Wilmington PT Corp. v. Bonilla et al

Filing 27

ORDER REJECTING IN PART 22 REPORT AND RECOMMENDATIONS AND DEFERRING RULING ON 19 Motion for Default Judgment --- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, the R&R issued by the magistrate judge is rejected in part a s Plaintiff's objections to the R & R are overruled in part and sustained in part and ruling on the motion for default judgment is deferred as it is returned to the magistrate judge to evaluate, based on the additional evidence presented by Plai ntiff, whether Plaintiff has complied with the notice requirements pursuant to RPAPL § 1303, and, if so, whether it is entitled to a default judgment against Defendants. Plaintiff is directed to serve a copy of this Electronic Order and the Att ached Written Memorandum and Order upon all Defendants at their last known addresses and file proof of service with the Court within five days of the date of this Memorandum and Order. SO ORDERED by Judge Dora Lizette Irizarry on 3/31/2021. (Irizarry, Dora) Modified on 3/31/2021 to correct errors in original entry (Carosella, Christy).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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WILMINGTON PT CORP.,
:
:
Plaintiff,
:
:
-against:
:
DENNIS P. BONILLA; MIKE8951 CORP.;
:
NYC ENVIRONMENTAL CONTROL BOARD; :
NYC PARKING VIOLATIONS BUREAU; NY
:
STATE DEPARTMENT OF TAXATION AND
:
FINANCE; and JOHN DOE & JANE DOE,
:
:
Defendants.
:
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MEMORANDUM & ORDER
REJECTING IN PART REPORT
AND RECOMMENDATIONS
19-cv-2684(DLI)(ST)

DORA L. IRIZARRY, United States District Judge:
On May 7, 2019, Wilmington PT Corp. (“Plaintiff”) commenced this diversity action
against Dennis P. Bonilla (“Bonilla”), Mike8951 Corp., NYC Environmental Control Board, NYC
Parking Violations Bureau, NY State Department of Taxation and Finance, John Doe, and Jane
Doe1 (collectively, “Defendants”), seeking to foreclose on a mortgage encumbering a property
located at 89-51 121st Street, Richmond Hill, New York 11418 (the “Property”), pursuant to New
York Real Property Actions and Proceedings Law (“RPAPL”) §§ 1301 et seq. See, Compl.,
Docket (“Dkt.”) Entry No. 1. After Defendants Bonilla, Mike8951 Corp., NYC Environmental
Control Board, NYC Parking Violations Bureau, and NY State Department of Taxation and
Finance failed to appear, the Clerk of the Court entered a notation of default against them on June
24, 2019. See, Dkt. Entry No. 18.
On July 8, 2019, Plaintiff filed a motion for default judgment, which the Court referred to
the Honorable Steven Tiscione, U.S. Magistrate Judge, for a Report and Recommendation (“R &

John Doe and Jane Doe are fictitious parties representing “tenants, occupants, persons, or corporation[s], if
any, having or claiming an interest in or lien upon the [Property].” See, Compl. at ¶ 9.
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R”). See, Dkt. Entry No. 19; Order dated July 9, 2019. On March 3, 2020, the magistrate judge
issued an R & R recommending that the motion be denied. See, R & R, Dkt. Entry No. 22. Plaintiff
timely objected to the R & R. See, Pl. Wilmington PT Corp.’s Mem. of Law in Obj. to the R & R
Dated March 3, 2020 (“Pl. Obj.”), Dkt. Entry No. 24. Defendants did not respond to Plaintiff’s
objections. For the reasons set forth below, the objections are overruled in part and sustained in
part and ruling on the motion for default judgment is deferred as it is returned to the magistrate
judge with instructions consistent with this Memorandum and Order.
BACKGROUND
In September 2007, Bonilla executed and delivered a mortgage agreement to JPMorgan

Chase Bank, N.A. (the “Mortgage”) and executed a Home Equity Line of Credit Agreement
and Disclosure Statement (the “Note”) under the Mortgage, securing a loan in the amount of
$105,000.00 from JPMorgan Chase Bank, N.A. See, R & R at 2. The Mortgage and Note
provide that failure to make payments on the loan constitutes a default, permitting JPMorgan
Chase Bank, N.A. or its assignees to foreclose on the Property. Id. at 3.
Plaintiff alleges that Bonilla defaulted on the Mortgage and Note in May 2011. Id. In
October 2018, following a series of assignments, Plaintiff became the holder of the Mortgage and
Note. Id. at 2-3. On May 7, 2019, Plaintiff commenced this action to foreclose on the Property.
See, Compl.
On May 13, 2019, Plaintiff filed a copy of the notice of foreclosure required under RPAPL
§ 1303. See, Dkt. Entry No. 6. On June 11, 2019, Plaintiff filed an Affidavit of Service, stating
that on May 23, 2019, it had served Bonilla with “THE SUMMONS IN A CIVIL ACTION AND
COMPLAINT, NOTICE PURSUANT TO RPAPL ON BLUE COLORED PAPER bearing Index
# 19-CV-2684 DLI-ST[.]” See, Dkt. Entry No. 8. The Affidavit of Service further provided that

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Bonilla was served personally at 20209 100th Avenue, Hollis, New York 11423, rather than at the
Property. Id.
Plaintiff filed additional Affidavits of Service on June 11 and 14, 2019, indicating that it
had served: (1) the Summons and Complaint on Defendants NYC Parking Violations Bureau,
NYC Environmental Control Board, Mike 8951 Corp., and New York State Department of
Taxation and Finance; (2) the Summons, Complaint, and “Notice Pursuant to RPAPL on Blue
Colored Paper” on Defendants Jane Doe and John Doe at the Property; (3) the Summons,
Complaint, and “Notice Pursuant to RPAPL 1303(b) Tenant Foreclosure Notice on Green Colored
Paper” on Defendants Jane Doe and John Doe at the Property; and (4) the Summons, Complaint,
and “Notice Pursuant to RPAPL on Blue Colored Paper” on an unnamed “Occupant” at the
Property. See, Dkt. Entry Nos. 9–12-1, 13–13-2, 14–16.
LEGAL STANDARD
When a party objects to a Report and Recommendation, a district judge must make a de
novo determination with respect to those portions of the Report and Recommendation to which the
party objects. See, Fed. R. Civ. P. 72(b)(3); 28 U.S.C. § 636(b)(1); See also, United States v. Male
Juvenile, 121 F.3d 34, 38 (2d Cir. 1997) (citation omitted). If, however, a party makes conclusory
or general objections, or attempts to relitigate the party’s original arguments, the court will review
the Report and Recommendation for clear error. See, Robinson v. Superintendent, Green Haven
Corr. Facility, 2012 WL 123263, at *1 (E.D.N.Y. Jan. 17, 2012) (internal quotation marks and
citation omitted).
Even upon de novo review, the court does not “consider arguments, case law and/or
evidentiary material which could have been, but were not, presented to the magistrate judge in the
first instance.” E. Sav. Bank, FSB v. Johnson, 2020 WL 1452461, at *1 (E.D.N.Y. Mar. 25, 2020)

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(internal quotation marks and citations omitted). After its review, the district court may then
“accept, reject, or modify the recommended disposition; receive further evidence; or return the
matter to the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3); See also, 28 U.S.C. §
636(b)(1).
DISCUSSION
The magistrate judge recommended that Plaintiff’s motion for default judgment be denied
based on Plaintiff’s noncompliance with RPAPL § 1304. See, R & R at 6. RPAPL § 1304 provides
that “with regard to a home loan,” at least 90 days prior to commencing a foreclosure proceeding,
a lender must transmit a notice, containing prescribed content, to the borrower. See, N.Y. Real
Prop. Acts. Law § 1304. The magistrate judge found that the Note constitutes a “home loan”
subject to the notice requirements of RPAPL § 1304 and that compliance with RPAPL § 1304, is
a “condition precedent” to commencing a foreclosure action. Id. at 3, 6, 6 n.2.
In support of its objections to the R & R, Plaintiff has submitted numerous exhibits that it
had not submitted previously to the magistrate judge in support of its motion for default judgment.
Compare, Dkt. Entry No. 19-3–19-10 with, Dkt. Entry No. 24-2–24-6. The Court will not consider
evidence presented for the first time in response to the R & R. See, Iacob v. http://re.brooklynflatbush.com/midtown-renter-hit-with-300k-lawsuit-for-using-airbnb/, 2020 WL 2570358, at *2
(S.D.N.Y. May 21, 2020) (noting that “it would be inappropriate and risk undermining the
authority of the Magistrate Judge” for the court to consider information that should have been, but
was not, presented to the magistrate judge) (citation omitted); Faison v. Comm’r of Soc. Sec., 2020
WL 1528152, at *2 (S.D.N.Y. Mar. 31, 2020) (noting that “litigants are required to make all
arguments before the magistrate judge in the first instance[]” and refusing to consider arguments
raised for the first time after the issuance of the R & R) (citation omitted).

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Initially, Plaintiff contends that it was inappropriate for the magistrate judge to raise the
issue of compliance with RPAPL § 1304 sua sponte, because, by virtue of their nonappearance,
Defendants have waived any such argument. See, Pl. Obj. at 3-4. However, proper service of a
RPAPL § 1304 notice on the borrower “is a condition precedent to the commencement of a
foreclosure action[]” and a plaintiff has “the affirmative obligation to establish strict compliance
with RPAPL § 1304[.]” Gustavia Home, LLC v. Hoyer, 362 F. Supp.3d 71, 83 (E.D.N.Y. 2019)
(internal quotation marks and citations omitted). Accordingly, it was proper for the magistrate
judge to examine whether Plaintiff complied with the notice requirements, and Plaintiff’s first
objection is overruled.
Plaintiff’s second objection is that the RPAPL § 1304 notice requirements do not apply
because the Note does not constitute a “home loan.” See, Pl. Obj. at 5-6. Pursuant to RPAPL §
1304, a “home loan” is a loan in which:
(i) The borrower is a natural person; (ii) The debt is incurred by the borrower
primarily for personal, family, or household purposes; (iii) The loan is secured by
a mortgage or deed of trust on real estate improved by a one to four family dwelling,
or a condominium unit, in either case, used or occupied, or intended to be used or
occupied wholly or partly, as the home or residence of one or more persons and
which is or will be occupied by the borrower as the borrower’s principal dwelling;
and (iv) The property is located in [New York] state.
N.Y. Real Prop. Acts. Law § 1304(6)(a)(1). The magistrate judge found that the Note constitutes
a “home loan” because: (1) Bonilla is alleged to be a natural person whose address is alleged to
be at the Property; and (2) The Mortgage describes the Property as one to be “improved by a one
or two family residence or dwelling only.” R & R at 6 n.2.
However, there is no evidence that Bonilla incurred the debt “primarily for personal,
family, or household purposes.” Moreover, there is no evidence that Bonilla used the Property as
his principal dwelling. On the contrary, the evidence indicates that the Property was not Bonilla’s

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principal dwelling. As set forth above, Bonilla was served at an address that is not the Property.
See, Dkt. Entry No. 8 (indicating that Bonilla was served personally at 20209 100th Avenue, Hollis,
New York 11423).

Additionally, Plaintiff’s attempt to serve Bonilla at the Property was

unsuccessful because he was not there and the Property’s “current occupant” did not know him.
See, Affidavit of Attempted Service, Dkt. Entry No. 19-8. Finally, the Note does not refer to the
Property as Bonilla’s principal dwelling or indicate his intent to reside at the Property. See, Home
Equity Line of Credit Agreement and Disclosure Statement, Dkt. Entry No. 19-3; Contra, West
Coast 2014-7, LLC v. Tolson, 2017 WL 3405517, at *8 (E.D.N.Y. Aug. 7, 2017) (finding that
mortgage constituted a “home loan” where it contained a “definitional requirement” that borrower
occupy subject property as principal dwelling for at least one year). Indeed, Plaintiff alleges that
in 2014, Bonilla entered into an agreement with Defendant Mike8951 Corp., which provides that
Bonilla, “having an address at 202-09 100th Avenue, Hollis, New York 11423,” has agreed to give
Mike8951 Corp. title to the Property. See, Compl., Ex. A, Dkt. Entry No. 1-3; Compl. at ¶ 5.
Based on the foregoing, the Court concurs with Plaintiff in finding that the Note does not
constitute a “home loan,” and the notice requirements of RPAPL § 1304 are inapplicable, contrary
to the finding of the magistrate judge. See, Gustavia Home, LLC v. Rutty, 2018 WL 2198742, at
*4 (E.D.N.Y. May 14, 2018), aff’d on other grounds, 785 F. App’x 11 (2d Cir. 2019) (Summary
Order) (“[T]he notice required by RPAPL § 1304 does not apply to [Plaintiff] because the
mortgaged property is not [Defendant’s] primary residence.”); HSBC Bank USA, N.A. v. Ozcan,
154 A.D.3d 822, 825 (2d Dep’t 2017) (holding that where loan was for a commercial property and
defendant resided elsewhere, loan was not a home loan and, therefore, notice provisions of RPAPL
§ 1304 did not apply). Accordingly, Plaintiff’s second objection is sustained.

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CONCLUSION
For the reasons set forth above, Plaintiff’s objections to the R & R are overruled in part
and sustained in part and ruling on the motion for default judgment is deferred as it is returned to
the magistrate judge to evaluate, based on the additional evidence presented by Plaintiff, whether
Plaintiff has complied with the notice requirements pursuant to RPAPL § 1303, and, if so, whether
it is entitled to a default judgment against Defendants. Plaintiff is directed to serve a copy of this
Memorandum and Order upon all Defendants at their last known addresses and file proof of service
with the Court within five days of the date of this Memorandum and Order.

SO ORDERED.
Dated: Brooklyn, New York
March 31, 2021
/s/
DORA L. IRIZARRY
United States District Judge

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