Wells Fargo Bank, National Association v. Barrington Park Owner LLC
- Ho
- 1:23-cv-09972
- U.S. District Court · Southern District of New York
- 4
Wells Fargo v. Barrington Park: Judge Ho granted requests to extend discovery and issue third-party subpoenas in a receivership dispute.
Wells Fargo Bank, National Association; Barrington Park Owner LLC and the other defendants; the Receiver; Shadow Creek Owner, LLC; and the subpoenaed nonparties JP Morgan Chase Bank, Iron Hound Management Company, LLC, and Ernst & Young.
What happened
In Wells Fargo Bank, National Association v. Barrington Park Owner LLC, the Receiver brought the court a dispute about whether a property called Tract 2 was part of Wells Fargo’s secured collateral. Wells Fargo asked for 30 more days of discovery and permission to subpoena three nonparties: JP Morgan Chase Bank, Iron Hound Management Company, LLC, and Ernst & Young.
The defendants objected, arguing that the subpoenas were late and would complicate their ability to prepare their defenses. The court found good cause because of the recent dispute about the Shadow Creek Apartments and concluded that the subpoenas sought relevant information and would cause little or no prejudice.
Judge Dale E. Ho granted both requests. The court ordered document production completed by September 30, 2024, all discovery completed by October 30, 2024, and adjourned the scheduled conference to November 12, 2024; the parties had to submit a joint status letter by November 5, 2024.
The detailed version
- Wells Fargo Bank, National Association v. Barrington Park Owner LLC · No. 1:23-cv-09972
- Ho
- Aug. 7, 2024
Background
On February 6, 2024, the court entered an interim order appointing a receiver. The Receiver took exclusive possession and control of 27 multifamily apartment complexes in Alabama, Arkansas, Florida, Mississippi, Louisiana, Ohio, Tennessee, and Texas. The receivership order authorized the Receiver to seek instructions from the court about the receivership estate and the Receiver’s duties.
The Receiver later reported a dispute between Wells Fargo and Shadow Creek Owner, LLC, concerning the scope of Wells Fargo’s secured collateral at the Shadow Creek Apartments. Those apartments include two complexes in Lufkin, Texas: Tract 1 and Tract 2. On June 26, 2024, the court extended discovery so the parties could determine whether Tract 2 was part of Wells Fargo’s secured collateral.
Requests and objections
In a joint status letter filed August 6, 2024, Wells Fargo requested a 30-day discovery extension and permission to serve third-party subpoenas on JP Morgan Chase Bank, Iron Hound Management Company, LLC, and Ernst & Young. Wells Fargo said the subpoenas would seek information relevant to Tract 2 and whether it was intended to be part of the collateral properties.
The defendants objected that Wells Fargo and the Temporary Receiver had not explained why the subpoenas could not have been served by the court’s July 1, 2024 deadline. They also argued that the subpoenas would significantly complicate the Borrower Defendants’ ability to prepare their defenses.
Court’s ruling
The court granted Wells Fargo’s request for the third-party subpoenas and the discovery extension. Applying the federal discovery rule and its authority to manage the case, the court found good cause based on the recent dispute concerning the Shadow Creek Apartments. It concluded that each subpoena would provide relevant information about Tract 2 and that the relatively modest extension would cause little to no prejudice to the defendants.
The court adopted this schedule:
- Document production had to be completed by September 30,
- - All discovery, including depositions of parties and nonparties, had to be completed by October 30,
- The court stated that no further extensions would be granted absent compelling circumstances. - The August 13, 2024 conference was adjourned to November 12, 2024, at 10:00 a.m. Eastern Time. - The parties had to submit a joint status letter by November 5,
- The letter also had to describe their settlement efforts and state whether they wanted a referral for settlement discussions before the assigned magistrate judge or through the district’s mediation program.
This was a discovery-management order; the opinion did not decide whether Tract 2 ultimately was part of Wells Fargo’s secured collateral.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.