680 F.Supp.3d 265
E.D.N.Y2023Background
- In May 2006 Varlas executed a $425,000 Consolidated Note and Mortgage on property at 149-44 20th Ave., Whitestone, NY; the mortgage was recorded in June 2006.
- The Note/Mortgage was assigned to Ponce de Leon Federal Bank (recorded 2013) and then assigned to Avail 1 LLC (recorded 2018), the plaintiff here.
- Plaintiff alleges Varlas defaulted beginning February 1, 2014; plaintiff mailed demand letters and a 90-day RPAPL §1304 notice and filed this foreclosure action in April 2019.
- Defendant filed a verified answer asserting ten affirmative defenses but failed to file a proper Local Rule 56.1 counterstatement and produced no admissible evidence opposing summary judgment.
- The court deemed plaintiff’s Rule 56.1 facts admitted, found plaintiff presented the note, mortgage, and proof of default, struck defendant’s affirmative defenses, and granted summary judgment ordering foreclosure and sale; plaintiff must submit a proposed receiver order and accounting by July 20, 2023.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff established a prima facie foreclosure case (possession of note/mortgage + default) | Avail produced note, mortgage, recorded assignments, and an affidavit attesting to default | Varlas disputes default and contends the affidavit lacks personal knowledge / underlying business records | Granted — court found note/mortgage produced and affidavit admissible (affiant based on review of business records in official capacity); default established and defendant offered no admissible contrary evidence |
| Admissibility of plaintiff’s affidavit based on business records | Affiant is manager/member of LLC and reviewed company records; Rule 56(c) permits such testimony | Varlas argued federal summary judgment requires production of underlying records and affidavit lacked personal knowledge | Admissible — federal practice allows officials to testify from company records; affidavit sufficient to support default at summary judgment |
| Sufficiency of defendant’s affirmative defenses | N/A (plaintiff moved to strike) | Varlas asserted lack of standing, RPAPL noncompliance, contractual and evidentiary defects in conclusory form | Struck — defenses were legal conclusions or unsupported assertions lacking specific factual support or admissible evidence |
| Compliance with RPAPL §1304 notice requirement | Plaintiff mailed the 90-day notice and filed required §1306 notice | Varlas argued counsel’s mailing renders notice defective because counsel is not a "lender, assignee or servicer" | Rejected — court found counsel service adequate (and defendant had actual notice); §1304 argument meritless |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant may show absence of any genuine issue by pointing to absence of evidence for non-movant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (materiality and standard for genuine dispute at summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (no genuine issue where record as a whole cannot support non-movant)
- Capobianco v. City of New York, 422 F.3d 47 (2d Cir. 2005) (court must construe facts in favor of non-moving party)
- Monahan v. N.Y.C. Dep’t of Corr., 214 F.3d 275 (2d Cir. 2000) (strict compliance required for Local Rule 56.1 opposing statements)
- Fed. Deposit Ins. Corp. v. Giammettei, 34 F.3d 51 (2d Cir. 1994) (plaintiff may satisfy Rule 56 by showing absence of evidence for an essential element of an affirmative defense)
- Utica Mut. Ins. Co. v. Munich Reinsurance Am., Inc., 7 F.4th 50 (2d Cir. 2021) (definition and treatment of affirmative defenses)
- Eastway Constr. Corp. v. City of New York, 762 F.2d 243 (2d Cir. 1985) (unsupported assertion that evidence lies exclusively with opponent is insufficient to defeat summary judgment)
- Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38 (2d Cir. 1989) (court may rely on detailed affidavits or documentary evidence to determine damages)
- Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (damages must be established to a reasonable certainty)