United States of America v. Calaman et al

Filing 53

ORDER re 43 REPORT AND RECOMMENDATIONS. In light of the fact that the Government has cured the service issues identified in the R&R, the R&R is ADOPTED in part and the Government's Motion for Default Judgment against NYDTF (Dk t. 34) is GRANTED. NYDTF is hereby adjudged to have no right, title, claim, or lien interest in the Marlborough Road Property. The Clerk of Court is respectfully DIRECTED to enter judgment against NYDTF in accordance with this Order. So Ordered by Judge Nicholas G. Garaufis on 2/2/2017. (fwd'd for jgm) (Lee, Tiffeny)

Qlf

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-X

UNITED STATES OF AMERICA
MEMORANDUM & ORDER

-against15-CV-180(NGG)
(PK)
DONALD CALAMAN,TOBY CALAMAN,
CITIBANK,N.A., RUTH CALAMAN,trustee
on behalf of 121 MARLBOROUGH ROAD

TRUST and THE NEW HAVEN TRUST,
CAPITAL ONE BANK,NA,and NEW YORK
DEPARTMENT OF TAXATION AND

FINANCE,

Defendants.
X

NICHOLAS G. GARAUFIS,United States District Judge.

On January 13,2015,the United States of America(the "Government") brought this
action to enforce federal tax liens encumbering Defendant Donald Calaman's interest in certain

real property. (See Compl.(Dkt. 1).) On March 15,2016,the Government moved for a default
judgment against Defendant New York Department of Taxation and Finance("NYDTF")(the
"Motion"). (See Mot. for Default J.(Dkt. 34).) The Motion requests that a defaultjudgment be
entered in favor ofthe Government and against NYDTF declaring (i)that the Government's

federal tax liens are superior to NYDTF's interest in the real property located at 121
Marlborough Road,Brooklyn, New York(the "Marlborough Road Property") and in the
proceeds of any sale ofthe Marlborough Road Property, and (ii) that NYDTF's interest in the
Marlborough Road Property shall be extinguished upon the sale ofthe property. (See Proposed
Order(Dkt. 34-4).)

By Order dated April 5,2016,the court referred the Motion to Magistrate Judge Peggy
Kuo for a Report and Recommendation("R&R")pursuant to 28 U.S.C. § 636(b)(1)(B) and
1

Federal Rule of Civil Procedure 72(b)(1). (Apr. 5, 2016, Order Referring Mots.) On November
16,2016, Judge Kuo issued an R&R recommending that the court deny the Government's

Motion without prejudice because service on NYDTF was not timely or, if service is found to be
proper or its timeliness is cured, the court grant the Motion. (R&R(Dkt. 43)at 2.)
No party has objected to Judge Kuo's R&R,and the time to do so has passed.
Fed. R. Civ. P. 72(b)(2). (See also R&R at 16("Written objections to this Report and
Recommendation must be filed within 14 days of service ofthis report.... Failure to file

objections within the specific time waives the right to appeal any order or judgment entered

based on this Report and Recommendation....").)^ Therefore,the court reviews the R&R for
clear error.

Gesualdi v. Mack Excavation & Trailer Serv.. Inc.. No.09-CV-2502(KAM)

(JO), 2010 WL 985294, at *1 (E.D.N.Y. Mar. 15, 2010); La Torres v. Walker.
216 F. Supp. 2d 157,159(S.D.N.Y. 2000);^28 U.S.C. § 636(b)(1). Finding no clear error, the

court ADOPTS the R&R in part and,in light ofthe fact that the Government has cured the
service issues identified in the R&R,GRANTS the Government's Motion for Default Judgment

against NYDTF. S^ Porter v. Potter. 219 F. App'x 112(2d Cir. 2007)(summary order).
1.

DISCUSSION
a. Service on Defendant NYDTF

"[DJefaultjudgment can only be contemplated ifthe court has jurisdiction over the
defendant and the defendant has been served with process properly." First Tennessee Bank Nat.
Ass'nv.Thause. No. 1 l-CV-2219(NGG)
(ALC),2011 WL 4543869, at *2(E.D.N.Y. Sept. 28,
2011). Judge Kuo correctly found that

^ On January 10,2017,the Government filed proofofservice ofthe R&R on NYDTF. (Certificate of Serv.
(Dkt. 51).)

service on NYDTF [on January 22, 2016] was valid under CPLR §

307(2)^^^ in that the Summons was delivered to a person designated
by the NYDTF to receive service of process.
CPLR § 307(2).
However,such service was made long after the May 13, 2015 cutoff
date for service, and the docket sheet reflects that[the Government]
never requested an extension oftime to serve NYDTF.
(R&R at 10.) After Judge Kuo issued the R&R,the Government conceded that service of
process was not completed until after the deadline and moved for an extension oftime to serve
NYDTF nunc pro tune. (S^ Gov't's Mot. for Extension ofTime(Dkt. 45).) Upon a showing of
good cause, this court granted the nunc pro tune extension. (Order(Dkt. 47).) Accordingly,the
court finds that the service of process issues identified in the R&R have been cured, and NYDTF
has been properly served with the Summons and Complaint in this action.
b. Priority of the Government's Liens Against Donald Calaman Over NYDTF's
Interest in the Marlborough Road Property and Extinguishment of NYDTF's
Interest

Having concluded that the Government's untimely service was cured through a nimc pro
tune extension,the court next examines the substance ofthe Motion and whether the factual

allegations in the Complaint "provide a proper basis for liability and relief."

Rolls-Rovce

PLC V. Rolls-Rovce USA.Inc..688 F. Supp. 2d 150,153(E.D.N.Y. 2010)(citing Au Bon Pain
Corp. V. Artect. Inc.. 653 F.2d 61,65(2d Cir. 1981)). Judge Kuo found that the Government's

federal tax liens against Donald Calaman are superior to NYDTF's interest in the Marlborough
Road Property and recommended that any interest ofNYDTF in the Marlborough Road Property

^ Section 307(2)ofthe New York Civil Practice Law and Rules applies here pursuant to Rule 4(j)(2)ofthe Federal
Rules of Civil Procedure.
Fed. R. Civ. P. 4(j)(2)("A ...state-created governmental organization that is subject
to suit must be served by:(A)delivering a copy ofthe summons and ofthe complaint to its chiefexecutive officer;
or CB)serving a copv ofeach in the manner prescribed bv that state's law for serving a summons or like process on
such a defendant."(emphasis added)).

be deemed extinguished upon sale ofthe property.^ (See R&R at 14-16.) Finding no clear error,
the court adopts this portion ofthe R&R in full.
II.

CONCLUSION

In light ofthe fact that the Government has cured the service issues identified in the
R&R,the R&R is ADOPTED in part and the Government's Motion for Default Judgment

against NYDTF(Dkt. 34)is GRANTED. NYDTF is hereby adjudged to have no right, title,

claim, or lien interest in the Marlborough Road Property. The Clerk of Court is respectfully
DIRECTED to enter judgment against NYDTF in accordance with this Order.
SO ORDERED.

s/Nicholas G. Garaufis
Dated: Brooklyn, New York
February
2017

NICHOLAS G. GARAUFIS
United States District Judge

^ On December 1, 2016,the court ordered the sale ofthe Marlborough Road Property. (Order(Dkt. 50).)
4