Freedom Mortgage Corporation v. Thompson, 2:18-cv-06594

On June 14, 2017, Alfonso Thompson and Francesca Torto executed a note and mortgage for $402,573 on 27 Osage Drive, Huntington Station, NY; the mortgage was recorded and later assigned to Freedom Mortgage Corporation (FMC).
Borrowers defaulted by failing to make the June 1, 2018 payment and subsequent payments; FMC mailed RPAPL §1304 90-day pre-foreclosure notices (July 6, 2018) and a second notice (Aug. 1, 2018) and complied with RPAPL §1306(2) registration.
FMC commenced a foreclosure action Nov. 26, 2018; the Clerk entered default as to Thompson, Torto and the Suffolk County Traffic & Parking Violations Agency on Jan. 11, 2019 (the latter named as a subordinate judgment creditor).
FMC moved for a default judgment of foreclosure and sale (filed Mar. 20, 2019); the matter was referred to the magistrate judge for a report and recommendation.
The magistrate judge found FMC submitted the mortgage, note, and default notices and recommended entry of default judgment against all defendants and quantified recovery components (principal, interest, miscellaneous charges, and limited fees/costs).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Liability of Thompson & Torto (default judgment)	FMC produced note, mortgage, recorded assignment, and notice of default to establish prima facie right to foreclose.	No opposition; no affirmative showing to rebut prima facie case.	Recommended: default judgment against Thompson & Torto.
Liability of Suffolk County Traffic & Parking Violations Agency (necessary party)	Named as subordinate judgment creditor; necessary to extinguish subordinate liens under RPAPL §1311.	No opposition; only nominal/subordinate interest alleged.	Recommended: default judgment against the agency as a necessary party.
Damages & award amount	Seeks principal $396,937.37; interest at 4.25% from May 1, 2018–Feb 9, 2019 ($13,022.13); per diem interest $46.22 from Feb 9, 2019; late charges, tax disbursements, PMI, inspection fees; and $1,633.38 in fees/costs (reduced by the court).	No opposition to calculations.	Recommended entry of judgment including the stated principal and interest components, per diem interest of $46.22, miscellaneous charges ($7,692.58), and awarded fees/costs limited to $1,588.38.
Need for evidentiary hearing on damages	Plaintiff submitted affidavit and accounting (Lisa Thomas) detailing amounts owed; requested judgment without hearing.	No request by defendants for hearing.	Court found no hearing necessary and recommended entering judgment on the submitted calculations.

Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (default admits well-pleaded factual allegations except damages)
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (court must determine plaintiff's allegations establish liability as a matter of law before default judgment)
Finkel v. Romanowicz, 577 F.3d 79 (2d Cir. 2009) (procedural standards for magistrate review and default judgments)
Cablevision Sys. N.Y.C. Corp. v. Lokshin, 980 F. Supp. 107 (E.D.N.Y. 1997) (default constitutes admission that damages were proximately caused by defendant's conduct)
Beverly v. Walker, 118 F.3d 900 (2d Cir. 1997) (objections to magistrate judge rulings and waiver rule)
Savoie v. Merchants Bank, 84 F.3d 52 (2d Cir. 1996) (same on magistrate objection waiver)