The opinion
FILED
IN CLERK'S OFFICE
UNITED STATES DISTRICT COURT us oistRicr colwrmeee
EASTERN DISTRICT OF NEW YORK □ SEP 03 209 *
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Plaintiff,
ORDER
-against-
16-CV-2104 (NGG) (RER)
THE BOARD OF MANAGERS OF OCEANA
CONDOMINIUM NO. TWO
Defendants.
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NICHOLAS G. GARAUFIS, United States District Judge.
Plaintiff Gustavia Home, LLC brings this diversity action against Defendant The Board
of Managers of Oceana Condominium No. Two (the “Board”) to foreclose upon a residential
mortgage pursuant to New York Real Property and Proceedings Law, Section 1301 et seq.
(Compl. (Dkt. 1).) Upon Plaintiff's application and in light of the Board’s failure to appear in or
otherwise defend this action, the Clerk of Court entered the Board’s default on July 25, 2016.
(Entry of Default (Dkt. 12).) Currently pending before the court is Plaintiff's motion for default
judgment. (Pl. Mot. for Default J. (“Mot.”) (Dkt. 37).) The undersigned referred Plaintiff's
motion to Magistrate Judge Ramon E. Reyes, who issued a report and recommendation (“R&R”)
that the court grant the motion. (R&R (Dkt. 39) at 1.)
This case arises out of a $280,000 loan taken out by Irina Krupnikova, secured by a
residential mortgage on her residence, located at 120 Oceana Drive West, Apt. 51, Brooklyn,
New York (the “Property”). (Compl. ff 3, 9; see also Credit Line Mortgage (the “Mortgage”)
(Dkt. 1-1 at ECF pp. 4-11); Equity Reserve Agreement (the “Note”) (Dkt. 1-1 at ECF pp. 12-
21).) Through a series of assignments, Plaintiff acquired both the Note and the Mortgage.
(Compl. ff 11-13; Note at ECF pp. 19-21.) The Board holds an undisclosed lien or judgment on
the Property that is subordinate to the Mortgage. (Id. §] 4, 6.) On December 5, 2018, the court
granted Plaintiff's motion for summary judgment against Krupnikova (who was named as a
defendant in this action) after determining that there was no genuine dispute of material fact as to
whether she had defaulted under the Note. (See Mem & Order (Dkt. 36) at 6-10.) Accordingly,
Plaintiff now moves for a judgment of foreclosure and sale. (See Mot. at ECF p. 6.)
Judge Reyes applied New York law and found that Plaintiff had successfully established
the Board’s status as a junior interest-holder and, accordingly, a necessary party to this
proceeding. (R&R at 2.) Judge Reyes further found that Plaintiff's submission of the Mortgage
(Dkt. 1-1 at ECF pp. 4-11) and the Note (Id. at ECF pp. 12-21), coupled with this court’s finding
that Krupnikova had defaulted, established Plaintiff's entitlement to a judgment of foreclosure
and sale as a matter of law. (R&R at 2-3.) Judge Reyes recommended that the court appoint
Plaintiff's designee, Susan E. Rizos, Esq., as referee to conduct the contemplated sale of the
Property. (Id. at 3.)
In order to calculate damages, Judge Reyes examined the Mortgage, the Note, and the
affidavit of Jared Dotoli (Dkt. 37-2). He then recommended that Plaintiff be awarded
$379,902.10 together with pre-judgment interest at a rate of $26.83 per diem from December 18,
2018 until the date on which judgment is entered, against which he recommended the proceeds
from the sale of the Property be applied. (R&R at 3-4.) Judge Reyes denied as premature
Plaintiff's request to have the referee’s fees and other ancillary costs of the sale applied against
the sale proceeds, but recommended that Plaintiff be granted leave to file a detailed application
setting forth the costs actually incurred to sell the Property after the Property has been sold. (Id.
at 4.)
No party has objected to Judge Reyes’s R&R, and the time in which to do so has passed.
See Fed. R. of Civ. P. 72(b)(2). (See also R&R at 5.) Therefore, the court reviews the R&R for
clear error. See Gesualdi v. Mack Excavation & Trailer Serv., Inc., No. 09-CV-2502 (KAM)
(JO), 2010 WL 985294, at *1 (E.D.N.Y. Mar. 15, 2010); La Torres v. Walker, 216 F. Supp. 2d
157, 159 (S.D.N.Y. 2000).
The court finds no clear error, but declines to appoint Susan E. Rizos, Esq. as referee at
this time. Accordingly, the court ADOPTS the R&R as modified, and GRANTS Plaintiff's
motion for default judgment.
Plaintiff is awarded $379,902.10 together with pre-judgment interest at a rate of $26.83
per diem from December 18, 2018 until the date on which judgment is entered, against which the
proceeds of the sale of the property shall be applied. Following the sale of the Property, Plaintiff
may apply to have the referee’s fees and other ancillary costs applied against the sale proceeds.
Plaintiff is DIRECTED to file under seal Ms. Rizos’s resume, as well as the resumes of at
least two additional candidates to serve as referee in connection with the contemplated sale of the
Property. Plaintiff is further DIRECTED to file a Proposed Judgment and Order of Foreclosure
and Sale consistent with this order.
SO ORDERED.
s/Nicholas Garaufis
Dated: Brooklyn, New York NICHOLAS G. GARAUFIS \ |
September 3, 2019 United States District Judge