United States of America v. Calaman et al
ORDER re 44 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 Capital One ( Dkt. 35) is GRANTED. Capital One 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 Capital One in accordance with this Order. So Ordered by Judge Nicholas G. Garaufis on 2/2/2017. (fwd'd for jgm) (Lee, Tiffeny)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA
MEMORANDUM & ORDER
DONALD CALAMAN,TOBY CALAMAN,
on behalf of 121 MARLBOROUGH ROAD
TRUST and THE NEW HAVEN TRUST,
CAPITAL ONE BANK,NA,and NEW YORK
DEPARTMENT OF TAXATION AND
NICHOLAS G. GARAUFIS,United States District Judge.
On January 13,2015,the United States of America(the "Goyemment")brought this
action to enforce federal tax liens encumbering Defendant Donald Calaman's interest in certain
real property. fSee Compl.(Dkt. 1).) On March 15, 2016,the Government moved for a default
judgment against Defendant Capital One Bank,NA ("Capital One")(the "Motion"). (See Mot.
for Default J.(Dkt. 35).) The Motion requests that a defaultjudgment be entered in favor ofthe
Government and against Capital One declaring (i)that the Government's federal tax liens are
superior to Capital One'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 Capital One's interest in the Marlborough Road
Property shall be extinguished upon the sale ofthe property. (See Proposed Order(Dkt. 35-4).)
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
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 Capital One was not timely or, if service is found to
be proper or its timeliness is cured, the court grant the Motion. (R&R(Dkt. 44)at 2.)
No party has objected to Judge Kuo's R&R,and the time to do so has passed. See
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 orjudgment entered
based on this Report and Recommendation....").)^ Therefore,the court reviews the R&R for
clear error. S^ 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); cL 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 Capital One. S^ Porter v. Potter. 219 F. App'x 112(2d Cir. 2007)(summary order).
a. Service on Defendant Capital One
"[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
service on Capital One through [the Corporation Service Company
("CSC")] was valid under Federal Rule 4(h)(1)(B)[("Rule 4")] or
the applicable New York law in that CSC is an 'agent authorized by
^ On January 17,2017,the Government filed proofofservice ofthe R&R on Capital One. (Certificate of Serv.
appointment' to receive service ofprocess on Capital One.
R. Civ. P. 4(h)(1). However, such service was made long after the
May 13, 2015 cutoff date, and the docket sheet reflects that [the
Government] never requested an extension of time to serve Capital
(R&R at 9-10.) After Judge Kuo issued the R&R,the Government conceded that service of
process was not completed imtil after the Rule 4 deadline and moved for an extension oftime to
serve Capital One nunc pro tune. (See 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 Capital One has been properly served with the Summons and Complaint in this
b. Priority of the Government's Liens Against Donald Calaman Over Capital
One's Interest in the Marlborough Road Property and Extinguishment of
Capital One's Interest
Having concluded that the Government's untimely service was cured through a nunc 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." S^ 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 Capital One's interest in the
Marlborough Road Property and recommended that any interest of Capital One in the
Marlborough Road Property be deemed extinguished upon sale ofthe property.^ (See R&R
at 13-15.) Finding no clear error, the court adopts this portion ofthe R&R in fiill.
^ On December 1,2016,the court ordered the sale ofthe Marlborough Road Property. (Order(Dkt. 50).)
In light ofthe fact that the Gcvemment 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 Capital One(Dkt. 35)is GRANTED. Capital One 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 enterjudgment against Capital One in accordance with this Order.
s/Nicholas G. Garaufis
Dated: Brooklyn, New York
/NICHOLAS G. GARAUFIS
United States District Judge
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