MEMORANDUM & ORDER Plaintiff U.S. Bank National Association brought the instant action to foreclose on a mortgage encumbering the property at 100 Briar Patch Road, East Hampton, New York 11937 (the “Property”). See Compl., ECF No. 1. Presently before the Court is Plaintiff’s unopposed motion for (1) default judgment against all non-appearing defendants and (2) summary judgement against the two defendants who have appeared (the “Motion”). See ECF No. 45. Plaintiff seeks recovery of outstanding principal and interest due on the mortgage note, as well as entry of a judgment of foreclosure and sale of the Property. Plaintiff’s motion is GRANTED IN PART and DENIED IN PART as set forth herein. I. FACTUAL BACKGROUND For the unopposed motion for default judgment, the Court accepts as true Plaintiff’s factual assertions that are well-pled in the Complaint. See Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 187 (2d Cir. 2015) (per curiam) (holding that courts must accept well-pled factual allegations as true on a motion for default judgment). For the unopposed motion for summary judgment, the Court accepts as true Plaintiff’s factual assertions that are supported by undisputed documentary evidence. See Vt. Teddy Bear Co. v. 1-800 BEARGRAM Co., 373 F.3d 241, 244, 246 (2d Cir. 2004) (holding the district court may “accept the movant’s factual assertions as true” when adjudicating an unopposed summary judgment motion). A. The Note and Mortgage On November 6, 2006, defendant H. Christopher Whittle (“Borrower”) executed a note in favor of nonparty Lehman Brothers Bank, FSB in the amount of $8,250,000.00 (the “Note”). ECF No. 45-6. That same day, Borrower executed a mortgage on the Property to secure the Note (the “Mortgage”). ECF No. 45-7. On December 18, 2006, the Mortgage was recorded in the Suffolk County Clerk’s Office. Id. On July 17, 2013, the Mortgage was assigned to nonparty Nationstar Mortgage LLC; this assignment was recorded in the Suffolk County Clerk’s Office on February 21, 2014. See ECF No. 45-3 6; ECF No. 45-8. Since September 1, 2021, Borrower has breached the Note and Mortgage (the “Agreements”) by failing to make the required monthly payments. See ECF No. 45-3 10. On November 3, 2021, Borrower was sent a default notice via first class mail, which stated that the total amount in arears was $192,917.73 and Borrower must correct the default. See ECF No. 45- 10. The default notice further stated that the Borrower’s failure to cure the default by December 8, 2021, would permit acceleration of the loan and foreclosure and sale on the Property. See id. That same day, Borrower was sent via first class and certified mail the 90-day notice required by New York’s Real Property Actions And Proceedings Law (“RPAPL”) Section 1304(1). ECF No. 45-11. Consistent with RPAPL Section 1306, the Superintendent of the New York State Department of Financial Services was notified within three days that Borrower had been sent the 90-day notice. See ECF No. 45-3 16; ECF No. 45-12. On May 31, 2022, the Mortgage was assigned to Plaintiff; this assignment was recorded in the Suffolk County Clerk’s Office on February 3, 2023. See ECF No. 45-3 7; ECF No. 45-8. B. Additional Relevant Parties Defendant 100 Briar Patch LLC has been a 50 percent record owner of the Property since November 30, 2017. See ECF No. 45-15 (showing that Borrower transferred 50 percent of his interest in the Property to nonparty Priscilla Ratazzi Whittle on November 26, 2013, and that Ms. Whittle later transferred that interest to 100 Briar Patch LLC on November 30, 2017). Three Defendants hold subordinate mortgages on the Property: (1) Golden Eagle International Trading Limited, a Hong Kong Corporation (“Golden Eagle”); (2) Pure East Global Investments Limited, a British Virgin Islands Company (“Pure East”); and (3) Richard B. Montanye as Successor Trustee of the PIRA Trust (by appointment dated December 15, 2017) (“PIRA”). See ECF No. 45-14 (documenting Golden Eagle’s mortgage); ECF No. 45-16 (documenting Pure East and PIRA’s mortgages). Defendant Avenues Global Holdings LLC (“Avenues Global”) allegedly holds a junior lien of an unspecified type on the Property. See ECF No. 1 8. Defendant New York State Department Of Taxation And Finance (“NYSDTF” and together with Borrower, 100 Briar Patch LLC, Golden Eagle, Pure East, PIRA, and Avenues Global, collectively “Defendants”) is “a necessary party to this action by virtue of the fact that there may be possible unpaid franchise taxes due to the State of York.” Id. 9. II. PROCEDURAL HISTORY On September 14, 2022, Plaintiff filed the Complaint with the special summonses required by RPAPL Section 1320.1 Compare ECF Nos. 1-8, with N.Y. REAL PROP. ACTS. LAW §1320 (providing the summons required for a foreclosure action on a residential property with three or fewer units). Defendants were duly served with summonses and copies of the Complaint. See ECF Nos. 17-23. Golden Eagle and Avenues Global were the only defendants to file answers. See ECF Nos. 25, 34. The Clerk of the Court entered certificates of default for all other defendants on February 24, 2023. See ECF No. 29. On July 26, 2023, Plaintiff, Golden Eagle, and Avenues Global stipulated to a briefing schedule for the instant motion. See ECF No. 43. On August 24, 2023, those parties completed discovery. See ECF No. 41 (setting that deadline); ECF No. 44 (joint confirmation that the appearing parties conducted discovery as scheduled). On August 31, 2023, Plaintiff filed the instant motion consistent with the stipulated schedule and served same by mail upon all defendants in default. See ECF No. 45. None of the Defendants opposed this motion. III. LEGAL STANDARDS A. Default Judgment The Federal Rules of Civil Procedure prescribe a two-step process for a plaintiff to obtain a default judgment. First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” FED. R. CIV. P. 55(a). Second, after a default has been entered against the defendant, and provided the defendant failed to appear and move to set aside the default, the court may, on a plaintiff’s motion, enter a default judgment. See FED. R. CIV. P. 55(b)(2). Before imposing a default judgment, the district court must accept well-pled allegations as true and determine whether they establish the defendant’s liability as a matter of law. Bricklayers, 779 F.3d at 187. “While a party’s default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.” Id. at 189 (internal alterations and quotations omitted). Instead, the plaintiff must establish to a “reasonable certainty” entitlement to the relief requested. Cement & Concrete Workers Dist. Council Welfare Fund, Pension Fund, Annuity Fund, Educ. & Training Fund & Other Funds v. Metro Found. Contractors Inc., 699 F.3d 230, 234 (2d Cir. 2012) (internal quotations omitted). B. Summary Judgment Summary judgment must be granted when there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). “No genuine dispute of material fact exists when the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” McKinney v. City of Middletown, 49 F.4th 730, 737 (2d Cir. 2022) (internal quotations omitted). “The moving party bears the initial burden of showing that there is no genuine dispute as to a material fact.” Jaffer v. Hirji, 887 F.3d 111, 114 (2d Cir. 2018) (internal quotations omitted). For any burden of proof that rests with the nonmoving party, the movant can “point[] to a lack of evidence to go to the trier of fact on an essential element of the nonmovant’s claim.” Id. (internal quotations and alterations omitted). Once the moving party carries its burden, “the nonmoving party must come forward with evidence that would be sufficient to support a jury verdict in its favor.” McKinney, 49 F.4th at 738 (internal quotations omitted). In this analysis, the Court must “construe the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor.” ING Bank N.V. v. M/V Temara, 892 F.3d 511, 518 (2d Cir. 2018). Ultimately, “[t]he role of the district court on summary judgment is ‘not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried.’” McKinney, 49 F.4th at 738 (quoting Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011)). IV. DISCUSSION A. Five Of The Defendants Defaulted As detailed above, Borrower, 100 Briar Patch LLC, Pure East, PIRA, and NYSDTF each were properly served with a summons and the Complaint but failed to answer, file an appearance, or otherwise defend this action. See supra Part II. The Clerk of the Court properly entered a certificate of default for those defendants on February 24, 2023. See ECF No. 29. B. Borrower’s Liability Under New York law, “a plaintiff in an action to foreclose a mortgage [must] demonstrate: ‘the existence of the mortgage and mortgage note, ownership of the mortgage, and the defendant’s default in payment.’” Gustavia Home, LLC v. Bent, 321 F. Supp. 3d 409, 414 (E.D.N.Y. 2018) (quoting Campaign v. Barba, 805 N.Y.S.2d 86, 86 (2d Dep’t 2005)). “Once the plaintiff submits the mortgage, the unpaid note, and evidence of the default, it has demonstrated its prima facie case of entitlement to judgment.” Id. (citing Fleet Natl. Bank v. Olasov, 793 N.Y.S.2d 52, 52 (2d Dep’t 2005)). Here, Plaintiff submitted copies of the Agreements and chain of assignments, (ECF Nos. 1-2, 1-3, 1-4), which together establish the existence — and Plaintiff’s ownership — of the Mortgage and Note. See OneWest Bank, N.A. v. Melina, 827 F.3d 214, 222 (2d Cir. 2016) (“[A] written assignment of the underlying note…prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident.” (quoting U.S. Bank, N.A. v. Collymore, 890 N.Y.S.2d 578, 580 (2d Dep’t 2009)). Plaintiff submitted evidence of Borrower’s default in the form of an affidavit by Britney Wilson, Document Execution Associate of Nationstar Mortgage LLC, Plaintiff’s mortgage servicer, which states that Borrower defaulted on the Agreements on September 1, 2021. See ECF No. 45-3 10. Additionally, Plaintiff submitted the notices that it was required to send to Borrower under the terms of the Agreements, as well as proof that it complied with its obligations under the RPAPL. See supra Part I.A (detailing, inter alia, Plaintiff’s compliance with its contractual obligations and RPAPL §§1304, 1306); ECF Nos. 2-8 (showing summonses compliant with RPAPL §1320); ECF No. 45-23 (reflecting the Notice of Pendency filed consistent with RPAPL §1331). This documentary evidence, together with the allegations in the Complaint, are sufficient to establish Borrower’s liability. Thus, Plaintiff has established its right to foreclose upon the Property. Accordingly, a judgment of foreclosure and sale will be entered. C. 100 Briar Patch LLC’s Liability Under New York law, “[w]hen a mortgagor conveys property burdened by a mortgage, as a matter of law, the grantee takes title subject to the mortgage of record.”2 2 Bergman on New York Mortgage Foreclosures §12.04 (2023); see Andy Assocs., Inc. v. Bankers Tr. Co., 49 N.Y.2d 13, 20 (1979) (holding that a purchaser of property after a mortgage is recorded “has no cause for complaint…when its interest is upset as a result of a prior claim against the land the existence of which was apparent on the face of the public record at the time it purchased”); Courchevel 1850 LLC v. Mohammed Alam, 464 F. Supp. 3d 475, 482 (E.D.N.Y. 2020) (explaining that one who acquirers a New York property subject to a recorded mortgage obtains said property “burdened by the lien” (internal quotations omitted)). As explained above, the Mortgage was recorded in 2006, Borrower transferred 50 percent ownership of the Property to nonparty Priscilla Ratazzi Whittle in 2013, and Ms. Whittle transferred that interest to defendant 100 Briar Patch LLC in 2017. See ECF No. 45-6 (reflecting that the Mortgage was recorded on December 18, 2006); ECF No. 45-15 (documenting chain of transfers to 100 Briar Patch LLC). Accordingly, default judgment against 100 Briar Patch LLC — limited to only foreclosure on the Property — is warranted given Plaintiff’s above-described entitlement to foreclosure.3 See Miss Jones, LLC v. Bisram, No. 16-CV-7020, 2018 WL 2074200, at *3 (E.D.N.Y. Feb. 5, 2018) (recommending grant of default judgment and order of foreclosure and sale against record owner of property not alleged to have been a signatory to the note or mortgage), report and recommendation adopted, 2018 WL 2074205 (E.D.N.Y. Feb. 22, 2018); JXB 84 LLC v. Khalil, No. 15-CV-6251, 2017 WL 1184001, at *4 (E.D.N.Y. Feb. 17, 2017) (same), report and recommendation adopted, 2017 WL 1184141 (E.D.N.Y. Mar. 29, 2017). D. Other Defendants’ Nominal Liability Under the RPAPL, the necessary parties to a mortgage foreclosure include “[e]very person having any lien or incumbrance upon the real property which is claimed to be subject and subordinate to the lien of the plaintiff.” REAL PROP. ACTS. LAW §1311(3). “The rationale for joinder of these interests derives from the underlying objective of foreclosure actions — to extinguish the rights of redemption of all those who have a subordinate interest in the property and to vest complete title in the purchaser at the judicial sale.” 71-21 Loubet, LLC v. Bank of Am., N.A., 174 N.Y.S.3d 400, 404 (2d Dep’t 2022) (internal quotations omitted). Plaintiff seeks to extinguish the subordinate liens on the Property held by Golden Eagle, Pure East, PIRA, Avenues Global, and the NYSDTF. Plaintiff must therefore establish this “nominal liability” for each defendant. E.g., Onewest Bank N.A. v. Louis, No. 15-CV-00597, 2016 WL 3552143, at *12 (S.D.N.Y. June 22, 2016) (internal quotations omitted). “To plead nominal liability, a plaintiff must allege ‘in great detail’ the nature of a defendant’s interest in the subject property.” Miss Jones LLC v. Brown, No. 17-CV-898, 2020 WL 13889871, at *7 (E.D.N.Y. Aug. 14, 2020) (quoting Wells Fargo Bank, N.A. v. Landi, No. 13-CV-5822, 2015 WL 5657358, at *3 (E.D.N.Y. Sept. 22, 2015)), report and recommendation adopted, 2020 WL 5503535 (E.D.N.Y. Sept. 11, 2020). Plaintiff submitted documents confirming that Golden Eagle, Pure East, and PIRA hold subordinate mortgages on the Property. See ECF No. 45-14 (documenting Golden Eagle’s mortgage); ECF No. 45-15 (documenting Pure East and PIRA’s mortgages). As such, Plaintiff established “nominal liability” sufficient for judgment against those defendants extinguishing their interests in the Property. See, e.g., CIT Bank, N.A. v. Howard, No. 14-CV-7470, 2018 WL 3014815, at *13 (E.D.N.Y. June 15, 2018) (imposing nominal liability against defendants after reviewing documents confirming their subordinate property interests). The Court reaches a different conclusion with respect to the two remaining defendants. Plaintiff did nothing more than allege, in conclusory fashion, that Avenues Global “holds a junior lien against the Subject Property” and NYSDTF “may” have an interest in the Property due to “possible” unpaid taxes owed to New York State. ECF No. 1
8-9. “Lacking here are wellpleaded allegations of nominal liability on [Avenues Global and NYSDTF's] part” such as how or when either of them “came about its lien on the Property demonstrating that [said] lien or interest is subordinate to the Mortgage.”4 Freedom Mortg. Corp. v. Habeeb, No. 19-CV-05881, 2023 WL 5181444, at *13 (E.D.N.Y. July 27, 2023), report and recommendation adopted, 2023 WL 5179668 (E.D.N.Y. Aug. 11, 2023). Plaintiff also did not submit documents with the Motion concerning the purported liens of these two defendants.5 See id. (finding nominal liability against a defendant would be improper because plaintiff “has not attached any documentation” regarding that defendant’s supposedly subordinate interest in the property); Landi, 2015 WL 5657358, at *3 (declining to impose nominal liability against a defendant because the plaintiff failed to adequately describe that defendant’s interest in the property or submit documentation for it). For these reasons, the Court declines to impose liability against Avenues Global and NYSDTF. E. Damages In addition to the foreclosure and sale of the Property, Plaintiff requests from Borrower $8,160,308.42 composed of (1) $8,144,675.42 in compensatory damages for amounts owed under the Agreements, (2) $13,050.00 in attorney’s fees in connection with this action, and (3) $2,583.00 in costs in connection with this action. See ECF No. 45-2
