Windward Bora LLC v. Valencia
2:19-cv-04147
| E.D.N.Y | Oct 16, 2020Background
- Plaintiff Windward Bora, LLC sued on July 18, 2019 in diversity to foreclose a 2007 mortgage and note originally in JP Morgan's name, alleging default since June 2013 and possession of the original note in May 2018.
- The mortgaged property is 214 North 5th Street, Bethpage, NY; the note-maker Javier Valencia died in December 2016 and a 2017 deed reflects transfers and residential addresses for Jonathan, Jessica, and Erica Valencia at other locations.
- Defendant individuals (Jonathan, Jessica, Erica) did not answer; the Clerk entered default on September 9, 2019 and Plaintiff moved for default judgment of foreclosure and sale.
- Service was effected by leaving process at 214 North 5th Street (the property), which Plaintiff treated as the defendants’ dwelling or usual abode.
- The magistrate judge examined service and personal jurisdiction, denied the default-judgment motion, recommended vacating the clerk’s entry of default as to the individual defendants for improper service, and granted Plaintiff 30 days to re-serve under Rule 4(m).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment may be entered | Service at the property was proper; foreclosure elements established | No response from individual defendants | Denied: service was improper given deed showing different residential addresses; court lacks personal jurisdiction over individuals |
| Whether nominal/non-individual defendants may be defaulted | Judgment against all named defendants appropriate | No response; but no relief can be sought against nominal defendants if personal jurisdiction absent over individuals | Denied as to nominal defendants too because no valid basis remains if individuals not before the court |
| Whether to vacate the clerk's entry of default (Rule 55(c)) | Plaintiff implicitly opposed vacatur by seeking judgment | No substantive opposition (defendants defaulted); record shows defective service | Vacate entry of default as to Jonathan, Jessica, Erica: default not willful, no prejudice to plaintiff, meritorious defenses unknown but court favors vacatur where service defective |
| Whether to permit re-service under Rule 4(m) | Plaintiff should be allowed to cure service and re-serve | N/A | Granted: Plaintiff given 30 days to properly serve the individual defendants and may move again for default if warranted |
Key Cases Cited
- Priestley v. Headminder, Inc., 647 F.3d 497 (2d Cir. 2011) (default-judgment procedure and standards)
- Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (district court discretion over defaults)
- City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (court must determine liability before entering default judgment)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (well-pleaded allegations in complaint treated as true on default)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50 (2d Cir. 2012) (service of process is prerequisite to personal jurisdiction)
- Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207 (2d Cir. 2010) (personal jurisdiction requires proper service)
- SEC v. McNulty, 137 F.3d 732 (2d Cir. 1998) (factors for relieving a party from default judgment)
- Davis v. Musler, 713 F.2d 907 (2d Cir. 1983) (improper service may end the default-judgment inquiry)