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Sims v. New Penn Financial LLC

United States District Court, N.D. Indiana, South Bend Division

August 2, 2017

MARIO L. SIMS, et al., Plaintiff,
v.
NEW PENN FINANCIAL LLC d/b/a SHELLPOINT MORTGAGE SERVICING, Defendant.

          OPINION AND ORDER

          Michael G. Gotsch, Sr. United States Magistrate Judge.

         Before the Court are three discovery-related motions: Plaintiffs' Motion to Compel Defendant to Respond to Discovery [DE 48]; Defendant's Motion for Protective Order [DE 61]; and Plaintiffs' Motion to Stay Discovery [DE 62]. For the following reasons, the Court denies Plaintiffs' motion to compel and Defendant's motion for protective order without prejudice. In addition, the Court extends the discovery deadline and denies Plaintiffs' motion to stay.

         I. Relevant Background

         This cases arises out of Plaintiffs' efforts to assume the mortgage loan of Defendant's borrower, John Tiffany. Plaintiffs purchased land on a land-sale contract from Tiffany who stopped paying his mortgage payments to Defendant after executing the contract with Plaintiffs. Plaintiffs attempted to assume the loan, but were not able to do so. Plaintiffs, proceeding pro se, initiated this lawsuit alleging violations of the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq. Plaintiffs allege that Defendant made statements that discouraged them from the credit application process and that Defendant discriminated against them based on race by imposing different terms and conditions on assumption.[1]

         As part of their discovery related to the ECOA claim, Plaintiffs served Defendant with their First Requests for Production of Documents on February 28, 2017. On March 30, 2017, Defendant served responses and objections on Plaintiffs without including any of the requested documents. Through e-mail on the same day, however, Defendant informed Plaintiffs that the document production would be delivered shortly either by e-mail or on a CD via regular mail. Production of the documents did not occur immediately resulting in e-mails and telephone calls between Plaintiff, Mario Sims (“Mr. Sims”), and Defendant's counsel regarding the discovery requests. On April 6, 2017, Defendant's counsel produced the documents provided to him by Defendant. Finding the production incomplete, Mr. Sims exchanged additional emails with Defendant's counsel. Defendant's counsel sent the last e-mail in the exchange on April 11, 2017, indicating that he would consult with his client about additional documents and would supplement production as necessary as soon as possible. Still dissatisfied with Defendant's production and before any supplemental production was served, Plaintiffs filed the instant motion to compel on April 26, 2017. In their motion, Plaintiffs contend that Defendant's production was untimely and incomplete. Plaintiffs also asked the Court to award them reasonable expenses for the filing of the instant motion to compel.

         Plaintiffs then stipulated to three extensions of Defendant's deadline to respond to the instant motion to compel, presumably to allow Defendant time to produce its supplemental responses. On June 2, 2017, Defendant filed its supplemental responses totaling about 1, 000 pages of information. [DE 56]. Through an e-mail to Mr. Sims dated June 6, 2017, Defendant's counsel reported Defendant's willingness to produce additional information, such as certain confidential and proprietary documents namely its Fair Servicing Policy and its Subservicing Agreement, and reminded Mr. Sims about the proposed protective order sent to Plaintiffs for their approval about a week earlier. [DE 58-2 at 2]. Earlier in the same e-mail, Defendant's counsel wrote

I write you to follow-up on your very brief telephone call to me early this morning. Unfortunately, I was not afforded any opportunity to respond to your general dissatisfaction with my discovery responses before you ended the call. I am happy to discuss any specific disputes you may have about my client's document production. As you know, Rule 37 requires parties to meet and confer about any discovery disputes. That did not occur. I find it most productive for parties to discuss specific issues in the case rather than resorting to disparaging remarks and angry demands. If you would like to have such a discussion, please give me a call at your convenience.

[Id.].

         Later the same day, Mr. Sims responded via e-mail (1) accusing Defendant's counsel of patronizing him; (2) disputing Defendant's counsel's interpretation of the Rule 37 meet and confer requirement; (3) advocating for his legal position based on information found in Defendant's supplemental production; (4) advising Defendant's counsel to read Rule 11; and (5) reminding Defendant's counsel that his discovery responses were not complete. [Id.]. In his email, Mr. Sims also stated: “I am not your [n-word], . . . .” and “We are not your [n-word]s.” [Id.]. Mr. Sims then concluded:

Neither Chief Judge Simon, nor Magistrate [Judge] Gotsch would be happy with this continuing dilatory behavior in light of the facts. We will no longer confer. I do not trust you. We believe we have met the requirements. You may want to counsel your client to take our last settlement offer. It will be off the table forever after 5 p.m, [sic] June 15th.

[Id.].

         On June 15, 2017, Defendant timely filed its response opposing the instant motion to compel for four reasons. First, Defendant argues that Plaintiffs' efforts to meet and confer before filing the motion to compel did not satisfy the Rule 37(a) requirements. Second, Defendant argues that Plaintiffs' motion, and their correspondence with Defendant before filing the motion, did not explain their opposition to Defendant's discovery responses in sufficient detail. Third, Defendant contends that its supplemental discovery responses on June 2, 2017, rendered the instant motion to compel moot. And lastly, Defendant claims it acted in good faith to resolve the parties' discovery dispute such that sanctions in the form of costs related to the instant motion should not be awarded to Plaintiffs.

         On June 20, 2017, Plaintiffs timely filed their reply brief, which included no evidence of any further efforts to resolve the discovery dispute with Defendant after its supplemental discovery responses were served, and properly filed, on June 2nd.[2] In addition, Plaintiffs reiterated the arguments originally set forth in their motion to compel and stated that Defendant still had not produced documents responsive to their Request Nos. 12-26. Furthermore, Plaintiffs cited documents produced by Defendant in support of arguments on the merits of their ECOA claim. Plaintiffs also argued for sanctions against Defendant based on its alleged lies and gamesmanship in this litigation.

         On June 30, 2017, Defendant properly filed and served its First Set of Discovery Requests Directed to Plaintiffs, which included interrogatories, requests for production of documents, and requests for admission. Under Fed.R.Civ.P. 33(b)(2), 34(b)(2)(A), and 36(a)(3), ...


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