Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Traut v. Quantum Servicing LLC

United States District Court, N.D. Texas, Dallas Division

February 23, 2018

CONRAD S. TRAUT AND CELINA M. TRAUT, Plaintiffs,
v.
QUANTUM SERVICING, LLC, ET AL., Defendants.

          MEMORANDUM OPINION AND ORDER

          DAVID L. HORAN, UNITED STATES MAGISTRATE JUDGE.

         Defendant 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.

         United 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.

         RCS filed a response, see Dkt. No. 11, and Rushmore filed a reply, see Dkt. No. 13.

         For the 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, 2016)).

         Background

         The 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.”).

         The 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.

         Because 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).

         Rushmore further explains the background to its Motion to Enforce as follows:

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 (the “Property”).
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 deposition.
RCS currently maintains a corporate headquarters in Fort Worth, Texas.

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) ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.