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GMFS LLC v. Cenlar FSB

United States District Court, M.D. Louisiana

October 28, 2019




         Before the Court is the Motion to Compel Responses to Interrogatories, Requests for Admission, and Requests for Production of Documents (R. Doc. 34) filed by Plaintiff, GMFS, LLC (“GMFS”) on March 15, 2019. Defendant, Cenlar FSB (“Cenlar”) opposes the motion. (R. Doc. 39). GMFS filed a Reply (R. Doc. 48).

         Also before the Court is the Motion to Compel (R. Doc. 40) filed by Cenlar on April 12, 2019. GMFS opposes the motion. (R. Doc. 49). Cenlar filed a Reply. (R. Doc. 58).

         Oral argument was held on July 19, 2019. (R. Doc. 61). Pursuant to the Court's July 19, 2019 Order (R. Doc. 61), the parties submitted correspondence to the Court and participated in a subsequent telephone conference on August 19, 2019. (R. Doc. 73). Following that telephone conference, the parties participated in additional court-ordered discovery, participated in an in-chambers conference on September 6, 2019 (R. Doc. 75), GMFS submitted a Status Report (R. Doc. 76) on September 9, 2019 as ordered, and participated in a final telephone conference (R. Doc. 77) on September 19, 2019. At the September 19, 2019 telephone conference, the Court indicated that no further information was needed to resolve the pending discovery motions.

         The Court also notes that it previously issued an Order (R. Doc. 57) granting the parties' joint request to modify the scheduling order and extend the discovery deadlines, wherein the Court stated that an amended scheduling order would be issued upon resolution of the pending discovery related motions.

         I. Background

         GMFS initiated this litigation with the filing of its Complaint (R. Doc. 1) on May 25, 2018. GMFS alleges that it entered into a Subservicing Agreement with Cenlar on or about December 14, 2012, wherein the parties agreed that Cenlar would service certain mortgage loans for GMFS. (R. Doc. 1 at 2). GMFS alleges that, after the August 2016 flood event in Baton Rouge and the surrounding area, it began receiving complaints about Cenlar's loan servicing, causing numerous problems and exposing GMFS to various penalties. (R. Doc. 1 at 3-5). GMFS then terminated the Subservicing Agreement with Cenlar, and Cenlar withheld an “Exit Fee, ” to which GMFS alleges it is entitled. (R. Doc. 1 at 7). GMFS also seeks recovery of a deconversion fee and damages. (R. Doc. 1 at 7, 10).

         GMFS propounded its First Set of Interrogatories, Requests for Admission, and Requests for Production of Documents to Cenlar on October 9, 2018. (R. Doc. 34-1 at 4). Cenlar provided responses to GMFS on January 16, 2019, which GMFS alleges are “incomplete, evasive or otherwise inadequate.” (R. Doc. 34-1 at 4). GMFS filed its Motion to Compel after transmitting correspondence regarding Cenlar's purportedly deficient responses. (R. Doc. 34-1 at 4).

         Cenlar served its Request for Production and Interrogatories on October 2, 2018. (R. Doc. 40-1 at 6). Rather than providing written responses to Cenlar's Interrogatories, GMFS produced business records pursuant to Fed.R.Civ.P. 33(d). (R. Doc. 40-1 at 8). Cenlar then filed its Motion to Compel. (R. Doc. 40).

         The Court held oral argument on July 19, 2019. (R. Doc. 62). Pursuant to the Order issued following oral argument, the parties were required to engage in additional conferencing, as well as providing certain documents to the Court for in camera review. (R. Doc. 63). The parties provided an update to the Court by way of correspondence dated August 15, 2019, and an additional telephone conference was held with the Court on August 19, 2019, wherein the parties were able to narrow the issues remaining in dispute. (R. Doc. 73). Following that telephone conference, the parties participated in a subsequent conference in chambers on September 6, 2019, wherein the parties facilitated the Court's understanding of certain production and discovery issues. (R. Doc. 75). GMFS provided a supplemental Status Report (R. Doc. 76) on September 9, 2019, outlining its review of the Complaint Logs provided by Cenlar. On September 19, 2019, the parties participated in a final telephone conference wherein the Court advised that it considered the pending motions fully briefed and ripe for resolution.

         II. Law and Analysis

         A. Legal Standard

         “Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.” Fed.R.Civ.P. 26(b)(1). The court must limit the frequency or extent of discovery if it determines that: “(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed.R.Civ.P. 26(b)(2)(C).

         “The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c)(1). Rule 26(c)'s “good cause” requirement indicates that the party seeking a protective order has the burden “to show the necessity of its issuance, which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.” In re Terra Int'l, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (quoting United States v. Garrett, 571 F.2d 1323, 1326 n.3 (5th Cir. 1978)).

         Rule 33 of the Federal Rules of Civil Procedure provides for the service of written interrogatories. A party seeking discovery under Rule 33 may serve interrogatories on any other party and the interrogatory “may relate to any matter that may be inquired into under Rule 26(b).” Fed.R.Civ.P. 33(a)(2). “If the answer to an interrogatory may be determined by examining . . . a party's business records (including electronically stored information), and if the burden of deriving or ascertaining the answer will be substantially the same for either party, the responding party may answer by: (1) specifying the records that must be reviewed, in sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could; and (2) giving the interrogating party a reasonable opportunity to examine and audit the records and to make copies, compilations, abstracts, or summaries.” Fed.R.Civ.P. 33(d).

         Rule 34 of the Federal Rules of Civil Procedure provides for the discovery of documents and tangible items. A party seeking discovery must serve a request for production on the party believed to be in possession, custody, or control of the documents or other evidence. Fed.R.Civ.P. 34(a). The request is to be in writing and must set forth, among other things, the desired items with “reasonable particularity.” Fed.R.Civ.P. 34(b)(1)(A).

         A party must respond or object to interrogatories, requests for production, and requests for admission within 30 days after service. See Fed. R. Civ. P. 33(b)(2); Fed.R.Civ.P. 34(b)(2)(A); Fed.R.Civ.P. 36(a)(3). This default date may be modified by stipulation between the parties. Fed.R.Civ.P. 29(b). If a party fails to respond fully to discovery requests made pursuant to Rule 33 or Rule 34 in the time allowed by the Federal Rules of Civil Procedure, the party seeking discovery may move to compel responses and for appropriate sanctions under Rule 37. An “evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer or respond.” Fed.R.Civ.P. 37(a)(4).

         B. Analysis

         i. GMFS's Motion to Compel

         GMFS seeks to compel Cenlar's response to certain interrogatories and requests for production of documents.[1] The Court will address the substantive issue below based on the representations made in the August 15, 2019 correspondence received from the parties. (R. Doc. 73 at 5-17).

         Interrogatory Nos. 6-11

         GMFS continues to request the Court compel Cenlar's response to Interrogatory Nos. 6-11. These interrogatories ask Cenlar to identify persons who communicated with a government regulator concerning the Subservicing Agreement, the Customers, or regarding any Consumer or Transfer Regulatory Issues, as those terms are defined in the requests. (R. Doc. 34-2 at 3-4). Cenlar argues that the requests “are impermissibly vague and susceptible to multiple interpretations, ” and that the requests are not relevant because “Plaintiff's Complaint does not allege that it has been subject to any regulatory investigation or finds as a result of the subservicing relationship.” (R. Doc. 39 at 9). Cenlar also argues that the defined terms inappropriately import legal conclusions. (R. Doc. 39 at 10).

         In its Complaint, GMFS alleges that the Subservicing Agreement required Cenlar to “perform its services… (iv) in compliance and in accordance with the provisions of this Agreement and Applicable Requirements, ” that “Cenlar's servicing caused numerous other problems as well, exposing GMFS to Dodd-Frank and other ...

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