Opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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WELLS FARGO BANK NATIONAL ASSOCIATION

AS TRUSTEE FOR THE HOLDERS OF COMM 2014-

UBS6 MORTGAGE TRUST COMMERCIAL

MORTGAGE PASS-THROUGH CERTIFICATES BY

AND THROUGH ITS SPECIAL SERVER, LNR REPORT AND

PARTNERS LLC, RECOMMENDATION

Plaintiff, 17-CV-3570

(Matsumoto, J.)

v. (Marutollo, M.J.)

366 REALTY LLC; JOSHUA MIZRAHI; CRIMINAL

COURT OF THE CITY OF NEW YORK; NYC

ENVIRONMENTAL CONTROL BOARD; NEW

YORK CITY DEPARTMENT OF FINANCE; KASSIN

SABBAGH REALTY LLC,

Defendants.

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JOSEPH A. MARUTOLLO, United States Magistrate Judge:

Plaintiff Wells Fargo Bank National Association, as Trustee for the Holders of COMM

2014-UBS6 Mortgage Trust Commercial Pass-Through Certificates, by and through its special

service, LNR Partners LLC (“Plaintiff”) filed this foreclosure action on June 13, 2017 against

Defendants 366 Realty LLC (“366 Realty”); Joshua Mizrahi; Criminal Court of the City of New

York (the “Criminal Court”); NYC Environmental Control Board (“ECB”); New York City

Department of Finance (“DOF”); Kassin Sabbagh Realty LLC (“Kassin”); as well as several other

defendants who were thought to possess or claim an interest in or lien upon the real property

located at 366 Knickerbocker Avenue, Brooklyn, New York 11237 (the “Property”). See Dkt. No.

1.

On March 16, 2021, the Court granted Plaintiff’s motion for summary judgment against

366 Realty. See Dkt. No. 58; see also Wells Fargo Bank Ass’n v. 366 Realty LLC, 2021 WL

9494173 (E.D.N.Y. Mar. 16, 2021) (Johnson, J.). On November 26, 2024, the undersigned issued

a Report and Recommendation, recommending that default judgment be granted as to Kassin, but

denied as to Mizrahi,1 the Criminal Court, the ECB, and the DOF. See Dkt. No. 110. On February

20, 2025, the Honorable Kiyo Matsumoto, United States District Judge, adopted that Report and

Recommendation in full. See Dkt. No. 118.

Currently pending before this Court,2 on a referral from the Judge Matsumoto, is Plaintiff’s

motion for default judgment (the “Motion”) against Defendants Criminal Court, the ECB, and the

DOF (collectively, the “Defaulting Defendants”).3 See Dkt. No. 148; Dkt. No. 137 Text Entry.

For the reasons set forth below, this Court respectfully recommends that Plaintiff’s Motion be

GRANTED in part and DENIED in part.

I. Background

A. Factual Allegations

The following facts are taken from the Second Amended Complaint, Plaintiff’s Motion,

and the attachments filed in support of Plaintiff’s Motion. The facts are assumed to be true for the

purposes of this motion. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (in light of

defendant’s default, a court is required to accept all of plaintiff’s factual allegations as true and

1 While Mizrahi initially appeared through counsel and answered the Complaint on August 21, 2017, see

Dkt. No. 7, he defaulted with regard to the First Amended Complaint. See Dkt. Nos. 70, 90. Plaintiff’s

motion for default judgment against Mizrahi, however, was denied, as Mizrahi subsequently became active

in the litigation again and answered the Second Amended Complaint. See November 12, 2024 Text Order;

Dkt. Nos. 110, 128.

2 Also pending before this Court are Plaintiff’s and Mizrahi’s cross-motions for summary judgment on the

issue of Mizrahi’s deficiency liability as a guarantor, and Plaintiff’s motion for appointment of a receiver.

See Dkt. Nos. 141, 142. A separate opinion shall issue with regard to those motions.

3 Plaintiff also moves for default judgment against Kassin. See Dkt. No. 148. Per the Court’s September

19, 2025 Order, however, Plaintiff’s motion for default judgment against Kassin (see Dkt. No. 148-9 at 11-

12), is denied as moot because the Court already granted Plaintiff’s default judgment motion against Kassin.

See Dkt. No. 118; September 19, 2025 Text Order.

draw all reasonable inferences in plaintiff’s favor); see also BASF Corp. v. Original Fender

Mender, Inc., No. 23-CV-2796 (HG) (JAM), 2023 WL 8853704 (E.D.N.Y. Dec. 22, 2023), report

and recommendation adopted, Text Order (E.D.N.Y. Jan. 9, 2024) (same); Doe v. Hyassat, No.

18-CV-6110 (PGG) (OTW), 2024 WL 1955354 (S.D.N.Y. May 3, 2024) (same).

On November 6, 2014, 366 Realty executed a loan agreement (the “Loan Agreement”)

obtaining a loan (the “Loan”) for $2,200,000 from Cantor Commercial Real Estate Lending, L.P.

(the “Original Lender”). Dkt. Nos. 121 ¶¶ 13-14; 121-3. Defendant 366 Realty signed and

delivered an Amended, Restated, and Consolidated Promissory Note (the “Note”). Dkt. No. 121

¶ 15; Dkt. No. 121-4. The indebtedness owed under the Note is secured by the Property, as outlined

in the Mortgage Security Agreement and Assignment of Leases and Rents (“Original Mortgage”).

Dkt. No. 121 ¶ 16; Dkt. No. 121-5. The Original Mortgage was recorded in the Office of City

Register of the City of New York, Kings County on August 22, 2006, as CRFN 2006000473672.

Dkt. Nos. 121 ¶ 17.

After numerous assignments, the indebtedness owed under the Note was further secured

by the Property, as evidenced by the Amended, Restated and Consolidated Mortgage, Assignment

of Leases and Rents, Security Agreement and Fixture Filing, dated November 6, 2014 (the

“Amended Mortgage”). Dkt. No. 121 ¶¶ 17-22. The Amended Mortgage, which restated,

amended, and consolidated the Original Mortgage, granted the Original Lender a first-priority lien

on the Property, and was recorded in the Office of City Register of the City of New York, Kings

County on November 28, 2014, as CRFN 2014000393969. See Dkt. Nos. 121 ¶¶ 23-25; 121-8.

As a further source of repayment for the obligations owed by 366 Realty, including its

obligations under the Note, Defendant 366 Realty executed an Assignment of Leases and Rents

(the “ALR”). Dkt. No. 121 ¶ 27; Dkt. No. 121-9. Defendant Mizrahi also allegedly guaranteed

repayment of the Loan pursuant to a Guaranty of Recourse Obligations, dated November 6, 2014

(the “Guaranty”). Dkt. No. 121 ¶ 29; Dkt. No. 121-10.

In December 2014, the Original Lender assigned and transferred all rights, title, and interest

in the Loan Agreement, Note, ALR, and Mortgage (collectively, the “Loan Documents”) to

Plaintiff. Dkt. No. 121 ¶ 30; Dkt. No. 121-11.

By letter dated February 19, 2016, Plaintiff notified Defendant 366 Realty that it was in

default under the terms of the Loan for failing to have all rents deposited into the requisite clearing

account, failing to remit all excess cash to Plaintiff, failing to deliver outstanding financial

statements to Plaintiff, and executing a lease at the Property without Plaintiff’s prior review and

consent. Dkt. Nos. 121 ¶ 37; 121-13. Plaintiff sent four additional default letters to Defendant

366 Realty after it failed to cure the aforementioned defaults. See Dkt. Nos. 121 ¶¶ 38-41; 121-14

– 121-17. Then, on April 3, 2017, Plaintiff accelerated the Note after Defendant 366 Realty failed

to cure the defaults. See Dkt. Nos. 121 ¶¶42-43; 121-18.

As of Plaintiff’s commencement of this action on June 13, 2017, and through the filing of

Plaintiff’s Second Amended Complaint on February 28, 2025, Plaintiff asserts that Defendant 366

Realty was and is in default under the terms of the Loan Documents. See Dkt. No. 121 ¶¶ 36.

Accordingly, Plaintiff alleges that Defendant 366 Realty is indebted to the Lender for all

sums due and owing under the Loan Documents. Id. ¶ 46. Plaintiff further claims that it is entitled

to possession of the Property and to collect rents and profits of the same under the terms of the

Amended Mortgage and the ALR. Id. ¶¶ 47-49. Moreover, Plaintiff contends that the Amended

Mortgage entitles Plaintiff to foreclose on the Property and that Plaintiff be granted immediate

possession of the same. Id. ¶ 50.

Plaintiff has named the Criminal Court as a defendant in this action based on its status as

a potential judgment creditor of 366 Realty and its possible liens upon the Property. Id. ¶ 4.

Specifically, Plaintiff contends that the Criminal Court has judgment liens on the Property,

including monetary judgments in its favor and against 366 Realty LLC

in the amount of (i) $2,750, docketed February 17, 2017, by the

Clerk of the Criminal Court of Kings County, as Control Number

003594062 01, obtained in the Kings County Criminal Court at

Index No. 2010SK113570, and (ii) $52,750, docketed February 17,

2017, by the Clerk of the Criminal Court of Kings County, as

Control Number 003594063, obtained in the Kings County Criminal

Court at Index No. 2010SK115382.

Id. ¶ 53; Dkt. No 121-19 at 2-3.4

Plaintiff has named the ECB as a defendant in this action based on its status as a potential

judgment creditor of 366 Realty and its possible liens upon the Property. See Dkt. No. 121 ¶ 5.

Specifically, Plaintiff contends that ECB has “possible liens and several outstanding penalties for

non-compliance issued with respect to the Property and owed to the [ECB], including . . . violations

with various numbers existing as of November 2022.” Id. ¶ 54; Dkt. No. 121-20.

Plaintiff has named the DOF as a defendant in this action because of any lien or claim it

may have regarding the Property, due to possible outstanding New York City corporate business

or franchise tax liabilities owed by 366 Realty. See Dkt. Nos. 121 ¶ 6; 121-21.

B. Relevant Procedural History

In light of the lengthy litigation history here, the Court presumes familiarity with the bulk

of the procedural history of this case. See, e.g., Dkt. Nos. 118 at 8-9, 110 at 4-6, 101 at 5, 95 at 3-

4, 58 at 2-4.

4 Citations are to ECF file-stamped pages unless otherwise noted.

Relevant to the analysis here, on April 12, 2024, Plaintiff moved for default judgment

against Defendants Mizrahi, the Criminal Court, the ECB, the DOF, and Kassin. See Dkt. 103.

Judge Matsumoto subsequently referred that default judgment motion to the undersigned for a

Report and Recommendation. September 24, 2024 Text Order.

On November 26, 2024, the undersigned issued a Report and Recommendation,

recommending that default judgment be granted as to Kassin, but that default judgment be denied

as to Mizrahi, the Criminal Court, the ECB and the DOF. See Dkt. No. 110 at 24. Over Plaintiff’s

objections, see Dkt. No. 113, on February 20, 2025, Judge Matsumoto adopted that Report and

Recommendation in full, granting Plaintiff’s motion for default judgment as to Kassin, but denying

it as to Mizrahi, the Criminal Court, the ECB and the DOF. See Dkt. No. 118 at 24.

In accordance with Judge Matsumoto’s Order, Plaintiff filed the Second Amended

Complaint on February 28, 2025, addressing “the pleading deficiencies identified in the [Report

& Recommendation] and [Order adopting it] regarding the Criminal Court [], the [ECB], and the

[DOF].”5 Dkt. No. 121, Dkt. No. 118 Text Order.

Plaintiff served the Defaulting Defendants, respectively, on March 5, 2025 and March 6,

2025. Dkt. Nos. 131-133. On March 28, 2025, the Court directed Plaintiff to move, by April 4,

2025, for entry of a Clerk’s certificate of default for any Defendant that had not yet answered and

5 As noted above, Plaintiff’s Second Amended Complaint reiterates claims against Kassin. See Dkt. No.

121. However, the Court previously granted Plaintiff’s motion for default judgment against Kassin, see

Dkt. Nos. 110, 118, and on September 19, 2025, the Court directed the Clerk of Court to enter judgment

against Kassin. September 19, 2025 Text Order. The Court also struck Plaintiff’s claims against defendant

Kassin in its Second Amended Complaint and denied as moot Plaintiff’s pending motion for default

judgment as against Kassin at Dkt. No. 148 because the Court already granted Plaintiff’s default judgment

against Kassin at Dkt. No. 118. See id. (citing Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir.

2008) (“A party seeking to file an amended complaint postjudgment must first have the judgment vacated

or set aside pursuant to Fed. R. Civ. P. 59(e) or 60(b).”)).

for which the time to do so had expired. Dkt. No. 137 Text Entry. Judge Matsumoto also referred

any forthcoming motion for default judgment to the undersigned. Id.

On April 4, 2025, Plaintiff requested a Clerk’s certificate of default for the Defaulting

Defendants. Dkt. No. 138. On April 8, 2025, the Clerk of Court entered a notation of default

against the Defaulting Defendants. Dkt. No. 140. Plaintiff thereafter filed this Motion on May 15,

2025. Dkt. No. 148.

On September 19, 2025, the Court directed Plaintiff to supplement its Motion by filing “a

recent title search indicating all liens on the property at 366 Knickerbocker Avenue, Brooklyn, NY

11237, and the priority of such liens.” See September 19, 2025 Text Order. Plaintiff supplemented

its Motion on September 26, 2025. Dkt. No. 157.

II. Legal Standard

“Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining

a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). “First,

where a party’s failure to respond is ‘shown by affidavit or otherwise, the clerk must enter the

party’s default.’” Hwang v. Couple Spa 65, Inc., No. 23-CV-5336 (NGG) (RML), 2025 WL

2699944, at *3 (E.D.N.Y. Sept. 23, 2025) (quoting Fed. R. Civ. P. 55(a)). “Second, the plaintiff

must petition the Court for an entry of default judgment pursuant to Rule 55(b)(2).” Id. (citing

Priestley, 647 F.3d at 505).

The Second Circuit “generally disfavor[s]” default judgment and has repeatedly expressed

a “preference for resolving disputes on the merits.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96

(2d Cir. 1993). Nonetheless, in evaluating a motion for default judgment, a court accepts as true

the plaintiff’s well-pleaded factual allegations, except those relating to damages. Greyhound

Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (citing Flaks v.

Koegel, 504 F.2d 702, 707 (2d Cir. 1974)). The plaintiff bears the burden of alleging “specific

facts,” rather than “mere labels and conclusions” or a “formulaic recitation of the elements,” so

that a court may infer a defendant’s liability. Cardoza v. Mango King Farmers Mkt. Corp., No.

14-CV-3314 (SJ) (RER), 2015 WL 5561033, at *3 (E.D.N.Y. Sept. 1, 2015) (citing Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009)), report and recommendation adopted, 2015 WL 5561180

(E.D.N.Y. Sept. 21, 2015).

The decision to grant or deny a default motion is “left to the sound discretion of a district

court.” Esquivel v. Lima Rest. Corp., No. 20-CV-2914 (ENV) (MMH), 2023 WL 6338666, at *3

(E.D.N.Y. Sept. 29, 2023) (quoting Shah v. New York State Dep’t of Civ. Serv., 168 F.3d 610, 615

(2d Cir. 1999)). A court “possesses significant discretion” in granting a motion for default

judgment, “including [determining] whether the grounds for default are clearly established.” Chen

v. Oceanica Chinese Rest., Inc., No. 13-CV-4623 (NGG) (PK), 2023 WL 2583856, at *7

(E.D.N.Y. Mar. 21, 2023) (quotations and citation omitted). The Court may also “consider

numerous factors, including whether plaintiff has been substantially prejudiced by the delay

involved and whether the grounds for default are clearly established or in doubt.” Franco v. Ideal

Mortg. Bankers, Ltd., No. 07-CV-3956 (JS) (AKT), 2010 WL 3780972, at *2 (E.D.N.Y. Aug. 23,

2010) (cleaned up), report and recommendation adopted, 2010 WL 3780984 (E.D.N.Y. Sept. 17,

2010).

“The plaintiff bears the burden of alleging specific facts, rather than mere labels and

conclusions or a formulaic recitation of the elements, so that a court may infer a defendant’s

liability.” Hwang, 2025 WL 2699944, at *3 (citation omitted).

III. Jurisdiction and Venue

The Court “must satisfy itself that it has subject matter and personal jurisdiction before

rendering judgment against defendants.” Dumolo v. Dumolo, No. 17-CV-7294 (KAM) (CLP),

2019 WL 1367751, at *4 (E.D.N.Y. Mar. 26, 2019); see Covington Indus., Inc. v. Resintex A.G.,

629 F.2d 730, 732 (2d Cir. 1980) (“A judgment entered against parties not subject to the personal

jurisdiction of the rendering court is a nullity.”).

A. Subject Matter Jurisdiction

The Court has subject matter jurisdiction over Plaintiff’s claims pursuant to 28 U.S.C. §

1332, because Plaintiff is citizen of South Dakota, Defendants are all citizens of New York, and

the amount in controversy—exclusive of interest and costs—exceeds $75.000.00. See 28 U.S.C.

§ 1332 (“[D]istrict courts shall have original jurisdiction of all civil actions where the matter in

controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between

citizens of different states.”); see also Dkt. No. 121 ¶¶ 1-7.

Accordingly, the undersigned respectfully recommends a finding that this Court has subject

matter jurisdiction over Plaintiff’s claims against the Defaulting Defendants.

B. Personal Jurisdiction

“[B]efore a court grants a motion for default judgment, it may first assure itself that it has

personal jurisdiction over the defendant.” Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp.,

619 F.3d 207, 213 (2d Cir. 2010) (citation omitted); see also BASF Corp., 2023 WL 8853704, at

*5 (“A court may not enter default judgment unless it has jurisdiction over the person of the party

against whom the judgment is sought, which also means that he must have been effectively served

with process.” (internal quotations and citation omitted)).

Here, Plaintiff properly served each of the Defaulting Defendants with the summons and

Second Amended Complaint. See Dkt. Nos. 131-33.

Specifically, Plaintiff served ECB and DOF with the summons and Second Amended

Complaint by serving copies of the same on the Office of the Corporation Counsel. Dkt. Nos. 132-

33. ECB and DOF are New York City agencies and non-suable governmental entities. See NYC

Charter § 396 (“All actions . . . shall be brought in the name of the city of New York and not in

that of any agency[.]”). Thus, when an action is brought against DOF, ECB, or another City

agency, the Court construes the action as one against the City of New York. See, e.g., Windward

Bora LLC v. Thomas, No. 20-CV-5320 (DG) (MMH), 2022 WL 14731628, at *4 (E.D.N.Y. Sept.

30, 2022); Miss Jones, LLC v. Viera, No. 18-CV-1398 (NGG) (SJB), 2018 WL 11467906, at *1

(E.D.N.Y. Dec. 7, 2018); Thompson v. Grey, No. 08-CV-4499 (JBW), 2009 WL 2707397, at *5

(E.D.N.Y. Aug. 26, 2009), aff’d, 385 F. App’x 54 (2d Cir. 2010); Alleva v. New York City Dep’t

of Investigation, 696 F. Supp. 2d 273, 276 n.2 (E.D.N.Y. 2010), aff’d, 413 F. App’x 361 (2d Cir.

2011).

Additionally, because the ECB appeared in this case through counsel, see Dkt. Nos. 75,

112, the same was automatically served with the Second Amended Complaint via ECF. See Fed.

R. Civ. P. 5(b)(1) (“If a party is represented by an attorney, service under this rule must be made

on the attorney unless the court orders service on the party.”); NYKCool A.B. v. Pac. Int’l Servs.,

Inc., No. 12-CV-5754 (LAK) (AJP), 2013 WL 6799973, at *5 (S.D.N.Y. Dec. 20, 2013) (holding

that judgment debtors were served with amended complaint via ECF).

Plaintiff properly served the Criminal Court by delivering copies of the summons and

Second Amended Complaint upon an individual authorized to accept service at its place of

business at 120 Schermerhorn Street, Brooklyn, New York 11201. See Dkt. No. 131.

Accordingly, the undersigned respectfully recommends a finding that this Court has

personal jurisdiction over the Defaulting Defendants.

C. Venue

“[A] civil action may be brought in a judicial district in which any defendant resides, if all

defendants are residents of the State in which the district is located.” 28 U.S.C. § 1391(b)(1).

Here, Defaulting Defendants are considered residents of New York, and venue is therefore proper

in this district. See Dkt. No. 121 ¶¶ 2-7.

Accordingly, the undersigned respectfully recommends a finding that venue is proper as to

the Defaulting Defendants in the United States District Court for the Eastern District of New York.

IV. Procedural Compliance with Local Civil Rules 7.1 and 55.2

“A motion for default judgment will not be granted unless the party making the motion

adheres to all of the applicable procedural rules.” Annuity, Welfare & Apprenticeship Skill

Improvement & Safety Funds of Int’l Union of Operating Engineers, Loc. 15, 15A, 15C & 15D v.

Allstate Mapping & Layout, LLC, No. 22-CV-1831 (PKC) (TAM), 2023 WL 1475389, at *1

(E.D.N.Y. Feb. 2, 2023) (quoting Century Surety Co. v. Adweek, No. 16-CV-335 (ENV) (PK),

2018 WL 10466835, at *1 (E.D.N.Y. Jan. 9, 2018)). “[L]ocal rules have the force of law, as long

as they do not conflict with a rule prescribed by the Supreme Court, Congress, or the Constitution.”

Fin. Servs. Vehicle Tr. v. Osmeña, No. 22-CV-7491 (RPK) (CLP), 2023 WL 7000935, at *2

(E.D.N.Y. Aug. 15, 2023) (internal quotations and citation omitted).

Local Civil Rule 7.1 requires that a plaintiff attach to a motion for default (1) a notice of

motion specifying the applicable rules or statutes pursuant to which the motion is brought; (2) a

memorandum of law setting forth the cases and other authorities relied upon in support of the

motion; and (3) supporting affidavits and exhibits containing any factual information and portions

of the record necessary for the decision of the motion. See L. Civ. R. 7.1. Plaintiff complied with

the procedural requirement set forth in Local Civil Rule 7.1 by filing a notice of motion (Dkt. No.

148), a memorandum of law (Dkt. No. 148-9), and affidavits and exhibits (Dkt. Nos. 148-1 – 148-

8) in support of its motion.

Local Civil Rule 55.2 requires that a plaintiff attach to any motion for default judgment an

affidavit or declaration showing that the clerk has entered a Certificate of Default, that the movant

has complied with the Servicemembers Civil Relief Act (“SCRA”), and that the defaulting party

is not known to be a minor or an incompetent person. See L. Civ. R. 55.2(a)(1)(A)-(C); 50 U.S.C.

§ 3931. A movant must also file a certificate of service indicating the motion and all supporting

documents, including the Clerk’s Certificate of Default, have been personally served on or mailed

to the last residence (for a natural person) or business address (for an entity) of the defaulting party.

Id. at (a)(3). Additionally, if damages, attorneys’ fees, or costs are at issue, a moving party must

also file “a statement of damages, sworn or affirmed to by one or more people with personal

knowledge, in support of the request.” Id. at (c).

In accordance with Local Civil Rule 55.2(a), Plaintiff has attached to its motion for default

judgment the Clerk’s certificate of default as to the Defaulting Defendants, see Dkt. No. 148-8, a

copy of the Second Amended Complaint, see Dkt. No. 148-6, and a proposed form of default

judgment, see Dkt. No. 148-10. Moreover, because Defaulting Defendants are government

agencies or entities and not natural persons, Plaintiff need neither demonstrate compliance with

the SCRA, nor confirm that they are not minors or incompetent compliance with Local Civil Rule

55.2(a). Per Local Civil Rule 55.2(a)(3), Plaintiff has mailed all papers submitted in connection

with its motion for a default judgment to the “last known business address[es]” of the Defaulting

Defendants. See Dkt. 148-11; L. Civ. R. 55.2(a)(3).

Plaintiff has also submitted sufficient documentation to fulfill Local Rule 55.2(c)’s

requirement to “file a statement of damages, sworn or affirmed to by one or more people with

personal knowledge, in support of the request, showing the proposed damages and the basis for

each element of damages, including interest, attorney’s fees, and costs.” L. Civ. R. 55.2(c).

Plaintiff’s motion for default judgment does not seek interest, attorney’s fees, and costs against the

Defaulting Defendants; instead, it seeks foreclosure relief against these entities. See Dkt. No. 148-

10 ¶ 2; 148-9. In support of its motion, and in compliance with Local Rule 55.2(c), Plaintiff has

filed its declaration, affirmed by a person alleging personal knowledge, regarding the relative

interests of the Defaulting Defendants sought to be extinguished by its motion. See Dkt. No. 148-

1; L. Civ. R. 55.2(c).

Accordingly, the undersigned respectfully recommends a finding that the Court that

Plaintiff has satisfied the jurisdictional requirements to proceed with its motion under Local Civil

Rules 7.1 and 55.2.

V. Discussion

Plaintiff seeks a default judgment against the Defaulting Defendants for their respective

failures to respond to the Second Amended Complaint. See Dkt. No. 148. Plaintiff alleges that

the Defaulting Defendants are non-mortgagors holding some interests in or liens on the Property

that are subordinate to the Mortgage. See Dkt. No. 121 ¶¶ 4-6, 53-55; see also Dkt. No. 148-9 at

9-11.

RPAPL § 1311 provides that “[e]very person having any lien or incumbrance upon the real

property which is claimed to be subject and subordinate to the lien of the plaintiff” shall be joined

as a necessary party to a foreclosure action. RPAPL § 1311(3); see also Bank of Am., N.A. v. Puig,

No. 17-CV-3361 (RRM) (ARL), 2020 WL 13540961, at *2 (E.D.N.Y. Sept. 21, 2020) (describing

RPAPL § 1311). “This rule ‘derives from the underlying objective of foreclosure actions—to

extinguish the rights of redemption of all those who have a subordinate interest in the property and

to vest complete title in the purchaser at the judicial sale.’” Bank of Am., N.A. v. 3301 Atl., LLC,

No. 10-CV-5204 (FB) (SMG), 2012 WL 2529196, at *14 (E.D.N.Y. June 29, 2012) (quoting N.C.

Venture I, L.P. v. Complete Analysis, Inc., 22 A.D.3d 540, 542-43 (2d Dep’t 2005)).

Entry of “[d]efault judgment against non-mortgagor defendants is generally appropriate

where the complaint alleges ‘nominal liability,’ meaning that ‘any judgments or liens a defendant

may have against the property are subordinate to the plaintiff’s lien.’” Windward Bora LLC v.

Baez, No. 19-CV-5698 (PKC) (SMG), 2020 WL 4261130, at *3 (E.D.N.Y. July 24, 2020)

(citations omitted). “When a default judgment is entered against a defendant with a ‘nominal

interest’ in a property, any such interest in the relevant property is terminated.” Id. (internal

quotations and citation omitted). But “[w]here a necessary party is not joined, that ‘party’s rights

are unaffected by the judgment of foreclosure and sale.’” 3301 Atl., LLC, 2012 WL 2529196, at

*14 (quoting In re Oligbo, 328 B.R. 619, 640 (Bankr. E.D.N.Y. 2005)).

Plaintiff named the Defaulting Defendants as nominal defendants in the Second Amended

Complaint. See Dkt. No. 148 ¶¶ 4-6. Plaintiff does not seek monetary relief from these defendants;

rather, they are named as defendants because their subordinate interests make them necessary

parties to a foreclosure action under New York law. See RPAPL § 1311(3); Wells Fargo Bank,

N.A. v. Watts, No. 16-CV-6919 (ENV) (RER), 2019 WL 3716190, at *1 (E.D.N.Y. Jan. 3, 2019),

report and recommendation adopted, 2019 WL 3714582 (E.D.N.Y. Mar. 13, 2019).

With respect to municipal defendants, courts apply a heightened pleading standard to

determine whether the plaintiff has established nominal liability. Windward Bora, LLC v.

Thompson, No. 18-CV-1811 (NGG) (RML), 2020 WL 1242828, at *5 (E.D.N.Y. Mar. 16, 2020)

(citations omitted) (explaining that courts apply a heightened pleading standard where a state or

city agency is named as a defendant); see also NDF1, LLC v. Cunningham, 754 F. Supp. 3d 273,

286 (E.D.N.Y. 2024) (“With respect to municipal defendants ECB and DOF, courts apply a

heightened pleading standard to determine whether the plaintiff has established nominal

liability.”). “The complaint must allege ‘detailed facts showing the particular nature of the interest

in or lien on the real property and the reason for making the state or city agency a party-

defendant.’” Windward Bora, LLC, 2020 WL 1242828, at *5 (alterations omitted) (quoting

RPAPL §§ 202(1), 202-a(1)). “If the lien exists ‘by virtue of a judgment,’ and the defendant is a

state agency, the complaint must include ‘the name of the court, date recorded, clerk’s office in

which filed, and names of the parties against whom and in whose favor the judgment was

recorded.’” Id. (alteration omitted) (quoting RPAPL § 202(2)). “If the defendant is a city agency,

the complaint must include that same information, as well as ‘a brief description of the grounds

for or the nature of such judgment.’” Id. (quoting RPAPL § 202-a(2)). In addition, the plaintiff

must substantiate their allegations with documentation. See, e.g., Baez, 2020 WL 4261130, at *4

(collecting cases).

A. The Criminal Court

Plaintiff alleges that the Criminal Court is a nominal defendant based on its status as a

potential judgment creditor of 366 Realty and its possible liens upon the Property. See Dkt. No.

121 ¶ 4. Specifically, Plaintiff contends that the Criminal Court has judgment liens on the

Property, including monetary judgments in its favor and against 366 Realty LLC

in the amount of (i) $2,750, docketed February 17, 2017, by the

Clerk of the Criminal Court of Kings County, as Control Number

003594062 01, obtained in the Kings County Criminal Court at

Index No. 2010SK113570, and (ii) $52,750, docketed February 17,

2017, by the Clerk of the Criminal Court of Kings County, as

Control Number 003594063, obtained in the Kings County Criminal

Court at Index No. 2010SK115382.

Dkt. Nos. 121 ¶ 53; 121-19 at 2-3.

Here, the Court finds that Plaintiff has met the heightened pleading standards with respect

to the Criminal Court by submitting documentation relating to judgements of $2,750 and $52,750

docketed in favor the Criminal Court and against 366 Realty, including the name of the court, date

recorded, docket number, and the names of the parties. See Dkt. No. 121-19 at 2, 3. This

information is sufficient to establish the Criminal Court’s interest in the Property and thus its

nominal liability. See Baez, 2020 WL 4261130, at *4 (E.D.N.Y. July 24, 2020) (holding

heightened pleading standard met where documentation relating to the judgment lien shows the

name of the court, date recorded, and docket number, and identifies the parties).

Accordingly, the undersigned respectfully recommends that Plaintiff’s motion for default

judgment be granted as to the Criminal Court.

B. The ECB

Plaintiff alleges that the ECB is a nominal defendant based on its status as a potential

judgment creditor of 366 Realty and its possible liens upon the Property. See Dkt. No. 121 ¶ 5.

Specifically, Plaintiff contends that ECB has “possible liens and several outstanding penalties for

non-compliance issued with respect to the Property and owed to the [ECB], including . . . violations

with various numbers existing as of November 2022.” Id. ¶ 54; Dkt. No. 121-20. Plaintiff attaches

to its Second Amended Complaint evidence of a series of fines issued by ECB against the Property,

dating from September 2014 to November 2022. See Dkt. No. 121-20 at 2. Plaintiff’s

supplemental filing also reveals additional fines issued since November 2022, with some as recent

as March 2025. See Dkt. No. 157-1 at 9. Plaintiff’s submissions contain details regarding the

fines (which range in value from $300 to $1000), as well as their alleged violation numbers, order

dates, notice dates, docket dates, and balances due. Id.; see Dkt. No. 121-20 at 2. The Court finds

that this information is sufficient to meet the heightened pleading standards with respect to the

ECB. See NDF1, LLC, 754 F. Supp. 3d at 287 (finding that the plaintiff sufficiently alleged the

nominal liability of ECB where “the complaint references an Exhibit G, which lists twelve

sanitation violations recorded against the [property at issue] and includes the dates of the

violations, the penalty amounts, and their current status.”); see Courchevel 1850 LLC v. Pinto-

Bedoya, No. 16-CV-6716 (NGG) (RER), 2017 WL 5157451, at *1 (E.D.N.Y. Nov. 7, 2017)

(plaintiff met RPAPL § 202-a’s enhanced pleading burden by attaching “list of citations” that

defaulting city agency had issued against the debtor defendant’s other properties, although “the

Complaint’s allegations are somewhat sparse” regarding the agency’s lien against the subject

property), report and recommendation adopted, 2017 WL 8793381 (E.D.N.Y. May 11, 2017).

Accordingly, the undersigned respectfully recommends that Plaintiff’s motion for default

judgment be granted as to the ECB.

C. The DOF

Plaintiff alleges that the DOF is a nominal defendant because of any lien or claim it may

have regarding the Property, due to possible outstanding New York City corporate business or

franchise tax liabilities owed by 366 Realty. See Dkt. Nos. 121 ¶ 6; 121-21. As documentary

evidence of the DOF’s potential interest in the Property, Plaintiff attaches what appears to be one

page of a title search that lists the DOF as a one of six “necessary party defendant[s]” based on

“Possible NYC Business Tax.” See Dkt. No. 121-21 at 2. Plaintiff’s supplemental submission on

September 26, 2025 did not contain additional information regarding the DOF’s potential interest

in the Property. See Dkt. No. 157.

Ultimately, Plaintiff’s proffered information is insufficient to meet RPAPL § 202-a’s

heightened pleading standard. See NDF1, 2024 WL 4509759, at *1 (adopting report and

recommendation finding that plaintiff’s conclusory allegations regarding DOF’s alleged interest

in the property were insufficient to meet RPAPL s 202-a’s heightened pleading); SAC Fund II

0826, LLC v. Burnell’s Enterprises, Inc., No. 18-CV-3504 (ENV) (PK), 2019 WL 5694078, at *7

(E.D.N.Y. Sept. 7, 2019) (“Plaintiff does not allege more than ‘bare allegations’ of the DOF’s

interest and thus did not reach the heightened pleading standard that is required for this

Defendant.”), report and recommendation adopted, 2019 WL 5956526 (E.D.N.Y. Nov. 13, 2019);

Miss Jones, LLC v. Brahmadutta Bisram, Y & S Dev. of NY, Inc., No. 16-CV-7020 (NGG) (SMG),

2018 WL 2074200, at *4 (E.D.N.Y. Feb. 5, 2018) (recommending denial of motion for default

judgment against DOF because plaintiff failed to meet the heightened pleading requirements of

RPAPL § 202-a), report and recommendation adopted, 2018 WL 2074205 (E.D.N.Y. Feb. 22,

2018).

As noted above, Plaintiff’s prior motion for default judgment, see Dkt. No. 103, was denied

as against the DOF, on similar grounds. See Dkt. No. 110 at 22-23, report and recommendation

adopted, Dkt. No. 118. In the Second Amended Complaint and in Plaintiff’s memorandum in

support of its default judgment motion, Plaintiff states that the amount and extent of [the DOF’s

interest] is “currently unknown by public search.” See Dkt. Nos. 121 ¶ 55; 148-9 at 10. Moreover,

in its objection to the Court’s November 11, 2024 Report and Recommendation, see Dkt. No. 113,

Plaintiff stated that:

due to the nature of [366 Realty] as a limited liability company, the

title company is unable to determine with certainty what if anything

is owed [to the DOF] in business taxes. Furthermore, Plaintiff has

been advised by a title company that the State and City of New York

have required that tax status requests come directly from the limited

liability company and not from an outside party, such as the title

company. Therefore, Plaintiff is unaware of the specifics

concerning the taxes owed and any lien that the [DOF] may have to

be able to plead additional information.

Dkt. No. 113 at 9.

If Plaintiff is able to obtain the information necessary to substantiate the DOF’s potential

interest, whether from 366 Realty or elsewhere, and satisfy RPAPL § 202-a’s heightened pleading

standard, it may renew its motion to do so. A motion for default judgment as to the DOF, however,

will not be granted without “[d]etailed facts showing the particular nature of the interest in or lien

on the real property and the reason for making such city a party-defendant.” RPAPL § 202-a(1);

see also Cit Bank v. Dambra, No. 14-CV-3951 (SLT) (VMS), 2015 WL 7422348, at *6 (E.D.N.Y.

Sept. 25, 2015) (finding list of citations sufficient to establish [agency’s] nominal liability), report

and recommendation, 2015 WL 7430006 (E.D.N.Y. Nov. 20, 2015).

Significantly, however, the Court notes that, in a mortgage foreclosure action, “if a plaintiff

wishes to have the property sold subject to a lien, [the Court] see[s] no impediment to it doing

so.”6 E. Sav. Bank v. Walker, 775 F. Supp. 2d 565, 574 (E.D.N.Y. 2011); see also In re Comcoach

Corp., 698 F.2d 571, 574 (2d Cir. 1983) (“The absence of a necessary party in a foreclosure action

simply leaves such party’s rights to the premises unaffected.” (internal citations omitted)); Glass

v. Estate of Gold, 48 A.D.3d 746, 746-47 (2d Dep’t 2008).

Accordingly, this Court respectfully recommends that Plaintiff’s motion for default

judgment be but denied, without prejudice, as against the DOF.

6 Like the Court in Walker, this Court makes no representation as to the commercial reasonability of taking

such action. See Walker, 775 F. Supp. 2d at 574 n.10.

VI. Conclusion

For the foregoing reasons, this Court respectfully recommends that Plaintiff’s motion for

default judgment be GRANTED as against the Criminal Court and the ECB but DENIED as

against the DOF.

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 Defaulting

Defendants by overnight mail and first-class mail and file proof of service on ECF by September

29, 2025.

Copies shall be served at the following addresses:

NYC Department of Finance

100 Church Street

New York, NY 10007

NYC Environmental Control Board

59-17 Junction Boulevard

Corona, NY 11368

Criminal Court of the City of New York

120 Schermerhorn Street

Brooklyn, New York 11201

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 Matsumoto. 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

September 27, 2025 SO ORDERED.

/s/ Joseph A. Marutollo

JOSEPH A. MARUTOLLO

United States Magistrate Judge