“when parties set down their agreement in a clear, complete document, their writing . . . should be enforced according to its terms.” (quotations omitted)
How later courts described this case
- “when parties set down their agreement in a clear, complete document, their writing . . . should be enforced according to its terms.” (quotations omitted)
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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FREEDOM MORTGAGE CORPORATION,
Plaintiff,
SUA SPONTE REPORT
v. AND RECOMMENDATION
JORGE TREJO, MARIBEL TREJO, NEW YORK 22-CV-7116
CITY PARKING VIOLATIONS BUREAU, (Gujarati, J.)
(Marutollo, M.J.)
Defendants.
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JOSEPH A. MARUTOLLO, United States Magistrate Judge:
On November 22, 2022, Plaintiff Freedom Mortgage Corporation initiated this foreclosure
action against Defendants—Jorge Trejo and Maribel Trejo (the “Trejos”), the New York City
Parking Violations Bureau (“PVB”), the New York City Environmental Control Board (“ECB”),
and the New York City Transit Adjudication Bureau (“TAB”)—to foreclose on the residential
property located at 105 Cortlandt Street, Staten Island, New York 10302 (the “Property”). Dkt.
No. 1 ¶¶ 7-8.1
On August 26, 2024, the Court adopted the undersigned’s report and recommendation and
entered default judgment against the Trejos and PVB (collectively, “Defendants”). See Aug. 26,
2024 Dkt. Order; see also Freedom Mortg. Corp. v. Trejo, No. 22-CV-7116 (DG) (JAM), 2024
WL 3465241, at *1 (E.D.N.Y. July 19, 2024). In the Court’s August 26, 2024 order, the Court
instructed Plaintiff that “[a]ny renewed request for escrow advances and mortgage insurance
premium shall be filed by August 30, 2024.”
1 The Board of Managers of Willowbrook Heights Condominium Association and John Doe #1-10 were
voluntarily dismissed from this action on July 31, 2023. See Dkt. No. 19. The ECB and TAB were
dismissed without prejudice on August 26, 2024. See Aug. 26, 2024 Dkt. Order.
Following an extension of the August 30, 2024 deadline, on September 23, 2024, Plaintiff
filed a letter-motion for escrow advances in the amount of $17,814.31. See Dkt. No. 35. For the
reasons explained below, the undersigned sua sponte respectfully recommends that Plaintiff’s
motion be GRANTED.
I. Background
The Court presumes the parties’ familiarity with this case and only includes those facts that
are necessary for resolving the instant motion.
A. Factual Background
On June 28, 2018, Defendant Jorge Trejo executed a Note (the “Note”) with Plaintiff
wherein he promised to pay $402,014.00 plus interest on the unpaid amount due. See Dkt. No. 1
¶ 6; Dkt. No. 1-3. To secure the Note, the Trejos executed a mortgage (the “Mortgage”) with
Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Plaintiff, on the
Property. Dkt. No. 1 ¶¶ 7-8; Dkt. No. 1-4. The Mortgage was assigned to Plaintiff on December
20, 2019. Dkt. No. 1 ¶ 8; Dkt. No. 1-5.
On December 17, 2021, Plaintiff and the Trejos entered into an agreement to amend and
supplement the Note and Mortgage (the “Loan Modification Agreement”). Dkt. No. 1 ¶ 9; Dkt.
No. 1-6. According to the terms of the Loan Modification Agreement, the new principal balance
due on the Note was $400,529.27. Dkt. No. 1 ¶ 9; Dkt. No. 1-6 § 3(B).
On April 1, 2022, Jorge Trejo allegedly defaulted on the Note by failing to make the
monthly payments due. Dkt. No. 1 ¶ 10. Since then, the Trejos have not made any subsequent
payments towards the Note. Id. ¶¶ 10-11. As of November 22, 2022, the “amount due and owing
on the Note and Mortgage” consisted of $399,152.89 in principal; interest that has accrued at a 3%
rate since March 1, 2022; and “late charges, monies advanced for taxes, assessments, insurance,
maintenance and preservation of the Property, and the cost, allowances, expenses of sale, and
reasonable attorney’s fees for the foreclosure.” Id. ¶ 11.
B. Procedural History
Plaintiff filed the complaint in this action on November 22, 2022, seeking to foreclose on
the Property pursuant to RPAPL § 1301 et seq. See generally Dkt. No. 1. After the Trejos and
PVB failed to respond to the complaint, Plaintiff moved for default judgment. See Dkt. Nos. 23,
27.
On April 3, 2024, the undersigned issued a Report and Recommendation recommending
that Plaintiff’s Motion for Default Judgment and Judgment of Foreclosure and Sale, be granted in
part and denied in part. See generally Dkt. No. 25. Plaintiff subsequently filed objections to the
Report and Recommendation on April 16, 2024, accompanied by a declaration not previously
submitted to the undersigned. See Dkt. Nos. 27, 27-1.
On July 17, 2024, the Court recommitted the matter to the undersigned for a supplemental
and/or amended report and recommendation in light of Plaintiff’s objections. See July 17, 2024
Dkt. Order (citing 28 U.S.C § 636(b)(1)(C)).
On July 19, 2024, the undersigned issued a Supplemental and Amended Report and
Recommendation, which superseded the Report and Recommendation issued on April 3, 2024.
See Dkt. No. 29. The Supplemental and Amended Report and Recommendation recommended
that Plaintiff’s motion for default judgment be granted in part and denied in part. See id.
Specifically, the undersigned recommended that: (1) the Court order the foreclosure and
sale of the Property; (2) the proposed Referee be appointed to conduct the sale and receive a sum
of $750.00 from the proceeds of the sale; (3) Plaintiff be awarded the various amounts specified;
(4) Plaintiff be permitted to deduct from the proceeds of the sale all reasonable expenses of the
sale, including the cost of advertising as shown on the bills presented and certified by the Referee
to be correct; (5) Plaintiff’s request for escrow advances and mortgage insurance premium be
denied due to Plaintiff’s failure “to explain the requested escrow balance or provide supporting
documentation to establish its entitlement to the requested amount of $17,089.87”; (6) Plaintiff be
awarded post-judgment interest at the statutory rate under 28 U.S.C. § 1961(a) from the date
judgment is entered until judgment is satisfied; (7) if the proceeds of the foreclosure sale are
insufficient to pay the amount(s) adjudged, Plaintiff be permitted to seek a deficiency judgment
against Jorge Trejo to recover the whole deficiency remaining unsatisfied in accordance with
RPAPL § 1371; (8) Plaintiff’s motion for default judgment against PVB be granted and their claim
extinguished; (9) Midland be added as a defendant, default judgment be entered against Midland,
and Midland’s claim extinguished; and (10) Plaintiff’s motion for default judgment against ECB
and TAB be denied, and Plaintiff’s claims against ECB and TAB be dismissed without prejudice.
See id. at 14, 35-36.
On August 2, 2024, Plaintiff filed objections to the Supplemental and Amended Report and
Recommendation, attaching a supplemental affidavit not previously presented to the undersigned.
See Dkt. No. 32. In the supplemental affidavit, Plaintiff objected solely to the denial of escrow
advances and mortgage insurance premiums and explicitly stated that it had no objection to the
remainder of the Supplemental and Amended Report and Recommendation. See id. Despite
proper service, Defendants did not object to the Supplemental and Amended Report and
Recommendation or respond to Plaintiff’s objection. See Dkt. Nos. 30, 33.
On August 26, 2024, the Court adopted the Supplemental and Amended Report and
Recommendation in its entirety and permitted Plaintiff to submit any renewed request for escrow
advances and mortgage insurance by August 30, 2024. See Aug. 26, 2024 Dkt. Order
Plaintiff filed the instant letter motion for escrow advances on September 23, 2024. See
Dkt. No. 35. The Trejos and PVB were served with the motion but have not filed a response. See
Dkt. No. 36.
II. Discussion
As liability has already been established for both the Trejos and PVB, see Aug. 26, 2024
Dkt. Order, Plaintiff’s request for escrow advances pertains to the damages portion of Plaintiff’s
motion for default judgment.
Once liability is established, “the court must ascertain damages with ‘reasonable
certainty.’” CIT Bank N.A. v. Elliott, No. 15-CV-4395 (JS) (ARL), 2019 WL 4439347, at *2
(E.D.N.Y. Sept. 17, 2019) (citation omitted). “An evidentiary hearing is not required so long as
there is a basis, by detailed affidavits and other documentary evidence, for the damages awarded.”
Id. (citation omitted). “The party seeking to recover costs bears the burden of adequately
documenting and itemizing the costs requested.” Id. (cleaned up).
In foreclosure actions, damages are determined based on the terms of the note and
mortgage. See RSS WFCM2018-C44-NY LOD, LLC v. 1442 Lexington Operating DE LLC, No.
21-CV-4424 (DLC) (VF), 2024 WL 4486058, at *2 (S.D.N.Y. Aug. 19, 2024) (“Any
determination of damages in an action for foreclosure and sale should be determined under the
terms of the Notes and Mortgages.” (citation omitted)), report and recommendation adopted, 2024
WL 4132554 (S.D.N.Y. Sept. 10, 2024), judgment entered, 2024 WL 4381120 (S.D.N.Y. Oct. 2,
2024); Builders Bank v. Rockaway Equities, LLC, No. 08-CV-3575 (MDG), 2011 WL 4458851,
at *5 (E.D.N.Y. Sept. 23, 2011) (same); see also Vermont Teddy Bear Co. Inc. v. 538 Madison
Realty Co., 1 N.Y.3d 470, 475 (2004) (“when parties set down their agreement in a clear, complete
document, their writing . . . should be enforced according to its terms.” (quotations omitted)).
Courts routinely award escrow advances when supported by affidavits explaining the
charges and a detailed payment history. See, e.g., Freedom Mortg. Corp. v. McLain, No. 23-CV-
1309 (FB) (LB), 2023 WL 8473948, at *1 (E.D.N.Y. Oct. 12, 2023) (relying on an affidavit to
show that “escrow advances correspond with costs incurred to obtain insurance for the property
and pay taxes related to the property.”), report and recommendation adopted, 2023 WL 7320257
(E.D.N.Y. Nov. 7, 2023); ARCPRE Holding, LLC v. 9Q4U5E LLC, No. 19-CV-6417 (DLI) (RER),
2022 WL 2467085, at *4 (E.D.N.Y. Apr. 15, 2022) (“Although the ‘escrow advances’ schedule
does not specifically indicate that the disbursements were made in order to insure the property,
Olson’s sworn affidavit sufficiently explains the purpose of these disbursements such that an award
of insurance costs is warranted.”).
Here, Plaintiff seeks escrow advances in the amount of $17,814.31 pursuant to the terms
of the Mortgage. See Dkt. No. 35. To support this request, Plaintiff submits a declaration from
counsel, see Dkt. No. 35-1; an affidavit from Charles Lemons, a FCL Specialist II at Freedom
Mortgage, that sets forth the basis for requesting escrow advances and includes a breakdown of
the requested $17,814.31, see Dkt. No. 35-2; and an account history report that provides an
itemized description of all the escrow payments advanced from 2018 to 2024, see id.
According to Plaintiff, escrow advances are authorized under paragraph 3 of the Mortgage,
which states:
Borrower’s Obligations. I will pay to Lender on the day Periodic
Payments are due under the Note, until the Note is paid in full. a sum
to provide for payment of amounts due for: (a) taxes and
assessments and other items which can attain priority over this
Security Instrument as a lien or encumbrance on the Property; (b)
leasehold payments or ground rents on the Property, if any; (c)
premiums for any and all insurance required by Lender under
Section 5; and (d) Mortgage Insurance premiums to be paid by
Lender to the Secretary or the monthly charge by the Secretary
instead of the monthly Mortgage Insurance premiums. These items
arc called “Escrow Items.” At origination or at any time during the
term of the Loan, Lender may require that Community Association
Dues, Fees, and Assessments, if any, be escrowed by Borrower, and
such dues, fees, and assessments shall be an Escrow Item . . . . The
amounts that I pay to Lender for Escrow Items under this Section 3
will be called “Escrow Funds.”
See Dkt. No. 35-1 ¶ 10 (citing Dkt. No. 23-6 ¶ 3).
Additionally, under paragraph 9 of the Mortgage, if the Trejos failed to make required
escrow payments, Plaintiff was entitled to pay the amounts due and recover those payments from
the Trejos. See Dkt. No. 23-6 ¶ 9.
The breakdown provided by Plaintiff itemizes the requested escrow advances as follows:
(1) $3,105.66 for total hazard insurance; (2) $3,880.58 for total mortgage insurance; (3) $11,269.29
for total property taxes; and (4) $441.22 in total escrow credit. See Dkt. No. 35-1 ¶ 12; Dkt. No.
35-2 ¶ 5; see also Dkt. No. 23-3. The detailed account history substantiates these amounts,
demonstrating that the advances were made in accordance with the terms of the Mortgage. See
Dkt. No. 35-2 at 6-25. Courts have found such documentation sufficient to award escrow advances
in foreclosure cases. See, e.g., McLain, 2023 WL 8473948, at *7 (awarding plaintiff escrow
advances based on affidavit and breakdown of itemized charges); ARCPRE Holding, LLC, 2022
WL 2467085, at *4 (finding that plaintiff’s sworn affidavit accompanied by a schedule detailing
monthly escrow advances was sufficient to recommend an award of damages with respect to
insurance costs); Elliott, 2019 WL 4439347, at *2 (holding that plaintiff’s affidavit and itemized
breakdown were sufficient to award plaintiff escrow advances).
Accordingly, the undersigned respectfully recommends that Plaintiff be awarded escrow
advances in the amount of $17,814.31.
III. Conclusion
For the foregoing reasons, the undersigned respectfully recommends that Plaintiff’s letter-
motion be GRANTED and that Plaintiff be awarded escrow advances in the amount of
$17,814.31.
A copy of this Report and Recommendation is being electronically served on counsel.
Plaintiff’s counsel is directed to serve a copy of this Report and Recommendation on the Trejos
and PVB by overnight mail and first-class mail and file proof of service on ECF by November 20,
2024.
Copies shall be served at the following addresses:
Jorge Trejo
105 Cortlandt Street
Staten Island, NY 10302
Maribel Trejo
105 Cortlandt Street
Staten Island, NY 10302
Jorge & Maribel Trejo
542B Buchanan Avenue
Staten Island, New York 10314
New York City Parking Violations Bureau
100 Church Street, 4th Floor
New York, NY 10007
Any objections to this Report and Recommendation must be filed within 14 days after
service of this Report and Recommendation. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2).
See also Fed. R. Civ. P. 6(a) & (d) (addressing computation of days). Any requests for an extension
of time for filing objections must be directed to Judge Gujarati. Failure to file objections within
this period designating the particular issues to be reviewed waives the right to appeal the district
court’s order. See 28 U.S.C. § 636(b); Fed. R. Civ. P. 72(b)(2); Wagner & Wagner, LLP v.
Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010);
Kotlyarsky v. United States Dep’t of Just., No. 22-2750, 2023 WL 7648618 (2d Cir. Nov. 15,
2023); see also Thomas v. Arn, 474 U.S. 140 (1985).
Dated: Brooklyn, New York
November 19, 2024
SO ORDERED.
/s/ Joseph A. Marutollo
JOSEPH A. MARUTOLLO
United States Magistrate Judge