MATSUMOTO, District Judge:
Plaintiff U.S. Bank, N.A. ("plaintiff") seeks to foreclose on a $1,575,000 mortgage secured by a commercial property located at 501-509 East 78th Street in Brooklyn, New York. This court has subject-matter jurisdiction in this action pursuant to 28 U.S.C. § 1332. Pending before the court is plaintiff's motion for summary judgment on its claim for foreclosure and application for attorneys' fees and costs.
For the reasons set forth below, the court: (1) grants summary judgment to plaintiff against the remaining defendants, Annith Byrd, Wayne Byrd, Harvestime Tabernacle, Inc., Carmen Fairclough, Travelene Neckles, Jacqueline Simpson, Rupert Wynter, Melvyn Dunkley, and Norris Wynter; (2) orders the foreclosure and sale of the property located at 501-509 East 78th Street in Brooklyn, New York
The following facts are undisputed and viewed in the light most favorable to the defendants.
On February 9, 2007, defendant Annith Byrd executed a promissory note (the "Note"), promising to pay Greenpoint Mortgage Funding Inc. ("Greenpoint") a principal sum of $1,575,000. (Id. ¶¶ 1-2.) On the same date, defendants Annith and Wayne Byrd (the "Byrd defendants") executed and delivered to Greenpoint an assignment of rents, security agreement, and commercial mortgage (collectively, the "Mortgage") on the Property as security for the loan. (Id. ¶ 3.) The Mortgage, which is a lien on the Property, was recorded in the Office of the Register of the City of New York, County of Kings (the "Register's Office"), on November 30, 2007. (Id. ¶¶ 4-5.)
On February 28, 2008, Greenpoint assigned the Note, Mortgage, and all related loan documents to Park National Bank ("Park National"). (Id. ¶ 8.) The assignment to Park National was recorded in the Register's Office on August 5, 2008. (Id. ¶ 9.) On July 20, 2010, the Federal Deposit Insurance Corporation (FDIC), as receiver for Park National, assigned the Note and Mortgage to plaintiff. (Id. ¶ 11.) The assignment to plaintiff was recorded in the Register's Office on August 12, 2010. (Id. ¶ 12.) As such, plaintiff is the holder of the Note, the Mortgage, and all the other related loan documents. (Id. ¶ 14.)
The Byrd defendants failed to make the payment due under the Note and Mortgage on April 1, 2010, and have not made any payments toward the amounts due under the Note and Mortgage since that time. (Id. ¶¶ 15-16.) On July 23, 2010, plaintiff filed the instant foreclosure action. (See ECF No. 1, Complaint ("Compl.")). On April 12, 2011, plaintiff filed an amended complaint against the Byrd defendants; Harvestime Tabernacle, Inc. ("Harvestime"), a church that is located on the Property; and Carmen Fairclough, Travelene Neckles, Jacqueline Simpson, Rupert Wynter, Melvyn Dunkley, and Norris Wynter (collectively, "defendants"), a group of individuals whom plaintiff believes are in charge of Harvestime. (See ECF No. 29 Amended Complaint ("Am. Compl.") ¶¶ 1-13.) The Amended Complaint also named as defendants Dr. Joel Brick, Dr. Joshua Gindea, Bonnii Gargano, G.B.W. Glenwood Dental Administrators, Inc., and the Environmental Control Board of The City of New York, although plaintiff voluntarily dismissed its claims as to each of those defendants before moving for summary judgment. (See ECF Nos. 40, 41, 43, 46, Notices and Orders of Voluntary Dismissal.)
Summary judgment is appropriate where "there is no genuine issue as to any material fact." Miner v. Clinton Cnty., 541 F.3d 464, 471 (2d Cir.2008) (quoting Fed.R.Civ.P. 56(a)). "A fact is material when it might affect the outcome of the suit under governing law." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir.2007).
Thus, the court must determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be
In a motion for summary judgment, the moving party carries the initial burden of demonstrating an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The nonmoving party then "must come forward with specific facts showing that there is a genuine issue for trial." Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir.2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)) (internal quotation marks omitted). To defeat a summary judgment motion, there must be "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249, 106 S.Ct. 2505.
In opposition to plaintiff's motion, defendants do not dispute that the Byrd defendants executed the Note and Mortgage and have been "incapable of making payments on the loan as of April 1, 2010." (ECF No. 58, Defendants' Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment ("Defs.' Opp'n") at 4.
Defendants do not dispute that defendant Harvestime is not named in and is not a party to either the Note or Mortgage as a mortgagor or borrower, and defendants concede that Greenpoint "offer[ed] the mortgage to me [Wayne Byrd] and my wife [Annith Byrd] specifically." (ECF No. 58-1, Declaration of Wayne Byrd ("Byrd Decl.") ¶ 10.) Defendants assert, however, that before Greenpoint issued the Note and Mortgage to the Byrd defendants, Greenpoint requested, reviewed and relied upon Harvestime's financial documents because Greenpoint was aware that the Byrds' financial means were inadequate to cover the monthly payments due under the Note and Mortgage. (Defs.' Mem. at 6-7; Byrd Decl. ¶¶ 4-11.) Consequently, defendants argue, (1) Harvestime is in fact a party to the Mortgage; (2) the Mortgage involves real property owned by a religious corporation and is therefore subject to New York Religious Corporations Law Section 12(1); and (3) there is a genuine issue of material fact regarding the validity of the Mortgage because the mortgage was not previously approved by a court as required by New York Religious Corporations Law Section 12(1). (Defs.' Mem. at 6-7.)
Defendants' argument fails because it presupposes that Harvestime was a religious corporation when the Mortgage was executed, but defendants provide no admissible evidence to support that assertion.
The court finds unavailing all of defendants' affirmative defenses, which are set forth in their Answer to the Amended Complaint (see ECF No. 32 ("Answer")). Defendants assert as a first affirmative defense that plaintiff lacks standing to bring this action because plaintiff "was not the legal owner of the Note and/or Mortgage at the time it commenced this action." (Id. ¶ 4.) The undisputed facts demonstrate that defendants' affirmative defense is not supported and, indeed, is contradicted by the undisputed evidence in the record. The court has reviewed the relevant assignment and recording documents and finds that plaintiff became the owner and holder of the Note and Mortgage on July 20, 2010, three days before plaintiff commenced this action. Accordingly, defendants' first affirmative defense lacks merit.
Defendants' second, third, and fourth affirmative defenses allege that plaintiff failed to comply with various provisions in New York Real Property Actions and Proceedings Law ("RPAPL") §§ 1302 and 1304. (See Answer ¶¶ 5-7.) As plaintiff points out, however, RPAPL §§ 1302 and 1304 apply only to actions relating to a "high-cost home loan," or a "subprime home loan," as those terms are defined by New York Banking Law §§ 6-1 and 6-m. (See ECF No. 52, Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment, at 5.) Under New York Banking Law §§ 6-1 and 6-m, "high-cost home loans" and "subprime home loans" are, by definition, "secured by a mortgage or deed of trust on real estate ... used or occupied or intended to be used or occupied ... as the home or residence of one or more persons." The undisputed facts establish that the Property is commercial, not residential, real estate. Accordingly, RPAPL §§ 1302 and 1304 do not apply to the Note and Mortgage, and defendants' second, third, and fourth affirmative defenses lack merit.
Defendants' fifth affirmative defense alleges that plaintiff failed to comply with New York Banking Law §§ 595-a, 6-1, and 6-m. (Answer ¶ 8.) Because New York Banking Law § 595-a regulates mortgage bankers and mortgage brokers of residential mortgage loans, not commercial loans, it does not apply to plaintiff, the owner and holder of a commercial mortgage loan. Furthermore, as discussed supra, New York Banking Law §§ 6-1 and 6-m do not apply to plaintiff. Consequently, plaintiff's fifth affirmative defense also lacks merit.
Accordingly, the court finds that defendants have not raised any genuine issue of material fact or legal defense to defend against plaintiff's motion for summary judgment.
The choice-of-law provisions in the Note and Mortgage indicate that both are governed by the law of the "jurisdiction in which the Land is located." (See ECF No.
"Under New York law, summary judgment in a mortgage foreclosure action is appropriate where the note and mortgage are produced to the Court along with proof that the mortgagor has failed to make payments due under the note." Builders Bank v. Warburton River View Condo LLC, No. 9 CV 5484, 2011 WL 6370064, at *2 (S.D.N.Y. Dec. 20, 2011) (citing Regency Savs. Bank, F.S.B. v. Merritt Park Lands Assocs., 139 F.Supp.2d 462, 465 (S.D.N.Y.2001)); FGH Realty Credit Corp. v. VRD Realty Corp., 231 A.D.2d 489, 647 N.Y.S.2d 229, 230 (2d Dep't 1996) (same). "Once plaintiff has established its prima facie case by presenting the note, mortgage, and proof of default, the mortgagee has a presumptive right to foreclose, which can only be overcome by an affirmative showing by the mortgagor." Builders Bank, 2011 WL 6370064, at *2 (citing Regency Savs. Bank, 139 F.Supp.2d at 465-66).
Here, plaintiff has provided the court with the Note, Mortgage, and assignment documents. It is undisputed that the Byrd defendants are bound by the obligations arising under those documents. Moreover, as discussed supra, defendants have failed to raise a genuine issue of fact regarding plaintiff's claim that Annith and Wayne Byrd were the only defendants who assumed such obligations. Furthermore, the parties do not dispute that the Byrd defendants defaulted on the Note and Mortgage by failing to make timely payments of the principal and interest due on April 1, 2010.
Plaintiff has satisfied the requirements for a prima facie case of foreclosure, and there is no genuine dispute as to any material fact. Accordingly, the court grants summary judgment to plaintiff and orders foreclosure and sale of the Property.
In addition to a judgment of foreclosure and sale, plaintiff seeks to recover $1,532,921.14 in principal; $5,262.47 in late charges; $15,329.21 for a prepayment premium; $61,933.20 in advances for payment of taxes and insurance; $119,360.26 in interest from March 1, 2010 to February 16, 2011; interest on the Note and Mortgage, which continues to accrue from February 16, 2011 through the date of judgment at a rate of $345.97 per diem; and attorneys' fees and costs. (See ECF No. 51-2, Declaration of Kenneth Beck ¶ 20.)
Upon a finding of liability, the court must conduct an inquiry sufficient to establish damages to a "reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (quoting Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir.1997)). "[T]he court may rely on detailed affidavits or documentary evidence ... to evaluate the proposed sum." Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir.1989).
Upon review of the documents plaintiff submitted in support of its motion for summary judgment, the court finds an adequate factual basis for an award of attorneys' fees and costs, as discussed infra. The court also finds, however, that plaintiff has submitted insufficient information to support plaintiff's request for other amounts due under the Note and Mortgage. Accordingly, plaintiff shall submit additional affidavits, documents, and calculations to demonstrate the accuracy of its proposed damages by February 29, 2012. Any defendant who wishes to oppose the
Under the terms of the Note and Mortgage, plaintiff is entitled to attorneys' fees incurred in the instant action. (See Note ¶ 11; Mortgage ¶ 43.) Consequently, plaintiff requests $35,530.51 in attorneys' fees for 85.01 attorney hours spent, and necessary disbursements made, in prosecuting this claim. (ECF No. 51-3, Declaration of Joseph Aronauer ("Aronauer Decl.") ¶¶ 8-13.) Defendants have not objected to plaintiff's application for attorneys' fees.
A determination of the appropriate award for attorneys' fees rests soundly within the discretion of the district court. See Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). "The party seeking reimbursement bears the burden of proving the reasonableness and necessity of hours spent and rates charged." Morin v. Nu-Way Plastering Inc., No. 03-CV-405, 2005 WL 3470371, at *2 (E.D.N.Y. Dec. 19, 2005) (citing New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir.1983)).
"In determining the reasonableness of attorney's fees ... courts have generally used the lodestar method, in combination with the twelve factors articulated in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir.1971 [1974])."
Arbor Hill, 493 F.3d at 117-18. "After determining the amount of the presumptively reasonable fee, the court may use its discretion to increase or reduce the amount based on the particular circumstances
In addition, "[t]he Supreme Court directed that district courts should use the prevailing market rates in the community in calculating the lodestar, or what the Second Circuit is now calling the `presumptively reasonable fee.'" Lynch v. Town of Southampton, 492 F.Supp.2d 197, 210-11 (E.D.N.Y.2007) (citing Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)). The community is defined as the district in which the court sits. See Arbor Hill, 493 F.3d at 110; Lynch, 492 F.Supp.2d at 210-11; Polk v. N.Y. State Dep't of Corr. Serv., 722 F.2d 23, 25 (2d Cir.1983) (same).
In the Eastern District of New York, hourly rates range from approximately $300 to 400 per hour for partners, $200 to $300 per hour for senior associates, and $100 to $200 per hour for junior associates. See Konits v. Karahalis, 409 Fed.Appx. 418, 422 (2d Cir.2011) (affirming district court decision holding that prevailing rates for experienced attorneys in the Eastern District of New York range from approximately $300 to $400 per hour); Pilitz v. Inc. Vill. of Freeport, No. 07-CV-4078, 2011 WL 5825138, at *4 (E.D.N.Y. Nov. 17, 2011) (noting hourly rates of $300-$450 for partners, $200-$300 for senior associates, and $100-$200 for junior associates); Local 282, Int'l Bhd. of Teamsters v. Pile Found. Constr. Co., No. 09-cv-4535, 2011 WL 3471403, at *12 (E.D.N.Y. Aug. 5, 2011) (quoting Szczepanek v. Dabek, No. 10-CV-2459, 2011 WL 846193, at *8 (E.D.N.Y. Mar. 7, 2011)) (noting that "[r]ecent prevailing hourly rates in the Eastern District" are $200-$400 for partners and $100-$295 for associates); Crapanzano v. Nations Recovery Ctr., Inc., No. 11-CV-1008, 2011 WL 2847448, at *2 (E.D.N.Y. June 29, 2011) (noting hourly rates of $200-$350 for partners, $200-$250 for senior associates with four or more years of experience, and $100-$150 for junior associates with one to three years of experience), adopted by 2011 WL 2837415 (E.D.N.Y. July 14, 2011); Gutman v. Klein, No. 03-CV-1570, 2009 WL 3296072, at *2 (E.D.N.Y. Oct. 13, 2009) (approving hourly rates of $300-$400 for partners, $200-$300 for senior associates, and $100-$200 for junior associates); Carco Grp., Inc. v. Maconachy, No. CV 05-6038, 2011 WL 6012426, at *3 (E.D.N.Y. Dec. 1, 2011) ("In recent years, courts in this district have approved hourly fee rates in the range of ... $70 to $100 for paralegal assistants."); Szczepanek, 2011 WL 846193, at *8 (surveying cases and stating recent prevailing hourly rates in the Eastern District range between $70 and $80 for legal assistants).
Plaintiff's request for an award of attorneys' fees is based on the following hourly rates:
Hourly Rate Hourly Rate Attorney (2010) (2011) Joseph Aronauer, Esq. $490 $525 John Re, Esq. $440 $465 Kenneth Yudell, Esq. N/A $465 Christopher Owens, Esq. N/A $360 Andrew MacArthur, Esq. $325 N/A
In addition, time spent by paralegals is based on an hourly rate of $145. (Aronauer Decl. ¶ 12.) The court finds that, in light of the attorneys' experience and other case-specific factors as articulated by the Second Circuit in Arbor Hill, the requested hourly rates are not reasonable in this district.
Mr. Aronauer is a litigation partner who was admitted to the bar in 1975; Mr. Re is a litigation partner who was admitted to the bar in 1988; and Mr. Yudell is a litigation partner who was admitted to the bar in 1992. (Aronauer Decl. ¶ 9.) Although each of these attorneys has decades
Similarly, the court finds unreasonable the requested hourly rates of $325-360 for services rendered by Mr. Owens and Mr. MacArthur, litigation associates who were admitted to practice in 2006 and 2008, respectively. (See Aronauer Decl. ¶ 9.) As another court in this district noted in Crapanzano, 2011 WL 2847448, at *2, hourly rates of $200-$250 for senior associates with four or more years of experience prevail in this district. Moreover, the instant case did not pose complex issues of law warranting a heightened hourly fee award; rather, it involved a straightforward mortgage default.
Based on the prevailing rates in this district, and in light of each attorney's experience and the facts and circumstances in this case, the court finds that reasonable hourly rates in this case are as follows:
Attorney Hourly Rate Joseph Aronauer, Esq. $350 John Re, Esq. $325 Kenneth Yudell, Esq. $300 Christopher Owens, Esq. $225 Andrew MacArthur, Esq. $200
For the same reasons, the court finds that an hourly rate of $75 is reasonable for work performed by paralegals.
The court next turns to the issue of whether the number of hours expended by Plaintiff's counsel was reasonable. A party seeking attorneys' fees "must support that request with contemporaneous time records that show `for each attorney, the date, the hours expended, and the nature of the work done.'" Cablevision Sys. New York City Corp. v. Diaz, No. CV-01-4340, 2002 WL 31045855, at *5 (S.D.N.Y. July 10, 2002) (quoting Carey, 711 F.2d at 1154); see also Kingvision Pay-Per-View v. The Body Shop, No. 00 Civ. 1089, 2002 WL 393091, at *5 (S.D.N.Y. Mar. 13, 2002) (denying award of attorneys' fees where information regarding how the fees were accumulated was not provided even though the requested amount of $1,000 was reasonable).
In determining the presumptively reasonable fee, a court should adjust the hours actually billed to a number the court determines to have been reasonably expended. See Konits, 409 Fed.Appx. at 421. The number of hours claimed must be "supported by time records [and not be] excessive or duplicative." LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 756, 764 (2d Cir.1998); see also Hensley, 461 U.S. at 434, 103 S.Ct. 1933 (directing district courts to exclude hours not "reasonably expended"). In adjusting the number of hours, the court "must state its reasons for doing so as specifically as possible." LeBlanc-Sternberg, 143 F.3d at 764 (citation omitted).
Plaintiff has provided the court with detailed contemporaneous time records documenting the hours worked by the attorneys and paralegals, and describing the work performed. (See Aronauer Decl. Exs. G & H.) In total, plaintiff accounted
Accordingly, incorporating the adjustments discussed above, the court awards plaintiff attorneys' fees in the amount of $19,858, calculated as follows:
Adjusted Hourly Adjusted Hours Total Adjusted Fee Attorney/Personnel Rate Rate Billed Joseph Aronauer, $350 37.6 $13,160 Esq. John Re, Esq. $325 3.4 $ 1,105 Kenneth Yudell, Esq. $300 6.2 $ 1,860 Christopher Owens, $225 7.6 $ 1,710 Esq. Andrew MacArthur, $200 8.2 $ 1,637 Esq. Paralegal $ 75 5.1 $ 383 Total 68.1 $19,858
"As for costs, a court will generally award `those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.'" Pennacchio v. Powers, No. 05 CV 985, 2011 WL 2945825, at *2 (E.D.N.Y. July 21, 2011) (quoting LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir.1998)). "The fee applicant bears the burden of adequately documenting and itemizing the costs requested." Id. (citation omitted).
Plaintiff seeks reimbursement of costs in the amount of $1,801.92 for various disbursements. (Aronauer Decl. ¶ 13.) Although the application for reimbursement of costs attaches supporting documentation, the court's own review of plaintiff's invoices indicates that plaintiff's counsel wrote off a portion of that sum, and that the amount plaintiff actually paid for disbursements was $1,475.84, consisting of: (1) $385.00 in court filing fees; (2) $638.35 for service of process; (3) $116.50 for certified documents; (4) $200.00 for "Record POA & Assignment of Mortgage"; (5) and $135.99 for long-distance calls, photocopies and scanning, FedEx and United Lawyers Service, and postage. (Id. Exs. G & H.) Defendants failed to object to plaintiff's application for costs. Accordingly, because the court finds the application for reimbursement of costs reasonable and supported by documentation, the plaintiff is awarded $1,475.84 in costs.
For the foregoing reasons, the court grants summary judgment to plaintiff against all defendants. The court orders
SO ORDERED.
Emerald Invs., 2007 WL 1834507, at *5 (citing Johnson, 488 F.2d at 717-19).