, FSB's ("Plaintiff" or "WSFS") motion for default judgment pursuant to Rule 55, summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."), and a judgment of foreclosure and sale pursuant to Section 1351 of the New York Real Property Actions and Proceedings Law ("RPAPL"). See Plaintiff's Motion for Default Judgment, Summary Judgment, and Judgment of Foreclosure and Sale ("Plaintiff's Motion" or "Pl. Mot."), Docket Entry ("DE") [25].

By way of Complaint dated October 24, 2019, Plaintiff commenced this action against Defendants Mir A. Asadsaif ("Asadsaif"), Mir N. Khan ("Khan"), Farzana Saif ("Saif"), and Mats Group, Inc. ("Mats Group") (collectively, "Defendants") alleging that Asadsaif, Khan and Saif have failed to repay the note secured by the property at issue, 219 Ralph Avenue, Babylon, NY 11702 ("the Property"), and seeking to foreclose on the mortgage secured by the Property. See Complaint ("Compl."), DE [1]. For the reasons set forth herein, the Court respectfully recommends that Plaintiff's Motion be granted in part and denied in part.

I. BACKGROUND

A. Facts

All relevant facts are taken from the Complaint, pleadings, affidavits, exhibits and Plaintiff's Statement of Material Facts Pursuant to Local Rule 56.1 ("Pl. 56.1"), DE [27].

Plaintiff WSFS is a federally chartered savings bank with "home offices" in both Delaware and South Dakota, and is "empowered to hold, manage, and dispose of assets...and to prosecute legal actions on behalf of the Pretium Mortgage Acquisition Trust including this mortgage foreclosure action." See Compl. ¶¶ 2-3; Pl. 56.1 ¶ 1. Defendants Asadsaif, Khan and Saif are New York residents, and Mats Group¹ is a New York corporation with its principal place of business in Patchogue, New York. See Compl. ¶¶ 5-8.

On or about July 18, 2006, Asadsaif, Khan and Saif obtained a mortgage loan from Wells Fargo Bank, N.A. ("Wells Fargo") in the original amount of $325,600.00, memorialized in a note (the "Note") and secured by a mortgage (the "Mortgage") on the same date, on the Property, which were properly recorded with the Suffolk CountyClerk's Office on August 8, 2006, "whereby [Asadsaif, Khan and Saif] promised to pay the sum of $325,600.00 plus interest on the unpaid amount due." See id. at 19-53, ¶¶ 11-12. Wells Fargo assigned the Mortgage to Plaintiff on April 19, 2016, and the Assignment of Mortgage was properly recorded with the Suffolk County Clerk's Office on May 9, 2016. See id. at ¶¶ 12-13. At the time of purchase, Asadsaif, Khan and Saif jointly held title to the Property. See id. at ¶ 15. On or about November 27, 2006, Khan transferred his interest in the Property to Asadsaif and Saif, and Saif transferred her interest in the Property to Asadsaif on or about December 26, 2007. Id. Asadsaif is the current owner of the Property. Id.

On or about August 22, 2018, Asadsaif modified the Mortgage by a loan modification agreement (the "Loan Modification Agreement"), which was properly recorded with the Suffolk County Clerk on October 17, 2018. Id. at ¶ 14; Pl. 56.1 ¶¶ 6-7. According to Plaintiff, Asadsaif, Khan and Saif defaulted in repayment of the Note, Mortgage and Loan Modification Agreement because they "failed to make payment in accordance with the terms of the Note and Mortgage by not making the payment that was due on December 1, 2018 [or any] subsequent payments." Compl. ¶ 16. On or about April 29, 2019, Plaintiff mailed notices of default to Asadsaif, Khan and Saif at the Property, via first-class mail. See Pl. 56.1 ¶ 12.

Shortly after Asadsaif's, Khan's and Saif's default, WSFS "contracted with Selene Finance LP [("Selene Finance")] to act as [Plaintiff's] mortgage loan servicer and attorney-in-fact" during the foreclosure process. Id. at ¶ 9. Pursuant to RPAPL §1304, Selene Finance mailed pre-foreclosure notices to Asadsaif, Khan and Saif onor about April 29, 2019, and "listed at least five (5) housing counseling agencies" with each notice. Id. at ¶ 10. Within three business days of mailing the RPAPL §1304 notices, Selene Finance "electronically filed notice with the Superintendent of Financial Services on May 1, 2019 as required by RPAPL §1306(2) and confirmation number NYS4963363 was issued." See id. at ¶ 11.

B. Procedural History

WSFS commenced this action against Defendants on October 24, 2019. See Compl. The Complaint - seeking declaratory, compensatory, punitive and equitable relief - alleges that Asadsaif, Khan and Saif failed to repay the Note secured by the Property, and that Plaintiff is entitled to foreclose on the associated mortgage. See Compl.

On February 11, 2020, WSFS sought leave to file a motion for summary judgment pursuant to Fed. R. Civ. P. 56 against Asadsaif and Khan, a motion for default judgment pursuant to Fed. R. Civ. P. 55 against Saif and Mats Group, and a motion for a judgment of foreclosure and sale pursuant to RPAPL § 1351 against all Defendants, see DE [19], and were permitted to do so by Judge Hurley. See Electronic Order dated February 26, 2020. On March 1, 2021, Plaintiff filed the instant unopposed motion, which Judge Hurley referred to this Court for a report and recommendation as to whether Plaintiff's Motion should be granted, and if so, to determine the appropriate remedies. See Electronic Order dated March 2, 2021. For the reasons set forth herein, it is respectfully recommended that Plaintiffs' Motion begranted in part and denied in part, and that WSFS be awarded the relief described below.

II. LEGAL STANDARDS

A. Summary Judgment

Pursuant to Fed. R. Civ. P. 56, a "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the burden of establishing that there are no issues of material fact such that summary judgment is appropriate. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2004). In deciding a motion for summary judgment, the Court "is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Amnesty Am. v. Town of West Hartford, 361 F.3d 113, 122 (2d Cir. 2004); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986) (holding that a motion for summary judgment should be denied if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party").

Once the movant has met its initial burden, the party opposing summary judgment "must do more than simply show that there is some metaphysical doubt as to the material facts.... [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106S. Ct. 1348, 1356 (1986) (internal quotation omitted); see also Maxton v. Underwriter Labs., Inc., 4 F. Supp. 3d 534, 542 (E.D.N.Y. 2014) ("An issue of fact is considered 'genuine' when a reasonable finder of fact could render a verdict in favor of the non-moving party").

In determining whether summary judgment is warranted, "the court's responsibility is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986); see also Artis v. Valls, No. 9:10-cv-427, 2012 WL 4380921, at *6, n. 10 (N.D.N.Y. Sept. 25, 2012) ("It is well established that issues of credibility are almost never to be resolved by a court on a motion for summary judgment").

B. Default Judgment

Motions for default judgment are governed by Fed. R. Civ. P. 55, which provides for a two-step process. See Fed. R. Civ. P. 55; Priestley v. Headminder, Inc., 647 F.3d 497, 504-05 (2d Cir. 2011). Initially, the moving party must obtain a certificate of default from the Clerk of the Court. See Fed. R. Civ. P. 55(a). Once the certificate of default is issued, the moving party may apply for entry of a default judgment. See id. at 55(b). Where a default occurs, the well-pleaded factual allegations set forth in a complaint relating to liability are deemed true. See Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004); see also Fed. R. Civ. P. 8(b)(6) ("An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied.").However, the entry of a default judgment is "entrusted to the sound judicial discretion of the court," and a party is not entitled to a default judgment as a matter of right. Allstate Ins. Co. v. Howell, No. 09-cv-4660, 2013 WL 5447152, at *1 (E.D.N.Y. Sept. 30, 2013) (citation omitted).

A plaintiff seeking a default judgment must demonstrate that its "uncontroverted allegations, without more, establish the defendant's liability on each asserted cause of action." Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 83 (E.D.N.Y. 2012). In determining whether to grant a motion for default judgment, the court has the "responsibility to ensure that the factual allegations, accepted as true, provide a proper basis for liability and...