CIT Bank, N.A. v. Guy et al
MEMORANDUM DECISION AND ORDER dated 5/16/17 granting plaintiff's 17 Motion for Default Judgment. A Judgment of foreclosure and sale, with damages in the amount of $622,819.42, will be entered separately. ( Ordered by Judge Brian M. Cogan on 5/16/2017 ) (Guzzi, Roseann)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CIT BANK, N.A.,
: MEMORANDUM DECISION AND
: 17-CV-238 (BMC)
- against :
PAULA GUY; MORTGAGE ELECTRONIC :
REGISTRATION SYSTEMS, INC.; NEW
YORK CITY PARKING VIOLATIONS
BUREAU; and NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, :
COGAN, District Judge.
Plaintiff CIT Bank, N.A., as successor by merger to OneWest Bank, N.A. (“OneWest”),
brings this action based on diversity jurisdiction to foreclose on a mortgage. None of the interest
holders of record have appeared, defaults have been entered against them, and plaintiff has
moved for a judgment of foreclosure and sale. The motion is granted.
A default constitutes an admission of all well-pleaded factual allegations in the
complaint, except those relating to damages. See Greyhound Exhibitgroup, Inc. v. E.L.U.L.
Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, before a court enters a default
judgment, it must determine whether the allegations in the complaint establish liability as a
matter of law. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). Additionally, the
plaintiff still bears the burden of proving a “reasonable basis” for the damages requested. E. Sav.
Bank, FSB v. Robinson, 13-CV-7308, 2016 WL 3365091, at *4 (E.D.N.Y. May 9, 2016). An
evidentiary hearing is not required so long as the plaintiff’s affidavits and other documentary
evidence provide a basis for the damages awarded. Transatlantic Marine Claims Agency v. Ace
Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997).
In a mortgage foreclosure action under New York law, “the lender must prove . . . the
existence of an obligation secured by a mortgage, and a default on that obligation.” R.B.
Ventures, Ltd. v. Shane, 112 F.3d 54, 59 n.2 (2d Cir. 1997) (internal quotation marks omitted);
see also E. Sav. Bank, FSB v. Ferro, No. 13-CV-5882, 2015 WL 778345, at *6 (E.D.N.Y. Feb.
24, 2015). “[O]nce a plaintiff mortgagee in a foreclosure action has established a prima facie
case by presenting a note, a mortgage, and proof of default, it has a presumptive right to
foreclose that can only be overcome by an affirmative showing by the mortgagor.” E. Sav.
Bank, FSB v. Evancie, No. 13-cv-00878, 2014 WL 1515643, at *4 (E.D.N.Y. April 18, 2014);
see also Fleet Nat’l Bank v. Oslav, 16 A.D.3d 374, 793 N.Y.S.2d 52 (2d Dep’t 2005) (holding
that the plaintiff “established its prima facie entitlement to a judgment” by submitting the
mortgage, the unpaid note, and evidence of the mortgagors’ default).
Courts regularly enter default judgments in foreclosure actions against defendants with
“nominal interests” in the relevant property, including subordinate lien holders like defendants
the New York City Parking Violations Bureau and the New York City Environmental Control
Board. See, e.g., E. Sav. Bank, FSB v. Strez, No. 11-cv-1543, 2013 WL 6834806, at *6
(E.D.N.Y. Dec. 20, 2013) (entering default judgment against the Environmental Control Board,
who was a holder of a subordinate lien on the premises); Christiana Bank & Trust Co. v. Dalton,
No. 06-CV-3206, 2009 WL 4016507, at *5 (E.D.N.Y. Nov. 17, 2009) (entering default judgment
against, among others, the New York City Parking Violations Bureau and New York City
Environmental Control Board). “When a default judgment is entered against a defendant with a
‘nominal interest’ in a property, any such interest in the relevant property is terminated.”
Robinson, 2016 WL 3365091, at *4.
The documents submitted on the motion show that plaintiff has established a prima facie
case and is entitled to a judgment of foreclosure and sale. The original mortgage and note were
executed by defendant Paula Guy, as borrower, in favor of Sterling National Mortgage Company
(“Sterling”), a subsidiary of Federally Chartered Bank, on December 27, 2006 for $472,000. By
allonge dated the same day, Sterling endorsed the note to Indymac Bank, FSB (“Indymac”). By
allonge also dated the same day, the Federal Deposit Insurance Corporation, acting as receiver
for Idymac, endorsed the note to OneWest. The mortgage caught up with the note by
assignments from Sterling to Indymac on August 9, 2007, and from Indymac to OneWest on
June 17, 2010. The loan went into default, at the latest, on February 1, 2011.
Plaintiff seeks the following damages: (1) $621,344.42, representing an unpaid principle
amount of $453,996.95, plus late charges and 8.125% interest on the unpaid principal; (2) $1,475
for fees and disbursement costs in connection with filing and litigating this action; and (3)
$5,745.00 in attorneys’ fees. Except for its request for attorneys’ fees, plaintiff has sufficiently
established its damages.
The documents submitted by plaintiff support that $453,996.95 is the outstanding
principle amount and that the mortgage provides for an interest rate of 8.125% on the unpaid
principle and charges imposed for late fees. The mortgage also provides that in the event that the
mortgagee has to bring a lawsuit to collect the remaining unpaid amount as a result of the
mortgagor’s default, the mortgagee will have the right to collect all costs and disbursements in
connection with the lawsuit.
Although the mortgage also provides that the mortgagee will have the right to recover
reasonable attorneys’ fees in connection with the lawsuit, plaintiff has failed to meet its burden to
“demonstrate the reasonableness and necessity of hours spent and rates charged.” Finkel v.
Omega Commc’n Svs., Inc., 543 F. Supp. 2d 156, 164 (E.D.N.Y. 2008). Plaintiff has submitted
an affidavit of one of its attorneys, in which the attorney attests that a flat fee of $4,950.00 will
be charged to plaintiff upon completion of this action, and because counsel is charging plaintiff a
flat fee, “individual time sheets are not maintained.” Nonetheless, the affidavit itemizes various
tasks completed and the amount of time spent to complete each task. The affidavit, however,
fails to identify the names of the attorneys and paralegals who worked on the case, the
experience of the attorneys who worked on each task, the date on which each task was
completed, or the hourly rate from which the flat fee derives. Without this information, a flat
attorneys’ fee cannot be awarded. See OneWest Bank, N.A. v. Cole, No. 14-CV-3078, 2015 WL
4429014, at *6 (E.D.N.Y. July 17, 2015) (“In general, courts in this Circuit will not award
attorneys’ fees assessed at a flat-rate unless the supporting documentation is detailed enough to
satisfy the Second Circuit’s requirement that attorneys’ fees must be based on contemporaneous
time records specifying relevant dates, time spent and work done.”) (internal quotation marks
Moreover, the affidavit only accounts for a total of 10.4 hours paralegal time and 7 hours
attorney time. This is insufficient to support an award of almost $5,000 in attorneys’ fees,
especially without any details as to the experience level of the attorney or attorneys who worked
on this matter. See Claudio v. Mattituck-Cutchogue Union Fee Sch. Dist., No. 09 Civ 5251,
2014 WL 1514235, at *14 (E.D.N.Y. 2014) (collecting cases and finding that the maximum
prevailing rate for experienced attorneys in this district range is $450 per hour); OneWest, N.A.
v. Denham, No. CV 14-5529, 2015 WL 5562980, at *12 (E.D.N.Y. Aug. 31, 2015) (finding that
a range of $70 to $100 per hour is a reasonable rate for a paralegal).
In addition to the flat fee, plaintiff also seeks an additional $795 in attorneys’ fees,
consisting of $150 for preparing and filing the Lis Pendens and $645 for counsel’s preparation
for and appearance at the status conference held by this Court. It is impossible for the Court to
determine whether these fees are reasonable as the affidavit fails to even identify the amount of
time spent on either of these tasks. Plaintiff will therefore not be awarded any attorneys’ fees.
Accordingly, plaintiff’s motion for default judgment is granted. A judgment of
foreclosure and sale, with damages in the amount of $622,819.42, will be entered separately.
Digitally signed by Brian M.
Dated: Brooklyn, New York
May 16, 2017
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