Allstate Indemnity Company v. Collura et al

Filing 88

MEMORANDUM & ORDER ADOPTING REPORT AND RECOMMENDATION; For the foregoing reasons, BNY's objections are OVERRULED, and the R&R is ADOPTED IN PART and REJECTED IN PART. Plaintiff's motion to deposit funds (Docket Entry 56) is GRANTED IN PART and DENIED IN PART. Specifically, Plaintiff may proceed under Statutory Interpleader but must deposit $363,000 with the Court. At that time, Plaintiff may request that it be discharged from the case. Plaintiff is directed to file a letter indica ting if it is willing and able to deposit $363,000 with the Court within ten (10) days of the date of this Memorandum and Order. Additionally, Plaintiff's motion for a default judgment (Docket Entry 59) is GRANTED. The Clerk of the Court is directed to enter default judgments against Capital One Home Loans, LLC and Countrywide Home Loans, Inc. So Ordered by Judge Joanna Seybert on 3/22/2017. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------X
ALLSTATE INDEMNITY COMPANY,
Plaintiff,

MEMORANDUM & ORDER
15-CV-5047(JS)(AKT)

-against–
PAUL COLLURA, CHRISTINE COLLURA,
BANK OF NEW YORK MELLON f/k/a BANK
OF NEW YORK AS TRUSTEE FOR CERTIFICATE
HOLDER CWALT, INC., UNITED STATES OF
AMERICA, CAPITAL ONE HOME LOANS, LLC,
and COUNTRYWIDE HOME LOANS, INC.,
Defendants.
-------------------------------------X
APPEARANCES
For Plaintiff:
Karen Maria Berberich, Esq.
Rosa M. Feeney, Esq.
Caroline Knoepffler Hock, Esq.
Lewis Johs Avallone Aviles, LLP
One CA Plaza, Suite 225
Islandia, NY 11749
For Defendants:
Paul and Christine
Collura

Lloyd M. Eisenberg, Esq.
Eisenberg & Carton
535 Broadhollow Road, Suite M105
Melville, NY 11747
Donna Rosanne Ruggiero, Esq.
Eisenberg & Carton
1227 Main Street, Suite 101
Port Jefferson, NY 11777

Bank of New York
Mellon:

United States of
America:

Sarah Joanne Greenberg, Esq.
Eckert Seaman
10 Bank Street, Suite 700
White Plains, NY 10606

Wallace D. Dennis, Esq.
1

Department of Justice, Tax Division
Ben Franklin Station, PO Box 55
Washington, D.C. 20044
Capital One Home
Loans, LLC and
Countrywide Home
Loans, Inc.:

No appearances

SEYBERT, District Judge:
Plaintiff Allstate Indemnity Company (“Plaintiff” or
“Allstate”) commenced this interpleader action against Paul and
Christine

Collura

(the

“Colluras”),

Bank

of

New

York

Mellon

(“BNY”), the United States of America (the “United States” or the
“Government”), Capital One Home Loans, LLC (“Capital One”), Bank
of America (“Bank of America”) and Countrywide Home Loans, Inc.
(“Countrywide” and collectively, “Defendants”) on August 28, 2015.
(Compl., Docket Entry 1.)

Currently pending before the Court is

Magistrate A. Kathleen Tomlinson’s Report and Recommendation dated
February 7, 2017 (the “R&R”, Docket Entry 83) with respect to
Plaintiff’s

motion

to

deposit

proceeds

from

a

homeowner’s

insurance policy with the Court (Docket Entry 56) and Plaintiff’s
motion for a default judgment against Capital One and Countrywide
(Docket Entry 59).

Judge Tomlinson recommends that this Court

grant Plaintiff’s motions.

(R&R at 2.)

Defendant BNY filed

objections to the R&R, (BNY Obj., Docket Entry 86), and the United
States

responded

Entry 87).

For

to
the

those

objections

following

reasons,

2

(U.S.

Reply,

Docket

BNY’s

objections

are

OVERRULED, and the R&R is ADOPTED IN PART and REJECTED IN PART.
Plaintiff’s motion to deposit funds is GRANTED IN PART and DENIED
IN PART, and Plaintiff’s motion for a default judgment is GRANTED.
BACKGROUND
I.

Relevant Facts
Plaintiff issued a homeowners insurance policy (the

“Policy”) on a property owned by the Colluras (the “Property”) in
Southhampton, New York.

(Compl. ¶ 12.)

On March 16, 2015, the

Property sustained damage, and the Colluras subsequently filed a
claim.

(Compl. ¶¶ 2-3, 15.)

Plaintiff inspected the damage and

estimated the replacement cost value to be $75,460.04.
Compl. Ex. B, at 85.)

(Estimate,

Plaintiff further estimated that the actual

cash value of the net claim was $65,582.18, after reductions for
depreciation

of

$4,013.86

(Estimate at 85.)

and

prior

payments

of

$5,864.00.

On August 11, 2015, Plaintiff provided the

estimate to the Colluras and advised that it would settle the claim
for $65,582.18.

(Settlement Ltr., Compl. Ex. C, at 92.)

Pursuant

to the terms of the Policy, if the insured does not repair the
damage, payment will be made on an actual cash value basis and
depreciation is not recoverable.
64, at 40, ¶ 5(b).)

(Policy, Compl. Ex. A, at 22-

Conversely, the Policy provides that if the

insured repairs the damage within 180 days of receiving the actual
cash value payment, Plaintiff will “make additional payment to

3

reimburse [the insured] for cost in excess of actual cash value”
and depreciation is recoverable.1

(Policy at 40, ¶ 5(c).)

After forwarding the estimate to the Colluras, Plaintiff
discovered that there were multiple lienholders with potential
claims to the settlement proceeds, including: (1) Capital One,
which issued a mortgage and was on the deed for the Property; (2)
BNY, to which the mortgage was assigned by Capital One; (3) Bank
of America, the mortgage servicer; (4) the United States, which
had two federal tax liens on the Property of $75,690.80 and
$80,537.52; and (5) a third party who filed a Notice of Pendency
against the Colluras.

(Compl. ¶ 18.)

Plaintiff alleges that it

cannot determine which lienholders, if any, are entitled to the
proceeds and commenced this action to resolve the competing claims.
II.

Procedural History
As stated, Plaintiff filed the Complaint on August 28,

2015.

The Government answered the Complaint on November 15, 2015

and acknowledged the tax liens.

(U.S. Answer, Docket Entry 21.)

Bank of America answered the Complaint on November 30, 2015 and
disclaimed any right to the settlement proceeds.

(Bank of America

Although not material to the pending motion, the Settlement
Letter states that “[y]ou may make a claim for additional
payment as described in the Building Structure Reimbursement
provision and, when applicable, the Personal Property
Reimbursement provision if you repair or replace the damaged,
destroyed or stolen covered property ‘within two years after the
date of the loss.’” (Settlement Ltr., at 92.)
1

4

Answer, Docket Entry 25.)

BNY filed its answer on November 30,

2015 and asserted cross-claims against each of the Defendants.
(BNY Answer, Docket Entry 24.) The same day, the Colluras answered
the Complaint and asserted a counter-claim against Plaintiff and
cross-claims against each of the Defendants.
Docket Entry 26.)
from the case.

(Collura Answer,

On April 6, 2016, Bank of America was dismissed

(Stip. & Order, Docket Entry 54.)

On April 15, 2016, Plaintiff filed a motion to deposit
the proceeds with the Court and be released from this litigation.
(Mot. to Deposit, Docket Entry 56; Pl.’s Deposit Br., Docket Entry
58.)

Specifically,

Plaintiff

seeks

to

deposit

$65,582.18

immediately, and $4,013.86 at a later date should proof of repairs
be submitted (the “Settlement Amount”).

(Pl.’s Deposit Br. at 2.)

Finally, Plaintiff seeks dismissal of the Colluras’ counterclaim
against it.

(Pl.’s Deposit Br. at 2.)

BNY opposed the motion and

requested that the Court award the Settlement Amount to BNY.
Opp., Docket Entry 63, at 14-15.)

(BNY

The Colluras filed a response

on May 19, 2016, advising that while they did not object to
Plaintiff’s motion, they opposed disbursement of the Settlement
Amount to BNY.

(Collura Reply, Docket Entry 70.)

On June 14,

2016, the Government also opposed BNY’s request for affirmative
relief.

(U.S. Reply, Docket Entry 74.)

Plaintiff filed its reply

in further support of its motion on May 17, 2016.
Docket Entry 69.)
5

(Pl.’s Reply,

On April 18, 2016, Plaintiff filed a motion for a default
judgment against Capital One and Countrywide.
Docket Entry 59.)
On

(Default Mot.,

None of the parties opposed the motion.

October

24,

2016,

the

undersigned

referred

both

motions to Judge Tomlinson for an R&R on whether the motions should
be granted.

(Referral Order, Docket Entry 82.)

On February 7,

2017, Judge Tomlinson issued her R&R recommending that Plaintiff’s
motions be granted.

(R&R at 2.)

BNY has objected to Judge

Tomlinson’s recommendation that Plaintiff be permitted to deposit
the Settlement Amount with the Court and be discharged from the
case.

(See, BNY Obj.)

objections.
to

Judge

The Government filed a response to BNY’s

(See, U.S. Reply.)
Tomlinson’s

None of the Defendants objected

recommendation

that

the

Court

grant

Plaintiff’s motion for a default judgment.
III. The R&R
At the outset, Judge Tomlinson summarized the two-step
process for analyzing interpleader actions under either Federal
Rule of Civil Procedure 22 (“Rule Interpleader”) or 28 U.S.C.
§ 1335 (“Statutory Interpleader”).

(R&R at 9.)

First, the Court

analyzes the basis for interpleader jurisdiction, and second, if
interpleader is permitted, the Court resolves the competing claims
and directs that the funds be disbursed accordingly.
Judge

Tomlinson

limited

her

discussion

6

to

the

(R&R at 9.)
first

prong,

concluding that it was inappropriate to adjudicate the claims to
the proceeds at this juncture.2

(R&R at 15-17.)

Judge Tomlinson began by analyzing the requirements of
Statutory Interpleader.
established

the

(R&R at 15.)

jurisdictional

She found that Plaintiffs

prerequisites

for

Statutory

Interpleader based on the settlement amount and minimum diversity
between the parties.
that

the

Court

(R&R at 17-23.)

could

not

exercise

However, she concluded
Statutory

Interpleader

jurisdiction unless Plaintiff agreed to deposit the policy maximum
of $363,000, because Statutory Interpleader requires that the
plaintiff deposit the entire contested amount to proceed.3
at 17-27.)

(R&R

Accordingly, she gave Plaintiff an opportunity to

deposit $363,000 before recommending dismissal of the case.

(R&R

at 27.)
As an alternative, Judge Tomlinson analyzed whether
Plaintiff could maintain the action under Rule Interpleader.4 (R&R

Judge Tomlinson rejected BNY’s argument urging the Court to
award the proceeds to BNY, because, among other reasons, BNY
failed to comply with numerous procedural rules for seeking
affirmative relief. (R&R at 15-16.)
2

As Judge Tomlinson explained, “BNY has disputed the sufficiency
of th[e] [settlement] amount and instead invokes the Policy to
assert that Plaintiff should deposit the maximum amount of
dwelling coverage provided for.” (R&R at 27.)
3

In its motion, Plaintiff requested leave to amend the Complaint
to plead Rule Interpleader if necessary. Judge Tomlinson
concluded that the Court could sua sponte convert the case to an
4

7

at 28.)
that

Unlike Statutory Interpleader, Rule Interpleader requires
Plaintiff

jurisdiction.

affirmatively

(R&R at 10.)

demonstrate

subject

matter

Judge Tomlinson determined that the

Court could exercise diversity jurisdiction based on complete
diversity between Plaintiff and Defendants and the amount in
controversy.

(R&R at 28-31.)

She further found that Plaintiff’s

concerns regarding the proper allocation of the proceeds were
justified.

(R&R at 31-33.)

As a result, she concluded that the

action could be maintained under Rule 22 and recommended that
Plaintiff

be

directed

to

deposit

$69,596.045

pursuant to Federal Rule of Civil Procedure 67.

with

the

(R&R at 34.)

Court
With

regard to Plaintiff’s request to be discharged from the action,
Judge

Tomlinson

found

that

discharge

was

appropriate

because

Plaintiff was a neutral stakeholder and disclaimed any interest in
the proceeds.

(R&R at 35-36.)

She recommends that the Court

discharge Plaintiff after it deposits $69,596.04 with the Court.
(R&R at 36.)
As to Plaintiff’s final request--that the Court dismiss
the Colluras’ counter-claim--Judge Tomlinson declined to consider
dismissal at this time.

(R&R at 33, n.12.)

Because the Colluras

action for Rule Interpleader, rendering the motion to amend
moot. (R&R at 28, n.9.)
This includes the actual cash value of the claim, $65,582.18,
plus the recoverable depreciation of $4,013.86. (R&R at 34.)
5

8

did not oppose the dismissal of their counter-claim, she advised
the parties to seek voluntary dismissal under Federal Rule of Civil
Procedure 41(a)(2).

(R&R at 33, n.12.)

Finally, Judge Tomlinson considered Plaintiff’s motion
for a default judgment against Countrywide and Capital One. (R&R
at 37.)

Based on the relevant factors, she recommends that the

Court enter a default judgment against both defendants.

(R&R at

42.)
DISCUSSION
Before considering the parties’ arguments, the Court
will summarize the relevant legal standards.
I.

Legal Standards
“When evaluating the report and recommendation of a

magistrate judge, the district court may adopt those portions of
the report to which no objections have been made and which are not
facially erroneous.”

Walker v. Vaughan, 216 F. Supp. 2d 290, 291

(S.D.N.Y. 2002) (citation omitted).

A party may serve and file

specific, written objections to a magistrate judge’s report and
recommendation within fourteen days of being served with the
recommended disposition.
receiving

any

timely

See FED. R. CIV. P. 72(b)(2).

objections

to

the

magistrate

Upon
judge’s

recommendation, the 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)(1)(C); see also FED. R. CIV.
9

P. 72(b)(3).
must

point

A party that objects to a report and recommendation
out

the

specific

portions

of

recommendation to which they are objecting.

the

report

and

See Barratt v. Joie,

No. 96-CV-0324, 2002 WL 335014, at *1 (S.D.N.Y. Mar. 4, 2002).
When a party raises an objection to a magistrate judge’s
report, the Court must conduct a de novo review of any contested
sections of the report.

See Pizarro v. Bartlett, 776 F. Supp.

815, 817 (S.D.N.Y. 1991).
conclusory
original

or

general

arguments,

However, where a party “makes only

objections,
the

Court

or

simply

reviews

Recommendation only for clear error.”

reiterates

the

Report

his
and

Walker, 216 F. Supp. 2d at

291 (internal quotation marks and citation omitted).
Interpleader

actions

are

“designed

to

protect

stakeholders from undue harassment in the face of multiple claims
against

the

same

fund,

and

to

relieve

the

assessing which claim among many has merit.”

stakeholder

from

Fidelity Brokerage

Servs., LLC v. Bank of China, 192 F. Supp. 2d 173, 177 (S.D.N.Y.
Mar. 18, 2002).

As discussed, interpleader actions may proceed

under Federal Rule of Civil Procedure 22 or 28 U.S.C. § 1335,
although the jurisdictional requirements differ slightly.
Rule

22,

the

plaintiff

must

demonstrate

jurisdiction or federal question jurisdiction.

either

Under

diversity

CF 135 Flat LLC v.

Triadou SPV S.A., No. 15-CV-5345, 2016 WL 1109092, at *2, n.1
(S.D.N.Y.

Mar.

18,

2016).

To
10

plead

diversity

jurisdiction,

complete diversity between the parties, along with an amount in
controversy exceeding $75,000, is required.

Penn. Public School

Emps.’ Ret. Sys. v. Morgan Stanley & Co., Inc., 772 F.3d 111, 11718 (2d Cir. 2014); see also 28 U.S.C. § 1332(a).

In other words,

“all plaintiffs must be citizens of states diverse from those of
all defendants.”

Penn. Pub. School, 772 F.3d at 118.

However,

under Section 1335, the interpleader plaintiff need only show
minimal diversity between the parties.

Hartford Life Ins. Co. v.

Simonee, No. 14-CV-7520, 2016 WL 6956726, at *3 (E.D.N.Y. Nov. 9,
2016).

Additionally, the interpleader plaintiff must also show

that the “claims in question may expose [that] party . . . to
double or multiple liability.”

CF 135 Flat LLC, 2016 WL 1109092,

at *2 (quoting FED. R. CIV. P. 22(a)(1)) (internal quotation marks
omitted).

Generally, “[a] neutral stakeholder having no claim to

the subject matter of the action” may be discharged after the
disputed

funds

are

deposited

with

the

Court.

Aon

Corp.

v.

Hohlweck, 223 F. Supp. 2d 510, 514 (S.D.N.Y. Sept. 3, 2002).
II.

Rule Interpleader
As an initial matter, the Court must address an argument

made by the Government that may implicate its subject matter
jurisdiction.6

The R&R and BNY’s objections both relied on Rule

The Court has considered whether, as a procedural matter, the
Government waived this argument by failing to object to the R&R
in a timely manner. However, because a challenge to subject
matter jurisdiction can be raised at any time by either the
6

11

Interpleader

as

jurisdiction.

an

appropriate

basis

for

(BNY Obj. at 4; R&R at 34.)

interpleader

Further, unless

Plaintiff is willing to deposit the policy maximum with the Court,
Rule Interpleader is the only basis for interpleader jurisdiction.
The

Government

argues

that

Plaintiff

cannot

establish

the

jurisdictional requirements of Rule 22 because complete diversity
is destroyed by the presence of the United States as a party.
(U.S. Reply at 4.)
The Court agrees.

The statute which governs diversity

jurisdiction, 28 U.S.C. § 1332, states that “district courts shall
have original jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of $75,000 . . . between
. . . citizens of different states.”
Because

section

1332

requires

See 28 U.S.C. § 1332(a)(1).

complete

diversity

between

the

parties, the Court must examine the citizenship of each party.
See Penn. Public School, 772 F.3d at 118.
States is not a citizen of any state.

However, the United

See United States v. Dry

Dock Savings Institution, 149 F.2d 917, 918 (2d Cir. 1945).
Therefore, the presence of the United States as a defendant
destroys complete diversity.

See, e.g., United States v. Park

Place Assocs., Ltd., 563 F.3d 907, 919 n.7 (9th Cir. 2009) (“The

parties or the court, the Court is obligated to address it. See
Hammerstein v. Fed. Republic of Germany, 488 F. App’x 506, 508
(2d Cir. 2012).
12

United States, however, is neither a state nor a citizen of a
state, and may neither sue nor be sued under § 1332.”); Martin v.
Sallie Mae, Inc., No. 07-CV-0123, 2007 WL 4305607, at *3 (S.D. W.
Va. Dec. 7, 2007) (“[A] claim brought by a citizen of the United
States against the United States does not satisfy diversity or
citizenship.”); T M Sys., Inc. v. United States, 473 F. Supp. 481,
485 (D. Conn. 1979) (“Defendant United States, however, is not a
citizen

of

any

state

within

the

meaning

of

diversity

jurisdiction.”).7

Further, because it is an indispensable party in this action,
the Court declines to dismiss the United States to preserve
diversity jurisdiction. See CP Solutions PTE, Ltd. v. General
Electric Co., 553 F.3d 156, 159 (2d Cir. 2009) (“Federal Rule of
Civil Procedure 21 allows a court to drop a nondiverse party at
any time to preserve diversity jurisdiction, . . . provided the
nondiverse party is not ‘indispensable’ under Rule 19(b).”); T M
Sys. Inc., 473 F. Supp. at 485 (“[D]iversity is destroyed unless
the United States is not an indispensable party to [the]
suit.”). To evaluate whether a party is indispensable, Federal
Rule of Civil Procedure 19(b) specifies several factors: “(1)
whether a judgment rendered in a person’s absence might
prejudice that person or parties to the action, (2) the extent
to which any prejudice could be alleviated, (3) whether a
judgment in the person’s absence would be adequate, and (4)
whether the plaintiff would have an adequate remedy if the court
dismissed the suit.” CP Solutions, 553 F.3d at 159 (citing FED.
R. CIV. P. 19(b)); see also Rubler v. Unum Provident Corp., No.
04-CV-7102, 2007 WL 188024, at *2 (S.D.N.Y. Jan. 25, 2007).
Because the purpose of this proceeding is to adjudicate the
competing claims to the insurance proceeds, and the United
States has asserted a claim to the proceeds, the Court finds
that allowing the case to proceed without the United States
would be prejudicial to its claims and such prejudice could not
be alleviated. Additionally, any judgment would not fully
resolve the claims to the proceeds, and as discussed infra,
there is an alternative basis for interpleader jurisdiction.
7

13

Therefore, Rule 22 is not a proper basis for interpleader
jurisdiction.8
Statutory

If Plaintiff wishes to proceed, it must do so under

Interpleader.

Tomlinson’s

R&R,

the

For

Court

the

finds

reasons
that

stated

the

in

Judge

requirements

for

Statutory Interpleader will be satisfied so long as Plaintiff is
willing to deposit the policy maximum of $363,000.9
III. BNY’s Objections
A. Discharge
BNY
discharged
stakeholder.

contends

from

this

that

Plaintiff

action

because

(BNY Obj. at 3.)

is
it

not
is

entitled
not

a

to

be

neutral

However, the majority of BNY’s

arguments are moot in light of the Court’s determination that
Plaintiff must deposit $363,000 to proceed.

(See, e.g., BNY Obj.

at 4 (discussing that Plaintiff could face further exposure up to
the policy maximum and that Plaintiff underestimated the damage to

As set forth in the R&R, there is no basis for federal question
jurisdiction at this juncture. (R&R at 31, n.11.)
8

There is minimal diversity despite the presence of the United
States as a defendant because minimal diversity requires
“diversity of citizenship between two or more claimants.” (R&R
at 18 (citing Metro. Life Ins. Co. v. Little, No. 13-CV-1059,
2013 WL 4495684, at *1 (E.D.N.Y. Aug. 17, 2013).) In this case,
the requirement is met because the Colluras are citizens of New
York and Bank of America, a party to the action at the time it
was filed, is a citizen of Delaware and North Carolina. (R&R at
21.) See also Cayuga Const. Corp. v. United States, No. 91-CV4883, 1993 WL 258738, at *1 (S.D.N.Y. July 6, 1993) (holding
that minimal diversity existed in statutory interpleader action
when United States was a party).
9

14

the property).

It is unclear if Plaintiff will seek dismissal

from the case if it elects to deposit the $363,000.
that

uncertainty

and

the

In light of

counterclaim10,

Colluras’

the

Court

declines to hold that Plaintiff is entitled to discharge at this
time.
B. Interest11
BNY maintains that Plaintiff is obligated to deposit
interest under the terms of the policy.

(BNY Obj. at 6-7.)

Under

“Additional Protection,” the Policy states that Plaintiff “will
pay, in addition to the limits of liability . . . interest accruing
on damages awarded until such time as we have paid, formally
offered, or deposited in court the amount for which we are liable
under this policy; interest will be paid only on damages which do
not exceed our limits of liability.”
noting

that

BNY’s

argument

(Policy at 47.)

assumes

that

It is worth

Plaintiff

will

be

depositing the Settlement Amount of $69,596.04--not the policy
maximum.

Moreover, BNY has failed to request a particular rate of

interest or a specific amount of interest.

Regardless, the Court

finds that consideration of this issue is premature.

If Plaintiff

As set forth in the R&R, if the Colluras agree to dismiss the
counterclaim, they may seek dismissal under Rule 41(a)(2). (R&R
at 33, n.12.)
10

The Court finds BNY’s objections regarding the amount in
controversy and Plaintiff’s willingness to deposit the policy
maximum to be moot. (See BNY Obj. at 5-6.)
11

15

elects to deposit the $363,000 to proceed, BNY may renew its
request at that time.
IV.

BNY’s Claim
BNY also provides additional evidence that purportedly

shows that BNY has a superior interest in the proceeds.
at 7-9.)

(BNY Obj.

The Government disputes that BNY’s claim is superior.

(U.S. Reply at 7-10.)

As Judge Tomlinson noted, the appropriate

inquiry at this stage is to determine whether the Court has
interpleader jurisdiction.

(R&R at 15-16.)

If Plaintiff deposits

$363,000 with the Court, the Court will begin the process of
adjudicating the claims and distributing the proceeds.

BNY’s

request is premature and procedurally defective at this stage.12
V.

Plaintiff’s Motion for a Default Judgment Against Capital One
and Countrywide
If no timely objections have been made to an R&R, the

“court need only satisfy itself that there is no clear error on
the face of the record.”

Urena v. New York, 160 F. Supp. 2d 606,

609-10 (S.D.N.Y. 2001) (internal quotation marks and citation
omitted).

None of the parties have objected to Judge Tomlinson’s

recommendation that a default judgment be entered against Capital
One and Countrywide. Accordingly, all objections are hereby deemed
to have been waived.

The Court finds Judge Tomlinson’s R&R to be

As noted, BNY failed to comply with several procedural rules.
(See R&R at 15-17.)
12

16

comprehensive, well-reasoned, and free of clear error in this
respect, and it adopts her recommendation.
CONCLUSION
For

the

foregoing

reasons,

BNY’s

objections

are

OVERRULED, and the R&R is ADOPTED IN PART and REJECTED IN PART.
Plaintiff’s motion to deposit funds (Docket Entry 56) is GRANTED
IN PART and DENIED IN PART.

Specifically, Plaintiff may proceed

under Statutory Interpleader but must deposit $363,000 with the
Court.

At that time, Plaintiff may request that it be discharged

from the case.

Plaintiff is directed to file a letter indicating

if it is willing and able to deposit $363,000 with the Court within
ten (10) days of the date of this Memorandum and Order.
Additionally, Plaintiff’s motion for a default judgment
(Docket Entry 59) is GRANTED.

The Clerk of the Court is directed

to enter default judgments against Capital One Home Loans, LLC and
Countrywide Home Loans, Inc.

SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

March
22 , 2017
Central Islip, New York

17