U.S. Bank National Association v. Joeefi LLC

Background

U.S. Bank National Association, as trustee for the benefit of certificate holders, brought a foreclosure action involving property at 546 East 182nd Street in the Bronx, New York. The bank sought a declaration barring defendants from asserting rights, liens, claims, or an equity of redemption in the property; an order allowing the property to be sold; payment of the loan balance and other amounts from the sale proceeds; and attorneys’ fees.

The loan documents included a loan agreement, consolidated mortgage, consolidated note, assignment of leases, and a city uniform commercial code financing statement. The documents were transferred through several assignments. The opinion states that Federal Home Loan Mortgage Corp. assigned them to U.S. Bank on March 27, 2018, and that U.S. Bank held them thereafter.

Joeefi LLC was the borrower, and the Estate of Joseph Goldberger and Eva Goldberger were guarantors. The borrower was required to make monthly payments but stopped making them on December 1, 2023. U.S. Bank sent notices of default in February and March 2024, including a demand for payment of the entire outstanding loan balance. U.S. Bank filed the action on May 22, 2024, and later amended its complaint.

The borrower defendants answered and asserted 20 affirmative defenses, but they did not oppose U.S. Bank’s motion for summary judgment. They later acknowledged that the borrower had defaulted and stated that they had no substantive opposition to the motion. The remaining defendants did not respond to the complaint or amended complaint. The Department of Housing Preservation and Development stated that it did not intend to oppose the motion but reserved the right to seek surplus funds from the sale.

Summary Judgment Against the Borrower Defendants

The court applied the rule that summary judgment must be granted when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. Even though the motion was unopposed, the court independently examined whether U.S. Bank had established its entitlement to judgment.

Under New York law, a foreclosure plaintiff generally must produce the mortgage, the unpaid note, and evidence of default. The court found that U.S. Bank submitted the consolidated mortgage and note and documented the chain of assignments showing that it was the note holder or mortgage assignee when the action began. The court also found evidence that Joeefi LLC stopped making required payments in December 2023, which constituted an event of default under the note.

The court concluded that U.S. Bank had established its right to foreclose and that the borrower defendants had presented no evidence overcoming that showing. Although their answer asserted defenses including bad faith, lack of standing, failure to state a claim, lack of notice, defects in the loan documents, statute of limitations, and usury, the court found no evidence supporting those defenses. The court therefore granted U.S. Bank’s motion for summary judgment on its foreclosure claims and struck the borrower defendants’ answer.

Guarantors’ Liability and Attorneys’ Fees

The court held that U.S. Bank had shown that Joeefi LLC signed the consolidated note and that the guarantors signed a guaranty. Under the guaranty, the guarantors were described as absolutely, unconditionally, and irrevocably liable for amounts owed by the borrower. Because of the borrower’s default, the court ruled that the guarantors were liable for any outstanding debt remaining after the property was sold.

The court also ruled that the loan agreement, guaranty, and consolidated mortgage authorized recovery of attorneys’ fees and costs incurred in enforcing U.S. Bank’s rights. It held that U.S. Bank was entitled to those fees and costs.

Default Judgment Against the Nonresponding Defendants

U.S. Bank separately moved for default judgment against defendants who did not respond. The bank submitted proof that it had served the complaint and amended complaint and obtained certificates of default. The court found that the defendants had ample opportunity to respond and concluded that no hearing was necessary. It granted U.S. Bank’s motion for default judgment against those defendants.

Disposition

The court granted both U.S. Bank’s motion for summary judgment and its motion for default judgment. It held that U.S. Bank was entitled to foreclose the mortgage and security interest, that the guarantors were liable for the debt remaining after the sale, and that the borrower defendants were liable for attorneys’ fees and costs. It barred defendants from asserting rights, liens, claims, or an equity of redemption in the property. The court directed the Clerk to enter judgment for U.S. Bank and stated that separate orders would provide more details and refer the parties to a magistrate judge for an inquiry to determine damages.