Dekker v. Cenlar FSB

Background

Justin J. Dekker and Michelle K. Dekker alleged that they submitted a mortgage-loss-mitigation application to CitiMortgage, Inc. in 2017 and that CitiMortgage transferred servicing of the loan to Cenlar FSB in April 2019. They asserted multiple claims involving loss-mitigation procedures, foreclosure activity, mortgage servicing, federal regulations, and related state-law theories.

The plaintiffs moved to compel discovery responses from both defendants. The court applied Federal Rule of Civil Procedure 26, which permits discovery of nonprivileged information relevant to a claim or defense and proportional to the needs of the case. The court emphasized that parties must show some relevance and that discovery may be limited when its burden outweighs its likely benefit.

Rulings on Discovery Requests

- Document Requests 1 and 2: The motion was denied as moot because the plaintiffs and CitiMortgage agreed that those disputes had been resolved. - Document Request 5: The motion was granted in part and denied in part. The defendants were ordered to supplement their production within 30 days, if they had not already done so, with documents from fall 2017 through January 2021 concerning loss mitigation or the loss-mitigation application for the account. This included applicable investor guidelines and screenshots for loan-modification or forbearance activity. The motion was denied as to documents outside that period or documents already produced. - Document Request 7: The motion was granted in part and denied in part. Within 30 days, the defendants had to provide a definitive statement about whether they had produced all responsive call recordings, explain the search process and whether recordings fell outside a retention period, and provide any responsive recordings located after the hearing. The motion was otherwise denied. - Document Request 9: The motion was granted in part and denied in part. The defendants had to produce responsive communications specifically about the plaintiffs’ loan within 30 days, if they had not already done so. They did not have to produce communications concerning the broader pool of loans because the plaintiffs had not shown sufficient relevance and the request would be disproportionate and burdensome. - Document Requests 10 and 13: The motion was granted in part and otherwise denied. The defendants had to produce a redacted copy of their subservicing agreement, limited to information concerning their relationship about the loss-mitigation matters at issue. They did not have to produce the broader categories of documents concerning their entire business relationship. - Document Request 14: The motion was granted in part and denied in part. The defendants had to produce documents between themselves and Wells Fargo Bank, N.A. that related specifically to the plaintiffs’ loan. They did not have to produce documents concerning the broader pool of loans. - Document Request 15 and the second set of production requests to Cenlar, Nos. 1 and 2: The motion was granted in part and denied in part. The defendants had to produce relevant loss-mitigation policies and procedures, including procedures explaining how foreclosure is handled when a loss-mitigation application is pending. They did not have to produce general foreclosure procedures unrelated to pending loss-mitigation applications. - Document Request 16 and Interrogatory No. 4: The motion was granted in part and denied in part. The court found the plaintiffs’ request for every complaint, judgment, final order, or settlement involving the defendants over an unlimited period too broad and burdensome. It instead required the defendants to produce or identify judgments entered against them in any federal district court in the United States between September 16, 2017, and September 16, 2022, involving the specified loss-mitigation, foreclosure, servicing, and related allegations. - Document Request 23: The motion was granted in part and denied in part. CitiMortgage had to produce a glossary describing non-obvious terms in its produced documents or definitively state within 30 days that it had searched for such a glossary and did not have one. - Interrogatory No. 5: The motion was granted in part. The defendants had to supplement their answers with their net worth, gross revenue, and net revenue for 2018 through 2021, but only after summary judgment if the plaintiffs’ punitive-damages claims survived summary judgment. The information would then be due within 30 days of the summary-judgment order. - Interrogatories Nos. 1, 2, and 3 to CitiMortgage: The motion to require supplemental answers was denied. The court concluded that CitiMortgage properly answered by identifying documents from which the requested information could be determined. - The second set of production requests to CitiMortgage, Nos. 1 and 2: The motion was granted as to Request No. 1. CitiMortgage had to produce relevant continuity-of-contact policies and procedures from September 2017 through April 1, 2019, within 30 days, if it had not already done so. The motion was denied as to Request No. 2 because the request for broad reports to agencies, shareholders, or corporate officers was not sufficiently limited or proportional.

Attorney Fees and Final Order

The plaintiffs requested attorney fees and costs for bringing the motion. Judge Tony N. Leung denied that request, reasoning that the motion had been granted in part and denied in part and that an award would be unjust under the circumstances. The final order granted in part and denied in part the motion to compel, required each party to bear its own costs and attorney fees, and stated that failure to comply could result in sanctions or other remedies.