McLoyd v. BAC Home Loan Services et al

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
In re: ) Case No. 11-12324
)
DEBRA A. McLOYD, ) Chapter 13
)
Debtor. ) Chief Judge Pat E. Morgenstern-Clarren
)
___________________________________ )
)
DEBRA A. McLOYD, ) Adversary Proceeding No. 11-1125
)
Plaintiff, )
)
v. ) MEMORANDUM OF OPINION AND
) ORDER CONCLUDING SHOW CAUSE
BANK OF AMERICA, N.A., et al., ) AS TO ATTORNEY JANSING, ONLY
)
Defendants. )
Chapter 13 debtor Debra McLoyd filed a second amended complaint in this adversary
proceeding in which, among other things, she challenges any interest claimed by Bank of
America, N.A. in her residence. The plaintiff propounded discovery to Bank of America, N.A.,
including a request to produce the original note under which Bank of America, N.A. claims an
interest, as well as interrogatories, requests to produce other documents, and requests for
admissions. Bank of America, N.A. did not timely respond and the parties requested a1
telephone conference to address these issues.
The court held that conference on March 16, 2012. At the close, the court issued an order
directing Bank of America, N.A. to respond to the discovery by March 23, 2012 and giving
Bank of America, N.A. is the servicer for the note at issue. See docket 85. Based on1
Bank of America, N.A.’s participation to date, it appears to be responding to this lawsuit as the
authorized agent for the entity entitled to enforce the note.
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notice that if it failed to respond to any request, the court would hold a hearing on April 4, 2012
and require an officer with corporate responsibilities to appear and show cause why it had failed
to reply. This order arises out of that hearing.
Applicable Law
Parties may “obtain discovery regarding any nonprivileged matter that is relevant to any
party’s claim or defense . . . .” FED. R. CIV. P. 26 (b)(1) (made applicable by FED. R. BANKR. P.
7026). The Supreme Court has noted the “fundamental maxim of discovery that ‘[m]utual
knowledge of all the relevant facts gathered by both parties is essential to proper litigation.’”
Société Nationale Industrielle Aérospatiale v. U.S. Dist. Court for the S. Dist. of Iowa, 482 U.S.
522, 540 n. 25 (1987), quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947) (alteration in
original). “To that end, either party may compel the other to disgorge whatever facts he has in
his possession. The deposition-discovery procedure simply advances the stage at which
disclosure can be compelled from the time of trial to the period preceding it, thus reducing the
possibility of surprise.” Hickman, 329 U.S. at 507. The plaintiff in this proceeding used several
of the permitted methods of discovery. See FED. R. CIV. P. 33 (made applicable by FED. R.
BANKR. P. 7033) (interrogatories to parties); FED. R. CIV. P. 7034 (made applicable by FED. R.
BANKR. P. 7034) (requests for production); and FED. R. CIV. P. 36 (made applicable by FED. R.
BANKR. P. 7036) (requests for admission).
Rule 37 deals with failures to disclose or to cooperate in discovery, and authorizes the
court to compel discovery and to impose sanctions against a party, or the advising attorney, in
appropriate circumstances. FED. R. CIV. P. 37 (made applicable by FED. R. BANKR. P. 7037).
The purpose of Rule 37 “is not only to punish discovery abusers, but also to protect litigants who
legitimately seek information to prepare for trial.” SPX Corp. v. Bartec USA, LLC, 574 F. Supp.
2
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2d 748, 756 (E.D. Mich. 2008). This court exercises its discretion in imposing discovery
sanctions. Fencorp. Co. v. Ohio Kentucky Oil Corp., – F.3d – , 2012 WL 1109648 at *6 (6 Cir.th
April 4, 2012).
The Court’s Show Cause Order2
Counsel for the plaintiff filed a statement that Bank of America, N.A. failed to answer
one of the interrogatories, failed to answer request for admission no. 2, listed objections that are
not supported by the law, and failed to produce any documents, including the original note. The
court then entered a show cause order confirming that the April 4, 2012 hearing would go
forward and giving (1) notice to Bank of America, N.A. that it should be prepared to show cause
why it should not be held in civil contempt for violating the court’s order and also why it should
not be sanctioned under Federal Civil Rule 37(b), (c), and (d); and (2) notice to Debra Jansing, as
the attorney advising the defendant in this matter, why she should not be sanctioned under
Federal Civil Rule 37(b) and (d) and held responsible for paying the plaintiff’s reasonable
expenses, including attorney fees, caused by Bank of America, N.A.’s failure to comply with the
court order and other failures to act.
The April 4, 2012 Hearing
A. The Failure to Timely Produce the Original Note
Attorney Jansing appeared at the hearing with Neil Patak, a Bank of America, N.A.
Assistant Vice President and Unit Manager. At the hearing, the court asked Attorney Jansing to
explain why the original note had not been produced until the day before the hearing. Based on
that information, the court will issue a separate show cause order directing Ann Thorn, Senior
Docket 130.2
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Servicing Executive over Bankruptcy and Foreclosure to appear. Mr. Patak is excused from
attending future hearings, unless otherwise directed by the court.
B. The Written Answers to the Discovery Requests
The interrogatories were answered and verified by Katherine Cacho, Bank of America,
N.A. Assistant Vice President, and the objections were signed by Attorney Jansing. This is a
sample of the interrogatories, and the answers and objections:
Question No. 3: Identify Mary Ann Heirman (Ms. Heirman’s name is on the
assignment).
ANSWER: Objection. This request is vague, ambiguous, and overly broad and
burdensome; requests irrelevant, immaterial or inadmissible information or
information protected by privilege and/or contains questions in violation of law,
rule or regulation.
/s/Debra Jansing . . .
Without waiving said objection and answering in part, Mary Ann Hierman is an
Assistant Secretary for MERS with authority to execute an Assignment of
Mortgage.
Question No. 4: Identify Teresa D. Williams. (Ms. Williams’s name is on the
assignment).
ANSWER: Objection. This request is vague, ambiguous, and overly broad and
burdensome; requests irrelevant, immaterial or inadmissible information or
information protected by privilege and/or contains questions in violation of law,
rule or regulation.
/s/Debra Jansing . . .
Without waiving said objection and answering in part, Teresa D. Williams is a
Notary Public for the State of California.
Question No. 5: State the chain of title from originator to current purported
holder of the mortgage, including dates. Do not refer to documents, but just state
your answer.
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ANSWER: Objection. This request is vague, ambiguous, and overly broad and
burdensome; requests irrelevant, immaterial or inadmissible information or
information protected by privilege and/or contains questions in violation of law,
rule or regulation.
/s/Debra Jansing . . .
Without waiving said objection and answering in part, copies of the requested
documents are part of the court record and are either available to Debtor or in the
Debtor’s possession.
The court asked Ms. Jansing to explain, with respect to each of these objections, how the
request was vague, ambiguous, and overly broad and burdensome; and how it requests irrelevant,
immaterial or inadmissible information or information protected by privilege and/or contains
questions in violation of law, rule or regulation. Ms. Jansing acknowledged that she used
boilerplate language in all of these objections, which language did not, in fact, apply to this case.
By way of explanation, she stated that she had submitted the interrogatories to Bank of America,
N.A., but not gotten a substantive answer. As a result, she inserted the admittedly inapplicable
boilerplate and intended to supplement the answers when she got more information. She also
promised that she would not, in the future, use this approach.
The answer to question 5 concerning the chain of title for the mortgage at issue warrants
an additional comment. Ms. Jansing stated that opposing counsel already had all of the
information that she needed and that the chain of title was as Bank of America, N.A. had stated it
previously; therefore, Ms. Jansing felt that the plaintiff posed this question to harass Bank of
America, N.A. This is not a reason to refuse to answer this interrogatory. Counsel is
permitted–and in fact encouraged–to use interrogatories to narrow the issues and to simplify the
presentation of evidence at trial. The answer to this interrogatory will do so.
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Request to Produce Documents
In response to the plaintiff’s request to produce documents, Bank of America, N.A.
responded that “Copies of the requested documents are part of the court record and are either
available to Debtor or in Debtor’s possession.” This is not a permitted response. The documents
are to be produced or, alternatively, Bank of America, N.A. can identify each document
previously produced that complies with the request. As stated above, the objections that begin
with “This request is vague, ambiguous, and overly broad and burdensome. . .” are not acceptable
in this context, either.
Request for Admissions
The plaintiff posed three requests for admissions. Bank of America, N.A. did not cleanly
respond to any one of them using the alternatives permitted by Federal Civil Rule 36, which
states that a party must either admit the request or specifically deny it or state in detail why the
answering party cannot truthfully admit or deny. For example, Admission No. 1 states:
The PSA (exhibit 4.1 to Form 8-K and filed in SEC file number),
found at http://www.secinfo.com/dsvr4.v4Yu.d.htm#1stPage is a
true and accurate copy of the PSA for the trust.
Bank of America, N.A. answered and raised the same boilerplate objection, supplemented
by this statement: “Without waiving said objection and answering in part, PSA was filed with
the court and is part of the record.” Ms. Jansing stated at the hearing that she felt that opposing
counsel could check on the internet to see if this address works and she did not feel that she
should be expected to do opposing counsel’s work. That is not, however, the point. A party is
permitted and–again, encouraged–to use requests for admissions to turn theory into evidence,
including to help establish an evidentiary foundation for a document. This request does exactly
that.
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Bank of America, N.A.’s Amended Response to Plaintiff’s Interrogatories
To Ms. Jansing’s credit, she did file an amended response to the debtor’s discovery
requests, although it is not verified by Bank of America, N.A. and suffers from some of the same
deficiencies.
Conclusion
The court accepts Ms. Jansing’s statement that she had a fundamental misunderstanding
about how to handle these discovery requests and that she will, in the future, handle all such
requests in a different manner. The court also notes that Ms. Jansing has appeared before it on
other occasions, competently representing her clients and behaving with the requisite
professionalism. As a result, the court will conclude the show cause against Ms. Jansing without
further consequence. Bank of America, N.A. will be directed to file a Second Amended
Response through a separate order.
IT IS SO ORDERED.
________________________________
Pat E. Morgenstern-Clarren
Chief Bankruptcy Judge
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