United States District Court, Northern District of New York
April 21, 2015
ONEWEST BANK, N.A., Plaintiff,
JASON P. HICKOK; NATHAN LITTAUER HOSP.; FULTON CNTY CLERK; and JOHN DOE, Defendants.
GROSS POLOWY, LLC Counsel for Plaintiff
AMY E. POLOWY, ESQ.
KEITH R. YOUNG, ESQ.
DECISION AND ORDER
HON. GLENN T. SUDDABY U.S. DISTRICT JUDGE
Currently before the Court, in this real property foreclosure action arising under diversity jurisdiction and filed by OneWest Bank, N.A. (“Plaintiff”) against Jason P. Hickok, Nathan Littauer Hospital, Fulton County Clerk, and John Doe (collectively “Defendants”), is Plaintiff’s motion for default judgment pursuant to Fed.R.Civ.P. 55(b). (Dkt. No. 16.) For the reasons stated below, Plaintiff’s motion is granted. However, to the extent that Plaintiff additionally requests that the Court issue a Judgment of Foreclosure and Sale, Plaintiff is directed to file an amended proposed Judgment of Foreclosure and Sale and a memorandum of law.
I. RELEVANT BACKGROUND
A. Plaintiff’s Complaint
Generally, liberally construed, Plaintiff’s Complaint alleges as follows. (Dkt. No. 1) On or about July 26, 2007, Defendant Hickok executed a promissory note (“Note”) promising to pay $105, 600.00. To secure his promise to pay his obligation under the Note, Defendant Hickok executed and delivered a Mortgage on the property located at 202 East State Street Gloversville, New York 12078 (the “Property”). On October 8, 2008, Defendant signed a Loan Modification Agreement, modifying the terms of the Note (“Modified Note”) and the Mortgage. Subsequently, Mortgage was assigned first to IndyMac Federal Bank, FSB, and then to OneWest Bank N.A. (formally known as OneWest Bank, FSB). On May 1, 2009, Defendant failed to make a payment due and owing in accordance with the terms of the Modified Note and Mortgage. Plaintiff accelerated the loan and declared the entire amount due and owing under the Modified Note. As a result, the principal balance presently due and owing under the Note and Mortgage is $182, 247.69, in addition to interest accruing from October 17, 2014, at a rate of 6.125%.
Finally, alleges the Complaint, the remaining Defendants claim an interest or a lien in the Property prior and adverse to Plaintiff’s mortgage lien, which claim is invalid. (Id.)
Based on these (and other) factual allegations, Plaintiff’s Complaint asserts the following two claims against Defendants: (1) a claim for a judgment foreclosing on Plaintiff’s mortgage encumbering 202 East State Street Gloversville pursuant to Article 13 of the New York Real Property Actions and Proceedings Law (“NY RPAPL”); and (2) a claim for a judgment discharging the prior and adverse liens on the Property pursuant to Article 15 of the NY RPAPL. (See generally Dkt. No. 1.)
B. Plaintiff’s Service of Its Complaint and Defendants’ Failure to Answer
On June 27, 2014, Plaintiff served its Complaint on Defendants. (Dkt. No. 3.) As of the date of this Decision and Order, Defendants have filed no Answer to that Complaint. (See generally Docket Sheet.)
C. Clerk’s Office’s Entry of Default and Defendants’ Non-Appearance
On October 3, 2014, Plaintiff filed for entry of default. (Dkt. No. 13.) On October 6, 2014, the Clerk of the Court entered default against Defendants, pursuant to Fed.R.Civ.P. 55(a). (Dkt. No. 14.) As of the date of this Decision and Order, Defendants have not appeared and attempted to cure that entry of default. (See generally Docket Sheet.)
D. Plaintiff’s Motion for Default Judgment and Defendants’ Non-Response
On December 8, 2014, Plaintiff filed a motion for default judgment against Defendants pursuant to Fed.R.Civ.P. 55(b). (Dkt. No. 16.) As of the date of this Decision and Order, Defendants have filed no response to that motion. (See generally Docket Sheet.)
Generally, in support of its motion for default judgment, Plaintiff argues as follows: (1) Plaintiff is entitled to a judgment of foreclosure and sale; (2) the property should be sold pursuant to NY RPAPL § 1351 and that the sale of the proceeds be distributed in accordance with NY RPAPL § 1354; and (3) Plaintiff is entitled to reimbursement for its attorney fees and Plaintiff is entitled to reimbursement for its costs, allowances, and disbursements made in accordance with the Note and Mortgage and Article 83 of the New York Civil Practice Law and Rules (“NY CPLR”). (Dkt. No. 16, at ¶ 16-17.) Familiarity with the particular grounds for Plaintiff’s motion for default judgment against Defendants is assumed in this Decision and Order, which is intended primarily for the review of the parties.
II. GOVERNING LEGAL STANDARD
“Federal Rule of Civil Procedure 55 provides a two-step process that the Court must follow before it may enter a default judgment against a defendant.” Robertson v. Doe, 05-CV-7046, 2008 WL 2519894, at *3 (S.D.N.Y. June 19, 2008). “First, under Rule 55(a), when a party fails to ‘plead or otherwise defend . . . the clerk must enter the party's default.’” Robertson, 2008 WL 2519894, at *3 (quoting Fed.R.Civ.P. 55[a]). “Second, pursuant to Rule 55(b)(2), the party seeking default judgment is required to present its application for entry of judgment to the court.” Id. “Notice of the application must be sent to the defaulting party so that it has an opportunity to show cause why the court should not enter a default judgment.” Id. (citing Fed.R.Civ.P. 55[b]). “When an action presents more than one claim for relief . .., the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties . . . if the court expressly determines that there is no just reason for delay.” Fed.R.Civ.P. 54(b).
When a court considers a motion for the entry of a default judgment, it must “accept[ ] as true all of the factual allegations of the complaint . . . .” Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (citations omitted). “However, the court cannot construe the damages alleged in the complaint as true.” Eng’rs Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds v. Catone Constr. Co., Inc., 08-CV-1048, 2009 WL 4730700, at *2 (N.D.N.Y. Dec. 4, 2009) (Scullin, J.) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 [2d Cir. 1999]). “Rather, the court must ‘conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.’” Eng’rs Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds, 2009 WL 4730700, at *2 (quoting Alcantara, 183 F.3d at 155 [citation omitted]). This inquiry “involves two tasks:  determining the proper rule for calculating damages on such a claim, and  assessing plaintiff's evidence supporting the damages to be determined under this rule.” Alcantara, 183 F.3d at 155. Finally, in calculating damages, the court “need not agree that the alleged facts constitute a valid cause of action . . . .” Au Bon Pain, 653 F.2d at 65 (citation omitted).
After carefully considering Plaintiff’s unopposed motion, the Court is satisfied that Plaintiff has met its modest threshold burden of establishing entitlement to default judgment against Defendants on the issue of liability under the circumstances.
For example, for the reasons stated above in Part I of this Decision and Order, the Court finds that due notice of this action has been given to Defendants. However, no Answer has been filed and no one has appeared on behalf of Defendants. In addition, the Clerk has already entered default against Defendants, and Plaintiff has served Defendants with its motion for the issuance of a default judgment. However, Defendants have still neither responded to the motion nor even appeared in this action. Finally, the Court finds that the factual allegations of Plaintiff’s Complaint are sufficient to state a claim upon which relief can be granted. See W.A. W.Van Limburg Stirum et al. v. Whalen et al., 90-CV-1279, 1993 WL 241464, at *4 (N.D.N.Y. June 29, 1993) (Munson, J.) (holding that, “[b]efore judgment can be entered, the court must determine whether plaintiff’s factual allegations are sufficient to state a claim for relief . . . the court may exercise its discretion to require some proof of the facts that must be established in order to determine liability”).
For each of these alternative reasons, the Court grants Plaintiff’s motion for the issuance of a default judgment on the issue of liability pursuant to Fed.R.Civ.P. 55(b).
After carefully considering Plaintiff’s unopposed motion, the Court has calculated the amount of damages owed as follows.
In support of its damages request, Plaintiff has provided, inter alia, the certification of Plaintiff’s Assistant Secretary, Caryn Edwards, which demonstrates that Defendant Hickok is indebted to Plaintiff in the amount of $176, 411.67 as of October 17, 2014. In addition, Plaintiff has established the following amounts due and owing: $3, 388.92 in interest based on a per diem rate of $18.22 accruing from October 17, 2014, to the date of this Decision and Order (April 21, 2015),  $1, 145 in costs and disbursements,  and $2, 500 in attorney’s fees.
Therefore, the Court concludes that Plaintiff has met its burden of establishing a valid basis for the damages, and that default judgment against Defendants in the amount of $183, 445.59 is appropriate.
C. Proposed Judgment of Foreclosure and Sale
In addition to submitting a proposed Judgment requesting the relief granted by this Decision and Order, Plaintiff has submitted a proposed Judgment of Foreclosure and Sale, which the Court finds to not be sufficiently explained in Plaintiff’s attorney affirmation. (Compare Dkt. No. 22, Attach. 1, at 4-9 with Dkt. No. 16, Attach. 1.)
If Plaintiff continues to request such a Judgment of Foreclosure and Sale, Plaintiff is directed to do the following three things within thirty days of the date of this Decision and Order: (1) file an amended proposed Judgment of Foreclosure and Sale, which fills in the blanks currently contained in its proposed Judgment of Foreclosure and Sale, and which amends the amounts of money referenced therein so they comport with the amounts of money awarded in this Decision and Order; (2) in addition to filing that amended document, email it in Word format to the undersigned’s courtroom deputy, Lori Welch, at firstname.lastname@example.org; and (3) file a memorandum of law citing legal authority for each of the paragraphs requested in the amended document.
ACCORDINGLY, it is
ORDERED that the Clerk of the Court shall TERMINATE John Doe as a Defendant in this action, in accordance with note 1 of this Decision and Order; and it is further
ORDERED that Plaintiffs motion for entry of default judgment against Defendants (Dkt. No. 16) is GRANTED; and it is further
ORDERED that Plaintiff is awarded a Judgment against Defendant Hickok in the amount of $183, 445.59, with interest at the statutory rate after the date of the entry of this Decision and Order; and it is further
ORDERED that the Property shall be sold pursuant to NY RPAPL § 1351, that a deed shall be issued in accordance with NY RPAPL § 1353(1), and that the sale proceeds shall be distributed in accordance with NY RPAPL § 1354; and it is further
ORDERED that, should Plaintiff continue to request a proposed Judgment of Foreclosure and Sale, Plaintiff shall, within THIRTY (30) DAYS of the date of this Decision and Order, do each of the three things specified above in Part III.C. of this Decision and Order; and it is further
ORDERED that, if plaintiff fails to do each of the three things specified above in Part III.C. of this Decision and Order within THIRTY (30) DAYS of the date of this Decision and Order, the Clerk is directed to enter a default judgment in favor of the Plaintiff in the amount of $183, 445.59, with interest at the statutory rate after the date of entry of this Decision and Order against Defendant Hickok and close this case.