Eastern Savings Bank, FSB v. Robinson et al
Filing
75
ORDER granting 60 Motion for Default Judgment; adopting 67 Report and Recommendations; Based on the foregoing, the Homeowners objections to the May 9, 2016 Report and Recommendation by United States Magistrate Judge Steven I. Locke are overrul ed in their entirety. Therefore, on Judge Lockes recommendation, the Court grants the Banks motion for a default judgment against the Defaulting Defendants pursuant to Fed. R. Civ. P. 55, and holds that the interests of those parties in the Residence , if any, are hereby extinguished. Further, the Court grants the Banks motion for a judgment of foreclosure and sale, which will issue under separate cover in a form substantially similar to the proposed judgment submitted by the Bank. On Judge Locke s recommendation, the Court will appoint Lara Harmel, Esq. as the referee of the sale. Finally, on Judge Lockes recommendation, the Court grants the Bank the following damages, which it is entitled to recover to the extent possible through a foreclo sure and sale of the Residence: see order. Except for the limited purpose of issuing a final Judgment of Foreclosure and Sale, this case is now closed. SEE ATTACHED ORDER for further details. So Ordered by Judge Arthur D. Spatt on 6/2/2016. cm by cm/ecf to counsel; cm by fcm to Americredit Financial Services, Inc., LI Anesthesiologist, PLLC and Quinn Robinson. (Coleman, Laurie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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EASTERN SAVINGS BANK, FSB,
Plaintiff,
FILED
CLERK
6/2/2016 2:53 pm
U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
LONG ISLAND OFFICE
ORDER
13-cv-7308 (ADS)(SIL)
-againstRICHARD ROBINSON A/K/A RICHARD A. ROBINSON, GAIL
ROBINSON, AMERICREDIT FINANCIAL SERVICES, INC., LI
ANESTHESIOLOGIST PLLC, and QUINN ROBINSON,
Defendants.
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APPEARANCES:
Kriss & Feuerstein, LLP
Attorneys for the Plaintiff
360 Lexington Avenue, Suite 1200
New York, NY 10017
By:
Jerold C. Feuerstein, Esq., Of Counsel
Craig D. Robins, Esq.
Attorney for the Defendants Richard Robinson a/k/a Richard A. Robinson and Gail Robinson
180 Froehlich Farm Blvd.
Woodbury, NY 11797
NO APPEARANCE:
Americredit Financial Services, Inc.
Defendant
LI Anesthesiologist PLLC
Defendant
Quinn Robinson
Defendant
SPATT, District Judge:
On December 23, 2013, the Plaintiff Eastern Savings Bank, FSB (“Plaintiff” or the
“Bank”) commenced this diversity mortgage foreclosure action under Article 13 of the New
York Real Property Actions and Proceedings Law (“RPAPL”), seeking to foreclose its
1
security interest in a parcel of real property owned by the Defendants Richard Robinson
a/k/a Richard A. Robinson and Gail Robinson (the “Homeowners”), located at 734 Carlton
Road in West Babylon (the “Residence”).
In addition to the Homeowners, the Plaintiff named Americredit Financial Services,
Inc. (“Americredit”), LI Anesthesiologist PLLC (“LI Anesthesia”), and Quinn Robinson
(together with Americredit and LI Anesthesia, the “Defaulting Defendants”) as nominal
Defendants in this action, whose interests in the Residence, if any, the Bank seeks to
extinguish in order to quiet title to the property.
On January 22, 2015, the Homeowners filed an answer to the complaint and
asserted various affirmative defenses and counterclaims.
To date, the Defaulting Defendants have not submitted answers to the complaint, or
otherwise appeared in this action. On July 1, 2015, the Clerk of the Court noted the
Defaulting Defendants’ default.
Also on July 1, 2015, the Plaintiff moved under Federal Rule of Civil Procedure
(“Fed. R. Civ. P.”) 56 for summary judgment on its complaint, and dismissal of the
Homeowners’ affirmative defenses and counterclaims.
On October 23, 2015, the Homeowners cross-moved under Rule 56 for summary
judgment against the Bank on one of their counterclaims, namely, a cause of action based
on an alleged breach of a bankruptcy discharge order, and sought to dismiss the complaint
and recover associated monetary damages.
By Memorandum of Decision and Order dated February 4, 2016, this Court granted
the Bank’s motion for summary judgment in its entirety; dismissed the Homeowners’
affirmative defenses and counterclaims; and denied the Homeowners’ cross-motion for
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summary judgment in all respects. See E. Sav. Bank, FSB v. Robinson, 2016 U.S. Dist. LEXIS
13529 (E.D.N.Y. Feb. 4, 2016) (Spatt, J.). The Court directed the Bank to submit a proposed
judgment of foreclosure and sale for the Court’s review within 10 days of that order.
Further, the Court held that, to the extent the Bank intended to pursue default judgments
against the Defaulting Defendants, the case would remain open for that limited purpose.
On February 12, 2016, the Bank filed a motion under Fed. R. Civ. P. 55, seeking the
entry of a default judgment against the Defaulting Defendants. In accordance with the
Court’s directive, the Bank also submitted a proposed judgment of foreclosure and sale
purporting to resolve this case in its entirety.
On February 16, 2016, the Court referred this matter to United States Magistrate
Judge Steven I. Locke for a recommendation as to whether the Bank’s motion for a default
judgment should be granted, and if so, the relief to be granted, including whether the
proposed judgment of foreclosure and sale properly resolves this matter.
On May 9, 2016, Judge Locke issued a Report and Recommendation (the “R&R”),
recommending that: (i) the Bank’s motion for a default judgment be granted; (ii) the
Defaulting Defendants’ interest in the Residence, if any, be extinguished; and (iii) the Bank
be awarded damages totaling $385,639.85, representing the unpaid principal balance due
on the underlying promissory note, together with interest, late charges, escrow advances,
deferred amounts, attorneys’ fees, and costs. See E. Sav. Bank v. Robinson, 2016 U.S. Dist.
LEXIS 62005 (E.D.N.Y. May 9, 2016). However, as the Court noted in its previous opinion,
in light of a discharge order obtained by the Homeowners in a bankruptcy proceeding, the
Bank is only entitled to collect these amounts to the extent possible through a foreclosure
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and sale of the Residence, and may not seek to recover a personal judgment against the
Homeowners for any deficiency remaining after the sale.
Judge Locke also recommended that a judgment of foreclosure and sale in a form
substantially similar to that proposed by the Bank should be entered, and that Lara Harmel,
Esq. be appointed as referee to effectuate the sale of the Residence.
Presently before the Court is a series of written objections, timely filed by the
Homeowners on May 24, 2016, pursuant to 28 U.S.C. § 636(b)(1),
I.
Discussion
The relevant facts and procedural history of this case were set forth in detail in the
prior opinion of this Court and the R&R by Magistrate Judge Locke, and will not be repeated
here. The Court will discuss the underlying motion record only to the extent necessary to
resolve the present objections.
A.
The Standard of Review
To the extent that the Homeowners make specific and timely written objections to
the R&R, the Court must review de novo those portions of the report to which objection is
made. See Leser v. U.S. Bank Nat’l Ass’n, No. 09-cv-2362, 2013 U.S. Dist. LEXIS 32464, at *6
(E.D.N.Y. Mar. 7, 2013) (quoting 28 U.S.C. § 636(b)(1)(C)). In this regard, “[d]e novo review
requires that the court ‘give fresh consideration to those issues to which specific objections
have been made’ ” and “examine the entire record, and make an independent assessment of
the magistrate judge’s factual and legal conclusions.’ ” Singleton v. Caron, No. 03-cv-455,
2006 U.S. Dist. LEXIS 49117, at *5-*6 (N.D.N.Y. July 18, 2006) (quoting Almonte v. N.Y. State
Div. of Parole, No. 04-cv-484, 2006 U.S. Dist. LEXIS 2926, at *15 (N.D.N.Y. Jan. 18, 2006)).
After a review, “the district court ‘may accept, reject, or modify, in whole or in part, the
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findings or recommendations made by the magistrate judge.’ ” Leser, 2013 U.S. Dist. LEXIS
32464, at *6 (quoting 28 U.S.C. § 636(b)(1)).
However, “where ‘the objecting party makes only conclusory or general objections,
or simply reiterates the original arguments, the Court will review the report and
recommendation strictly for clear error.’ ” Id. at *6-*7 (quoting Zaretsky v. Max-Aids, Inc.,
No. 10-cv-3771, 2012 U.S. Dist. LEXIS 64291, at *4 (E.D.N.Y. June 18, 2012), aff’d, 529
F. App’x 97 (2d Cir. 2013)). In this regard, it has been noted that:
It is improper for an objecting party to attempt to relitigate the entire
content of the hearing before the Magistrate Judge by submitting papers to a
district court which are nothing more than a rehashing of the same
arguments and positions taken in the original papers submitted to the
Magistrate Judge. Clearly, parties are not to be afforded a “second bite at the
apple” when they file objections to a Report and Recommendation, as the
“goal of the federal statute providing for the assignment of cases to
magistrates is to ‘increase the overall efficiency of the federal judiciary.’ ”
McCarthy v. Manson, 554 F. Supp. 1275, 1286 (D. Conn. 1982), aff’d, 714 F.2d
234 (2d Cir. 1983) (quoting Nettles v. Wainwright, 677 F.2d 404, 410 (5th
Cir. 1982) (en banc)) (footnote omitted). “The purpose of the Federal
Magistrates Act is to relieve courts of unnecessary work.” Park Motor Mart,
Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980). There is no increase
in efficiency, and much extra work, when a party attempts to relitigate every
argument which it presented to the Magistrate Judge.
Camardo v. GM Hourly-Rate Emples. Pension Plan, 806 F. Supp. 380, 382 (W.D.N.Y. 1992);
see Mario v. P & C Food Mkts., 313 F.3d 758, 766 (2d Cir. 2002) (“Merely referring the court
to previously filed papers or arguments does not constitute an adequate objection under
either Fed. R. Civ. P. 72(b) or Local Civil Rule 72.3(a)(3)”).
As courts in this Circuit have observed, “[c]lear error review is especially
appropriate where the objections are merely copied verbatim from the objecting party’s
earlier briefing.” Holloway v. Colvin, No. 14-cv-5165, 2016 U.S. Dist LEXIS 44366, at *3
(S.D.N.Y. Mar. 31, 2016) (citations omitted); see King v. City of New York, Nos. 12-cv-2344
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& 13-cv-0037, 2014 U.S. Dist. LEXIS 140790, at *11 (E.D.N.Y. Sept. 30, 2014) (reviewing
objections for clear error where, “[n]ot only [were they] simply an attempt to rehash the
same arguments that the magistrate judge considered and found deficient, [but a] section
of [the objector’s] brief [was] in fact identical – word for word – to the equivalent portion
of” his opposition to the underlying motion); Brooks v. Hogan, No. 09-cv-743, 2013 U.S.
Dist. LEXIS 44739, at *2-*3 (N.D.N.Y. Mar. 28, 2013) (finding that de novo review was not
warranted by a party’s submission, which was “filed as an objection,” but was “in fact, a
near-verbatim recitation of his earlier-filed response in opposition to” the underlying
motion); Weinrauch v. N.Y. Life Ins. Co., No. 12-cv-5010, 2013 U.S. Dist. LEXIS 37142, at *6
(S.D.N.Y. Mar. 18, 2013) (reviewing objections for clear error where the objector
“rehashe[d] his previous arguments to” the Magistrate Judge, and “indeed, the majority of
his objection [was] verbatim quotation from his previous submission”).
Further, the Second Circuit has held that “bare statement[s], devoid of any reference
to specific findings or recommendations to which [the plaintiff] objected and why, and
unsupported by legal authority,” are insufficient to warrant de novo review. Mario, 313
F.3d at 769; see Rothenberger v. N.Y. City Police Dep’t, No. 06-cv-868, 2008 U.S. Dist. LEXIS
46614, at *3 (E.D.N.Y. June 16, 2008) (finding the plaintiff’s objections to be insufficient
where they consisted of “little more than a list of documents and facts that he believe[d] the
court should have considered in arriving at its findings” and failed to “provide any
reasoning – legal or otherwise – to support his argument that [the] Magistrate Judge [ ]
erred either in her consideration of the evidence or in arriving at any conclusion or
recommendation”).
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With these standards in mind, the Court will turn to the Homeowners’ specific
objections.
B.
As to the Sufficiency of the Bank’s Supporting Affidavit
The Homeowners contend that the affidavit of Senior Asset Manager Terry Brown,
which the Bank submitted in support of its request for damages, was “defective” insofar as
it lacked a proper evidentiary foundation. In this regard, the Homeowners appear to
contend that Brown failed to adequately demonstrate that she is proficient in reading and
interpreting the computerized mortgage files relied upon by the Bank in computing the
amounts due under the note and mortgage.
Further, the Homeowners argue that, although Judge Locke concluded that Brown’s
affidavit was sufficient to permit a calculation of the Bank’s damages with “reasonable
certainty,” they believe that “absolute certainty should be the only acceptable standard.”
See Objections, DE [69], at 5. The Court finds that both of these contentions are without
merit.
First, the Homeowners’ argument regarding the evidentiary value of Brown’s
affidavit is a near-verbatim reproduction of the argument the Homeowners unsuccessfully
submitted to Judge Locke, and is therefore insufficient to warrant de novo review at this
juncture. Compare Defs. Partial Opp. to Pl. Mot. for Def. J., DE [65], at 2-5, with Objections,
DE [69], at 2-3. Rather, the Court reviews this portion of the R&R for clear error, and
finding none, now concurs in both its reasoning and its result.
In this regard, the Court notes that Judge Locke thoroughly addressed this precise
issue, writing that:
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In opposition, the Robinsons argue that Plaintiff should not be awarded damages
because the Affidavit of Eastern’s Senior Asset Manager Terry Brown “contains
numerous defects as it lacks a foundation and is based on computerized records
which also lack a foundation.” Defs.’ Opp’n ¶ 1. According to the Robinsons, Brown
fails to state that she has “actual personal knowledge; [and] instead, [s]he states that
[s]he ‘has personal knowledge of the facts and circumstances by virtue of [her]
employment at Eastern in the ordinary course of business . . .” Id. at ¶ 3. Relying on
E. Sav. Bank, FSB v. Rabito, No. 11-CV-2501, 2013 WL 5423786, at *4 (E.D.N.Y. Sept.
26, 2013), in which Magistrate Judge Viktor V. Pohorelsky deemed an affidavit
submitted by Brown to be “wholly conclusory,” the Robinson’s argue that her
instant Affidavit is also “flawed and deficient.” See id. at ¶¶ 1-6. However, in Rabito,
the court acknowledged “that a mortgage bank’s senior manager would be a person
with actual knowledge,” and observed that, because “Brown’s statements [were]
made under penalty of perjury . . . [it did] not have a reason to doubt the veracity of
the assertions . . .” 2013 WL 5423786, at *4. Moreover, unlike Rabito, where Brown
“did not provide a factual basis to substantiate the amounts requested,” id., here,
Brown has submitted, among other things: (i) an Account History documenting the
payments made on the Note; (ii) a Late Charge Schedule summarizing the fees
incurred as a result of late monthly payments; and (iii) an Escrow Advance
Schedule, as well as documentation substantiating the amounts requested. See
Brown Aff. ¶¶ 8, 16-18. Finally, to the extent the Homeowner Defendants argue that
Brown lacks “actual personal knowledge,” in a Reply Affidavit, Brown affirms that
she has “actual personal knowledge of the facts of this case and the events that
transpired to date . . .” See Reply Affidavit of Terry Brown in Further Support of
Statement of Damages . . ., DE [66-1], ¶ 1.
R&R at 12-13.
The Homeowners argue conclusorily that, notwithstanding Judge Locke’s
“exceptionally thorough,” “meticulous,” and “comprehensive” R&R, it remains true that
Brown’s affidavit lacks a proper “foundation” because she “fail[ed] to indicate that she is
experienced in reviewing computerized information.” See Objections at 2, 5. However, the
Homeowners fail to raise any particularized challenges to the authenticity or
trustworthiness of Brown’s calculations or the documentation upon which they rest. In
fact, other than her apparent failure to explicitly state that she has proficiency in reviewing
the relevant computer files, the Homeowners provide no specific basis for doubting the
overall veracity of her affidavit. In this regard, they do not argue that any particular figure
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was incorrectly computed, or that a particular document maintained by the bank is
inaccurate. Nor do they offer their own calculation of the amounts allegedly due under the
note and mortgage. Instead, notwithstanding Judge Locke’s reasoned conclusion to the
contrary, the Homeowners argue that Bank should be awarded no damages whatsoever
because Brown did not adequately describe her training as it pertains to reviewing
digitally-maintained mortgage files.
However, the Homeowners do not identify any relevant caselaw that they contend
might support this position. Nor do they specify what aspects of Judge Locke’s reasoning or
consideration of the evidence they believe constituted clear error. They contend simply
that, for the exact same reasons already argued to Judge Locke, “Brown has still failed to
establish a sufficient foundation in order for her affidavit to be probative.” Id. The Court
disagrees, and under these circumstances, discerns no clear basis for sustaining the
Homeowners’ objection.
Further, the Homeowners imply that Judge Locke utilized the incorrect legal
standard when he determined that Brown’s affidavit permitted a calculation of damages
with “reasonable certainty.” They state, without citation to facts or legal authority, that an
“absolute certainty” standard would be more appropriate. However, this contention is
contrary to controlling law, and is therefore without merit. See, e.g., Bank of the West v.
Sailing Yacht Serendipity, 101 F. Supp. 3d 238, 246 (E.D.N.Y. 2015) (noting that, in passing
on a motion for a default judgment, “a district court must [ ] conduct an inquiry in order to
ascertain the amount of damages with reasonable certainty” (quoting Credit Lyonnais Sec.
(USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).
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Accordingly, to the extent the Homeowners object to the R&R on the ground that it
improperly relied upon the affidavit of Terry Brown, their objection is overruled.
C.
As to the Calculation of Attorneys’ Fees
The Homeowners also challenge Judge Locke’s computation of the award of
attorneys’ fees to which the Bank is entitled under the relevant mortgage documents. As
described more fully below, this argument is totally without merit, and similarly fails to
warrant a de novo review.
In a thorough and highly-detailed discussion, Judge Locke undertook to review the
billing records submitted by counsel for the Bank, namely, the law firm of Kriss &
Feuerstein, LLP (“K&F”), and made the following findings:
(1) Four attorneys from K&F, including one partner and three associates, worked on
this case. Partner Jerold F. Feuerstein, Esq. billed for 22.6 hours of his time; and
associates Greg Friedman, Jason Liebowitz, and Joseph Vozza billed for 34.3, 25.6,
and 3.25 hours of their time, respectively. All four attorneys billed their time to the
Bank at a rate of $300 per hour. Thus, the initial fee application sought the
following:
Title
Partner
Associate
Associate
Associate
Name
J. Feuerstein
G. Friedman
J. Liebowitz
J. Vozza
Hourly Rate
$300
$300
$300
$300
Hours Spent
22.6
34.3
25.6
3.25
Total
Total Charge
$6,780
$10,290
$7,680
$975
$25,725
(2) Judge Locke found that, although $300 per hour was a reasonable hourly rate for
work performed by Mr. Feuerstein, namely, a Partner in the firm with 22 years of
relevant legal experience, this rate was excessive for the associates. After reviewing
the applicable caselaw, Judge Locke concluded that $250 per hour was appropriate
for Messrs. Friedman, Liebowitz, and Vozza.
(3) Judge Locke further conducted an extensive review of the billing records submitted
by K&F, and concluded that certain entries for work performed were redundant,
unreasonable, or excessive, and determined that a 10% across-the-board reduction
in the number of hours expended by each attorney was warranted, as follows:
10
Title
Partner
Associate
Associate
Associate
Name
J. Feuerstein
G. Friedman
J. Liebowitz
J. Vozza
Original Hours
22.6
34.3
25.6
3.25
Reduced Hours
20.34
30.87
23.04
2.93
(4) Then, by multiplying the attorneys’ adjusted hourly rates by the reduced number of
hours expended, Judge Locke appropriately included the following chart in the R&R:
Title
Partner
Associate
Associate
Associate
Name
J. Feuerstein
G. Friedman
J. Liebowitz
J. Vozza
Hourly Rate
$300
$250
$250
$250
Hours Spent
20.34
30.87
23.04
2.93
Adjusted Total
Total Charge
$6,102
$7,717.50
$5,760
$732.50
$20,312
Based on these calculations, Judge Locke recommended that this Court grant the
Bank an award of reasonable attorneys’ fees in the reduced amount of $20,312. In this
regard, the reasoning in the R&R was abundantly clear and well-supported by the evidence
in the record. Nevertheless, strangely, the Homeowners objected on the ground that:
Plaintiff originally billed out both partner-level attorneys and associate
attorneys at the same hourly rate – $300. However, the Magistrate Judge
determined that while the partner-level attorney was entitled to that hourly
rate, associate attorneys were not. Yet, the R&R does not indicate that the
time and billing discrepancy was addressed.
Objections at 6 (emphasis supplied).
As indicated above, this objection is totally without merit. In the Court’s view, it
would have been almost impossible to read the R&R with any level of care and reach the
conclusion, as the Homeowners apparently did, that Judge Locke failed to address any
discrepancies in the materials supporting the fee award. There certainly is no basis for
finding that Judge Locke clearly erred in computing these amounts.
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Accordingly, to the extent the Homeowners object to the R&R on the ground that it
improperly computed the award of attorneys’ fees payable to the law firm of Kriss &
Feuerstein LLP, their objection is overruled.
II.
Conclusion
Based on the foregoing, the Homeowners’ objections to the May 9, 2016 Report and
Recommendation by United States Magistrate Judge Steven I. Locke are overruled in their
entirety.
Therefore, on Judge Locke’s recommendation, the Court grants the Bank’s motion
for a default judgment against the Defaulting Defendants pursuant to Fed. R. Civ. P. 55, and
holds that the interests of those parties in the Residence, if any, are hereby extinguished.
Further, the Court grants the Bank’s motion for a judgment of foreclosure and sale,
which will issue under separate cover in a form substantially similar to the proposed
judgment submitted by the Bank.
On Judge Locke’s recommendation, the Court will
appoint Lara Harmel, Esq. as the referee of the sale.
Finally, on Judge Locke’s recommendation, the Court grants the Bank the following
damages, which it is entitled to recover to the extent possible through a foreclosure and
sale of the Residence:
(1)
$224,128.81 representing the outstanding principal balance due on the
underlying promissory note; plus
(2)
$64,621.43 in unpaid interest accrued on the outstanding principal through
May 9, 2016, namely, the date that the R&R issued; plus
(3)
Continuing per diem interest on the outstanding principal balance at a rate of
$58.27 per day from May 10, 2016 until judgment is entered; plus
(4)
$4,157.59 for unpaid late charges incurred between June 16, 2008 and
December 18, 2013; plus
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(5)
$30,276.70 for certain unpaid escrow advances provided for in the relevant
mortgage documents; plus
(6)
$4,821.73 in unpaid interest accrued on the unpaid escrow advances through
May 9, 2016; plus
(7)
Continuing per diem interest on the unpaid escrow advances at a rate of
$7.87 per day from May 10, 2016 until judgment is entered; plus
(8)
$35,402.05 for certain “deferred amounts” provided for in a June 21, 2011
Note Modification executed by the parties; plus
(9)
$20,312 for reasonable attorneys’ fees; plus
(10)
$1,919.54 in costs; and
(11)
post-judgment interest at the contractual rate of 9.49% to accrue from the
date judgment is entered.
Except for the limited purpose of issuing a final Judgment of Foreclosure and Sale,
this case is now closed.
SO ORDERED
Dated: Central Islip, New York
June 1, 2016
/s/ Arthur D. Spatt____________________________________
ARTHUR D. SPATT
United States District Judge
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