Green Mountain Holdings (Cayman) Ltd. v. Eddington Link, LLC
1:21-cv-01729
E.D.N.YDec 31, 2021Background
- Plaintiff Green Mountain Holdings (Cayman) Ltd. sued Eddington Link, LLC and its sole member Lisa Eddington for foreclosure on a mortgage securing a $250,000 promissory note executed May 2, 2019; Eddington signed a personal guaranty.
- The loan matured May 2, 2020; defendants defaulted by failing to repay on that date.
- Golden Bridge assigned the mortgage to Green Mountain on February 9, 2021; Green Mountain filed a notice of pendency and served defendants in April 2021.
- Defendants failed to answer; clerk entered default May 10, 2021, and plaintiff moved for default judgment seeking foreclosure and sale, damages (principal and interest), appointment of a special master, and permission to seek a post-sale deficiency against Eddington.
- Magistrate Judge Reyes recommended granting default judgment: $250,000 principal; $99,943.04 unpaid default interest through Dec. 31, 2021; $164.38 per diem until judgment; post-judgment statutory interest; appointment of a special master to compute amounts and conduct sale; permission to seek a deficiency judgment against Eddington if one remains.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to foreclosure and sale | Produced note, mortgage, assignment, and proof of default; seeks foreclosure. | No answer or defenses (default). | Default judgment granted; plaintiff established prima facie foreclosure right. |
| Liability of personal guarantor for deficiency | Eddington signed unconditional guaranty; liable for any post-sale deficiency. | No response. | Eddington may be held personally liable; plaintiff may seek post-sale deficiency judgment. |
| Appointment of special master to compute amounts and oversee sale | A special master should ascertain sums due, determine parcel saleability, and conduct the foreclosure sale. | No response. | Special master recommended to compute amounts, decide single-parcel saleability, and conduct sale. |
| Damages (principal, interest, rates) | Requests $250,000 principal; default rate (24%) yields $164.38/day; $99,943.04 interest through 12/31/2021; per diem until judgment; post-judgment interest under 28 U.S.C. § 1961. | No response. | Damages awarded as requested: $250,000 principal; $99,943.04 unpaid interest through 12/31/2021; $164.38 per diem until judgment; post-judgment interest per § 1961. |
Key Cases Cited
- Priestly v. Headminder, Inc., 647 F.3d 497 (2d Cir. 2011) (two-step default-judgment process under Rule 55)
- Greyhound Exhibit Group, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (unchallenged factual allegations accepted on default; damages must have basis)
- Finkel v. Romanowicz, 577 F.3d 79 (2d Cir. 2009) (draw reasonable inferences in plaintiff’s favor on default)
- Shah v. New York State Dep’t of Civil Serv., 168 F.3d 610 (2d Cir. 1999) (district court discretion in granting default judgment)
- JPMorgan Chase Bank Nat’l Assn. v. Futterman, 173 A.D.3d 1496 (N.Y. App. Div. 2019) (possession/endorsement of wet-ink note evidences ownership)
- Cassia Corp. v. North Hills Holding Corp., 281 A.D. 709 (N.Y. App. Div. 1952) (deficiency judgment may follow foreclosure sale with personal liability adjudicated)
- United States v. Whitney, 602 F. Supp. 722 (W.D.N.Y.) (mortgagee may recover unpaid debt only if person liable was named and served)
- Small v. Secretary of Health & Human Servs., 892 F.2d 15 (2d Cir. 1989) (failure to timely object waives right to appeal)