Loancare LLC v. Dimont & Associates, LLC

Background

Loancare brought claims against Dimont concerning alleged improper processing of more than 20,000 reimbursement claims connected to federally backed home loans that had gone into foreclosure. According to Dimont’s filing, Loancare sought damages for claims involving expenses such as inspections, lawn care, utilities, maintenance, taxes, and related interest.

Dimont said the parties used cloud-based software systems established by Loancare, and that Dimont generally did not keep local copies of the supporting claim documents. After Loancare terminated Dimont’s access to those systems, Dimont said it could no longer review the disputed claims. Loancare later produced approximately 1.5 million documents, which Dimont estimated represented about 15 million pages.

Discovery-extension request

Dimont asked for a three-month extension of the discovery deadlines. It argued that it needed time to review Loancare’s production, produce its own electronically stored information, and prepare witnesses for depositions. Dimont also described delays involving the transition of its loan-processing division to co-defendant Investor Claims Solutions, LLC, and problems backing up its emails. Of 21 deposition notices served on Dimont, Dimont stated that only three of the listed individuals remained affiliated with it.

Dimont further stated that Loancare had not produced damages documentation before an earlier settlement conference and did not produce a spreadsheet allegedly showing damages until July 3, 2023. Loancare did not consent to the requested extension. Investor Claims Solutions consented.

Ruling

Federal Rule of Civil Procedure 16(b)(4) allows a scheduling order to be modified for good cause and with the judge’s consent. The court stated that good cause depends on the moving party’s diligence. The court was not persuaded that Dimont had shown, or could show, good cause for the requested three-month extension.

The court nevertheless extended the discovery deadlines by one month. It ordered Dimont to respond fully to Loancare’s March 14, 2023 demands by July 28, 2023; produce a list of Investor Claims Solutions employees by July 12, 2023; and promptly schedule three employee depositions to occur no later than August 4, 2023, unless the parties agreed otherwise or the court granted permission to change those requirements. The court rescheduled the next pretrial conference for October 18, 2023, at 9:00 a.m., and cautioned that counsel should not expect further discovery extensions if the lack of progress continued.

Disposition

The court granted a one-month discovery extension rather than the three-month extension Dimont requested.