The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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CIT BANK N.A.,
Plaintiff, MEMORANDUM & ORDER
15-CV-4395 (JS) (ARL)
-against-
ELLEN M. ELLIOTT, KEYHOLE CAPITAL-
FUND V, and PORTFOLIO RECOVERY
ASSOCIATES LLC,
Defendants.
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APPEARANCES
For Plaintiff: Allison J. Schoenthal, Esq.
Nicole E. Schiavo, Esq.
Hogan Lovells US LLP
875 Third Avenue
New York, New York 10022
Rachel B. Stein, Esq.
Sean Kevin Monahan, Esq.
Robert G. Wilk, Esq.
Windels Marx Lane & Mittendorf, LLP
156 West 56th Street
New York, New York 10019
Nicole E. Schiavo, Esq.
Moore & Van Allen
100 N. Tryon Street, Suite 4700
Charlotte, North Carolina 28202
For Defendants:
Ellen M. Elliott William D. Shapiro, Esq.
The Law Office of William D. Shapiro
34 Hast Montauk Highway, Suite 3
Hampton Bays, New York 11946
Keyhole Capital-
Fund V Adam J. Friedman, Esq.
Pulvers, Pulvers, Thompson & Friedman, LLP
950 Third Avenue, 11th Floor
New York, New York 10022
Danielle Paula Light, Esq.
Hasbani & Light, P.C.
450 Seventh Avenue, Suite 1408
New York, New York 10123
Portfolio Recovery
Associates LLC No appearance
SEYBERT, District Judge:
In its March 8, 2019 Electronic Order adopting
Magistrate Judge Arlene R. Lindsay’s recommendation that Plaintiff
be awarded a judgment of foreclosure and sale against Defendant
Ellen M. Elliot, this Court referred Plaintiff’s renewed motion
for damages to Judge Lindsay. On July 25, 2019, Judge Lindsay
issued her Report and Recommendation (R&R, D.E. 75) recommending
that Plaintiff be awarded (a) $1,648,038.90 in unpaid principal as
of June 5, 2018 and accrued interest amounting to $530,224.41; (b)
recoverable costs in the amount of $4,113; (c) escrow advances of
$88,856.50; and (d) attorneys’ fees in the amount of $31,850.00
(R&R at 1).
On August 6, 2019, defendant Windward Bora LLC (as
assignee of defendant “Keyhole Capital-Fund V”) filed an objection
to the R&R, objecting only to the recommendation that Plaintiff be
awarded escrow advances of $88,856.50. (Windward Obj., D.E. 77;
Winward Mem. of Law, D.E. 77-1, at 4.) According to the Complaint,
Keyhole “has an interest in the Mortgaged Property by virtue of
being the holder of a subordinate judgment.” (Compl., D.E. 1, at
¶ 5.) Plaintiff responded to Windward’s objection on August 8,
2019. (Pl. Resp., D.E. 79.)
This Court “may accept, reject, or modify the
recommended disposition” and “must determine de novo any part of
the magistrate judge’s disposition that has been properly objected
to.” Fed. R. Civ. P. 72. “When a party makes no objections, or
where it makes only conclusory or general objections, courts will
review the magistrate’s findings for clear error.” Pagan v. Brown,
No. 07-CV-0453, 2011 WL 3235769, at *1 (E.D.N.Y. July 28, 2011),
aff’d, 485 F. App’x 454 (2d Cir. 2012).
The Court first notes the Clerk entered a certificate of
default judgment against Keyhole Capital on July 21, 2017. (See
D.E. 54.) Neither Keyhole nor Windward as assignee has moved to
set aside the default. However, “[u]nlike the issue of liability,
which was settled when defendants defaulted, defendants are
entitled to challenge the R&R’s damage award.” Labarbera v.
Interstate Payroll Co., Inc., No. 07-CV-1183, 2009 WL 1564381, at
*2 (E.D.N.Y. June 2, 2009).
Windward objects to the escrow advance “because the
Plaintiff has failed to provide this Court with the admissible
documentary evidence that is required for the rewarding of such
damages.” (Windward Mem. of Law at 5). Windward claims that the
affidavit of Tenisa Brooks, an assistant secretary at Loan Care,
is insufficient to satisfy the business records exception, see FED.
R. EVID. 803(6), because it “fail[s] to integrate Plaintiff’s
records into LoanCare’s records.” (Windward Mem. of Law at 7).
However, Brook’s affidavit states that she is “familiar with the
Note and Mortgage, which are the subject of this action, as well
as with the books and records kept and maintained by Plaintiff, in
connection with this matter.” (Brooks Aff., D.E. 72-3 ¶ 1.)
Further, “[t]o the extent that business records were created by
prior owners and servicers of the Note, those records have been
integrated into LoanCare’s business records and verified in
accordance with LoanCare’s policies and procedures and are kept
and relied upon as a regular business practice and in the ordinary
course of business conducted by LoanCare.” (Brooks Aff., ¶ 2.)
Thus, it is admissible as a business record and the Court OVERRULES
Windward’s objection on this point.
Windward also argues that the evidence as to the escrow
advance is insufficient because the itemization submitted by
Plaintiff “is not supported by cancelled checks or any other
documentation establishing that the Plaintiff actually made any of
the alleged disbursements.” (Windward Mem. of Law at 7). However,
once “liability is established, the court must ascertain damages
with ‘reasonable certainty.’ An evidentiary hearing is not
required so long as there is a basis, by detailed affidavits and
other documentary evidence, for the damages awarded.” Nationstar
Mortg. LLC v. Mullany, No. 16-CV-5501, 2018 WL 4658437, at *3
(E.D.N.Y. Sept. 11, 2018), R&R adopted, 2018 WL 4637352 (E.D.N.Y.
Sept. 27, 2018) (quoting Credit Lyonnais Sec. [USA] Inc. v.
Alcantara, 183 F.3d 151, 155 (2d Cir. 1999); citing Transatlantic
Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105,
111 (2d Cir. 1997) and Action S.A. v. Marc Rich & Co., 951 F.2d
504, 508 (2d Cir. 1991)). “[T]he party seeking to recover costs
bears the burden of adequately documenting and itemizing the costs
requested.” Id. (internal quotation marks and citations omitted).
Windward cites no case for its proposition that
Plaintiff is required to submit cancelled checks or other
documentation in addition to its business records with itemized
transactions, and Plaintiff has submitted an itemized description
of all tax and insurance payments advanced from 2009 to 2018.
(Brooks Aff., Ex. 6, D.E. 72-9.) The Court finds that this
itemized breakdown, in conjunction with Brooks’ affidavit, (see
Brooks Aff. ¶ 7), is adequate documentation of the escrow advances
and allows the Court to ascertain damages to a “reasonable
certainty.” Thus, Windward’s objection on this point is also
OVERRULED.
The Court ADOPTS the findings and recommendations in
Judge Lindsay’s well-reasoned and thorough R&R in their entirety.
Accordingly, Plaintiff’s renewed motion for damages is GRANTED and
Plaintiff is awarded (a) $1,648,038.90 in unpaid principal as of
June 5, 2018 and accrued interest amounting to $530,224.41; (b)
recoverable costs in the amount of $4,113; (c) escrow advances of
$88,856.50; and (d) attorneys’ fees in the amount of $31,850.00.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated: September 17__, 2019
Central Islip, New York