CIT Bank, N.A. v. Guy
1:17-cv-00238
E.D.N.YMay 16, 2017Background
- CIT Bank, N.A. (successor to OneWest) filed to foreclose a mortgage on property after borrower Paula Guy defaulted on a loan originated December 27, 2006 for $472,000.
- The note was endorsed (allonges) from Sterling to Indymac and then by the FDIC (as receiver) to OneWest; corresponding mortgage assignments tracked the note to OneWest.
- Defendants with record interests did not appear; defaults were entered against all interest holders.
- Plaintiff moved for default judgment and a judgment of foreclosure and sale; documentary evidence (note, mortgage, assignments) was submitted in support.
- Plaintiff sought damages totaling $622,819.42 (unpaid principal $453,996.95, accrued interest and late charges, $1,475 in costs, and $5,745 in attorneys’ fees).
- The court found plaintiff established entitlement to foreclosure and most damages but denied attorneys’ fees for insufficient documentation of reasonableness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/chain of title to foreclose | Note and mortgage were properly endorsed/assigned to OneWest, establishing prima facie right to foreclose | No appearance/opposition; no affirmative challenge to chain | Plaintiff established prima facie case: note, mortgage, assignments show ownership and default; foreclosure permitted |
| Effect of default by nominal/subordinate interest holders | Default judgment appropriate; subordinate liens extinguished by foreclosure | No appearance; no opposition | Defaults stand; judgment terminates any nominal subordinate interests |
| Damages (principal, interest, costs) | Documentary evidence supports unpaid principal, contract interest (8.125%), late charges, and litigation costs $1,475 | No opposition | Court awarded $621,344.42 for principal, interest, late charges, and $1,475 costs (total reflected in judgment) |
| Attorneys’ fees (reasonableness) | Mortgage authorizes recovery of reasonable attorneys’ fees; plaintiff provided attorney affidavit and flat-fee description totaling $4,950 plus $795 additional fees | No opposition; court requires contemporaneous time records and detail to prove reasonableness | Fees denied: affidavit lacked attorney/paralegal identities, rates, dates, contemporaneous time records, and sufficient time detail; additional $795 unsupported |
Key Cases Cited
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir.) (default admits well-pleaded factual allegations)
- Finkel v. Romanowicz, 577 F.3d 79 (2d Cir.) (court must determine legal sufficiency before entering default judgment)
- Transatlantic Marine Claims Agency v. Ace Shipping Corp., 109 F.3d 105 (2d Cir.) (no evidentiary hearing required when affidavits/documentary evidence suffice for damages)
- R.B. Ventures, Ltd. v. Shane, 112 F.3d 54 (2d Cir.) (elements a lender must prove in a New York foreclosure: obligation, mortgage, and default)
- Fleet Nat’l Bank v. Oslav, 16 A.D.3d 374 (N.Y. App. Div.) (prima facie entitlement to foreclosure established by mortgage, note, and default)