# Plenitude Capital LLC v. Utica Ventures, LLC

> District Court, E.D. New York · October 23, 2020

URL: https://www.frixlaw.com/law-library/cases/10305087

## Case

- **Court:** District Court, E.D. New York
- **Decided:** October 23, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10305087

## How later opinions describe it (automated extraction)

- holding that “general objection[s] [are] insufficient to obtain de novo review by [a] district court”

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------
PLENITUDE CAPITAL LLC,

Plaintiff, MEMORANDUM & ORDER
18-CV-2702 (MKB) (RER)
v.

UTICA VENTURES, LLC, MICHAEL ISRAEL,
SHOLOMO EHRENREICH, NEW YORK CITY
DEPARTMENT OF HOUSING PRESERVATION
AND DEVELOPMENT, BY CONSTRUCTION
CORP., NEW YORK CITY ENVIRONMENTAL
CONTROL BOARD, and JOHN DOES NOS. 1
THROUGH 10,

Defendants.
---------------------------------------------------------------
MARGO K. BRODIE, United States District Judge:
Plaintiff Plenitude Capital LLC commenced the above-captioned foreclosure action
against Utica Ventures, LLC (“Utica”), Michael Israel, Sholomo Ehrenreich, the New York City
Department of Housing Preservation and Development (the “HPD”), By Construction Corp.
(“Construction Corp.”), the New York City Environmental Control Board (the “ECB”), and John
Does 1–10 (the “John Doe Defendants”). (Compl, Docket Entry No. 1.) Plaintiff seeks to
foreclose on a mortgage encumbering property located at 404-406-408 Utica Avenue, Brooklyn,
New York (the “Property”). (Id.) On May 11, 2018, Plaintiff filed an Amended Complaint,
(Am. Compl., Docket Entry No. 10), and on August 20, 2018, Plaintiff filed a Second Amended
Complaint (“SAC”), (SAC, Docket Entry No. 13).
On October 29, 2019, Plaintiff filed a motion for default judgment seeking a judgment of
foreclosure and sale as to all Defendants. (Pl.’s Mot. for Default J. (“Pl.’s Mot.”), Docket Entry
No. 36; Pl.’s Mem. in Supp. of Pl.’s Mot (“Pl.’s Mem.”), Docket Entry No. 37.) By Order dated
October 30, 2019, the Court referred the motion to Magistrate Judge Ramon E. Reyes, Jr. for a
report and recommendation. (Order dated Oct. 30, 2019.) By report and recommendation dated
September 10, 2020, Judge Reyes recommended that the Court grant Plaintiff’s motion for
default judgment only as to Israel, HPD, and ECB, and deny default judgment against Utica and

Construction Corp. (the “R&R”). (R&R, Docket Entry No. 41.) Plaintiff objects in part, arguing
that he did not move for default judgment against Utica and Construction Corp. and did not need
to, and that a judgment of foreclosure and sale should be entered in its favor against all
Defendants. (Pl.’s Obj. to R&R (“Pl.’s Obj.”), Docket Entry No. 43.) For the reasons set forth
below, the Court adopts the R&R.
I. Background
The Court assumes familiarity with the underlying facts as detailed in the R&R and
provides only a summary of the pertinent facts.
a. Procedural history
Plaintiff alleges that it holds the mortgage and note for the Property, that Utica is the

mortgagor, that Israel is a guarantor, and that the other named Defendants hold subordinate
interests in the Property. (SAC 2, 5.) Plaintiff further alleges that Utica failed to pay the
mortgage, and that under the terms of the note, Plaintiff was entitled to commence a foreclosure
action against it. (Id. at 7.)
On December 19, 2018, Plaintiff filed a summary judgment motion seeking a judgment
of foreclosure and sale as to all Defendants and a deficiency judgment as to Utica and Israel.
(Pl.’s Mot. for Summ. J., Docket Entry No. 22.) By report and recommendation dated June 11,
2019, Judge Reyes recommended that the Court grant Plaintiff’s motion for summary judgment
as to Ehrenreich, deny default judgment against Utica, Israel, HPD, Construction Corp., and
ECB without prejudice to renewal upon entry of default, dismiss Plaintiff’s claims as to the John
Doe Defendants, and require Plaintiff to show cause for its failure to provide notice to tenants of
the Property (the “June 2019 R&R”). (June 2019 R&R, Docket Entry No. 27.) The Court
adopted the June 2019 R&R and, in accordance with the June 2019 R&R, directed Plaintiff to

request entry of default. (Mem. & Order dated Aug. 5, 2019, Docket Entry No. 30.)
On October 9, 2018, counsel for Construction Corp. filed a notice of appearance. (Notice
of Appearance, Docket Entry No. 18.) On August 9, 2019, counsel for Utica filed a notice of
appearance. (Notice of Appearance, Docket Entry No. 31.) Neither of these Defendants has
filed an answer or dispositive motion or otherwise asserted an affirmative defense.
b. Plaintiff’s motion for default
Plaintiff sought and obtained a certificate of default against Israel, HPD, and ECB but did
not seek a certificate of default as to Utica or Construction Corp. (Req. for Certificate of
Default, Docket Entry No. 32; Clerk’s Entry of Default, Docket Entry No. 33.)
On October 29, 2019, Plaintiff moved for a default judgment against Israel, HPD, and

ECB and for entry of a judgment of foreclosure and sale against all parties. (Pl.’s Mot.) Plaintiff
argued that it had presented a prima facie case against all Defendants, and therefore the Court
should grant it a judgment of foreclosure and sale. (Id. at 1.) In support, Plaintiff argued that it
had shown it was entitled to foreclose on the Property under New York law by presenting the
mortgage, the note, and evidence of the default and because it had presented sufficient
information about damages for a default judgment against Israel, HPD, and ECB to be entered
without an inquest. (Id. at 2–4.) Plaintiff further argued that it was entitled to a judgment of
foreclosure and sale. (Id. at 5–6.) Plaintiff also sought attorneys’ fees and costs. (Id. at 6–9.)
c. Report and recommendation
Judge Reyes recommended that the Court grant the motion for default judgment against
Israel, HPD, and ECB and deny Plaintiff’s motion for default judgment against Utica and
Construction Corp. “to the extent one ha[d] been made.” (R&R 8.) Judge Reyes recommended

that judgment be entered against Israel for the total amounts owed, with interest and fees to be
recalculated at the entry of final judgment, because, as the guarantor of the note and mortgage,
he had signed an unconditional guaranty, and the SAC contained allegations that established his
liability. (Id. at 4–5.) Judge Reyes found that Plaintiff’s documentation of the particular nature
of the interests of HPD and ECB was sufficient to meet the heightened pleading requirements
applied to state or city agencies. (Id. at 5–6.) As to Utica and Construction Corp., Judge Reyes
found that default judgment was inappropriate because Plaintiff had not requested entry of
default despite the Court’s earlier order. (Id. at 6–7.)
Judge Reyes declined to evaluate Plaintiff’s motion for attorneys’ fees and costs in the
interest of judicial economy. (Id. at 7.) He further recommended that the Court direct Plaintiff

to seek entry of default against Utica and Construction Corp. (Id. at 8.)
d. Plaintiff’s objections to the R&R
Plaintiff “requests that this Court deviate from the [R&R] to the extent that it denied
Plaintiff’s motion for a judgment of foreclosure and sale as against all [D]efendants with respect
to the [P]roperty.” (Pl.’s Obj. 4.) Plaintiff objects to the portion of the R&R that denies a default
judgment against Utica and Construction Corp because it did not seek a default judgment against
those parties. (Id. at 6.) Plaintiff also objects to the denial of a judgment of foreclosure and sale
as to all Defendants. (Id.) In support, Plaintiff argues that it has made a prima facie case for
issuance of the judgment as to all Defendants and that section 1321 of New York’s Real Property
Actions and Proceedings Law (“RPAPL”) permits a judgment against defendants who, like Utica
and Construction Corp., appear but do not challenge the merits in the time allotted. (Id. at 6–9.)
Plaintiff does not object to the recommendation that the Court enter a default judgment against
Israel, HPD, and ECB. (Id. at 5–6.)

II. Discussion
a. Standard of review
A district court reviewing a magistrate judge’s recommended ruling “may accept, reject,
or modify, in whole or in part, the findings or recommendations made by the magistrate judge.”
28 U.S.C. § 636(b)(1)(C). When a party submits a timely objection to a report and
recommendation, the district court reviews de novo the parts of the report and recommendation
to which the party objected. Id.; see also United States v. Romano, 794 F.3d 317, 340 (2d Cir.
2015). The district court may adopt those portions of the recommended ruling to which no
timely objections have been made, provided no clear error is apparent from the face of the
record. See John Hancock Life Ins. Co. v. Neuman, No. 15-CV-1358, 2015 WL 7459920, at *1

(E.D.N.Y. Nov. 24, 2015). The clear error standard also applies when a party makes only
conclusory or general objections. See Benitez v. Parmer, 654 F. App’x 502, 503–04 (2d Cir.
2016) (holding that “general objection[s] [are] insufficient to obtain de novo review by [a]
district court”); see Fed. R. Civ. P. 72(b)(2) (“[A] party may serve and file specific written
objections to the [magistrate judge’s] proposed findings and recommendations.”); see also
Colvin v. Berryhill, 734 F. App’x 756, 758 (2d Cir. 2018) (“Merely referring the court to
previously filed papers or arguments does not constitute an adequate objection under . . . Fed. R.
Civ. P. 72(b).” (quoting Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 766 (2d Cir. 2002))).
b. Unopposed portion of the R&R
Plaintiff does not object to the portion of the R&R that recommends a default judgment
against Israel, HPD, and ECB. Having reviewed the relevant portions of the R&R, and finding
no clear error, the Court adopts the recommendation pursuant to 28 U.S.C. § 636(b)(1).

Accordingly, the Court enters a default judgment against Israel, HPD, and ECB.
c. Plaintiff is required to seek a default judgment against Utica and
Construction Corp.

Plaintiff essentially argues that it is entitled to a judgment of foreclosure and sale against
Utica and Construction Corp. without having to first establish that those parties have defaulted in
this action. The Court disagrees.
Rule 55 of the Federal Rules of Civil Procedure sets forth “the basic procedure to be
followed when there is a default in the course of litigation.” City of New York v. Mickalis Pawn
Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011) (quoting Vt. Teddy Bear Co. v. 1–800 Beargram
Co., 373 F.3d 241, 246 (2d Cir. 2004)). Pursuant to Rule 55, there is “a ‘two-step process’ for
the entry of judgment against a party who fails to defend: first, the entry of a default, and second,
the entry of a default judgment.” Id. (citing New York v. Green, 420 F.3d 99, 104 (2d Cir.
2005)). Entry of default “formalizes a judicial recognition that a defendant has, through its
failure to defend the action, admitted liability to the plaintiff.” Id. Under New York law, as
under federal law, “[i]n the context of a mortgage foreclosure action, a default judgment is the
procedural equivalent of a finding of liability.” HSBC Bank, USA v. SSSR, Inc., 971 N.Y.S.2d
827, 829 (Sup. Ct. 2013) (citing Bergman on New York Mortgage Foreclosures § 2.01(1));
Butterly v. Maribert Realty Corp., 255 N.Y.S. 321, 324 (App. Div.) (“[Defendant’s] default
resulted in a judgment which established the right of [plaintiffs] to foreclose the mortgage, and
established his liability for the deficiency.”), aff’d, 260 N.Y. 554 (1932).
In substance, Plaintiff argues that it is entitled to a judgment of foreclosure and sale under
RPAPL § 1321 and that Utica and Construction Corp. have not challenged the merits of
Plaintiff’s complaint. (Pl.’s Obj. 7–9.) RPAPL § 1321 provides that “[i]f the defendant fails to
answer within the time allowed or the right of the plaintiff is admitted by the answer, upon

motion of the plaintiff, the court shall ascertain and determine the amount due, or direct a referee
to compute the amount due . . . .” RPAPL § 1321(1). While Plaintiff appears to correctly state
the procedure under New York law, because Plaintiff is proceeding in federal court, Plaintiff
must comply with the Federal Rules of Civil Procedure. Gasperini v. Ctr. for Humans., Inc., 518
U.S. 415, 427 (1996) (“[F]ederal courts sitting in diversity apply state substantive law and
federal procedural law.”);1 Com/Tech Commc’n Techs., Inc. v. Wireless Data Sys., Inc., 163 F.3d
149, 150–51 (2d Cir. 1998) (per curiam) (“[W]here the matter in question is one covered by the
Federal Rules of Civil Procedure, ‘it is settled that . . . the Federal Rule applies regardless of
contrary state law.’” (omission in original) (quoting Gasperini, 518 U.S. at 427 n.7)); see
Mihalik v. Credit Agricole Cheuvreux N. Am., Inc., 715 F.3d 102, 111-12 (2d Cir. 2013) (quoting

Com/Tech Commc’n Techs., Inc., 163 F.3d at 150–51). The equivalent procedural mechanism in
this Court is seeking a certificate of default, then entry of default, against these Defendants under
Rule 55. Mickalis Pawn Shop, LLC, 645 F.3d at 128.
Utica and Construction Corp. have filed notices of appearance, but Plaintiff may
nevertheless seek a default judgment against them in accordance with Rule 55(b)(2) of the
Federal Rules of Civil Procedure because they have failed to defend themselves in this action.
See Green, 420 F.3d at 105 (“By its terms, Rule 55(b)(2) requires advance written notice . . . if

1 Diversity jurisdiction under 28 U.S.C. § 1332 is the sole basis asserted for jurisdiction
in this action. (SAC ¶ 12.)
the party against whom a default judgment is sought has ‘appeared in the action.’” (quoting Fed.
R. Civ. P. 55(b)(2))); Parise v. Riccelli Haulers, Inc., 672 F. Supp. 72, 74 (N.D.N.Y. 1987)
(“Under Rule 55(b) default judgment shall be entered if a defendant has failed to plead or
otherwise defend an action. While defendant answered the original complaint, it has failed to

answer or otherwise respond to the amended complaint.”).
III. Conclusion
For the foregoing reasons, the Court adopts the R&R. Accordingly, the Court (1) grants
Plaintiff’s motion for default judgment as to Israel, HPD, and ECB, (2) denies Plaintiff’s motion
for a judgment of foreclosure and sale without prejudice to renewal, and (3) denies Plaintiff’s
motion for attorneys’ fees without prejudice to renewal. In accordance with the R&R, Plaintiff is
directed to request entry of default as to Utica and Construction Corp. or, in the alternative, file a
stipulation of voluntary dismissal as to its remaining claims or notify the Court that it seeks
dismissal of its claims against Utica and Construction Corp. and for a judgment of foreclosure
and sale.

Dated: October 22, 2020
Brooklyn, New York

SO ORDERED:

s/ MKB
MARGO K. BRODIE
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10305087. Public record. Not legal advice.