Brown v. Amarante

Background

Edward Brown sued Jose Amarante, Luis Datiz, the New York City Transit Authority Adjudication Bureau, and fictitiously named defendants in a foreclosure action. Brown moved for summary judgment on his foreclosure claim against Amarante and Datiz, asked the court to strike the defendants’ answer and counterclaims, and sought default judgment against defendants who had not answered.

The matter had been referred to Magistrate Judge Lehrburger for pretrial proceedings and dispositive motions. Judge Lehrburger recommended denying summary judgment on Brown’s foreclosure claim and denying default judgment. The recommendation also proposed granting summary judgment to Brown on the defendants’ First through Third and Fifth through Eleventh affirmative defenses and first counterclaim, while denying it as to the Fourth and Twelfth affirmative defenses and the second counterclaim for attorney’s fees. Brown objected; the defendants did not object.

Court’s analysis

Judge Clarke reviewed the challenged portions of the recommendation independently and reviewed the unchallenged portions for clear error. She found the recommendation well reasoned and rejected Brown’s arguments.

First, the court held that Brown’s Demand Loan Payoff document did not sufficiently prove a default. Although the court was willing to overlook Brown’s reference to the document as the payoff statement for a 2021 note, the document still raised questions because the note had changed owners through multiple reassignments and the payment records contained gaps. The court was not persuaded that the document accurately recorded the payment history rather than stating the amount Brown believed was owed.

Second, the court held that federal law governs when an affirmative defense is waived in a federal case. It also explained that, even if New York waiver rules applied, the outcome would be the same for the defenses involving New York Real Property Law § 421 and New York Real Property Actions and Proceedings Law § 1302(1)(b). The court found those issues concerned statutory requirements apparent from the earlier pleadings and therefore were not waived merely because defendants developed them in opposition to the summary-judgment motion. The court declined to consider Brown’s new prejudice arguments because he raised them for the first time in his objections.

Third, the court found that the defense concerning Real Property Law § 421 raised a potentially valid statutory-compliance issue involving the recording of powers of attorney in the mortgage chain. Although defendants would have been clearer had they also cited section 294(1), the court found their reference to section 421 and their explanation sufficient.

Fourth, the court rejected Brown’s argument concerning the Fourth affirmative defense under Real Property Actions and Proceedings Law § 1306. Brown did not dispute that he failed to provide an appropriate telephone number as required by that provision. The court found that the cases Brown cited did not excuse the failure to include the required information.

Fifth, the court rejected Brown’s challenge to the Twelfth affirmative defense. That defense concerned the failure to show that Brown filed a copy of the complaint with the notice of pendency. Although defendants cited section 1331 rather than New York Civil Practice Law and Rules § 6511(a), the court found that the reference to the related statutory requirement was sufficient to state a potentially valid defense and that the issue was not waived.

Finally, the court rejected Brown’s argument that the defendants’ counterclaim for attorney’s fees should be dismissed because Brown was entitled to summary judgment on all other claims. Because Brown was not entitled to summary judgment on all other claims, the attorney-fee counterclaim remained viable.

Rulings

Judge Clarke adopted the Report and Recommendation in full. The court denied Brown’s motion for summary judgment on his prima facie foreclosure claim, meaning his initial showing of entitlement to foreclosure relief. The court granted in part and denied in part Brown’s motion for summary judgment concerning the defendants’ affirmative defenses and counterclaims.

Specifically, the court denied summary judgment as to the defenses under Real Property Actions and Proceedings Law § 1302(1)(b) and Real Property Law § 421, the Fourth and Twelfth affirmative defenses, and the second counterclaim for attorney’s fees. The court granted summary judgment as to all other defenses and counterclaims. The court also adopted the recommendation denying default judgment against the non-answering defendants.

The court directed the parties to file a joint status letter by April 15, 2025, with proposed trial dates in June, August, or September and information about whether they wanted mediation or a settlement conference. The clerk was directed to terminate the plaintiff’s motion at docket entry 28.