854 F. Supp. 2d 278
E.D.N.Y2012Background
- Plaintiff U.S. Bank seeks foreclosure on a $1,575,000 mortgage on commercial property at 501-509 East 78th Street, Brooklyn, NY, under 28 U.S.C. §1332 jurisdiction.
- Note dated February 9, 2007 was executed by Annith Byrd; Byrd defendants executed a mortgage and assignment of rents on the property to Greenpoint Mortgage Funding Inc.
- Mortgage was recorded November 30, 2007; Greenpoint assigned the note and mortgage to Park National Bank on August 5, 2008; FDIC, as Park National’s receiver, assigned to plaintiff on August 12, 2010.
- Byrd defendants defaulted on April 1, 2010 and have not paid since; foreclosure action filed July 23, 2010; amended complaint on April 12, 2011 adding Harvestime Tabernacle, Inc. and others as defendants.
- Defendants oppose on religious corporation grounds under N.Y. Religious Corporations Law §12, arguing Harvestime’s status affects mortgage validity; plaintiff moves for summary judgment on foreclosure and fees.
- Court grants summary judgment, orders foreclosure and sale, awards attorneys’ fees of $19,858 and costs of $1,475.84, and sets a briefing schedule for final damages by Feb. 29, 2012 with responses by Mar. 7, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose | Plaintiff acquired Note and Mortgage via assignments before suit. | No viable standing due to chain of title issues and religious-corporation defenses. | Plaintiff has standing; granted summary judgment. |
| Religious Corporation Law §12 validity | §12 inapplicable absent evidence Harvestime was a religious corporation when mortgage executed. | Harvestime status invalidates mortgage unless court-approved. | Defendants fail to show Harvestime was a religious corporation; §12 not triggered. |
| RPAPL applicability to this loan | RPAPL §§ 1302, 1304 do not apply to commercial loans or properties. | RPAPL applies to mortgage actions generally. | RPAPL provisions do not apply; defenses fail. |
| Right to damages and fees | Note and Mortgage authorize attorneys’ fees and costs; detailed billing reasonable. | Challenge to reasonableness of rates and hours. | Attorneys’ fees awarded at adjusted rates with 20% hours reduction; costs awarded as documented. |
| Damages beyond principal and interest | Amounts due include principal, late charges, prepayment premium, advances, and interest; further affidavits needed to finalize. | Object to amounts pending additional documentation. | Final damages deferred pending February 29, 2012 submissions and March 7, 2012 responses. |
Key Cases Cited
- Regency Sav. Bank, F.S.B. v. Merritt Park Lands Assocs., 139 F. Supp. 2d 462 (S.D.N.Y. 2001) (foreclosure burdens and evidentiary standards)
- FGH Realty Credit Corp. v. VRD Realty Corp., 231 A.D.2d 489, 647 N.Y.S.2d 229 (2d Dep’t 1996) (same considerations in foreclosures)
- Hensley v. Eckerhart, 461 U.S. 424 (Supreme Court 1983) (reasonableness of attorney’s fees; Johnson factors)
- Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 484 F.3d 162 (2d Cir. 2007) (Arbor Hill approach to calculating reasonable fees; twelve Johnson factors)
- Carey v. Am. Custom Builders, 711 F.2d 1136 (2d Cir. 1983) (considerations for awarding fees; lodestar methodology)
- Trans World Airlines, Inc. v. ATR, not included (not applicable) (not used)