United States District Court, N.D. Texas, Dallas Division
CONRAD S. TRAUT AND CELINA M. TRAUT, Plaintiffs,
QUANTUM SERVICING, LLC, ET AL., Defendants.
MEMORANDUM OPINION AND ORDER
L. HORAN, UNITED STATES MAGISTRATE JUDGE.
Rushmore Loan Management Services LLC
(“Rushmore”) filed a Motion to Enforce Subpoena
to Third Party Residential Credit Solutions, Inc. [Dkt. No. 1
(the “Motion to Enforce”), under Federal Rules of
Civil Procedure 34, 37, and 45 asking this Court to enforce a
subpoena, dated January 3, 2018 (the “Subpoena”),
issued from the United States District Court for the District
of Massachusetts in connection with the case styled
Conrad S. Traut, et al. v. Quantum Servicing Corporation,
et al., No. 15-CV-13401-NMG (the “Massachusetts
Action”), for the deposition of a corporate
representative of Residential Credit Solutions, Inc.
(“RCS”). Through its Motion to Enforce,
“Rushmore seeks an Order compelling RCS to immediately
make a corporate representative available for a deposition,
and imposing sanctions on RCS for its refusal to comply with
the subpoena or communicate with Rushmore's
counsel.” Dkt. No. 1 at 1.
States District Judge Sidney A. Fitzwater has referred the
Motion to Enforce to the undersigned United States magistrate
judge for hearing, if necessary, and determination under 28
U.S.C. § 636(b). See Dkt. No. 6.
filed a response, see Dkt. No. 11, and Rushmore
filed a reply, see Dkt. No. 13.
reasons explained below, the Court DENIES Defendant Rushmore
Loan Management Services LLC's Motion to Enforce Subpoena
to Third Party Residential Credit Solutions, Inc. [Dkt. No.
1]. See generally Brown v. Bridges, No.
3:12-cv-4947-P, 2015 WL 410062, at *1-*4 (N.D. Tex. Jan. 30,
2015) (explaining that, when a district judge refers a motion
for sanctions to a magistrate judge, the sanction chosen by
the magistrate judge, rather than the sanction sought by the
party, governs the determination of whether Federal Rule of
Civil Procedure 72(a) or 72(b) applies and that, when the
magistrate judge finds that dismissal or another sanction
disposing of a claim or defense is unwarranted, the motion
should be characterized as non-dispositive and may be ruled
on by the magistrate judge) (followed in Green Hills Dev.
Co., LLC v. Credit Union Liquidity Servs., LLC, No.
3:11-cv-1885-L-BN, Dkt. No. 373 at 2 (N.D. Tex. Dec. 1,
Subpoena was properly issued by the United States District
Court for the District of Massachusetts under Federal Rule of
Civil Procedure 45(a), as the court where the Massachusetts
Action is pending. See Fed. R. Civ. P. 45(a)(2)
(“Issuing Court. A subpoena must issue from the court
where the action is pending.”).
Subpoena commands a corporate representative of Residential
Credit Solutions, Inc. to appear for a deposition at a
location in Dallas, Texas on January 8, 2018 at 2:30 p.m.
See Dkt. No. 3 at 34 of 42.
the Subpoena requires compliance in Dallas, any
subpoena-related motion is properly filed in this Court,
which, as required by Rule 45, is the court in the district
where compliance with the Subpoena is required. See
Fed. R. Civ. P. 45(d), 45(e)(2)(B), 45(f) 45(g); accord
CSS, Inc. v. Herrington, No. 3:17-mc-71-N-BN, 2017 WL
4750707 (N.D. Tex. Oct. 20, 2017).
further explains the background to its Motion to Enforce as
On or about June 11, 2007, Conrad Traut
(“Conrad”) signed an Adjustable Rate Note in the
original principal amount of $415, 200 (“Note” or
the “Loan”) payable to American Home Mortgage,
and he and his wife, Celina Traut (collectively
“Trauts”) signed a mortgage (the
“Mortgage”) granting Mortgage Electronic
Registration Systems, Inc. a security interest in the
property located at 19 Longmeadow Lane, Sharon, Massachusetts
In 2007, when Quantum Servicing LLC (“Quantam”)
was servicing the loan, the Trauts defaulted. The Trauts
attempted to cure the default by entering into a forbearance
agreement, which they believed was the first step towards
reinstating and modifying the loan. In 2012, prior to Quantum
modifying or reinstating the loan, servicing of the Mortgage
transferred to RCS. RCS refused to honor the Forbearance
Agreement or any commitments the Trauts believed they had
received from Quantum. RCS also failed to properly evaluate
the Trauts for a loan modification. In 2015, servicing of the
Mortgage was transferred to Rushmore. The Traut's have
continued to dispute the status of the loan and their right
to a loan modification.
On September 21, 2015, the Trauts filed an initial Complaint
against the Quantum, RCS and Rushmore asserting claims
related to the servicing of their loan. In August 2017, after
the Trauts and RCS reached a settlement agreement, the Trauts
agreed to dismiss their claims against RCS.
On or about January 3, 2018, Rushmore served RCS with a
subpoena for a corporate representative to attend a
deposition in Dallas, Texas on January 8, 2018 (a copy of the
subpoena is attached as Exhibit 2). On January 8, 2018,
counsel for RCS emailed counsel for Rushmore stating that RCS
agreed to be deposed, but could not be deposed on January 8,
2018 (a copy of the January 8, 2018 email is attached as
Exhibit 3). Counsel for Rushmore subsequently sent various
emails and left voice messages for counsel for RCS, which
went unanswered. On January 17, 2018, counsel for RCS finally
responded, only to state that he “had a message into
RCS and will respond to you no later than tomorrow” (a
copy of the January 17, 2018 email is attached as Exhibit 4).
No. response was forthcoming.
Counsel for Rushmore sent additional emails and left
additional voice mails attempting to reschedule the
deposition. These calls and voice mails went unanswered. On
January 29, 2018 and January 31, 2018, counsel for Rushmore
sent emails to Counsel for RCS stating that if RCS was
unwilling to communicate with Rushmore, Rushmore would be
forced to file a Motion to Compel, and that Rushmore
considered RCS's conduct to be a violation of Local Rules
CV-7(h) and AT-3 (a copy of the January 29 and 31, 2018
emails are attached as Exhibit 5). Rushmore has still not
received any response to its attempts to reschedule the
RCS currently maintains a corporate headquarters in Fort
Dkt. No. 2 at 1-3 (footnote omitted).
RCS responds with its own take on the factual background,
explaining that [t]he subpoena was issued in a case pending
in the United States District Court for the District of
Massachusetts, captioned Traut, et al. v. Quantum
Servicing Corporation, et al., No. 15-CV-13401-NMG. On
September 21, 2015, Plaintiffs Conrad and Celine Traut
(“Plaintiffs”) brought suit against Quantum
Service Corporation (“Quantum”), Rushmore and
RCS, among others, in an action relating to a residential
loan and mortgage. See Ex. A to Appendix of Exhibits
in Support of RCS' Response in Opposition to
Rushmore's Motion to Enforce Subpoena, at Dkt. No. 1.
Quantum, Rushmore and RCS are or were servicers of
Plaintiffs' loan. RCS settled with Plaintiffs and was
dismissed with prejudice on August 10, 2017. Id., at
Dkt. No. 76. The case proceeded against the remaining
defendants including Rushmore.
On December 22, 2017, the Massachusetts Court issued an Order
extending various pre-trial deadlines in the case, but stated
“there will be no further continuances.”
Id., at Dkt. No. 104. The Order provides that
“all discovery [is] to be completed on or before
January 9, 2018.” Id. Trial is set for March
12, 2018. Id., at Dkt. No. 93.
For some unexplained reason, Rushmore's counsel signed
the subpoena on January 3, 2018, but did not serve it on RCS
until January 8, 2018.1 See Ex. B. The subpoena
seeks a deposition at 2:30 p.m. that same day in Dallas,
Texas2 of RCS' corporate representative on six broad
topics, several of which have multiple subparts. Id.
The subpoena also demands that RCS search for seven broad
categories of documents for the corporate representative to
bring to the deposition. Id.
At some point on January 8, 2018, RCS learned that a subpoena
of some sort had been issued and retained local counsel in
Texas to immediately address the issue. In his e-mail of
January 8, 2018 at 9:58 a.m., attorney Nathan Milliron
confirmed that RCS had not been served as of four and
one-half hours prior to the scheduled deposition and wrote,
in relevant part:
I understand you have issued a subpoena to RCS for a
deposition in Dallas this afternoon. It is my understanding
that RCS was never served with the subpoena and that a
conflict has arisen with its current counsel. I have been
asked to step in and assist.
RCS is willing to sit for a deposition but will
not be able to do so today, to the extent you
are still moving forward (since I'm informed that RCS was
not served) ...