U.S. Bank National Association v. 2150 Joshua's Path, LLC et al

Filing 91

OPINION AND ORDER granting 54 Motion to Amend/Correct/Supplement; adopting 82 Report and Recommendations; Defendants did not raise their futility argument before the Magistrate Judge, nor do they give a reason for their failure to do so. Accordi ngly, the argument is waived. Defendants do not object to the Report's recommendations with respect to the arguments raised in their opposition. For these reasons and because the Court finds that the Report is not facially erroneous, it is adopt ed in its entirety and plaintiff's motion to amend the complaint to add its restitution claim and to discontinue this action as to defendant Conference and Meeting Centers of Long Island, LLC is GRANTED.So Ordered by Judge Sandra J. Feuerstein on 9/10/2014. (Coleman, Laurie)

FILED

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

IN Clokt<'G CFFICE
U.S. DiSTRICT COURT c O.NY.

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*

U.S BANK NATIONAL ASSOCIATION,

SEP 1o2014

*

LONG I$LANO OFFICE

Plaintiff,
-against-

OPINION AND ORDER
13-CV-1598 (SJF)
2150 JOSHUA'S PATH, LLC, eta!.,
Defendants.

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FEUERSTEIN, District Judge:
Before the Court is the Report and Recommendation ("Report") of Magistrate Judge Gary
R. Brown, dated July 16, 2014, recommending that U.S. Bank National Association's
("plaintiff') motion to amend the complaint to add a claim and to discontinue this action against
defendant, the Conference and Meeting Centers of Long Island, LLC, be granted. For the
following reasons, the Report is adopted in its entirety.
I.

On March 25, 2013, plaintiff filed a complaint against defendants 2150 Joshua's Path,
LLC ("Joshua's Path"), Teddy D. Weiss ("Weiss"), Armand D' Amato ("D' Amato"), the
Conference and Meeting Centers of Long Island, LLC ("Conference and Meeting Centers"), the
State ofNew York Department of Taxation and Finance and other "John Doe" defendants to
foreclose on a commercial mortgage and for judgment on a personal guaranty executed by Weiss
and D' Amato. Pursuant to the mortgage, Joshua's Path granted a security interest to Citigroup
Global Markets Realty Corporation' in the real property located at 2150 Joshua's Path,
Hauppauge, New York ("Property"). Upon default, all principal and interest became due and
1

The mortgage was initially held by Citigroup and, through various assignments, came
under control of plaintiff.

owing under sections 23 and 24(c) of the mortgage.
During discovery, defendants produced financial documents which allegedly established
that Joshua's Path, after defaulting, used portions of the rents and other income from the Property
to repay loans to affiliated third parties and for other unrelated payments. Plaintiff moved to file
an amended complaint to include an additional claim against defendants Weiss and D' Amato for
any and all portions of the Property's rents and/or other income used by Joshua's Path to pay for
items other than the permitted expenses as of the date defendants defaulted on the mortgage.
Defendants opposed plaintiff's motion by arguing undue delay, abusive litigation tactics
and unfair prejudice. The motion was referred to Magistrate Judge Brown, who recommended
that leave to amend be granted. Both parties timely filed objections and responses to the Report.
II

Standard of Review
Title 28 U.SC. § 636(b)(l)(C) provides that a "judge of the court shall make a de novo
determination of those portions of the report or specified proposed findings or recommendations
to which objection is made." See also Fed. R. Civ. P. 72(b)(3) ("The district judge must
determine de novo any part of the magistrate judge's disposition that has been properly objected
to."). After reviewing a report, a district court "may accept, reject, or modifY, in whole or in part,
the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(l)(C). "[I]n
providing for a "de novo determination," ... Congress intended to permit whatever reliance a
district judge, in the exercise of sound judicial discretion, chose to place on a magistrate's
proposed findings and recommendations." United States v. Raddatz, 447 U.S. 667, 676 (1980).

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Analysis
Defendants Joshua Path, Weiss and D'Amato (collectively, "defendants") object to
Magistrate Judge Brown's recommendation that leave to amend be granted on the ground the
amendment is futile, which they raise for the first time.' Defendants claim that the Magistrate
Judge erred when he assumed that defendants' alleged actions constituted a breach of the terms of
the mortgage and guaranty. Plaintiff argues that defendants waived the futility argument by
failing to raise it before Magistrate Judge Brown in their opposition to the motion.
"A district court will generally not consider arguments that were not raised before the
magistrate judge." Diaz v. Portfolio Recovery Associates, LLC, No. 10 Civ. 3920, 2012 WL
1882976, at *2 (E.D.N.Y. May 24, 2012). See Murr v. United States, 200 F.3d 895,902 n.l (6th
Cir. 2000) ("Courts have held that while the Magistrate Judge Act, 28 U.S.C. § 631 et seq.,
permits de novo review by the district court if timely objections are filed, absent compelling
reasons, it does not allow parties to raise at the district court stage new arguments or issues that
were not presented to the magistrate."); Zhao v. State University ofNew York, No. 04 Civ. 0210,
2011 WL 3610717, at *I (E.D.N.Y. Aug. 15, 2011) ("'In this district and circuit, it is established
law that a district judge will not consider new arguments raised in objections to a magistrate
judge's report and recommendation that could have been raised before the magistrate but were
not.' ")(quoting Il/is v. Artus, No. 06 Civ. 3077, 2009 WL 2730870, at *2 (E.D.N.Y. Aug. 28,
2009)). Rather, "[i]ssues not raised before the Magistrate Judge, and therefore not addressed by
(him], may not properly be deemed 'objections' to the Recommended Ruling." Burden v. Astrue,

2

Defendants do not object to the Report's recommendations with respect to the
arguments raised before Magistrate Judge Brown.
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588 F. Supp.2d 269, 279 (D. Conn. 2008). If a district court were to consider these untimely
arguments, "it would unduly undermine the authority of the Magistrate Judge by allowing litigants
the option of waiting until a Recommended Ruling has issued to advance additional arguments."

Id
Ill.

Defendants did not raise their futility argument before the Magistrate Judge, nor do they
give a reason for their failure to do so. Accordingly, the argument is waived. Defendants do not
object to the Report's recommendations with respect to the arguments raised in their opposition.
For these reasons and because the Court finds that the Report is not facially erroneous, it is
adopted in its entirety and plaintiff's motion to amend the complaint to add its restitution claim
and to discontinue this action as to defendant Conference and Meeting Centers of Long Island,
LLC is GRANTED.
SO ORDERED.
Dated: September 10, 2014
Central Islip, New York

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