Windward Bora LLC v. Brito
| Decision Date | 24 November 2020 |
| Docket Number | 19-CV-04073 (MKB) (ST) |
| Parties | WINDWARD BORA LLC, Plaintiff, v. EDWAR BRITO, ANDERSON QUEZADA, CREDIT ACCEPTANCE CORPORATION Defendants. |
| Court | U.S. District Court — Eastern District of New York |
REPORT AND RECOMMENDATION
Plaintiff Windward Bora, LLC. ("Plaintiff" or "Windward") commenced an action on July 15, 2019, against defendants Edwar Brito ("Defendant Brito"), Anderson Quezada ("Defendant Quezada"), the Clerk of the Suffolk County Traffic and Parking Violations Agency ("Defendant TPVA"), and Credit Acceptance Corporation ("Defendant Credit Acceptance") to foreclose on a mortgage encumbering a property located 47 Community Road, Bay Shore, NY 11706 (the "Property") pursuant to New York Real Property Actions and Proceedings Law ("RPAPL") §§ 1301 et seq. See generally Compl., ECF No. 1. Plaintiff Windward requested a certificate of default against all Defendants on September 25, 2019. Pl's Req. for Default, ECF No. 14. Defendant TPVA opposed Plaintiff's request. Def. TPVA's Decl. in Opp'n, ECF No. 15. On October 3, 2019, the Clerk of the Court granted Plaintiff's request and entered default against Defendant Brito, Defendant Quezada, and Defendant Credit Acceptance (Clerk's Entry of Default, ECF No. 16), and denied Plaintiff's request as to Defendant TPVA. See Clerk's Denial of Req. for Default, Minute Entry, No. 19-cv-5334 (E.D.N.Y. Oct. 3, 2019). Plaintiff filed a Motion for Default Judgment against all Defendants on October 14, 2019, (Mot. for Default J., ECF No. 17), and a Notice of Voluntary Dismissal as to Defendant TPVA. Notice of Voluntary Dismissal, ECF No. 19. The Honorable Judge Margo K. Brodie referred this motion to me for a Report and Recommendation on October 15, 2019 (See Order, No. 19-cv-5334 (E.D.N.Y. Oct. 15, 2019)), and thereafter granted Plaintiff's request to release Defendant TPVA from the action. See Order, No. 19-cv-5334 (E.D.N.Y. Oct. 17, 2019). On October 16, 2020, I ordered a hearing on this motion, which took place on October 30, 2020. For the reasons set forth below, the Court respectfully recommends that Plaintiff's motion be GRANTED and that Windward be awarded damages in the amount of $183,276.21 and additional relief as described herein.
Unless otherwise specified, the following background facts are based on the allegations in the Plaintiff's Complaint, the Plaintiff's Motion for Default Judgment and accompanying exhibits, the October 30, 2020 hearing, and the Plaintiff's Supplemental Affidavit of Statement of Damages (ECF No. 23). Plaintiff brought this action to foreclose on a mortgage encumbering the property, located at 47 Community Road, Bay Shore, NY 11706 (the "Property"). On December 1, 2006, Karen A. Aiello executed and delivered a note (the "Note") to Mortgage Lenders Network USA, Inc.in the amount of $110,000.00. Compl. ¶ 11, ECF No. 1, Ex. C, ECF No. 1-1. That same day, Aiello executed a mortgage agreement (the "Mortgage") with Mortgage Electronic Registration Systems, Inc. ("MERS"), as the nominee of Mortgage Lenders Network USA, Inc., to secure the sum of $110,000.00 and interest, which was recorded in the Suffolk County Clerk's Office on December 17, 2006. See Compl. ¶ 10-11, ECF No. 1; see Compl. Ex. B, ECF No. 1-1; see Decl. of Regularity ¶ 2, ECF No. 17-1; see also Liber M00021437. The Note and Mortgage were subsequently transferred by the affixation of proper endorsements and allonge to the Note. See Compl. ¶ 11, ECF No. 1; see Compl. Ex. C, ECF No. 1-1.
The Note obligates Aiello to pay a principal amount of $110,000.00 plus interest at a yearly rate of 9.00%. See Compl. Ex. C ("Note"), ECF No. 1-1. Aiello was obligated to pay the principal and the interest by making monthly payments of $885.09 on the first day of the month beginning on January 2007. Id. If Aiello failed to pay off the principal and the interest of the note, in full, by December 1, 2036, she was obligated to pay the remaining balance of the principal and the interest on that date. Id.
The Note stated that Aiello would be in default if she failed to make a full 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 Aiello. Id. If Aiello 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 did not immediately demand payment upon Aiello's default, the Note allows the lender to exercise its right to demand payment at a later time. Id. The Note also provided that a 2% late fee would be assessed if Aiello failed to make a payment within fifteen (15) calendar days of the due date. Id.
On September 6, 2010, Aiello transferred ownership of the Property to Ludwig Duenas by way of a quitclaim deed. See Compl. Ex E, ECF No. 1-1. The transfer was recorded with the Suffolk County Clerk's Office on January 9, 2013. Id. After transferring ownership, Aiello failed to make the monthly payment due by June 11, 2013. See Compl. ¶ 14.
On May 4, 2017, Credit Acceptance Corp obtained a judgement in the amount of $10,010.76 against the Property. Compl. ¶ 6, ECF No. 1. About two months later, on July 13, 2017, Duenas transferred ownership of the Property to Defendants Brito and Quezada. SeeCompl. Ex. E, ECF No. 1-1; see also Compl. ¶ 3-4, ECF No. 1. The next day, this transfer was recorded with the Suffolk County Clerk's Office. See id.; see also Liber D00012920.
On or before June 5, 2018, Plaintiff came into possession of the original Note. See Compl. Ex. C, ECF No. 1-1. On December 17, 2018, Plaintiff sent Aiello a Notice of Default (the "Notice"). Compl. ¶ 15; see Compl. Ex. D, ECF No. 1-1. The Notice stated that the total amount in arrears was $59,064.34, and Aiello was required to correct the default by January 16, 2019. See Compl. Ex. D, ECF No. 1-1. The Notice further stated that a failure to correct the default could result in the acceleration of the loan. Compl. ¶ 15; see Compl. Ex. D, ECF No. 1-1. The Notice stated that, "[u]pon 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 Aiello and has submitted proof of mailing to this Court. Compl. ¶ 16; see Compl. Ex. D, ECF No. 1-1.
On July 15, 2019, Plaintiff filed this Complaint. See Compl., ECF No. 1. Plaintiff is a single member limited liability corporation organized under the laws of Delaware and, by virtue of its sole member, Yonel Devico, is a citizen of the Kingdom of Morocco. Compl. ¶ 2. Defendants Brito and Quezada are citizens of New York and owners of the Property by way of the deed recorded on July 14, 2017. Compl. ¶¶ 3-4, see Liber D00012920. Defendant Credit Acceptance is a corporation organized under the laws of Michigan and maintaining citizenship there. Compl. ¶ 6. Credit Acceptance is a judgement creditor as a result of a judgement it obtained against the property, which is subordinate to the Plaintiff's mortgage. Id. Defendant TVPA is an administrative tribunal of the County of Suffolk, and has multiple judgments against Defendants Brito, Quezada, or the Property which are subordinate to Plaintiff's mortgage. Compl. ¶ 5; Compl. Ex. F. Defendants were duly served with a copy of the Summons andComplaint. Summonses Returned Executed, ECF Nos. 8-10, 12. Defendant TPVA appeared in this action by way of a Notice of Appearance and Demand for Surplus Funds. Notice of Appearance by Dana Kobos, ECF No. 11. The other Defendants did not file an answer to the Complaint.
On September 25, 2019, the Plaintiff requested a certificate of default against all Defendants, including Defendant TPVA. Pl's Req. for Default, ECF No. 14. Defendant TPVA opposed the Plaintiff's request. Def. TPVA's Decl. in Opp'n, ECF No. 15. On October 3, 2019, the Clerk of the Court granted the Plaintiff's request and entered default against Defendants Brito, Quezada, and Credit Acceptance (Clerk's Entry of Default, ECF No. 16), and denied Plaintiff's request as to Defendant TPVA. See Clerk's Denial of Req. for Default, Minute Entry, No. 19-cv-5334 (E.D.N.Y. Oct. 3, 2019). The Plaintiff filed this Motion for Default Judgment against all Defendants on October 14, 2019, (Mot. for Default J., ECF No. 17), and a Notice of Voluntary Dismissal as to Defendant TPVA. Notice of Voluntary Dismissal, ECF No. 19. The Honorable Judge Margo K. Brodie granted Plaintiff's request to release Defendant TPVA from the action. See Order, No. 19-cv-5334 (E.D.N.Y. Oct. 17, 2019).
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. See generally Pl's. Mot for Default J., ECF 17. As a result of the Motion Hearing held before this Court on October 30, 2020 (Minute Entry, 19-cv-5334 (E.D.N.Y. November 2, 2020), the Plaintiff also filed a Supplemental Affidavit of Statement of Damages. Pl.'s Suppl Aff. of Statement of Damages, ECF No. 23. The Plaintiff requests that the Court appoint a Referee to sell the Property and that the Court ascertain and compute the amount due to Plaintiff for principal and interest.Declaration of Attorney Weinreb ("Decl. Weinreb"), ECF No. 17-1. 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...
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