Filed: Mar. 24, 2014
Latest Update: Mar. 24, 2014
Summary: Discovery Dispute Conference Order MARK R. ABEL, Magistrate Judge. On March 24, 2014, counsel for the parties participated in a telephone scheduling conference with the Magistrate Judge. The sole remaining claim is under RESPA. In his September 26, 2012 Order granting judgment on the pleadings, Judge Smith held that the complaint did not state a claim under RESPA because it did not allege actual damages. (September 26, 2012 Order, p. 12, Doc. 33, PageID 637.) In its November 26, 2013, the Uni
Summary: Discovery Dispute Conference Order MARK R. ABEL, Magistrate Judge. On March 24, 2014, counsel for the parties participated in a telephone scheduling conference with the Magistrate Judge. The sole remaining claim is under RESPA. In his September 26, 2012 Order granting judgment on the pleadings, Judge Smith held that the complaint did not state a claim under RESPA because it did not allege actual damages. (September 26, 2012 Order, p. 12, Doc. 33, PageID 637.) In its November 26, 2013, the Unit..
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Discovery Dispute Conference Order
MARK R. ABEL, Magistrate Judge.
On March 24, 2014, counsel for the parties participated in a telephone scheduling conference with the Magistrate Judge.
The sole remaining claim is under RESPA. In his September 26, 2012 Order granting judgment on the pleadings, Judge Smith held that the complaint did not state a claim under RESPA because it did not allege actual damages. (September 26, 2012 Order, p. 12, Doc. 33, PageID 637.) In its November 26, 2013, the United States Court of Appeals for the Sixth Circuit reversed that decision, holding that the complaint made sufficient allegations of actual damages:
. . . Marais's complaint sufficiently stated that interest damages flowed from Chase's deficient response to her QWR because any additional interest she paid on the principal balance after Chase deficiently responded to her QWR on February 28, 2011, would flow from the deficient response.
(November 26, 2013 Opinion, p. 16, Doc. 36, PageID 661.)
During a January 9 conference with me, both counsel thought that discovery was likely complete. Chase's counsel proposed that defendant file a motion for summary judgment but recognized that plaintiff might want to seek discovery under Rule 56(d), Fed. R. Civ. P. Plaintiff's counsel agreed.
On February 28, 2014, defendant Chase filed a motion for summary judgment (doc. 42), and plaintiff Marais filed a motion for partial summary judgment (doc. 43). In accordance with the procedure laid out in my January 10, 2014 scheduling order, plaintiff sought discovery under Rule 56(d), Fed. R. Civ. P. Defendant rejected the demand for discovery on the grounds that (1) plaintiff had more than eight months to conduct discovery before the appeal to the Sixth Circuit and did not request additional discovery during the January 9 conference, (2) the discovery is not necessary for her to respond to the motion for summary judgment; (3) and the litigation has already been costly even though plaintiff seeks only $1,000 in statutory damages.
Plaintiff seeks discovery regarding her damages and the information Chase reported to credit reporting agencies:
First, your motion attacks Chase's purported "lack of knowledge" about which very specific payments Ms. Marais made in 2008 and 2009 that were at issue. (MSJ at p.l2.) You argue that information which would be responsive is "unavailable or considered proprietary" and that is why Chase did not have to research or respond to these claims in its response to her QWR. (MSJ at p. 10.) In light of this, it is our intention to show Chase was well aware of Ms. Marais' payment issues, was well aware of what specific months she complained about, and none of the information needed to answer her questions were either unavailable or considered proprietary. The subpoenas to Chase's current and former employees whom Ms. Marais communicated with on multiple occasions will assist with obtaining that discovery.
Next, Chase's motion seeks to establish that Chase did not report to the credit reporting agencies information indicating Ms. Marais' loan was delinquent, despite Ms. Marais providing evidence such reporting actually occurred. This is a new theory of defense for Chase, and requires that we obtain discovery from Chase concerning its reporting, as well as evidence directly from the credit reporting agencies, so that the evidence submitted in response to summary judgment is correctly authenticated. It is surprising that Chase would claim it did not report late payments during the QWR period despite having clear evidence it did just that. However, now that this defense is raised, it requires the acquisition of additional evidence.
Next, your arguments concerns Ms. Marais' Rule 26 disclosures are beyond the scope of this discovery dispute. However, suffice it to say that Ms. Marais has been more than clear as to her alleged damages to put Chase on notice. If you recall, damages were primary issue on appeal, so Chase can hardly claim surprise or prejudice.
As to the specific dollar amount of damages, especially concerning the amount of interest accumulated due to Chase's failures, this is in Chase's control. If you recall, your client sought and received a protective order from the Court concerning Ms. Marias' ability to discover a wide swath of information pertaining to the misapplication of her payments. That protective order is still in place and needs lifted now that the Sixth Circuit indicated that those charges and interest as a result of failing to correctly apply payments are part of damages.
The Sixth Circuit pointed out at the offset of its discussion about Ms. Marais' alleged damages (at Section B) that, "Ms. Marais' compliant alleged that because Chase deficiently responded to her QWR, it continued to misapply payments of approximately $800 and that she incurred actual damages that included the amount of money Chase `converted' and 'interest and disgorgement interest.'" Marais at p. 14. The court continued, "A reasonable inference arising from those allegations is that because Chase (undisputedly) failed to correct or investigate the misapplied payments, Marais paid interest on a higher principal balance than she should have." ld at p. 15.
Thus, it appears clear that Ms. Marais may delve into the area of discovery pertaining to the allocation of her 2008 and 2009 payments, whether those payments were correctly applied, and whether she has wrongly been accumulating interest since that point in time. Because this kind of discovery has been thus far protected by an order limiting discovery, it is apt that we now be able to conduct discovery into this matter. I would further point out that your client has made a failure to show damages one of the major areas it is attacking in its motion, making this kind of discovery all the more relevant.
March 24, 2014 Letter from Troy J. Doucet to Daniel C. Gibson, p. 2.
As I understand defendant's motion for summary judgment, the Bank's damages arguments do not depend on a calculation of the interest on the approximately $97 overpayment that plaintiff maintains Chase misapplied, but on its argument that Ms. Marais ultimately suffered no damages because she stopped making mortgage payments. However, plaintiff does have a right to the calculation of the additional interest paid as a result of the misapplication of her mortgage payments during the period pleaded in the complaint and discussed by the Court of Appeals. It is ORDERED that Chase make that calculate, if it can easily be done with current bank records and software or that the parties enter into a stipulation of the effect of the $97 payments on the interest due on the loan.
Counsel are DIRECTED to email (mark_abel@ohsd.usourts.gov) me a proposed order establishing deadlines for further briefing on the February 28 motion for summary judgment or call my office (614.719.3370) with those dates on or before April 4, 2014.
Plaintiff also argued that the court issued a protective order that relieved Chase of the obligation of producing documents related to damages and from taking other discovery. Plaintiff would like relief from the protective order. Although I find that Ms. Marais's personal knowledge and the documents produced in discovery are sufficient for her to respond to summary judgment, should defendant's motion for summary judgment be denied plaintiff may renew its requests for discovery that it was unable to take because of the protective order.
