The opinion of the court was delivered by: Spatt, District Judge
Presently before the Court are objections to a Report and Recommendation of United States Magistrate E. Thomas Boyle dated March 8, 2010 addressing the calculation of damages in the above-captioned litigations between 4B's Realty 1530 CR39 LLC ("4B's Realty"), 4B's Realty's principals, Bert E. Brodsky ("Brodsky") and Barnett Brown ("Brown") (collectively "the Third-Party Defendants"), and Angelo Toscano ("Toscano"). For the reasons set forth below, the Court accepts in part and modifies in part Judge Boyle's Report.
Toscano holds a 50% stake in Southampton Brick & Tile, LLC ("SBT"), a wholesaler and retailer of masonry and tile products. The remaining interest is held by 4B's Realty, a separate corporation controlled by Brodsky and Brown. SBT is the tenant at 1530 County Road 39 ("the 1530 Property"), a property in Southampton that was owned by Toscano until December of 2008. In 2004, Toscano executed a promissory note ("the Note") with HSBC Bank ("HSBC") that was secured by a mortgage on the 1530 Property. The Note was guaranteed by SBT, Brodsky and Brown.
On or about March 31, 2007, Toscano defaulted on the Note. As guarantors, Brodsky and Brown were required to satisfy Toscano's obligations to HSBC. In exchange for satisfying the loan terms, HSBC subsequently assigned the mortgage on the property to 4B's Realty. In November of 2007, the Plaintiff commenced a mortgage foreclosure action in New York State Supreme Court, Suffolk County to foreclose on the 1530 Property. In that action, Toscano asserted a counterclaim for fraud against 4B's Realty as well as a third-party fraud claim against Brodsky and Brown. In April of 2008, 4B's Realty moved for summary judgment in the foreclosure action. Toscano defended against the motion, arguing that his default had been induced by fraudulent misrepresentations on the part of Brodsky and Brown.
In an Order dated June 19, 2008, the Supreme Court denied 4B's Realty's motion for summary judgment. Although the Supreme Court recognized that 4B's Realty had established a prima facie showing of its entitlement to summary judgment, it found that Toscano's affidavit in opposition raised a triable issue of fact as to whether his default was procured by fraud on the part of Brodsky and Brown. On June 30, 2008, 4B's Realty moved for reargument of the motion in the Supreme Court. However, in July of 2008, while the motion for reargument was pending, the United States, which had been named as a Defendant because of a tax lien recorded on the property, removed the action to this Court.
On December 23, 2008, Toscano entered into a contract for the sale of the Southampton property. At the closing, Toscano instructed the purchaser to tender two separate checks to 4B's Realty totaling $2,230,735.97, the amount Toscano alleges that 4B's Realty demanded to satisfy the debt. However, in a letter dated December 22, 2008, Toscano's attorney, Richard Kraslow ("Kraslow"), informed 4B's Realty that his client "contests the validity of the amount claimed to be due and owing by [the Plaintiff] and expressly reserves his right to contest Plaintiff's claims for interest, legal fees and/or late charges." By letter dated December 23, 2008, 4B's Realty advised Toscano that it would not accept his tender.
On January 6, 2009, 4B's Realty sought reconsideration of its motion for summary judgment of foreclosure in this Court. In an Order dated March 12, 2009, the Court granted 4B's Realty's motion. See 4 B's Realty 1530 CR39, LLC v. Toscano ("Toscano I"), 08-CV-2694, 2009 WL 702011 (E.D.N.Y. Mar. 12, 2009). First, the Court held that Toscano's offer of payment in December of 2008 was not a valid tender because it was conditioned upon his right to contest the amount due. Id., at *2--3. As a result, the Court held that 4B's Realty was "justified in refusing such a tender because it was not a valid satisfaction of Toscano's alleged debt" and therefore Toscano's conditional offer of payment did not moot the foreclosure action. Id. The Court then turned to the merits of the motion and granted the motion for summary judgment of foreclosure, finding that Toscano's allegations of fraud were unsubstantiated and insufficient to survive summary judgment. Id., at *6. In particular, the Court determined that Toscano offered no evidence confirming the alleged oral modifications of the Note terms and found that even if the terms had been modified, Toscano's reliance on those alleged modifications was not reasonable. Id.
After the Court granted 4B's Realty's motion for summary judgment, the remaining issues in the case were Toscano's counterclaim for fraud against 4B's Realty and a third-party claim for fraud against Brodsky and Brown. In an Order dated November 7, 2009, the Court granted the motions by 4B's Realty and the third-party defendants for summary judgment on the remaining claims. See 4 B's Realty 1530 CR39, LLC v. Toscano ("Toscano II"), 08-CV-2694, Docket Entry # 43 (E.D.N.Y. Nov. 7, 2009). The Court found that Toscano's fraud counterclaim against 4B's Realty was barred by the doctrine of collateral estoppel based on the Court's holding in Toscano I that Toscano had failed to offer sufficient evidence of fraud on the part of the third-party defendants. Id. at * 9. In addition, the Court dismissed Toscano's third-party fraudulent inducement claim, holding that:
Toscano is a sophisticated businessman who was represented by counsel in an arms-length transaction with business partners. Under the circumstances, having failed to memorialize the alleged oral representations, Toscano is now unable to make the required showing that he reasonably relied on those representations in agreeing to the transfer.
Id., at *12. On November 14, 2009, the Court referred this matter to United States Magistrate Judge E. Thomas Boyle to compute the amount due and owing to 4B's Realty under the Mortgage. Judge Boyle held a damages hearing on January 14, 2010.
On March 8, 2010, Judge Boyle issued a Report and Recommendation ("the Report"), recommending that the Court award 4B's Realty the following damages:
(1) the principal amount of the mortgage and promissory note in the amount of $1,700,000; (2) interest in the amount of $550,253.07; (3) attorney's fees and costs in the amount of $150,633.48; (4) interest on the attorney's fees and costs in the amount of $15,161.96; (5) a late penalty in the amount of $120,802.43; and, (6) post-judgment interest, to be calculated pursuant to 28 U.S.C. §1961. (Report at 14.) Judge Boyle further recommended that "additional interest be calculated from March 9, 2010 through the date of judgment entered herein at a rate of $675.23 per day and that additional late fees also be calculated from March 9, 2010 through the date of judgment at a per diem rate of $33.76." (Id.)
Toscano filed timely objections to the Judge Boyle's Report.
A court is required to make a de novo determination as to those portions of the report and recommendation to which objections were made. 28 U.S.C. § 636(b)(1)(C); Grassia v. Scully, 892 F.2d 16, 19 (2d Cir. 1989). The phrase " de novo determination" in Section 636(b)(1)-as opposed to "de novo hearing"-was selected by Congress "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, 100 S. Ct. 2406, 65 L. Ed. 2d 424 (1980). Section 636 does not require a court "to rehear the contested testimony in order to carry out the statutory command to make the required 'determination.'" Id. at 674, 100 S. Ct. 2406. Rather, in making such a determination, a court may in its discretion review the record and hear oral argument on the matter. See Pan Am. World Airways, Inc. v. Int'l Bhd. of Teamsters, 894 F.2d 36, 40 n. 3 (2d Cir. 1990). Furthermore, a court may in its sound discretion afford a degree of deference to the magistrate's report and recommendation. See Raddatz, 447 U.S. at 676, 100 S. Ct. 2406, 65 L.Ed.2d 424.
In case where a party "makes only conclusory or general objections, or simply reiterates his original arguments, the Court reviews the Report and Recommendation only for clear error." Pall Corp. v. Entegris, Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008) (quoting Barratt v. Joie, No. 96-CV-324, 2002 WL 335014, at *1 (S.D.N.Y. Mar. 4, 2002)). "Furthermore, even in a de novo review of a party's specific objections, the Court ordinarily will 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.'" Fairfield Financial Mortg. Group, Inc. v. Luca, 2011 WL 3625589, at *2 (E.D.N.Y. Aug. 16, 2011).
The Defendant contends that Judge Boyle erred in: (1) failing to take into account equitable considerations in awarding the Plaintiff interest after December of 2008; (2) awarding the Plaintiff compound interest; (3) awarding the Plaintiff late fees; and (4) awarding the Plaintiff attorneys' fees ...