Blue Castle (Cayman) LTD v. Scherer

CourtDistrict Court, N.D. New York
DecidedFebruary 26, 2025
Docket3:24-cv-00220
StatusUnknown

This text of Blue Castle (Cayman) LTD v. Scherer (Blue Castle (Cayman) LTD v. Scherer) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blue Castle (Cayman) LTD v. Scherer, (N.D.N.Y. 2025).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK _______________________________________

BLUE CASTLE (CAYMAN) LTD,

Plaintiff, vs. 3:24-cv-220 (ECC/ML) CAROL SCHERER, SUSAN SANCHEZ, STEVEN HINE, AARON HINE, AS HEIRS, DISTRIBUTEES AND NEXT OF KIN TO THE ESTATE OF MABLE G. HINE,

Defendants. _______________________________________

Alan H. Weinreb, Esq., for Plaintiff

Hon. Elizabeth C. Coombe, United States District Judge:

MEMORANDUM-DECISION AND ORDER On February 14, 2024, Plaintiff Blue Castle (Cayman) Ltd. (Blue Castle or Plaintiff) commenced this diversity action under Article 13 of the New York Real Property Actions and Proceedings Law (RPAPL), §§ 1301 et seq., against Defendants Carol Scherer, Susan Sanchez, Steven Hine and Aaron Hine (collectively, Defendants), as heirs, distributees, and next of kin to the Estate of Mable G. Hine. Complaint (Compl.), Dkt. No. 1. Blue Castle seeks to foreclose on a Home Equity Conversion Mortgage (the mortgage), more commonly known as a reverse mortgage, encumbering 105 Conklin Forks Road, Binghamton, New York 13903 (the property). Id. The Defendants have not filed an answer to the Complaint. Plaintiff requested and obtained an entry of default against the Defendants from the clerk under Rule 55(a) of the Federal Rules of Civil Procedure. Plaintiff now moves for default judgment of foreclosure and sale under Rule 55(b) of the Federal Rules of Civil Procedure. Dkt. No. 11. For the reasons set forth below, the motion is denied with leave to renew. I. BACKGROUND A. The Parties According to the verified Complaint, Blue Castle is a corporation organized under the laws of the Cayman Islands with its principal place of business in Florida. Compl. ¶ 3. Mable G. Hine

lived at the property until she died on April 21, 2017. Id. ¶ 4. Carol Scherer, Susan Sanchez, Steven Hine, and Aaron Hine are the heirs, distributees, and next of kin to the estate of Mable G. Hine. Id. ¶¶ 5-8. Carol Scherer, Steven Hine, and Aaron Hine are citizens of the State of New York. Id. ¶¶ 5, 7-8. Susan Sanchez is a resident and citizen of California. Id. ¶ 6. B. Plaintiff’s Allegations On July 15, 2002, Albert Duane Hine and Mable G. Hine executed a Home Equity Conversion Mortgage to M&T Mortgage Corporation to obtain $82,500 and interest. Compl. ¶ 12, Ex. B. The mortgage was recorded in the Broome County Clerk’s Office on July 19, 2002. Id. On the same day, Albert and Mable Hine executed a note (the note) to M&T Mortgage Corporation in the amount of $82,500 and interest. Id. ¶ 13, Ex. C. The mortgage was assigned eight times,

and Plaintiff was the last assignee on June 15, 2023. Id. ¶ 16, Ex. D. This assignment was recorded with the Broome County Clerk’s Office on June 27, 2023. Id. at 55. The note was similarly transferred by affixation of allonges and endorsements. Id. ¶ 13, Ex. C. Plaintiff has physical possession of the original mortgage and note. Id. ¶ 18. Albert Duane Hine died on January 27, 2007, and Mable G. Hine died on April 21, 2017. Compl. ¶ 15, Ex. F. The mortgage states that “Lender may require payment in full of all sums secured by this security instrument if a borrower dies and the property is not the principal residence of at least one surviving Borrower.” Id. ¶ 19, Ex. B at 7, ¶ (9)(a)(i). Plaintiff alleges that the “death of Mable G. Hine, deceased borrower, triggered the right to foreclose on the mortgage premised [sic] and payment of all outstanding amounts due,” Compl. ¶ 21, and Plaintiff “elects to declare the entire sum under the agreement to be due and payable,” id. ¶ 20. On September 20, 2023, Plaintiff mailed a default notice to the Estate of Mable G. Hine, addressed to the property, stating that the mortgage of $153,740.98 was “technically in default due

to the death of the last surviving borrower living in the principal residence” and warning of potential foreclosure action. Compl. ¶ 22, Ex. E at 49, Dkt. No. 1-1. The same day, Plaintiff mailed a 90-day pre-foreclosure notice (90-day notice), as required by RPAPL § 1304, to the Estate of Mable G. Hine at the property. Id. at 51-56. The affidavit of mailing for these two documents states that they were mailed to a person and address unrelated to this case. Dkt. No. 1-1 at 65. Defendants did not respond to these notices. Compl. ¶ 25. Plaintiff subsequently filed the Complaint on February 14, 2024. C. The Motion Plaintiff sought and received an entry of default from the Clerk’s office on May 29, 2024, and filed this motion on July 19, 2024. Dkt. Nos. 9, 10, 11. According to an affidavit from John

Ramer, Authorized Signatory for Plaintiff, the amount due and owing to Plaintiff is $153,718.20 as of July 2, 2024.1 Dkt. Nos. 11-1 ¶ 9; 11-6 ¶¶ 6-9. This amount is different than the amounts given in the Complaint ($155,268.54 as of September 15, 2023) and the default notice ($153,740.98 as of the end of September 2023). Compare Compl. ¶ 26 with Ex. E at 49. None of the Defendants have appeared or responded to any filing in this action to date.

1 The affidavit is addressed to the Eastern District of New York, rather than the Northern District of New York. Dkt. No. 11-6 ¶ 12. II. STANDARD OF REVIEW “Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment.” Priestly v. Headminer, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, the plaintiff must obtain a clerk’s entry of default under Rule 55(a). Id. at 504. See also Fed. R. Civ.

P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”); see also Northern District of New York Local Rule (Local Rule) 55.1 (requiring a party “applying to the Clerk” for an entry of default to “submit an affidavit showing” that (1) “the party against whom it seeks a judgment” is “not an infant, in the military, or an incompetent person” and “has failed to plead or otherwise defend the action . . .” and (2) “it has properly served the pleading to which the opposing party has not responded.”). Second, the plaintiff must “apply to the court for entry of a default judgment” under Rule 55(b)(2). Priestly, 647 F.3d at 505; see also Local Rule 55.2(b) (“A party shall accompany a motion to the Court for the entry of a default judgment, pursuant to Fed. R. Civ. P. 55(b)(2), with

a clerk’s certificate of entry of default . . . a proposed form of default judgment, and a copy of the pleading to which no response has been made.”). Default judgments “are generally disfavored and are reserved for rare occasions.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 98 (2d Cir. 1993). Before a court enters a default judgment, it must “ensure that (1) jurisdictional requirements are satisfied, (2) the plaintiff took all the required procedural steps in moving for [a] default judgment, and (3) the plaintiff’s allegations, when accepted as true, establish liability as a matter of law.” Windward Bora, LLC v. Brown, No. 21-cv-03147, 2022 WL 875100, at *2 (E.D.N.Y. Mar. 24, 2022) (quotation marks and citation omitted). III. DISCUSSION A.

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