Wilmington PT Corp. v. Bonilla
1:19-cv-02684
E.D.N.YAug 19, 2021Background
- In 2007 Dennis P. Bonilla executed a $105,000 mortgage and variable-rate note on 89-51 121st Street, Queens; the mortgage was recorded October 2007.
- After assignments, Wilmington PT Corp. acquired the mortgage on October 11, 2018 and commenced foreclosure on May 7, 2019.
- Plaintiff alleges Bonilla defaulted on payments beginning May 7, 2011; plaintiff mailed an RPAPL §1304 90-day notice on February 1, 2019 and filed proof with the NY DFS on February 4, 2019.
- Defendants Bonilla, Mike8951 Corp., NYCECB, NYCPVB, and NYSDOTF failed to appear and defaults were entered; John/Jane Doe defendants were served but not yet identified.
- Magistrate Judge Tiscione recommended granting default judgment: liability for Bonilla and the named non-mortgagors, monetary award, foreclosure and sale, appointment of referee, deficiency judgment if sale insufficient, and reformation of the mortgage legal description per Schedule A.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose | Plaintiff possessed the endorsed note/assignment before suit | No responsive challenge (defendants defaulted) | Standing established based on possession/assignment of the note |
| RPAPL §1304/§1306 notice | Mailed statutorily required 90‑day notice and timely filed with Superintendent | District court previously noted uncertainty whether loan is a “home loan” (so §1304 might not apply) | Court: even if §1304 applies, plaintiff complied; §1306 filing satisfied |
| Liability of mortgagor (Bonilla) | Produced mortgage, note, notice of default, affidavit and payoff statements | No answer / no contest | Default judgment recommended against Bonilla; elements (mortgage, note, default) proven |
| Liability of non‑mortgagors (Mike8951; NYCECB, NYCPVB, NYSDOTF) | Alleged nominal/subordinate liens; title/memo of contract and agency records support liens | No appearances; no proof of good‑faith purchaser status (Mike8951) | Default judgment recommended against Mike8951 and the named city/state agencies as subordinate lienholders |
| Remedies: damages, foreclosure, referee, deficiency, reformation | Seek unpaid principal, interest, late fees; foreclosure and sale; referee appointment; deficiency judgment; reform legal description per Schedule A | No opposition | Awarded $102,552.07 principal, $62,051.70 interest, $650.12 late fees; foreclosure and sale ordered; referee to be appointed after plaintiff proposes three names; deficiency judgment allowed; mortgage reformed to Schedule A description |
Key Cases Cited
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (defaulting party admits well‑pleaded factual allegations)
- Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (court retains discretion before entering final default judgment)
- City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (plaintiff must prove liability and relief even after default)
- Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (damages must be proved to a reasonable certainty)
- CIT Bank N.A. v. Schiffman, 948 F.3d 529 (2d Cir.) (plaintiff must establish compliance with RPAPL §1304 mailing requirements)
- Thomas v. Arn, 474 U.S. 140 (U.S. 1985) (failure to timely object to a magistrate report waives appellate review)
- Marcella v. Capital Dist. Physicians’ Health Plan, Inc., 293 F.3d 42 (2d Cir. 2002) (timely objections required to preserve review)
- Hadley v. Clabeau, 532 N.Y.S.2d 221 (N.Y. Sup. Ct. 1988) (scrivener’s errors in property descriptions can justify reformation)