United States District Court, E.D. California
ORDER ON DEFENDANT SELECT PORTFOLIO SERVICING,
INC.’S MOTION TO COMPEL RESPONSES, FOR SANCTIONS
AGAINST PLAINTIFFS, AND TO MODIFY THE COURT’S
SCHEDULING ORDER (DOC. 13)
SHEILA
K. OBERTO UNITED STATES MAGISTRATE JUDGE
I.
INTRODUCTION
Plaintiffs
Ivan and Tammi Coronado filed suit against various corporate
entities involved in the ownership, servicing, and
non-judicial foreclosure of their home. (Doc. 1-4
(Complaint).) Defendant Select Portfolio Servicing, Inc.
(“SPS”) seek to compel discovery related to
Plaintiffs’ allegations “regarding the alleged
fraudulently recorded documents, communications related to
the Loan, Plaintiffs’ Loan payments, Plaintiffs’
default, non-judicial foreclosure proceedings,
Plaintiffs’ alleged damages and other documents and
information related to the causes of action asserted in
Plaintiffs’ Complaint.” (Doc. 13 (Motion to
Compel Responses (“Motion”), p. 5.)
Because
this information is necessary for SPS to adequately notice
and prepare for Plaintiffs’ depositions and fully
prepare its motion for summary judgment, SPS’s motion
to compel is GRANTED. The scheduling order will be MODIFIED
to allow the parties sufficient time to complete and review
non-expert discovery. Finally, SPS’s motion to impose
monetary sanctions against Plaintiffs to compensate SPS for
its time and expenses in preparing the Motion is GRANTED in
part.
II.
Background
In
September 2006, Plaintiffs obtained a home loan (the
“Loan”) from Central Pacific Mortgage Company
(“Central”) for $380, 000.00 to purchase real
property located at 820 East Ashlan Avenue, Fresno,
California 93704 (the “Property”). (Compl.,
¶ 21.) In connection with the Loan, Plaintiffs executed
a deed of trust (“DOT”) in favor of Mortgage
Electronic Registration Systems, Inc. (“MERS”) as
nominee for Central and Central’s successors and
assigns, securing the promissory note (“Note”)
Plaintiffs executed in connection with the purchase of the
Property. (Id.)
On
April 8, 2013, MERS recorded an Assignment of the Deed of
Trust (“Assignment”), evidencing MERS’s
assignment of the DOT to the Bear Sterns Mortgage Funding
Trust.[1] After SPS began servicing the Loan,
Plaintiffs fell behind on their Loan payments and a Notice of
Default and Election to Sell Under Deed of Trust
(“NOD”) was recorded on May 13, 2014, with the
Fresno County Recorder’s Office. (Id., ¶
23, 28.) On December 10, 2014, a Notice of Trustee’s
Sale (“NOTS”) was recorded with the Fresno
County’s Recorder’s Office, evidencing the unpaid
principal balance and other charges totaling $433, 244.08.
(Id., 33.)
On June
1, 2015, Plaintiffs filed the instant
Complaint.[2] Plaintiffs claim that (1) Defendants did
not properly account for their Loan payments; (2) Defendants
stated incorrect sums due and owing in the NOD and NOTS; (3)
Defendants failed to contact them to discuss options to avoid
foreclosure prior to recording the NOD; and (4) the chain of
title is void because MERS lacked authority to assign the
Loan to the Trust and SPS fraudulently executed a
substitution of trustee. (Id., ¶¶ 4-6,
23-25, 27-28, 30-32.) Plaintiffs alleged claims for: (1)
violation of California Homeowners’ Bill of Rights; (2)
violation of California Civil Code section 2923.5; (3)
negligence; (4) violation of California Business and
Professions Code § 17200 et seq.; (5)
constructive fraud; (6) slander of title; (7) quiet title;
(8) declaratory relief; and (9) injunctive relief.
(Id., pp. 12-29.)
Defendants
filed their Answer to the Complaint in state court on June
23, 2015. (Doc. 1-6.) On March 15, 2016, SPS served
Interrogatories, Set One, Numbers 1-22 (the
“Interrogatories”) and Requests for Production of
Documents, Set One, Numbers 1-25 (the “RFPs”)
(collectively, the “Propounded Discovery”)
separately upon each of the Plaintiffs. (Doc. 13-1
(Declaration of Kristapor Vartanian), ¶
2.)[3]
The
Propounded Discovery includes various questions and document
requests related to Plaintiffs’ allegations regarding
the alleged fraudulently recorded documents, communications
related to the Loan, Plaintiffs’ Loan payments,
Plaintiffs’ default, non-judicial foreclosure
proceedings, Plaintiffs’ alleged damages and other
documents and information related to the causes of action
asserted in Plaintiffs’ Complaint. (Id. at Ex.
A.) Defendants seek this discovery “so that they may
notice each of the Plaintiffs’ depositions in a timely
manner and to properly prepare their motion for summary
judgment within the required timeframe. Plaintiffs’
responses to the Propounded Discovery were due to SPS by no
later than April 19, 2016.” (Doc. 13, p. 2; see
also Vartanian Decl., ¶ 3.)
No
responses were received by SPS on April 19, 2016.
(Id.) On May 6, 2016, SPS sent a meet and confer
letter to Plaintiffs informing Plaintiffs that all objections
to the discovery requests are waived, and attempting to
schedule a telephonic conference to discuss the issue.
(Id. at ¶ 4, Ex. B.) The parties met and
conferred by telephone on May 10, 2016, and Plaintiffs agreed
to provide complete, verified responses, without objections,
to the Propounded Discovery (including all responsive
documents), by May 16, 2016. (Id. at ¶ 5, Ex.
C.)
On May
16, 2016, however, Plaintiffs failed to produce any responses
to the Propounded Discovery. (Id. at ¶ 6.)
Though Plaintiffs provided some documents, it is unclear the
documents include all responsive documents, because
Plaintiffs have not responded in any way to the RFPs.
(Id., ¶ 6, n. 2.) Defense counsel emailed
Plaintiffs and again informed Plaintiffs of their failure to
respond. (Id. at ¶ 7, Ex. D.) Plaintiffs
responded that “[w]e were hoping to work this out Pro
Se, but after further review of the questions . . . [w]e will
not be answering” until “we [have] retain[ed]
counsel.” (Id.) Plaintiffs still have neither
provided any responses to the Propounded Discovery nor
contacted Defendants regarding the outstanding discovery.
SPS
filed the instant motion on June 29, 2016, seeking an order
compelling Plaintiffs to respond to the outstanding
discovery, imposing sanctions on Plaintiffs, and modifying
the scheduling order to allow the completion of non-expert
discovery. (Doc. 13.) In lieu of filing an opposition,
Plaintiffs filed a notice of change of address on July 6,
2016. (doc. 14.) Out of an abundance of caution, the Court
ordered SPS to serve Plaintiffs with another copy of the
Motion at their post office box and reset the deadline for
Plaintiffs to file their opposition to the Motion, if any.
(Doc. 15.) When Plaintiffs failed to file any opposition,
pursuant to the Court’s order, the matter was deemed
unopposed and submitted on the pleadings and the hearing was
vacated. (Doc. 17.) The non-expert discovery motion deadline
is currently set for August 15, 2016. (Doc. 12.)
III.
Scope of ...