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Gregg A. Stanford v. Ocwen Federal Bank

February 15, 2012


The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge


Previously pending on this court's law and motion calendar for February 9, 2012, was defendants' motion for monetary and terminating sanctions, filed January 26, 2012. Plaintiff filed an opposition on February 2, 2012. Chris Chapman appeared telephonically for defendants. Plaintiff made no appearance.*fn1 Having reviewed the papers in support of and in opposition to the motion and heard oral argument, the court now issues the following order.


Moving defendants are Ocwen Loan Servicing, LLC, successor in interest to Ocwen Federal Bank, FSB, and Bank of America, National Association as Successor by merger to LaSalle National Bank Association, as Trustee for the Certificateholders of the Mortgage Pass-Through Certificates 1997-R2 (erroneously sued as "Lasalle National Bank").

This action was originally filed in state court and removed to this court on July 8, 2010. After various motions, the case is proceeding on the second amended complaint, but only on the breach of contract claim. Plaintiff alleges that defendants did not reduce the principal balance on his home loan as agreed to in the contract for loan modification. Defendants point out that plaintiff has not made a payment on his loan since December, 2006, and for this reason it is apparent that plaintiff is in no hurry to prosecute this case.

Defendants previously brought a motion to compel plaintiff's attendance at deposition, in which they represented that they had twice noticed plaintiff's deposition, on October 13 and December 6, 2011,*fn2 only to receive a phone call from plaintiff's counsel the day before the scheduled depositions, telling them that plaintiff had disappeared and could not be located. Defendants sought and received an order setting plaintiff's deposition for January 26, 2012.*fn3 The order noted that plaintiff's counsel's actions were beyond reproach; however, plaintiff's own actions were not substantially justified. The order stated that "facts before the undersigned suggest that plaintiff is purposefully stalling his own prosecution of this action for reasons of remaining in his house -- payment free." (Order, filed January 6, 2012.)

The instant motion indicates that plaintiff did not appear at the re-scheduled deposition on January 26, 2012, but called his attorney on that date to prepare for his deposition which he claims he thought was on January 27th. Plaintiff contends that he made a mistake in scheduling his deposition. Plaintiff has now failed to appear at three scheduled depositions, and finally paid the monetary sanctions imposed in the previous order, but not within the time required by the order. The court finds plaintiff's most recent excuse not to be credible.

Defendants seek terminating sanctions under Rule 37(b) (2)(A)(v) and expenses in the amount of $3,730.90*fn4 under 37(d)(3) and (b)(2)(A)(v).


Rule 37 authorizes "a wide range of sanctions" for a party's failure to comply with discovery rules or court orders enforcing them. Wyle v. R.J. Reynolds Industries, Inc., 709 F.2d 585, 589 (9th Cir. 1983). Penalizing a party "for dilatory conduct during discovery proceedings" is discretionary. Bollow v. Federal Reserve Bank of San Francisco, 650 F.2d 1093, 1102 (9th Cir. 1981) (citing Fed. R. Civ. P. 37(a)(4)).

Fed. R. Civ. P. 37(a)(5) provides in part that if the motion to compel is granted "the court must, after giving an opportunity to be heard, require the party...whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorneys' fees. But the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(a)(5)(A).

Precluding evidence so that the recalcitrant party cannot support defenses is comparable to entering dismissal, which "represent[s] the most severe penalty that can be imposed." U.S. v. Kahaluu Const., 857 F.2d 600, 603 (9th Cir. 1988); accord, Valley Engineers v. Electric Engineering Co., 158 F.3d 1051 (9th Cir. 1998). Accordingly, such sanctions are authorized only in "extreme circumstances" for violations "due to willfulness, bad faith, or fault of that party." Kahaluu Const., 857 F.2d at 603; see also Commodity Futures Trading Com'n v. Noble Metals Intern., Inc., 67 F.3d 766,770 (9th Cir. 1995) (affirming standard and upholding sanctions in egregious circumstances).*fn5 Bad faith does not require actual ill will; substantial and prejudicial obduracy may constitute bad faith. B.K.B. v. Maui Police Dept., 276 F.3d 1091, 1108 (9th Cir. 2002).

Five relevant factors also determine whether severe sanctions ...

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