U.S. Bank National Association v. Kozikowski et al

Filing 35

ORDER ADOPTING IN PART 25 REPORT AND RECOMMENDATIONS AND DENYING, WITHOUT PREJUDICE, 20 Motion for Default Judgment --- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, Plaintiff's objections to the Report and Recomme ndations issued by the Hon. Cheryl L. Pollak, Chief U.S.M.J., on October 29, 2020, are overruled and the R&R is adopted and modified only to the extent that the Clerk of the Court is directed to close this case administratively, with leave to move to reopen by any party within thirty (30) days of the Second Circuit Court of Appeals' resolution of the Schiffman case.Accordingly, Plaintiff's default judgment motion is denied without prejudice to renew if this case is reopened. In the event that Plaintiff seeks to renew its motion, Plaintiff shall submit supplemental documentation to support its claims for $396,242.80 in unpaid principal, $169,818.35 as the deferred amount under the loan modification agreement, a nd $54,234.09 for pre-acceleration late charges, hazard insurance disbursements, tax disbursements, and property inspections and preservation disbursements.Plaintiff is directed to serve a copy of this Electronic Order and the Attached Written Memorandum and Order to all defendants within five days of the date of this Order and immediately thereafter file proof of such service with the Court. SO ORDEREDOrdered by Judge Dora Lizette Irizarry on 3/31/2021. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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U.S. BANK NATIONAL ASSOCIATION,
:
NOT IN ITS INDIVIDUAL CAPACITY BUT
:
SOLELY AS TRUSTEE FOR THE RMAC
:
TRUST, SERIES 2016-CTT,
:
:
Plaintiff,
:
:
-against:
:
RYSZARD KOZIKOWSKI, et al.,
:
:
Defendants.
:
:
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DORA L. IRIZARRY, United States District Judge:

MEMORANDUM AND ORDER
ADOPTING IN PART
REPORT & RECOMMENDATION
19-CV-00783 (DLI) (CLP)

On February 8, 2019, U.S. Bank National Association (“Plaintiff”) commenced this action
pursuant to New York Real Property Actions and Proceedings Law (“RPAPL”) against Ryszard
Kozikowski, Anna Chelstowska, Czeslaw Chelstowski, the Clerk of the Suffolk County District
Court and the Clerk of the Suffolk County Traffic and Parking Violations Agency (collectively,
“Defendants”), seeking to foreclose on a mortgage encumbering 99 Wilson Avenue, Amityville,
New York 11701. See generally, Complaint (“Compl.”), Dkt. Entry No. 1. Defendants did not
appear or answer the Complaint. Plaintiff requested a certificate of default, and the Clerk entered
a notation of default against the Defendants. See, Dkt. Entry Nos. 14-15. On October 16, 2019,
Plaintiff moved for a default judgment pursuant to Federal Rule of Civil Procedure 55. See, Plf.’s
Mot., Dkt. Entry No. 20. Defendants did not oppose the motion.
On October 17, 2019, the Court referred the default judgment motion to the Honorable
Cheryl L. Pollak, now Chief United States Magistrate Judge, for a Report and Recommendation
(“R&R”). On October 29, 2020, the magistrate judge issued an R&R recommending that the Court
deny the motion without prejudice to renew and stay the action pending the Second Circuit Court

of Appeals’ resolution of CIT Bank N.A. v. Schiffman, 948 F.3d 529 (2d Cir. 2020), certified
questions accepted, 34 N.Y.3d 1137 (2020). See, R&R, Dkt. Entry No. 25 at 1. Plaintiff objected
timely to the R&R. See, Plf.’s Objs., Dkt. Entry No. 27.
For the reasons set forth below, Plaintiff’s objections are overruled and the R&R is adopted
and modified in part. Plaintiff’s motion for default judgment is denied without prejudice to renew.
However, rather than stay the action, the Clerk of the Court is directed to close this case
administratively, with leave to move to reopen by any party within thirty days (30) of the Second
Circuit’s resolution of Schiffman.
LEGAL STANDARD
When a party objects to an R&R, a district judge must make a de novo determination with
respect to those portions of the R&R to which the party objects. See, Federal Rules of Civil
Procedure (“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 R&R for clear error. See, Robinson v. Superintendent, Green Haven Corr. Facility, 2012 WL
123263, at *1 (E.D.N.Y. Jan. 17, 2012) (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
In determining whether Plaintiff is entitled to default judgment, the magistrate judge, as an
initial matter, examined whether Plaintiff complied with the requirements of RPAPL §§ 1304 and
1306. RPAPL § 1304 requires that, at least ninety days before commencing a foreclosure action,

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Plaintiff must send notice “by registered or certified mail and also by first-class mail to the last
known address of the borrower, and to the residence that is the subject of the mortgage.” RPAPL
§§ 1304(1), (2). “Proper service of RPAPL 1304 notice on the borrower or borrowers is a
condition precedent to the commencement of a foreclosure action[] and the plaintiff has the burden
of establishing satisfaction of this condition. Compliance with § 1304 can be established with
proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant
signatures, or proof of a standard office mailing procedure designed to ensure that items are []
addressed and mailed, sworn to by someone with personal knowledge of the procedure.”
Schiffman, 948 F.3d at 533 (internal quotation marks and citations omitted). “Courts must
determine whether a plaintiff has complied with RPAPL § 1304, even on a default judgment
motion, because failure to comply [] is a sufficient basis to deny foreclosure relief.” Freedom
Mortg. Corp. v. Powell, 2020 WL 4932145, at *3 (E.D.N.Y. Aug. 24, 2020) (citations omitted).
As an additional precondition of a foreclosure action, Plaintiff must file with the
superintendent of financial services within three business days of mailing the RPAPL § 1304
notices “at a minimum, the name, address, last known telephone number of the borrower, and the
amount claimed as due and owing on the mortgage, and such other information as will enable the
superintendent to ascertain the type of loan at issue.” RPAPL §§ 1306(1), (2).
In Schiffman, the Second Circuit certified the following two questions to the New York
State Court of Appeals regarding the requirements of RPAPL §§ 1304 and 1306:
Where a foreclosure plaintiff seeks to establish compliance with RPAPL § 1304 through
proof of a standard office mailing procedure, and the defendant both denies receipt and
seeks to rebut the presumption of receipt by showing that the mailing procedure was not
followed, what showing must the defendant make to render inadequate the plaintiff’s proof
of compliance with § 1304?

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Where there are multiple borrowers on a single loan, does RPAPL § 1306 require that a
lender’s filing include information about all borrowers, or does § 1306 require only that a
lender’s filing include information about one borrower?
948 F.3d at 538. The Second Circuit invited the New York State Court of Appeals to reformulate
or expand these questions to address any other issues of New York law that would assist the Circuit
in determining whether the plaintiff in Schiffman complied with RPAPL §§ 1304 and 1306. Id.
The magistrate judge recommended that this Court deny Plaintiff’s motion for default
judgment without prejudice to renew and stay the case pending the Second Circuit’s resolution of
Schiffman. See, R&R at 1. The magistrate judge explained that the New York State Court of
Appeals’ answers to the certified questions may impact this Court’s analysis of Plaintiff’s
compliance with RPAPL §§ 1304 and 1306. Id. at 8. The magistrate judge also recommended
that, if Plaintiff renews its default judgment motion when Schiffman is resolved, the Court should
direct Plaintiff to submit additional documentation to support its damages claims. Id. at 13.
Plaintiff objects to the R&R on five grounds. First, Plaintiff claims that, because a violation
of RPAPL § 1304 must be raised by the Defendants as a defense, the magistrate judge erred by
sua sponte considering Plaintiff’s compliance with RPAPL § 1304 on a default judgment motion.
See, Plf.’s Objs. at 3. Second, Plaintiff alleges it complied with RPAPL § 1304. Id. at 5-6. Third,
Plaintiff contends that Schiffman is distinguishable and the Second Circuit’s certified questions
regarding RPAPL § 1304 is not applicable to facts of this case. Id. at 4. Fourth, Plaintiff alleges
it complied with RPAPL § 1306. Id. at 6-7. Finally, Plaintiff claims it submitted sufficient
documentation to demonstrate its entitlement to damages. Id. at 7-8. The Court reviews these
objections de novo.
In support of its first objection, Plaintiff cites several New York appellate court decisions
that suggest a plaintiff is not required to show compliance with RPAPL § 1304, if the borrower

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does not raise it as a defense. Id. at 3-4. In one case, the Appellate Division reversed the trial
court’s decision to deny a plaintiff’s motion for leave to enter a default judgment. See, U.S. Bank,
N.A. v. Carey, 137 A.D.3d 894, 896 (2d Dep’t 2016) (“Failure to comply with RPAPL § 1304 . . .
is a defense which may be raised at any time. However, in this case, that defense has never been
raised by the borrowers. Therefore, the plaintiff was not required to disprove that defense.”)
(internal citations omitted). Other appellate courts have issued similar rulings. See, Deutsche
Bank Nat’l Trust Co. v. Lopez, 148 A.D.3d 475, 476 (1st Dep’t 2017) (“Having so defaulted, and
having failed to proffer a reasonable excuse for his defaults, defendant is precluded from moving
to dismiss the foreclosure action on the ground of plaintiff’s alleged failure to comply with RPAPL
§ 1304.”) (internal citation omitted).
Although these cases appear to support Plaintiff’s position, they are at odds with the
disposition of this issue by courts in this district. See, Windward Bora, LLC v. Thompson, 2020
WL 1242828, at *4 n.6 (E.D.N.Y. Mar. 16, 2020) (“federal courts sitting in New York regularly
review compliance with RPAPL § 1304 in ruling on motions for default judgment in foreclosure
cases”) (collecting cases). Given the split between the state and federal courts on this issue and
the potential clarification forthcoming from the New York State Court of Appeals and the Second
Circuit, it would not be prudent to decide this question prior to the resolution of Schiffman.
Accordingly, Plaintiff’s objection on this ground is overruled.
As to its second objection, Plaintiff contends that it submitted an affidavit as evidence that
it mailed the RPAPL § 1304 notices to the Defendants by first class and certified mail more than
ninety days before commencing the action. See, Plf.’s Objs. at 5-6. Plaintiff asserts that the
affiant’s averments were based on a review of the business records that were submitted with the
affidavit and the standard mailing office procedure designed to ensure that items are addressed

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properly and mailed. Id. Plaintiff presumably refers to the affidavit of Justin Jenkins (the “Jenkins
Affidavit”), the Assistant Vice President of Rushmore Loan Management Services LLC, appointed
attorney in fact for the Plaintiff. See, Jenkins Aff., Dkt. Entry No. 22-6.
The magistrate judge concluded that the Jenkins Affidavit was insufficient to establish
notice by first class mail or certified or registered mail. See, R&R at 8-9. The Court agrees.
Plaintiff did not provide any mailing receipts or other proof of mailing and the first class postage
paid stamps on the mailing labels for each Defendant are not postmarked. Id. at 9. The Jenkins
Affidavit does not name the individual who mailed the RPAPL § 1304 notices or affirm that Mr.
Jenkins mailed them. Id. Furthermore, it does not describe any standard office mailing procedure
that was followed. Id. Plaintiff did not address any of these points in its objections. Accordingly,
Plaintiff’s objection is overruled as questions remain about whether Plaintiff can prove compliance
with RPAPL § 1304.
Plaintiff’s third objection is that Schiffman is distinguishable factually and procedurally
from this case and does not provide a basis for denying the motion. See, Plf.’s Objs. at 4. Unlike
Schiffman, where the Second Circuit was evaluating a contested summary judgment motion, this
case involves an unopposed default judgment motion. Id. As Defendants here have not appeared
in the case, they have not denied receipt of the RPAPL § 1304 notices or rebutted the presumption
of receipt by showing that Plaintiff’s mailing procedure was not followed. Id. As such, the
certified question in Schiffman regarding RPAPL § 1304 is not applicable to the facts of this case.
Id. The magistrate judge, while acknowledging the factual differences between this case and
Schiffman, observed that the New York State Court of Appeals’ answers to the certified questions
may clarify whether Plaintiff complied properly with RPAPL §§ 1304 and 1306. See, R&R at 8
n.5.

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The Court recognizes that the question certified by the Second Circuit in Schiffman
regarding RPAPL § 1304 does not bear perfectly on the issues raised by Plaintiff’s motion given
the different procedural postures of the two cases. However, in light of the uncertainty surrounding
the requirements of RPAPL § 1304, the New York State Court of Appeals may provide further
clarity on the subject. Thus, Plaintiff’s objection on this ground is overruled. See, Miss Jones,
LLC v. Viera, 2020 WL 1527141, at *2 (E.D.N.Y. Mar. 31, 2020) (overruling plaintiff’s objection
to R&R and stating that “[w]hile . . . there are important factual differences between Schiffman
and this case, these distinctions do not change [the magistrate judge’s] observation that, in
answering the certified question, the Court of Appeals is likely to shed light on the meaning and
application of § 1304.”) (internal quotation marks omitted).
As to its fourth objection, Plaintiff asserts that it timely filed with the superintendent of
financial services the borrower information required under RPAPL § 1306(2). See, Plf.’s Objs. at
6-7. A review of this filing reveals that Plaintiff listed the loan amount and the name, address and
telephone number for one of the borrowers, Defendant Ryszard Kozikowski. See, Jenkins Aff. at
96.

However, Plaintiff did not name or include any information for the other borrowers,

Defendants Anna Chelstowska and Czeslaw Chelstowski. Id. Plaintiff argues that the statute’s
purpose and text demonstrate that it needed only to name one borrower and its failure to name the
other borrowers is not a basis to deny its motion. See, Plf.’s Objs. at 7. As the magistrate judge
properly noted, this is the very issue presented to the Second Circuit in Schiffman that is pending
before the New York State Court of Appeals. See, R&R at 10. Accordingly, it would be premature
for the Court to decide this question and Plaintiff’s objection is overruled.
Plaintiff’s final objection is that the Jenkins Affidavit is sufficient to demonstrate its
entitlement to damages. See, Plf.’s Objs. at 7-8. The magistrate judge found that there were several

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deficiencies in the Jenkins Affidavit. This Court agrees. As an initial matter, it does not state how
many payments Defendants made prior to their default or the total amounts for the Court to verify
that $396,242.80 remains in unpaid principal. See, R&R at 11. The Jenkins Affidavit included a
series of computer “screen-prints” to support the claim that $396,242.80 is outstanding, but did
not explain the figures contained in these documents. Id. at 11-12; Jenkins Aff. at 6-11. Plaintiff
also claims that Defendant Ryszard Kozikowski entered into a loan modification agreement and
Plaintiff is seeking to recover the “deferred amount” of $169,818.35. Jenkins Aff. at 2-3; Compl.
at 3. However, Plaintiff did not include the agreement in its submission or explain this amount
further for the Court to determine its accuracy. See, R&R at 12.
Plaintiff also seeks $54,234.09 for pre-acceleration late charges, hazard insurance
disbursements, tax disbursements, and property inspections and preservation disbursements, but
Plaintiff did not provide the basis for this amount.1 Id. The magistrate judge recommended that
the Court direct Plaintiff to supplement its papers to verify and explain each of these amounts. Id.
Plaintiff objected to the magistrate judge’s findings regarding Plaintiff’s pre-acceleration late
charges, tax disbursements, hazard insurance disbursements, and property inspections and
preservation disbursements. See, Plf.’s Objs. at 7-8. Plaintiff argues that the Jenkins Affidavit
sufficiently itemizes each transaction, charge or disbursement and includes the specific date and
amount that was charged or disbursed. Id. at 7. While these amounts are listed in the Jenkins
Affidavit, Plaintiff failed to provide invoices, receipts or other documentary evidence to
substantiate these amounts. See, Freedom Mortg. Corp. v. Jett., 2019 WL 3714795, at *5-6
(E.D.N.Y. May 23, 2019), report and recommendation adopted, 2019 WL 3805103 (E.D.N.Y.
Aug. 13, 2019) (denying plaintiff’s unsubstantiated requests for pre-acceleration late charges,

1

The R&R did not reference Plaintiff’s pre-acceleration late charges, but included them in this amount.

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taxes, insurance costs, and property inspections and preservation costs). Accordingly, Plaintiff’s
objection is overruled as the Jenkins Affidavit is inadequate proof of these damages.
CONCLUSION
For the reasons set forth above, Plaintiff’s objections are overruled and the R&R is adopted
and modified only to the extent that the Clerk of the Court is directed to close this case
administratively, with leave to move to reopen by any party within thirty (30) days of the Second
Circuit Court of Appeals’ resolution of the Schiffman case. Accordingly, Plaintiff’s default
judgment motion is denied without prejudice to renew if this case is reopened. In the event that
Plaintiff seeks to renew its motion, Plaintiff shall submit supplemental documentation to support
its claims for $396,242.80 in unpaid principal, $169,818.35 as the deferred amount under the loan
modification agreement, and $54,234.09 for pre-acceleration late charges, hazard insurance
disbursements, tax disbursements, and property inspections and preservation disbursements.
SO ORDERED.
Dated: Brooklyn, New York
March 31, 2021
/s/
DORA L. IRIZARRY
United States District Judge

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