Diehl v. Paymap, Inc.
Filing
16
ORDER denying 11 Motion to Consolidate. Signed by District Judge William H. Steele on 3/16/2018. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ANASTASIA P. DIEHL,
Plaintiff,
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v.
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THE MONEY SOURCE, INC., et al.,
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Defendants.
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_______________________________________)
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ANASTASIA P. DIEHL,
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Plaintiff,
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v.
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PAYMAP, INC.,
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Defendant.
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CIVIL ACTION 17-0125-WS-B
CIVIL ACTION 18-0017-WS-B
ORDER
These matters come before the Court on the Joint Motion to Consolidate and Extend
Certain Scheduling Order Deadlines (doc. 84) filed in Civil Action 17-0125-WS-B, as well as the
Joint Notice of Filing Motion to Consolidate (doc. 85 in Civil Action 17-0125-WS-B, doc. 11 in
Civil Action 18-0017-WS-B) filed in both cases. The Joint Motion has been briefed and is now
ripe for disposition.
I.
Relevant Background.
The Joint Motion concerns two related matters filed by plaintiff, Anastasia P. Diehl, in
this District Court. On March 20, 2017, Diehl filed suit against The Money Source, Inc.,
LoanCare, LLC and certain other defendants, in an action styled Anastasia P. Diehl v. The
Money Source, Inc., et al., Civil Action 17-0125-WS-B (the “Money Source Action”). The
Amended Complaint in the Money Source Action explains that “[t]his action arises from the
mismanagement and wrongful actions taken in connection with Plaintiff’s home mortgage loan,”
which was alleged to be owned by LoanCare and serviced by Money Source. (Doc. 58, at 1.) In
particular, the pleading asserts that (i) these defendants “consistently held Plaintiff in default of
her mortgage despite the fact that every mortgage payment has been timely paid;” (ii) these
defendants “engaged in an aggressive collections campaign … in an attempt to coerce Plaintiff to
pay sums she does not owe;” (iii) defendant Money Source violated the Real Estate Settlement
Procedures Act by failing to perform the required investigation of Diehl’s Notice of Servicing
Error; and (iv) defendant Money Source violated the Fair Credit Reporting Act by failing to
conduct a proper investigation and correct its credit reporting in response to Diehl’s credit
reporting dispute. (Id. at 1-2.) On the strength of these and other allegations, Diehl asserts
claims in the Money Source Action for violation of RESPA, breach of the mortgage agreement,
fraud (concerning misrepresentations about the Equity Accelerator Program (“EAP”) in a
telephonic solicitation), invasion of privacy / wanton collections, and multiple violations of
FCRA. Discovery closed in the Money Source Action last month. By all appearances, that case
is almost ready for trial. Indeed, Money Source and LoanCare have both filed motions for
summary judgment as to which briefing is ongoing. The Money Source Action matter is set for
jury trial before the undersigned during the August 2018 civil term.
On January 16, 2018, nearly ten months after commencing the Money Source Action,
Diehl initiated another civil action in this District Court by filing suit against PayMap, Inc., in an
action styled Anastasia P. Diehl v. PayMap, Inc., Civil Action 18-0017-WS-B (the “PayMap
Action”).1 The Complaint in the PayMap Action alleged that PayMap managed the EAP
marketed by LoanCare in which Diehl had enrolled, and that Diehl’s mortgage payments were
routed to PayMap, which then failed to direct such payments to the proper entity to have them
1
Diehl, Money Source and LoanCare collectively explain the timing of the
PayMap Action as follows: “During the course of discovery in this action, the Parties discovered
the identity of a third party, Paymap, Inc. …, which performed certain duties in connection with
the Plaintiff’s residential mortgage loan.” (Doc. 84, ¶ 1; see also doc. 100, ¶ 10 (“Had the
Parties known certain facts regarding the role played by Paymap in plaintiff’s loan soon enough,
the Parties would have sought leave to amend to add Paymap as a defendant in [the Money
Source Action].”).) It is unclear why “the Parties” – and particularly LoanCare – would not have
been apprised of PayMap’s role in managing the EAP program at issue from the outset of this
dispute. See, e.g., doc. 90, Exh. A, ¶¶ 18-19 (indicating that the EAP “is owned by Paymap …
and is not affiliated with LoanCare,” but that LoanCare marketed the EAP until sometime in
2012); doc. 1 in Civil Action 18-0017, at ¶¶ 6 (“LoanCare and Paymap had arranged to market
an Equity Accelerator Program”), 8 (“Paymap’s involvement was the result of a referral and
marketing arrangement between Paymap and LoanCare”). By all appearances, information
concerning PayMap’s involvement with the EAP was reasonably available to movants long
before the Complaint in Civil Action 18-0017 was filed.
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credited to Diehl’s loan balance. Based on these allegations, Diehl asserts claims against
PayMap for fraud (concerning misrepresentations about the EAP in a telephone solicitation and
written/electronic correspondence), money had and received, conversion, wantonness, and
negligence. To date, discovery has not commenced in the PayMap Action. No scheduling order
has been entered, and no trial date has been set. The only substantive activity in the PayMap
Action thus far is defendant’s filing of a Motion to Dismiss directed exclusively at the
wantonness and negligence claims, as to which briefing is ongoing.
Now, MoneySource, LoanCare and Diehl seek to consolidate the PayMap Action into the
Money Source Action pursuant to Rule 42(a)(2), Fed.R.Civ.P. As grounds for this request,
movants reason that consolidation would serve the interests of judicial economy and conserve
the parties’ resources because both actions “address a common set of facts (the collection and
application (or lack thereof) of the mortgage payments) and the legal issues regarding liability
for the alleged mismanagement of those payments.” (Doc. 84, ¶ 5.) However, PayMap opposes
consolidation based on the stark differences in the procedural posture of the two actions, as well
as its contention that “there are more issues of fact that are uncommon to both legal actions than
issues of fact that are common to both.” (Civil Action No. 18-0017, doc. 15, at 3.)
II.
Analysis.
The Federal Rules of Civil Procedure authorize a district court to consolidate actions or to
“issue any other orders to avoid unnecessary cost or delay” when multiple actions before it
“involve a common question of law or fact.” Rule 42(a), Fed.R.Civ.P. The rule “is permissive
and vests a purely discretionary power in the district court.” Young v. City of Augusta, Ga.
Through DeVaney, 59 F.3d 1160, 1168 (11th Cir. 1995) (citations omitted); see also Eghnayem v.
Boston Scientific Corp., 873 F.3d 1304, 1313 (11th Cir. 2017) (“A district court’s decision
whether to consolidate is ‘purely discretionary.’”) (citation omitted). “What this means is that
the mere existence of common issues, although a prerequisite to consolidation, does not mandate
a joint trial.” Pennsylvania Lumbermens Mutual Ins. Co. v. D.R. Horton, Inc., 2015 WL
7888150, *2 (S.D. Ala. Dec. 1, 2015) (citation and internal quotation marks omitted). “The trial
court’s managerial power is especially strong and flexible in matters of consolidation.” Center
for Biological Diversity, Inc. v. BP America Production Co., 704 F.3d 413, 432 (5th Cir. 2013)
(citations omitted).
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The Eleventh Circuit has explained that “[i]n exercising its considerable discretion, the
trial court is obliged to consider … [w]hether the specific risks of prejudice and possible
confusion are overborne by the risk of inconsistent adjudications of common factual and legal
issues, the burden on parties, witnesses and available judicial resources posed by multiple
lawsuits, the length of time required to conclude multiple suits as against a single one, and the
relative expense to all concerned of the single-trial, multiple-trial alternatives.” Eghnayem, 873
F.3d at 1313 (citation omitted).2 “The party requesting consolidation bears the burden of
showing that the balance weighs in favor of consolidation.” Clayton v. District of Columbia, 36
F. Supp.3d 91, 94 (D.D.C. 2014); see also Kamdem-Ouaffo v. Pepsico, Inc., 314 F.R.D. 130,
136-37 (S.D.N.Y. 2016) (“[A]t all times, the burden remains with the moving party to
demonstrate that consolidation is appropriate.”) (citation omitted).
All parties agree that common issues of fact and law render these cases eligible for
discretionary consolidation pursuant to Rule 42.3 Those commonalities include the servicing and
payment history of Diehl’s mortgage loan, the circumstances under which Diehl enrolled in the
EAP program, whether actionable misrepresentations were made to Diehl in connection with the
EAP program and if so by whom, and how Diehl’s loan came to be in default. That said, there
are also significant areas of factual and legal divergence between the Money Source Action and
the PayMap Action. Many of Diehl’s claims and allegations in the Money Source Action relate
to the “aggressive collections campaign” pursued by Money Source and LoanCare, including
See also Campbell v. Boston Scientific Corp., 882 F.3d 70, 74 (4th Cir. 2018)
(reciting same list of factors and legal standard for consolidation analysis); American Family
Home Ins. Co. v. Hillery, 2009 WL 2711901, *2 (S.D. Ala. July 20, 2009) (“In exercising that
discretion, district courts must weigh the risk of prejudice and confusion wrought by
consolidation against the risk of inconsistent rulings on common factual and legal questions, the
burden on the parties and the court, the length of time, and the relative expense of proceeding
with separate lawsuits if they are not consolidated.”) (citations omitted).
2
3
In their reply brief, Money Source, LoanCare and Diehl characterize PayMap’s
stance as being that the Money Source Action and the PayMap Action “do not address a common
set of facts and legal issues.” (Doc. 100, at 2.) This assertion misstates PayMap’s position. In
fact, PayMap does not (and cannot reasonably) deny the presence of overlapping factual and
legal issues between the two actions; rather, PayMap’s argument is that “there are more issues of
fact that are uncommon to both legal actions than issues of fact that are common to both the
PayMap Action and the TMS Action.” (Civil Action No. 18-0017, doc. 15, at 3.)
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multiple alleged statutory and common-law violations arising from their collection activities. By
contrast, Diehl’s claims in the PayMap Action include allegations that PayMap failed to direct
her payments made under the EAP to the proper account, and converted the proceeds. In short,
while there certainly are areas of factual and legal overlap between the two actions, those
commonalities are limited and should not be overstated. That observation, in turn, mutes the
efficiency gains that would be reaped from consolidation, for purposes of the Rule 42(a)
balancing analysis.
On the other hand, as PayMap correctly points out, the two actions are in drastically
different procedural postures. Whereas the Money Source Action is at the summary judgment
stage and essentially ready for trial, the PayMap Action remains nascent. It is well settled that
“[c]onsolidation may properly be denied in instances where the cases are at different stages of
preparedness for trial.” Mills v. Beech Aircraft Corp., 886 F.2d 758, 762 (5th Cir. 1989).4 To
consolidate these two cases at this juncture would be to derail the trial-ready Money Source
Action for a prolonged interval; indeed, no answer has been filed, no scheduling order has been
entered, and no discovery has taken place in the PayMap Action. The Money Source Action
4
See also Lehman Bros. Holdings, Inc. v. Gateway Funding Diversified Mortg.
Services, LP, 785 F.3d 96, 102 (3rd Cir. 2015) (“But in light of the vastly different stages of the
cases – Gateway filed its complaint in the contribution action just eight days before it moved to
consolidate, while discovery had already closed and Lehman had already submitted its trial brief
in this case – the District Court acted well within its discretion in declining to consolidate.”);
Kamdem-Ouaffo, 314 F.R.D. at 137 (“Notably, judicial economy would not be served by
consolidating two actions at such disparate stages.”); Ulibarri v. Novartis Pharmaceuticals
Corp., 303 F.R.D. 402, 404 (D.N.M. 2014) (denying consolidation where one case was “in a
completely different procedural stage” than the other, with discovery closed and summary
judgment motions filed in one case but discovery still ongoing in the other); Ford Motor Credit
Co. v. Chiorazzo, 529 F. Supp.2d 535, 542 (D.N.J. 2008) (declining consolidation where
“[d]iscovery in the 2006 action is nearly complete, and pending before the Court are two
summary judgment motions,” while “[t]he 2007 action … is in its preliminary stages,” with
perhaps no discovery having occurred); Beloit v. Killion & Sons Well Service, Inc., 2016 WL
4539624, *2 (W.D. Pa. Aug. 31, 2016) (“courts have denied consolidation where the cases in
question are at such distinct phases that consolidation would cause undue delay in the furtherprogressed case”); Northstar Marine, Inc. v. Huffman, 2014 WL 4167019, *5 (S.D. Ala. Aug. 21,
2014) (“Given the vastly divergent procedural posture of the two cases, … the Court finds that
consolidation is not appropriate in these circumstances.”); In re Currency Conversion Fee
Antitrust Litigation, 2009 WL1834351, *2 (S.D.N.Y. June 18, 2009) (“Because the American
Express Action currently holds a significant lead over the Bank of America Action in the march
to a trial, this Court denies Plaintiffs’ motion to consolidate the related actions”).
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litigants would be forced to remain in a holding pattern for many months waiting for the PayMap
Action to catch up. Moreover, PayMap (a newcomer to a dispute that Diehl, Money Source and
LoanCare have been living with for quite some time) may be prejudiced if consolidation occurs.
After all, there would be an inherent risk that discovery time frames may be compressed or
scheduling order deadlines accelerated in order to expedite the PayMap Action’s progress
through the discovery and dispositive motions processes so that this consolidated litigation might
become ready for trial as expeditiously as possible, all to PayMap’s detriment.5
As noted, the Rule 42(a) balancing test requires a federal district court to weigh the
benefits and burdens of the proposed consolidation. Although binding precedent indicates that
numerous factors are germane to the inquiry, the only advantage identified by movants is that
consolidation would serve the interests of judicial economy and conserve the parties’ resources
in resolving all of Diehl’s claims against all defendants. (Doc. 84, ¶ 7; doc. 100, ¶ 17.) It is true
that efficiency gains could be realized by consolidating the two matters, given the overlapping
factual and legal issues. It is also true, however, that such efficiency gains would likely be
modest, given the limited commonalities between the two cases and the significant areas of
factual and legal divergence. Balanced against that consideration are the certainty that the
Money Source Action would be substantially delayed if consolidation were granted, and the risk
that PayMap might incur prejudice as a result of undue pressure to constrict applicable pretrial
deadlines as a means of forcing the PayMap Action to catch up to the Money Source Action.
Under the circumstances, movants have not met their burden of showing that the advantages of
consolidation outweigh the disadvantages. After weighing the value of time and effort saved by
consolidation against the inconvenience, delay and expense increased by it, the Court exercises
its discretion under Rule 42(a) to deny consolidation of these related actions.
5
This risk is underscored by movants’ representation that they “seek only a limited
extension of scheduling order deadlines for discovery and dispositive motions to permit the
parties the opportunity to engage in discovery with Paymap.” (Doc. 100, ¶ 15.) The “limited
extension” proposed by Money Source, LoanCare, and Diehl sounds suspiciously shorter than
the full measure of discovery and dispositive motion time that PayMap would be allotted via
Rule 26 and the separate scheduling order to be entered in the PayMap Action in the absence of
consolidation.
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III.
Conclusion.
For all of the foregoing reasons, the Joint Motion to Consolidate and Extend Certain
Scheduling Order Deadlines (doc. 84) is denied. This ruling is without prejudice to movants’
ability to renew their Joint Motion at a later date if circumstances change in a manner that might
materially alter the Rule 42(a) balancing analysis.
DONE and ORDERED this 16th day of March, 2018.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE
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