Mitchell et al v. Cenlar Capital Corporation et al

MEMORANDUM in Support re MOTION to Compel

S.D. Miss.January 16, 2018

Page 1 of 25 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI NORTHERN DIVISION PALAS MITCHELL AND JOHN MITCHELL PLAINTIFFS v. CIVIL ACTION NO. 3:16-cv-00814-WHB-JCG CENLAR CAPITAL CORPORATION d/b/a CENLAR FEDERAL SAVINGS d/b/a CENTRAL LOAN ADMINISTRATION & REPORTING, and MGC MORTGAGE, INC. DEFENDANTS Plaintiffs' Memorandum Of Law Supporting Motion To Compel And For Sanctions Against MGC Mortgage, Inc. Come Now the Plaintiffs and offer their memorandum of law supporting their motion to compel and for sanctions against MGC Mortgage, Inc. as follows: FACTS Plaintiffs filed this action on October 17, 2016 seeking an accounting of transactions associated with their home mortgage and force-placed insurance on that home, over the course of several years and a series of assignments of the loan and servicing duties associated with that loan. (Doc 1) Plaintiffs allege that Defendants intentionally force-placed insurance on their home several times, despite knowing that Plaintiffs had insurance policies in place on the home. (Id. pp 2-3) They also allege that the Defendants' knowingly caused Plaintiffs' insurers to cancel a series of policies Plaintiffs obtained on the home. (Id. pp 3-4) And, Plaintiffs seek damages and punitive damages (as applicable) for breach of contract; breach of the implied contractual duty of good faith; and fraud. (Id. pp 6-7) Defendants filed non-identical responsive pleadings, separately, by separate counsel, MGC on November 9, 2016 (Doc 3); and Cenlar on December 19, 2016 (Doc 6). The separateness and Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 1 of 25 Page 2 of 25 non-identity of defenses raised is significant particularly to MGC's objections to Plaintiffs' discovery, on the basis of a "joint-defense" privilege. (See 9/11/2017 MGC discovery responses in Plaintiffs' Discovery Exhibit III filed herewith.) On January 31, 2017, MGC submitted their initial disclosures (Plaintiffs' Discovery Exhibit II) (but did not file a notice of same). Thereafter, a series of discovery disputes ensued: On June 7, 2017 Plaintiffs served interrogatories and request for production of documents on MGC, making its responses due on July 7, 2017. MGC did not move the Court for additional time to respond to this discovery; and, on September 11, 2017, MGC responded, late, with answers to interrogatories which were not signed under oath by MGC (as required by Fed. R. Civ. P. 33(b)(1) and (5)); and, it raised late, non-specific objections as described in Plaintiffs' current motion to compel and herein below. Plaintiffs' counsel wrote to MGC counsel on September 19, 2017 in an attempt to resolve problems with MGC's discovery, but, on September 25, 2017 MGC counsel responded, refusing to comply. On October 11, 2017 Plaintiffs moved to compel discovery from MGC (Doc 25) and Cenlar (Doc 26); and on October 30, 2017 these motions were denied, without prejudice, due to Plaintiffs technical errors in presenting the motions without a good faith certificate and without adequate specificity. (Doc # 32) On November 27, 2017, MGC supplemented its responses to Plaintiffs' interrogatories and request for production as described in the current motion to compel. (Doc.s 42 and 43) These unverified supplements did not cure MGC's prior failures to provide discovery. Meanwhile, on November 15, 2017, Plaintiffs filed a Rule 30(b)(6) Notice of Deposition of MGC, with nineteen "General Areas of Inquiry." (Doc # 40) On November 16, 2017 Plaintiffs' counsel wrote to MGC counsel (mistakenly dated September 19, 2017) again attempting to resolve Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 2 of 25 Page 3 of 25 the discovery dispute between the parties. On November 22, 2017 MGC counsel wrote in response denying its obligations to provide discovery. On November 28, 2017, the parties agreed to 30(b)(6) depositions scheduled for December 14, 2017. On December 7, 2017, Plaintiffs' filed a revised Rule 30(b)(6) Notice of Deposition of MGC (Doc # 45) narrowing down the "General Areas of Inquiry" to seven, and including fourteen "Documents or Things Requested" to be produced prior to the deposition. MGC objected to both Plaintiffs' 30(b)(6) notices on December 11, 2017. (Doc.s 46 and 47) MGC's 30(b)(6) deposition took place as scheduled on December 14, 2017, but MGC did not designate witnesses to testify on the topics in the notice, nor produce any documents requested for that deposition, either in advance or at the deposition. MGC did not obtain a ruling on its objections prior to the deposition and did not file a motion for protective order at any time, to the present date. MGC's improprieties at the deposition itself are described in the current motion and below. Thereafter, Plaintiffs' counsel again wrote to MGC counsel in an attempt to resolve these issues on December 21, 2017. MGC counsel responded denying its obligations to provide discovery on December 28, 2017. The following day, December 29, 2017, MGC submitted its second supplemental response to Plaintiffs' interrogatory # 5 only, identifying additional items it may use in evidence at trial. This third response to written discovery was, yet again, not signed under oath by MGC. That date was the last date on which MGC could timely provide discovery, per the Court's text only Order dated November 28, 2017. That same Order makes dispositive motions due by January 19, 2018. On January 4, 2018. Plaintiffs' counsel prepared and sent defense counsel a draft of the current motion, several exhibits and a letter requesting voluntary compliance (prior to filing) in a last-ditch attempt to resolve this dispute. At the time of this writing, MGC counsel has not agreed Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 3 of 25 Page 4 of 25 to comply and Plaintiffs' motion is, thus, necessary. ARGUMENT I. MGC REPEATEDLY REFUSED TO NAME WITNESSES OR PERSONS WITH KNOWLEDGE OF PERTINENT FACTS. MGC's January 31, 2017 Initial Disclosures fail to name anyone other than the Plaintiffs; they do not state the "subjects" of any person's knowledge in any meaningful way; MGC never supplemented this disclosure even after being asked to do so by way of a September 12, 2017 email from Plaintiffs' counsel1; and, the discovery deadline passed on December 29, 2017. As a result, Plaintiffs have been severely prejudiced, because they cannot depose MGC witnesses even if MGC discloses them as a result of this motion. But Plaintiffs do not have the burden to prove that they were prejudiced; Rules 26 and 37 squarely place the burden on MGC to disprove prejudice: "Implicit in Rule 37(c)(1) is that the burden is on the party facing sanctions to prove harmlessness." Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1107 (9th Cir. 2001). Accord, Wilson v. Bradlees of New England, Inc., 250 F.3d 10, 21 (1st Cir. 2001). "The burden is on the party facing sanctions to prove that its failure to comply with Rule 26(a) was substantially justified or harmless.” Rembrandt Vision Techs., L.P. v. Johnson & Johnson Vision Care, Inc., 725 F.3d 1377, 1381 (Fed. Cir. 2013) (citation omitted). “The burden is on the party facing the [discovery] sanctions ... to make the requisite showing of harmlessness under Federal Rule of Civil Procedure 37(c)." Andazola v. Logan's Roadhouse, Inc., CV-10-S-316-NW, 2013 WL 2106815, at *2 (N.D. Ala. May 10, 2013) (citations omitted); McGee v. Arkel Int'l, LLC, CV 08-4704, 2010 WL 11538546, at *2 (E.D. La. Jan. 29, 2010); Current v. Atochem N. Am., Inc., CIV.A. WW-00-CA-332, 2001 WL 36101282, at *2 (W.D. Tex. Sept. 18, 2001). 1 See Plaintiffs' Discovery Exhibit VII. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 4 of 25 Page 5 of 25 In the past two years, in all MGC disclosures and discovery responses as to such persons (expert or lay witnesses, or simply persons with knowledge), MGC has named only the Plaintiffs and MGC referred to its potential witnesses only as "representatives". (See, Plaintiffs' Discovery Exhibits II (MGC Disclosures); Exhibit III (9/11/2017 MGC discovery responses); Exhibit IV (11/27/ 017 MGC supplemental discovery responses; and Exhibit VI, MGC 2d supplemental responses.)) This information is mandated in the initial disclosure. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties: (i) the name and, if known, the address and telephone number of each individual likely to have discoverable information--along with the subjects of that information--that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment; Fed. R. Civ. P. 26(a)(1)(A)(i) (emphasis added). The Rule includes defense witnesses - persons the disclosing party (MGC) may use to support its case. Id. “If a party fails to provide information or identify a witness as required by Rule 26(a) ..., the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless ...”). Fed. R. Civ. P. 37(c) (emphasis added). There is no excuse for MGC's repeated refusal to name its witnesses; and it has certainly harmed Plaintiffs' ability to prosecute their case against both defendants, because it is undisputed that both defendants work in servicing Plaintiffs' mortgage loan and both are involved with the ongoing performance of loan duties related to loan servicing and force-placement of insurance. There is ample precedent for prohibiting a party from offering the testimony of any witness it has refused to disclose in the disclosure/discovery process. See, e.g., Kasper v. Bd. of Supervisors of Lauderdale Cty., MS, 3:15-CV-613-WHB-JCG, 2017 WL 4698162, at *2 (S.D. Miss. Oct. 18, Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 5 of 25 Page 6 of 25 2017) (excluding defense expert witness testimony); Cooper v. Montgomery Cty., Ohio, 3:13-CV- 272, 2018 WL 272523, at *7 (S.D. Ohio Jan. 2, 2018) (excluding lay witness not disclosed until after discovery deadline). Excluding such testimony is automatic under Rule 37 where the nondisclosure is, as here, harmful and unjustified. See, e.g., United States v. $307,970.00, in U.S. Currency, 156 F. Supp. 3d 708, 722 (E.D.N.C. 2016) ("The Fourth Circuit has observed that, where the failure was not either substantially justified or harmless, Rule 37 operates as an “automatic sanction.”") (citing S. States Rack & Fixture, Inc. v. Sherwin–Williams, Co., 318 F.3d 592, 595 n. 2 (4th Cir. 2003) (quoting Fed.R.Civ.P. 37 advisory committee notes)). MGC's failure to name such persons was not inadvertent or merely mistaken, because similar identity information was refused in MGC's response to interrogatories and requests for production of documents; and its objections to Plaintiffs' Fed. R. Civ. P 30(b)(6) deposition notice; and again, refused at the deposition itself. After each of these refusals, Plaintiffs' counsel informed MGC, again and again, of its duty to provide the requested information. (See Plaintiffs' Discovery Exhibits I, III and VII) MGC's September 11, 2017 late, unverified responses to Plaintiffs' June 7, 2017 interrogatories and request for production of documents refused to identify persons with knowledge and potential witnesses in its first of three sets of responses: INTERROGATORY NO. 2: Please identify all persons who you know or believe have knowledge of any of the facts or circumstances relative to the subject of this litigation and provide their address and telephone number. RESPONSE NO. 2: MGC objects to this Interrogatory on the grounds that it seeks information protected by the joint defense, attorney-client and/or work product privileges, and is overly broad and seeks information that is not relevant, and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, Palas Mitchell, John Mitchell, representatives of Cenlar, representatives of MGC identified in documents Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 6 of 25 Page 7 of 25 produced by Defendant Cenlar in conjunction with its Initial Disclosures in this matter. INTERROGATORY NO. 3: Identify all lay witnesses whom you intend to call at trial, identifying their name, address, phone number, and provide a summary of their anticipated testimony. RESPONSE NO. 3: MGC's objects to this Interrogatory on the grounds it is premature and seeks information protected by the attorney-client and/or work product privileges. Subject to and without waiving the foregoing objections, MGC will supplement its response in accordance with deadlines set by the Court in this matter and/or the Federal Rules. (Plaintiffs' Discovery Exhibit III2) The above responses to interrogatories # 2 and # 3 include late, and therefore waived objections. "[D]iscovery objections are waived if a party fails to object timely to interrogatories, production requests, or other discovery efforts." Godsey v. United States, 133 F.R.D. 111, 113 (S.D. Miss. 1990) (emphasis added) (citing In Re U.S., 864 F.2d 1153, 1156 (5th Cir.1989) (other citations omitted). Accord, JCKP, LLC v. Berkley Reg'l Specialty Ins. Co., 2:14-CV-117-KS-MTP, 2015 WL 12978161, at *1 (S.D. Miss. Aug. 20, 2015); Boles v. Nat'l Heritage Realty, Inc., 4:07- CV-99-SA-DAS, 2010 WL 3087472, at *6 (N.D. Miss. Aug. 6, 2010). The waived objections also fail to explain how the requested identity information is "premature", "overly broad", "not relevant" or privileged. These objections are, mere boilerplate, interposed for the precise purpose of obstructing discovery. “The key requirement in both Rules 33 and 34 is that objections require specificity and there is precedent too ample to cite ... demonstrating the insufficiency of boilerplate objections." Team Contractors, L.L.C. v. Waypoint 2 MGC also improperly refused to identify expert and other witnesses in its September 11, 2017 discovery responses: It objected about expert witness identities requested in interrogatory #4, as "premature", and privileged, without ever supplementing the response, without ever providing a privilege log and without ever seeking a protective order. Likewise, it refused to identify the persons who conducted MGC's investigation in response to interrogatory # 9 asking for this information, on unspecific privilege grounds. It refused to identify "to whom the communication was from and addressed to" in objecting to interrogatory # 10 requesting that information about MGC efforts to collect force- placed insurance premiums. MGC refused to provide documents including the "name and address of the payee of any type of disbursement related to this [loan] account" as requested in production request # 9. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 7 of 25 Page 8 of 25 NOLA, L.L.C., CV 16-1131, 2017 WL 3216582, at *2 (E.D. La. July 28, 2017) (internal citation, brackets and quotation marks omitted). Plaintiffs needed this information to be provided in a timely fashion, while they could make beneficial use of it; and they are entitled to any “nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). The 2015 Amendments to the Rules of Discovery "do not ... permit the opposing party to refuse discovery simply by making a boilerplate objection that it is not proportional.” A party raising a proportionality objection must include specific details in its objection that explain why the request is improper." Small v. WellDyne, Inc., 5:16-CV-00062-BO, 2017 WL 2484181, at *1 (E.D.N.C. June 8, 2017) (citing and quoting Fed. R. Civ. P. 26, Advisory Committee Notes (2015 Amendment)). MGC failed to produce a privilege log and has never explained how any privilege may attach to the identity of persons whom it was required to identify even in initial disclosures. "When a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, the party must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed--and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim." Fed. R. Civ. P. 26(b)(5)(A) (emphasis added). A party withholding information claimed privileged or otherwise protected must submit a privilege log that contains at least the following information: name of the document, electronically stored information, or tangible thing; description of the document, electronically stored information, or tangible thing, which description must include each requisite element of the privilege or protection asserted; date; author(s); recipient(s); and nature of the privilege. To withhold materials without such notices subjects the withholding party to sanctions under Fed.R.Civ.P. 37 and may be viewed as a waiver of the privilege or protection. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 8 of 25 Page 9 of 25 L.U.Civ.R. 26(e) (emphasis added). A party ... from whom discovery is sought may move for a protective order ... The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense... Fed. R. Civ. P. 26(c). MGC did not file such a motion, but, even if it had, mere filing would not have relieved MGC of its duty to comply with the notice and provide the requested information, documents and testimony: "The filing of a motion for a protective order to limit or quash a deposition does not operate as a stay of the deposition. It is incumbent upon the party seeking the protection of the court to obtain a ruling on the motion before the scheduled deposition." L.U.Civ.R 37(d). These failures are repeated throughout MGC's discovery responses and the Court should compel it to provide the information and documents requested. The Court may, and should, award attorney's fees necessitated by MGC's tactics, and order additional sanctions striking its defenses, and forbidding it from calling any still unidentified witnesses at trial. Fed. R. Civ. P. 37. See also, Curtis v. Costco Wholesale Corp., 807 F.3d 215, 219 (7th Cir. 2015) (holding that court did not abuse its discretion in deeming facts admitted where party "provided only boilerplate objections, such as “relevance” and “vague and ambiguous.”"). "[B]oilerplate objections are borderline frivolous. Parties shall not make nonspecific, boilerplate objections. ... [S]ee also Fed. R. Civ. P. 34(b)(2)(B) (“[S]tate an objection to the request, including the reasons.” " Center For Individual Rights v. Irina Chevaldina, 16-20905-CIV, 2017 WL 5905191, at *4 (S.D. Fla. Nov. 29, 2017) (some citations omitted). Not only has MGC's failure to identify witnesses harmed Plaintiffs' case, MGC's failure is Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 9 of 25 Page 10 of 25 repeated five times, even after multiple written demands for the information. It can only be intentional obstruction by MGC and its counsel3, because MGC refused to disclose witnesses and the subjects of their knowledge or expected testimony a second time in MGC's November 27, 2017 supplemental discovery responses; and a third time in MGC's December 11, 2017 objections to Plaintiffs' notices of deposition; a fourth time by failing to designate and produce MGC witnesses at the December 14, 2017 30(b)(6) deposition, at which the sole witness, a "quality control manager" was unprepared to answer; was directed not to answer for reasons other than privilege; and; MGC counsel even answered for her as to what she knew. Each is discussed below. On November 27, 2017, MGC supplemented its response to interrogatory # 3 (but not # 2) as follows: SUPPLEMENTAL RESPONSE NO. 3: MGC may call the following witnesses at the trial of this matter: (a) Representatives of MGC. MGC representatives may provide testimony concerning the events underlying Plaintiffs' claim and MGC's actions following those events. ... (b) Representatives of Cenlar Capital Corporation d/b/a Cenlar Federal Savings Bank d/b/a Central Loan Administration & Reporting ("Cenlar FSB"). Cenlar FSB representatives may provide testimony concerning the events underlying Plaintiff's claim and Cenlar FSB's actions following those events. ... (c) Palas Mitchell. ... (d) John Mitchell. ... (Plaintiffs' Discovery Exhibit IV) The above supplemental response to Interrogatory # 3 again fails to name anyone but the Plaintiffs; and it further violates Rule 33 because it is not signed under oath by MGC. Fed. R. Civ. P. 33(b)(1) and (5). II. MGC REFUSED TO PROVIDE OTHER IMPORTANT DISCOVERABLE INFORMATION IN ITS WRITTEN DISCOVERY 3 All three sets of answers to Plaintiffs' interrogatories are unverified and only the first is signed by MGC. Rule 33 requires that interrogatories be answered by the party under oath. MGC's counsel submitted the first and second unsigned supplements and it is unknown whether MGC ever even saw them. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 10 of 25 Page 11 of 25 RESPONSES, COMPOUNDING ITS OBSTRUCTION OF PLAINTIFFS' RIGHTS TO DISCOVERY. In addition to witness identity information, MGC's September 11, 2017 responses refused to produce information about its servicing of Plaintiffs' loan, crucial to Plaintiffs' case, which only MGC could provide. It further failed to identify a single document by name and to state what interrogatory or production request it relates to other than interrogatory # 5 which asked about items it might use at trial. (Plaintiffs' Discovery Exhibits II, III, IV and VI) The responses being late, every single one of MGC's objections are ineffective and waived. L.U.Civ.R. 26(e). In addition, each is unexplained "borderline frivolous" boilerplate. Center For Individual Rights v. Irina Chevaldina, 16-20905-CIV, 2017 WL 5905191, at *4 (some citations omitted). Those responses which claim that responsive documents have been or will be produced fail to identify the documents in any meaningful way or to say by whom and when they will be or were produced, making them evasive. Evasive responses "must be treated as a failure to disclose, answer, or respond." Fed. R. Civ. P. 37(a)(4). No privilege log was ever provided from which Plaintiffs could determine whether they agree that the documents are privileged; curative supplemental responses were not made; and no protective order was ever sought. Plaintiffs need this information and they are entitled to any “nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). For these reasons, the Court should overrule each of the objections below, and order MGC to provide the requested information in full: INTERROGATORY NO. 8: Identify any previous or subsequent claims against you for improper place of forced placed insurance or improper cancellation of insurance, that have been levied against you in the past ten years, whether they results in litigation or not. RESPONSE NO. 8: MGC objects to this Interrogatory on the grounds that it is overly broad, unduly burdensome, and seeks information that is not relevant, Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 11 of 25 Page 12 of 25 and not reasonably calculated to lead to the discovery of admissible evidence. ... INTERROGATORY NO. 11: Please provide the detailed factual basis for your denial of the allegations of Paragraph 4 of the complaint. RESPONSE NO. 11: MGC did not conduct unlicensed business m the State of Mississippi. ... REQUEST NO. 1: Please produce all documents which support any and all defenses to the allegations contained in the Complaint. RESPONSE NO. 1: Non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 2: Please produce all documents, exhibits, presentations, photographs, videos or any other thing which will be introduced as evidence or presented to the finder of fact in the trial of this suit or any hearing. RESPONSE NO. 2: MGC's objects to this Request on the grounds it is premature and seeks information protected by the attorney-client and/or work product privileges. Subject to and without waiving the foregoing objections, MGC will supplement its response in accordance with deadlines set by the Court in this matter and/or the Federal Rules. REQUEST NO. 3: Please produce any and all written communications in Defendants possession which related in any way to the subject matter of this civil action. RESPONSE NO. 3: MGC objects to this Request on the grounds that it seeks information protected by the joint defense, attorney-client and/or work product privileges, and is overly broad and seeks information that is not relevant, and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 4: Please produce any and all documents that were reviewed, relied upon, or drafted by any expert(s) related to this suit or expected to testify at trial. RESPONSE NO. 4: MGC's objects to this Request on the grounds it is premature and seeks information protected by the attorney-client and/or work product privileges. Subject to and without waiving the foregoing objections, MGC will supplement its response in accordance with deadlines set by the Court in this matter and/or the Federal Rules. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 12 of 25 Page 13 of 25 REQUEST NO. 5: Produce all documents referred to and relied upon by you in responding to the above Interrogatories. RESPONSE NO. 5: Non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 6: Produce any and all policies, procedures, or written guidelines concerning forced placed insurance. RESPONSE NO. 6: MGC objects to this Request on the grounds that it seeks confidential and proprietary information protected by the joint defense, attorney- client and/or work product privileges, and is overly broad and seeks information that is not relevant, and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, non- privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 7: Produce all documents, tangible things and other items that support, refute or in any way relate to your denial of any of the allegations in the Complaint. RESPONSE NO. 7: MGC objects to this Request on the grounds that it seeks information protected by the joint defense, attorney-client and/or work product privileges, and is overly broad and seeks information that is not relevant, and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 8: Produce any and all documents related to any investigation identified in your response to Interrogatory No. 9. RESPONSE NO. 8: MGC objects to this Request on the grounds that it seeks confidential and proprietary information protected by the joint defense, attorney- client and/or work product privileges, and is overly broad and seeks information that is not relevant, and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 9: Produce a complete and itemized statement of the loan history from the date of the loan to the date of these interrogatories and request for production of documents including, but not limited to, all receipts by way of payment or otherwise and all charges to the loan in whatever form; this history should include the date of each and every debit and credit to any account related to this loan, the nature and purpose of each such debit and credit, and Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 13 of 25 Page 14 of 25 then name and address of the payee of any type of disbursement related to this account. RESPONSE NO. 9: MGC objects to this Request on the grounds that it is overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, non- privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 10: Please provide a complete and itemized statement of all advances or charges against this loan for any purpose that are not reflected on the loan history transaction statement provided in answer to Request No. 9, above. RESPONSE NO. 10: MGC objects to this Request as vague and ambiguous. REQUEST NO. 11: Please provide a complete and itemized statement of the escrow account of the loan, if any, from the date of the loan to the date of these interrogatories and request to produce, including, but not limited to, any receipts or disbursements with respect to real estate property taxes, fire or hazard insurance, flood insurance, mortgage insurance, credit insurance or any other insurance product. RESPONSE NO. 11: MGC objects to this Request on the grounds that it is vague and ambiguous and, to the extent it is understood, overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 12: Please provide a complete and itemized statement from the date of the loan to the date of these interrogatories and request to produce of any forced-placed insurance and expenses related thereto, related in any way to this loan. RESPONSE NO. 12: MGC objects to this Request on the grounds that it is vague and ambiguous and, to the extent it is understood, overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 13: Please provide a full and complete comprehensible definitional dictionary of all transaction codes and other similar terms used in the statements requested above. RESPONSE NO. 13: MGC objects to this Request on the grounds that it is vague and ambiguous and, to the extent it is understood, overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 14 of 25 Page 15 of 25 non-privileged, discoverable documents will be produced or were previously produced in this matter. REQUEST NO. 14: Provide a copy of the Transaction History Report for the debtor's mortgage loan account, with a detailed description of all fee codes. RESPONSE NO. 14: MGC objects to this Request on the grounds that it is vague and ambiguous and, to the extent it is understood, overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, non-privileged, discoverable documents will be produced or were previously produced in this matter. III. MGC OBSTRUCTED PLAINTIFFS' ATTEMPTS TO DEPOSE MGC. On November 15, 2017, Plaintiffs filed a Rule 30(b)(6) Notice of Deposition of MGC describing nineteen "General Areas of Inquiry." (Doc # 40) On November 28, 2017, the parties agreed to schedule 30(b)(6) depositions for December 14, 20174. On December 7, 2017, Plaintiffs' filed a revised Rule 30(b)(6) Notice of Deposition of MGC (Doc # 45) narrowing down the "General Areas of Inquiry" to seven, and it including fourteen "Documents or Things Requested" to be produced prior to the deposition. MGC filed its objections to both notices on December 11, 2017 (Doc.s 46, 47) but it did not seek a ruling or file a motion for protective order at any time; and it did not seek to postpone the deposition in order to gather documents and witnesses. The objections to the first notice are irrelevant due to the filing of the revised notice. As to the revised notice, MGC objected to every aspect of the notice and associated document request on the basis of boilerplate objections as privileged, "overly broad and unduly burdensome"; "vague"; "lack[ing] specificity"; "not relevant"; "not reasonably calculated to lead to the discovery of admissible evidence"; and "not in any way limited to the transaction at issue in this litigation." (Doc. 47.) MGC announced that it would not designate a witness to testify on any of the areas of 4 Plaintiffs' Discovery Exhibit III, at 12/28/2017 letter from Salvo; E-mail exchange between Salvo and Medley. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 15 of 25 Page 16 of 25 inquiry and that it would only "designate and make available a representative to testify regarding the documents produced by it as part of this litigation." (Id.) (emphasis added) But, in the same objections, it claimed that the requested information "is contained in documents produced by Cenlar to date in this litigation and, therefore, this topic should be addressed by a Cenlar representative(s) and not by MGC." (Id. at responses to general areas of inquiry 1-8; and document requests 1-3; 9-12) MGC was not at liberty to refuse to name and produce a witness to testify to what MGC knows about this case, regardless of whether the information was produced by it or any other person or entity. "The persons designated must testify about information known or reasonably available to the organization." Fed. R. Civ. P. 30(b)(6). Plaintiffs had no duty to challenge these objections and were well within their rights to proceed to deposition with the expectation of MGC's full compliance with the Rules of Discovery. Plaintiffs are not required to act as MGC's helpers in this adversarial matter. At the December 14, 2017 deposition, MGC's sole (undesignated) witness, "quality control manager"5 Kristi Cook, was not prepared to answer as to the areas of inquiry described in the notice of deposition and other discoverable topics relating to Plaintiffs' loan and complaint,6 even though she had access to all documents relating to the Plaintiffs' loan, including insurance.7 MGC did not produce a single document and the witness had none with her at deposition.8 In her preparations, Cook reviewed no MGC documents or information at all, but only the transaction history provided by Cenlar (even though MGC specifically objected beforehand that it would only testify about documents produced by MGC); and she did not know much about those 5 Cook Dep. p 4/15, filed herewith as "Plaintiff's Discovery Exhibit V" 6 Id. p 20/24-25 7 Id. p 27/13-15 8 Id. p 37/11 Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 16 of 25 Page 17 of 25 few Cenlar documents that she reviewed9. She could not testify about charges to the loan: "I don't memorize the charges on the loan."10 Counsel objected to questioning deemed to be outside the areas of inquiry described in the notice, including those related to "quality control" (Ms. Cook's only stated area of knowledge and her actual job title) and Plaintiffs' loan: "quality control activities with regard to this loan, it wasn't an area of inquiry."11 Counsel instructed her not to answer on behalf of MGC (which was her sole function at this corporate deposition - she was not there to answer on her own behalf) as to quality control issues: "Any more detail about quality control reviews, I'm going to have to limit her testimony."12 But, there was no objection on grounds that any quality control issue was privileged. MGC counsel actually answered for Ms. Cook as to what she knew/did not know13. Ms. Cook stated that MGC possesses the quality control-related documents requested in Plaintiffs' requests, even though she did not know the information in them and had not brought them to the deposition.14 Notably, Mr. Ortega and Mr. Salvo both offered objections at this deposition, seemingly on behalf of MGC. Counsel objected that questions about contracts or agreements between the defendants, pertaining to the loan, are "outside the scope of discovery"15. None of MGC counsel's actions (or Cenlar counsel's either) are permitted under our Rules, but some are particularly egregious. Fed. R. Civ. P. 30 provides that Plaintiffs did not have to be specific or detailed in describing the topics or areas of inquiry, but only reasonable; and, that MGC was required to 9 Id. p 21/21-24 10 Id. p 22/18 11 Id. p 19/18-19 12 Id. p 35/25-36/1 13 Id. p 13/2-13 14 Id. 39/2-10 15 Id. 29/11-16 Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 17 of 25 Page 18 of 25 designate and produce witnesses to testify to all information reasonably available to MGC pertinent to the case, not limited to those in the notice. In its notice ... a party may name as the deponent a ... private corporation, ... and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more ... persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify.... The persons designated must testify about information known or reasonably available to the organization. Fed. R. Civ. P. 30(b)(6). But, Plaintiffs were specific and detailed in their notice and production requests, more as a courtesy to MGC than anything else. MGC had no right to refuse to designate witnesses and produce them. It had no right to limit or prevent their testimony on non-privilege grounds and surely no right answer for the witness. Rule 30 does not limit the deposition topics to those in the notice and MGC was not permitted to refuse to answer (or provide witnesses to answer) as to any non-privileged information that MGC 'knows' or is "reasonably available" to MGC. In fact, Rules 26 and 30 require answers on any relevant non-privileged topic: An objection at the time of the examination--whether to evidence, to a party's conduct, to the officer's qualifications, to the manner of taking the deposition, or to any other aspect of the deposition--must be noted on the record, but the examination still proceeds; the testimony is taken subject to any objection. An objection must be stated concisely in a nonargumentative and nonsuggestive manner. A person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation ordered by the court, or to present a motion under Rule 30(d)(3). Fed. R. Civ. P. 30(c)(2) (emphasis added) Here, there is no limiting court order and no motion was presented under 30(d)(3) to terminate or limit the deposition. MGC counsel did not even say the word "privilege" at any time during the deposition (nor did Cenlar counsel). (Cook Deposition, Plaintiff's Discovery Exhibit V) "A party ... from whom discovery is sought may move for a protective order ... The court Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 18 of 25 Page 19 of 25 may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense..." Fed. R. Civ. P. 26(c). But, MGC did not file such a motion. It did not seek a ruling on its (unfounded boilerplate) objections to the notice and production request. MGC's undesignated witness was unprepared to answer as to most topics and did not have a scrap of paper with her. MGC did not produce a single document prior to or at deposition. Counsel disrupted the questioning with improper lengthy speaking objections that suggested how the witness should answer16. MGC improperly directed the witness not to answer. And MGC counsel actually answered for the witness, twice. For these reasons, the Court should compel MGC's compliance and issue appropriate sanctions. See, e.g., Storer v. Crown Cork & Seal Co., CV 14-2488, 2017 WL 424890, at *2 (W.D. La. Jan. 31, 2017) (granting motion to compel ordering production of witnesses prepared to testify as to all matters designated, and awarding attorney's fees after 30(b)(6) witness was unprepared to testify as to many areas described in the notice; no protective order was sought; and counsel instructed the witness not to answer.) In addition, because all of this abusive deposition conduct took place on the eve of the discovery deadline, the Court should find that MGC's and its counsel's tactics are obstructionist, as have been all of MGC's disclosures and discovery responses to date. No authority supports such a blatant refusal to cooperate in discovery. Plaintiffs provided MGC with several 'good faith' letters attempting to give MGC an opportunity to comply with the Rules and Plaintiffs provided a draft of the current Motion to Compel and for Sanctions in advance of filing, as a further opportunity to voluntarily provide compliant responses to Plaintiffs' interrogatories and document requests, and 30(b)(6) notice of deposition. But MGC's and its counsel's failure to take that opportunity bespeaks arrogant disregard of the Rules, the authority of this Court and Plaintiffs' rights. It shows MGC's 16 (See Cook Dep. pp 9; 12; 13; 15; 18; 19; 21; 25; 27; 28; 33; 36-37; 39; 40; and 43) All testimony consists of only 51 pages, of which counsel's speaking objections are a significant portion, on 16 pages. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 19 of 25 Page 20 of 25 intent to thwart Plaintiffs' attempts to obtain information beginning nearly two years ago, when they refused to name persons in their January 2016 initial disclosures. But, compelling their compliance now will not be sufficient, because Plaintiffs have spent a good deal of time and money, making discovery requests; writing good faith letters stating why MGC must comply with the Rules; drafting 30(b)(6) notices; and, attempting to take MGC's deposition. Plaintiffs have not procrastinated on these issues. The timelinei of disclosures, discovery, good faith letters and motions to compel (included here as an endnote for ease of reference) shows Plaintiffs' diligence. (Emails exchanged by Plaintiffs' counsel and MGC counsel referred to in the Timeline are filed herewith as "Plaintiffs' Discovery Exhibit VI"), two years into this case, the discovery deadline has passed and MGC has not identified a single person (other than Plaintiffs) who knows facts relevant to this case. MGC provided (without designating) a "quality control" witness for deposition; but she was not prepared to answer to most issues relevant to this case, including quality control and other areas of inquiry on the notice of deposition. MGC guided the testimony with speaking objections and prevented the witness from answering what she did know, even as to quality control issues. And MGC counsel went so far outside the bounds of the Rules as to answer for her, twice: Q. So I believe you said you've reviewed the -- the Notice of Deposition, and that's been made an exhibit to your testimony? A. Yes, I have. Q. So you're familiar with the items that are in there? A. Yes, I am. Q. So have you reviewed the transaction detail sheet for these plaintiffs? MR. SALVO: Object to the form. THE WITNESS: Yes, I have. Yes, I have. Q. And so you're familiar with the insurance policies that they had in place in there on this loan? A. Yes. [Lengthy speaking objection by Mr. Salvo] Q. So you're telling us, based on that objection, that you don't know about those documents? Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 20 of 25 Page 21 of 25 MR. SALVO: No, I said she had a general understanding of the insurance placed in the -- with regard to this loan, but in terms of details, what's in those documents, you can certainly ask her what level she knows. What I'm saying, in terms of my objection, those documents, questions about those documents is something that is - -should be directed to Cenlar. (Plaintiffs' Discovery Exhibit V, Cook Dep pp 11/22-25; 12/1-11; 13/2-13) (emphasis added) Q. ... and so now you're telling me that you oversee what TENA does. MR. SALVO: No, that misstates, I think, what she said, but go ahead with your questions, and we'll just see. (Id. p 19/2-6) (emphasis added). MGC's obviously intentional refusals, repeatedly, to provide requested, required, information in this case should be met with sanctions beyond merely compelling compliance and awarding motion-related attorney's fees. At this late date, ordering compliance alone may benefit Plaintiffs somewhat, but it will also serve to reward MGC and its counsel for the last two years of obstructionist behavior, making them more likely to repeat it in this case and perhaps others. The automatic sanction in Rule 37 is designed to encourage compliance with discovery/disclosure in the future, too, not merely to punish for failure to comply in the past. See, e.g., Harris v. United States, 132 Fed. Appx. 183, 184 (9th Cir. 2005). “If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed.R.Civ.P. 37(c). According to the Advisory Committee Note to Rule 37, this sanction provides “a strong inducement for disclosure of material that the disclosing party would expect to use as evidence, whether at a trial, at a hearing, or on a motion,” by the deadline. Specifically, the purpose of Rule 26(a)(2) is to “eliminate unfair surprise to the opposing party.” Lindsay v. Houseworth, 3:16CV33-NBB-RP, 2017 WL 4413041, at *2 (N.D. Miss. Oct. 4, 2017) (citations omitted) (emphasis added). Thus, MGC should not be allowed to present any unnamed witness to testify on any issue, or to offer any "information" or documentary evidence MGC did not produce - the automatic Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 21 of 25 Page 22 of 25 sanction in Rule 37(c). See, e.g., S. States Rack & Fixture, Inc. v. Sherwin–Williams, Co., 318 F.3d at 595 n. 2; Klonoski v. Mahlab, 156 F.3d 255, 269 (1st Cir.1998) (“[T]he new rule clearly contemplates stricter adherence to discovery requirements, and harsher sanctions for breaches of this rule... The Advisory Committee Notes describe it as a “self-executing,” “automatic” sanction to “provide [] a strong inducement for disclosure of material.... Fed.R.Civ.P. 37 advisory committee's note (1993).") Accord, Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). MGC's supplemental responses to Interrogatory # 5 listed documents it might use at trial. But it should not be allowed to use them because MGC failed to disclose them in its initial disclosures and it has never stated which of these documents is responsive to any other interrogatories or production requests. Its evasive answers, described herein and in the accompanying motion, refer to documents that will be or have been produced, but they do not state by whom and when. This alone is an evasion that should be treated as a failure to respond, per Fed. R. Civ. P. 37(a)(4). Rule 34 requires a party to "label" documents as responsive to a given request: "A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request." Fed. R. Civ. P. 34(b)(2)(E)(i). MGC's supplemental answers to interrogatory # 5 list 2067 documents it might rely on at trial, most of which are not produced by MGC. Most of them come from Cenlar, insurance companies and Plaintiffs, and, therefore, they are not produced as MGC kept them "in the usual course of business" per Rule 34. These documents do not provide the identities and subjects known by potential MGC witnesses. Many of the 2067 listed documents are letters on MGC letterhead, which are not Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 22 of 25 Page 23 of 25 signed by a person. By way example only, some are signed, "Insurance Department." (Plaintiffs' Discovery Exhibit VIII, Cenlar 001234-5; 001244-46; 001262-1264). As a result, MGC should not be allowed to offer any documentary evidence at trial, per the automatic, self-executing sanction in Rule 37. And the Court should implement this automatic sanction regardless of whether the Court finds willfulness or bad faith by MGC, even though it may preclude MGC from mounting a defense at trial. See, e.g., Hoffman v. Constr. Protective Servs., Inc., 541 F.3d 1175, 1180 (9th Cir. 2008), as amended (Sept. 16, 2008) ("We reject the notion that the district court was required to make a finding of willfulness or bad faith ... To the contrary, the portion of Rule 37 relied on ...has been described as “a self-executing, automatic sanction to provide a strong inducement for disclosure of material. The implementation of the sanction is appropriate “even when a litigant's entire cause of action ... will be precluded.”) (internal citations and quotation marks omitted)). CONCLUSION On the basis of all of the materials and information offered in support of the current motion, Plaintiffs move the Court to overrule MGC's objections to Plaintiffs' discovery requests; to deem MGC's discovery responses to be evasive; and to treat them as a failure to respond. Plaintiffs further request that the Court compel MGC to provide full amended disclosures; full responses to Plaintiffs' Interrogatories and Request for Production of Documents; and to designate and provide witnesses to testify per the 30(b)(6) notice within 10 days of the Order, at MGC's expense. Plaintiffs further request appropriate sanctions including reimbursement of Plaintiffs' costs associated with the Cook deposition; Plaintiffs' attorney's fees necessitated by MGC's obstruction of discovery; striking MGC's affirmative defenses; prohibiting its presently unidentified witnesses from testifying on any issue at trial; prohibiting MGC from offering any document or information Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 23 of 25 Page 24 of 25 at trial; and, any and all other sanctions the Court deems appropriate. Respectfully submitted, this the 16th day of January, 2018. s/ Donald W. Medley____________ Donald W. Medley Attorney for the Plaintiffs i TIMELINE 01/31/2017 MGC initial disclosures 06/07/2017 Plaintiffs' interrogatories and request for production of documents to MGC 07/07/2017 MGC email requesting extra time to respond to Plaintiffs' discovery 1 hour before end of business hours on due date. (Plaintiffs did not agree) 09/11/2017 MGC (late) responses to Plaintiffs' interrogatories/production requests (narratives only, no documents produced) 09/12/2017 Plaintiffs' counsel email to MGC requesting info required in Initial Disclosures 09/15/2017 MGC produces some documents by email 09/19/2017 Plaintiffs' counsel letter to MGC counsel 09/25/2017 MGC counsel letter refusing to provide discovery 10/11/2017 Plaintiff moved to compel discovery 10/22/2017 - 10/26/2017 Plaintiff's counsel exchanges numerous emails with MGC counsel 10/30/2017 Plaintiffs' motion denied without prejudice 11/15/2017 Plaintiffs served 30(b)(6) notice on MGC 11/16/2017 Plaintiffs' counsel letter to MGC counsel again requesting discovery 11/22/2017 MGC counsel letter refusing to provide discovery 11/27/2017 MGC supplemental discovery responses refusing to provide discovery 11/28/2017 All counsel agree by email to schedule 30(b)(6) depositions for 12/14/2017 12/07/2017 Plaintiffs serve revised 30(b)(6) notice 12/11/2017 MGC files objections to both notices 12/14/2017 30(b)(6) depositions take place 12/21/2017 Plaintiffs' counsel letter to MGC counsel again requesting discovery 12/28/2017 MGC counsel letter refusing to provide discovery 12/29/2017 Discovery deadline 12/29/2017 MGC 2d supplemental response to interrogatory #5 only 01/04/2018 Plaintiffs' counsel provides MGC counsel with draft motion to compel and final request for voluntary compliance with discovery rules. Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 24 of 25 Page 25 of 25 CERTIFICATE OF SERVICE I, Donald W. Medley, do hereby certify that I have this day caused to be served the foregoing, via the electronic filing system to: R. Ryan Daugherty Juan C. Ortega Sirote & Permutt, PC 2311 Highland Avenue South P.O. Box 55727 Birmingham, AL 35255-5727 rdaugherty@Sirote.com Frederick N. Salvo, III Brenton W. Cole Baker Donelson PC 100 Vision Drive, Ste. 400 P.O. Box 14167 (39236-4167) Jackson, MS 39211 fsalvo@bakerdonelson.com This, the 16th day of January, 2018. s/ Donald W. Medley Donald W. Medley Attorney for the Plaintiff Donald W. Medley MS Bar #2832 don@medleylawgroup.com Medley Law Group 902 West Pine Street Hattiesburg, MS 39401 Tel: 601-544-8110 Fax: 601-544-8158 Case 3:16-cv-00814-WHB-JCG Document 52 Filed 01/16/18 Page 25 of 25