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Focht v. Nationstar Mortgage, LLC

United States District Court, W.D. Pennsylvania

October 2, 2019

NATIONSTAR MORTGAGE, LLC, d/b/a MR. COOPER, as successor in interest to SETERUS, INC. Defendant.



         Before the Court are Plaintiffs James and Karen Focht's Motion for Sanctions (ECF No. 31) and Itemization of Attorneys' Fees and Costs Related to Motion to Compel Discovery and Impose Sanctions. (ECF No. 29.) Defendant Nationstar Mortgage, LLC filed a response to both motions (ECF Nos. 30, 32) and Plaintiffs filed a reply. (ECF No. 33.) Accordingly, the Motion is ripe for disposition. For the reasons that follow, the Court will grant Plaintiffs' Request for Attorneys' fees in part and deny Plaintiffs' Motion for Sanctions.

         I. Background

         This case arises from a dispute regarding a mortgage on a home that Plaintiffs own in Tyrone, Pennsylvania. (ECF No. 1-3 ¶ 3.) Seterus, Inc. was the mortgage-servicing company for Plaintiffs' mortgage. (Id. ¶¶ 4-6.) Plaintiffs allege that Seterus-and its successor in interest, Nationstar Mortgage, LLC, [1] doing business as Mr. Cooper (collectively "Defendant") -violated federal and Pennsylvania law by failing to accept payment to satisfy the mortgage and failing to adequately communicate with the Plaintiffs. (ECF No. 1-3 ¶¶ 40-100.)

         a. The Fee Dispute

         The fee dispute stems from Plaintiffs' prior Motion to Compel/Motion for Sanctions (ECF No. 25), which this Court granted in part and awarded attorney's fees. (See ECF No. 28.) Plaintiffs' counsel filed a Supplement, itemizing their attorney's fees required to prepare the motion and seeks a total of $3, 227.50 (6.15 hours, billed at $250.00 per hour for $1537.50; 4.1 hours, billed at $400.00 per hour for $1640). (ECF No. 29.)

         b. The Motion for Sanctions

         The second dispute arises from Defendant's alleged failure to respond to Plaintiffs' interrogatories. (ECF No. 31.) On February 5, 2019, Plaintiffs served interrogatories on Defendant, and Defendant responded on June 12, 2019, along with objections. (Id. at ¶¶ 1-2.) In its response, Defendant did not disclose any potential individual fact witnesses; on June 17, 2019, Plaintiffs filed their first Motion to Compel in reply. (Id. at ¶¶ 3-4.) Defendant amended its responses to identify Edward Hyne, [2] a record custodian, and later amended its responses a second time to include Stephanie Colgrove. (Id. at ¶¶ 7, 9, 10.)

         Before the parties took depositions on August 8, 2019, Plaintiffs believed that most of Defendant's employees were terminated following its merger with Nationstar; during the deposition of Mr. Hyne, Plaintiffs learned that several of Defendant's employees were still employed with Defendant, rather than having been terminated following the merger. (Id. at ¶¶ 13-16.) Plaintiffs now wish to take the depositions of these employees, Stephanie Colgrove, Kayla Heady, Hyuen Nguyen, and Jennifer Moorman (the "Employees"), or bar Defendant from introducing their testimony at trial.

         The Employees are located at Defendant's Beaverton, Oregon office, and Defendant has offered to make them available by telephone. (ECF No. 32 at ¶ 22.) At the parties' post-discovery status conference, the Parties and the Court discussed the issue (see ECF No. 34), and the parties agreed that conducting depositions via videoconference would be appropriate.

         The Court will address the parties' arguments in turn.

         II. Legal Standard

         Rule 37 provides the mechanism to compel discovery from a person or party who refuses to provide discovery. See Fed R. Civ. P. 37. Rule 37 allows this Court to levy sanctions on a party who fails to disclose, supplement, or "provide information or identify a witness as required by Rule 26(a) or (e)." Id. Rule 37(c)(1). When a party fails to provide that information, the Court may sanction that party by barring the testimony of the witness, unless the failure to disclose was either "substantially justified" or "harmless." Id. The Court may also order other sanctions, including requiring the noncompliant party to pay attorneys' fees, inform the jury of that party's failure, or impose "other appropriate sanctions," including those under Rule 37(b)(2)(A)(i)-(iv).[3] Id.

         In determining whether to preclude the testimony of witnesses that a party fails to disclose, this Court considers several factors: (1) the prejudice to the surprised party; (2) the ability of the surprised party to cure that prejudice; (3) the disruption of trial caused by a waiver of the rule barring the calling of an unlisted witness; and (4) willfulness or bad faith in the withholding party's failure to comply with the Court's order. Smith v. Allstate Ins. Co.,912 F.Supp.2d 242, 249 (W.D. Pa. 2012) (citing Meyers v. Penny-pack WoodsHome ...

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