Brown v. Amarante

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

EDWARD BROWN

Plaintiff,

-against-

JOSE AMARANTE, LUIS DATIZ, THE NEW

YORK CITY TRANSIT AUTHORITY 23-CV-3514 (JGLC)

ADJUDICATION BUREAU and “JOHN

DOE” and “JANE DOE”, the last two names ORDER ADOPTING REPORT

being fictitious, said parties intended being AND RECOMMENDATION

tenants or occupants, if any, having or claiming

an interest in, or lien upon, the premises

described in the complaint,

Defendants.

JESSICA G. L. CLARKE, United States District Judge:

This case was referred to Magistrate Judge Lehrburger for general pretrial purposes and

all dispositive motions. See ECF No. 8. Plaintiff moved for an order (1) granting summary

judgment on his foreclosure claim against Defendants Jose Amarante and Luis Datiz; (2) striking

Defendants’ Answer and Counterclaims; and (3) granting default judgment against the non-

answering Defendants. ECF No. 28. On November 8, 2024, Judge Lehrburger issued a Report

and Recommendation recommending that summary judgment on Plaintiff’s foreclosure claim be

denied, that summary judgment be granted to Plaintiff on Defendants’ First through Third and

Fifth through Eleventh affirmative defenses and Defendants’ first counterclaim, but denied as to

Defendants’ Fourth and Twelfth affirmative defenses and second counterclaim for attorney’s

fees, and that default judgment be denied against the non-answering defendants. ECF No. 35

(“R&R”). On November 21, 2024, Plaintiff filed a timely Objection. ECF No. 36 (“Obj.”).

Defendants do not object, filing timely responses to Plaintiff’s Objection. ECF No. 38.

In reviewing a report and recommendation, a district court “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). A district court “must determine de novo any part of the magistrate judge’s

disposition that has been properly objected to.” Fed. R. Civ. P. 72(b)(3); see also United States v.

Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997). To accept those portions of the report to which no

timely objection has been made, however, a district court need only satisfy itself that there is no

clear error on the face of the record. See, e.g., Wilds v. United Parcel Serv., 262 F. Supp. 2d 163,

169 (S.D.N.Y. 2003). This clearly erroneous standard also applies when a party makes only

conclusory or general objections, or simply reiterates his original arguments. See, e.g., Ortiz v.

Barkley, 558 F. Supp. 2d 444, 451 (S.D.N.Y. 2008). Finally, “new arguments and factual

assertions cannot properly be raised for the first time in objections to the report and

recommendation, and indeed may not be deemed objections at all.” Piligian v. Icahn Sch. of

Med. at Mount Sinai, 490 F. Supp. 3d 707, 716 (S.D.N.Y 2020) (internal citation omitted).

The Court has reviewed the motion papers, the R&R, the Objection, and Defendants’

response, and finds the R&R to be well-reasoned and grounded in fact and law. Plaintiff’s

arguments in the Objection lack merit.

First, Plaintiff contends that he submitted sufficient evidence of default through the

attachment of the Demand Loan Payoff exhibit. Obj. at 5. Plaintiff argues that the R&R should

not have recommended ignoring the Demand Loan Payoff based on Plaintiff’s inadvertent

mistake referencing the document as the payoff statement of a 2021 Note. Id. at 5–6. Given

Plaintiff’s assertions in the Objection that the reference to a 2021 Note was indeed an inadvertent

typographical error, the Court is inclined to overlook the error and consider the Demand Loan

Payoff as evidence. But even so, the Demand Loan Payoff is insufficient evidence of default for

the other reasons stated in the R&R. See R&R at 14–18. Specifically, given the number of times

that the Note has changed owners through reassignments, as well as the temporal gaps of specific

recordkeeping evidenced by the first exhibit attached to Plaintiff’s affidavit, see ECF No. 28-12

at 7–69, the Court is not convinced that the Demand Loan Payoff is an accurate record of

payment history rather than a statement of what Plaintiff claims is owed. Indeed, while Plaintiff’s

affidavit calls the first exhibit with temporal gaps the “Payment History,” this same affidavit only

references the Demand Loan Payoff in the context of a paragraph detailing the total amount he

believes is due. Id. at ¶¶ 13, 15. With “questions regarding what the [Demand Loan Payoff]

show[s],” the Court cannot find summary judgment in favor of Plaintiff based on this document.

FTS Cap., LLC v. Stuyvesant Constr. Corp., No. 19-CV-7275 (TAM), 2024 WL 1014120, at *5

(E.D.N.Y. Mar. 8, 2024).

Second, Plaintiff argues that the R&R was in error to consider defenses that were raised

for the first time in Defendants’ opposition to Plaintiff’s motion for summary judgment. Obj. at

7–10. Plaintiff challenges the R&R’s reliance on federal law for waiver of defenses and urges the

Court to instead adopt the rule of New York law as stated in U.S. Bank National Association v.

Nelson, 169 A.D.3d 110 (2d Dep’t N.Y. 2019), aff’d, 163 N.E.3d 49 (N.Y. 2020). Obj. at 7–10.

To the contrary, federal law governs when an affirmative defense is waived in a federal court

proceeding. See Fed. R. Civ. P. 8(c); see, e.g., Legal Aid Soc’y v. City of New York, 114 F. Supp.

2d 204, 222 (S.D.N.Y. 2000) (applying federal procedural law on the forfeiture of an affirmative

defense supplied by state law); Santos v. Dist. Council of N.Y.C. & Vicinity of United Bhd. of

Carpenters & Joiners of Am., AFL-CIO, 619 F.2d 963, 967 (2d Cir. 1980) (directing district

courts to follow federal procedural rules when determining whether untimely assertions of state-

law-based affirmative defenses were waived).

But even applying state law waiver rules under Nelson, the outcome would be the same.

That is because Nelson only requires that “where the answering party wishes to interpose new

matter in defense to the cause of action that goes beyond the essential elements of the cause of

action . . . the party must plead, as an affirmative defense, ‘all matters which if not pleaded

would be likely to take the adverse party by surprise or would raise issues of fact not appearing

on the face of a prior pleading.’” Nelson,169 A.D.3d at 113. (citing N.Y. C.P.L.R. 3018(b)). The

Nelson Court found that certain issues of standing were such a defense that must be pled

affirmatively. Id. But the defenses raised under RPAPL § 1302(1)(b) and RPL § 421 are both

issues that Plaintiff should have been previously aware of as statutory requirements and are

apparent from the face of the prior pleadings. Moreover, Plaintiff’s arguments concerning

prejudice are untimely. See Obj. at 9–10. As the R&R notes, Plaintiff failed to assert any such

arguments in the original briefing, though given opportunity to do so. R&R at 21. The Court

declines to consider those arguments now, because “new arguments and factual assertions cannot

properly be raised for the first time in objections to the report and recommendation[.]” Piligian v.

Icahn Sch. of Med. at Mount Sinai, 490 F. Supp. 3d 707, 716 (S.D.N.Y 2020) (internal citation

omitted).

Third, Plaintiff contends that the defense under RPL § 421 is unfounded on the merits.

Obj. at 10. Defendants’ Section 421 defense is that Plaintiff failed to demonstrate statutory

compliance because some recordings of power of attorney in the chain of mortgages for the

Property were not in the county where the Property is located. R&R at 23. Plaintiff argues that

this defense must fail because Section 294(1), not Section 421, is the statutory provision that

requires power of attorney to be filed within the registrar of the county where the Property is

located. Obj. at 10. However, Section 421 is the provision that requires the recording for

conveyance of property. N.Y. RPL § 421. For the sake of clarity, it certainly would have been

preferable for Defendants to also reference Section 294(1). But the sole reference to Section 421,

in addition to the explanation for the basis of the defense, is sufficient to raise a meritorious issue

of statutory compliance.

Fourth, Plaintiff asserts the fourth affirmative defense under RPAPL § 1306 must fail

because Plaintiff complied with that provision, which sets out certain requirements for filing

RPAPL § 1304 notices. Obj. at 11–13. But Plaintiff does not contest the fact that it failed to

provide an appropriate telephone number, as required by Section 1306. Plaintiff cites to several

cases for the idea that Section 1306 filing requirements are not “perfunctory”—but provides no

citation that excuses a filer from including the statutorily required information. Plaintiff relies

almost exclusively on CIT Bank N.A. v. Schiffman, 168 N.E.3d 1138 (N.Y. 2021), which held that

in certain cases, not every liable individual needs to be listed on the filing. Id. at 1145. But

providing the contact information for the borrower is a separate matter. Given the R&R’s

extensive analysis of the RPAPL § 1306 minimal requirements and the statutory purpose of

having those requirements, see R&R at 27–30, this argument lacks merit.

Fifth, Plaintiff argues that the twelfth affirmative defense under RPAPL § 1331 must fail.

Obj. at 13–14. This defense is that Plaintiff failed to comply with statutory requirements because

Plaintiff did not show that he filed his complaint along with his notice of pendency. Plaintiff’s

issue with this defense is that it was asserted under Section 1331 when the actual statutory

provision at issue is N.Y. CPLR § 6511(a), which Defendants failed to raise until opposition

briefing. Id. Section 1331 requires a plaintiff to file a notice of pendency at least twenty days

before a final judgment directing a sale is rendered. Section 6511(a) requires a plaintiff to file a

copy of the complaint along with the notice of pendency required by Section 1331, which

Plaintiff appears to have failed to do. Like the dispute over Section 421, discussed above, it

would have been preferable for Defendants to reference Section 6511(a) in its original statement

of affirmative defense. But Defendants’ notice of a defense under the related Section 1331 is

sufficient to state a meritorious defense. Moreover, for the same reasons explained in the R&R at

20-21 and in this Order at 3-4, the fact that Defendants only raised the Section 6511(a) statutory

compliance issue in opposition briefing does not render that argument waived.

Finally, Plaintiff objects that the counterclaim for attorney’s fees should be dismissed

because Plaintiff is entitled to summary judgment in its favor on all other claims. /d. at 14.

Plaintiff is not entitled to summary judgment on all other claims. The attorney’s fees claim

remains viable.

Accordingly, the R&R is ADOPTED in full. Plaintiff’s motion for summary judgment as

to its prima facie case is DENIED. Plaintiff’s motion for summary judgment as to Defendants’

affirmative defenses and counterclaims is GRANTED in part and DENIED in part. Specifically,

Plaintiff’s motion is DENIED with respect to Defendants’ affirmative defenses under RPAPL §

1302(1)(b) and RPL § 421, Defendants’ Fourth and Twelfth affirmative defenses, and

Defendants’ second counterclaim for attorney’s fees. The motion is GRANTED with respect to

all other defenses and counterclaims.

By April 15, 2025, parties shall file a joint status letter with proposed trial dates for June,

August, or September, and the letter shall include whether parties are interested in a referral to

the Mediation Program or for a settlement conference. The Clerk of Court is directed to

terminate ECF No. 28.

Dated: March 27, 2025

New York, New York

SO ORDERED.

/ |

JESSICA G. L. CLARKE

United States District Judge