Balcom et al v. Deutsch Bank National Trust Company et al

Filing 31

MEMORANDUM OPINION AND ORDER denying 10 Motion to Dismiss; denying 29 Joint Motion to Continue. ( Rule 26 Meeting Report due by 7/2/2012.) Signed by Honorable Robert T. Dawson on June 22, 2012. (cap)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
ELIZABETH A. BALCOM and
CURTIS J. BALCOM
v.

PLAINTIFFS
CASE No. 11-6043

DEUTSCHE BANK NATIONAL TRUST
COMPANY AS TRUSTEE FOR MORGAN
STANLEY ABS CAPITAL I, INC.
TRUST 2007-NCI MORTGAGE
PASS-THROUGH CERTIFICATES,
SERIES 2007-NCI, MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
INC. (MERS), AS NOMINEE FOR NEW
CENTURY MORTGAGE CORPORATION,
and OCWEN LOAN SERVICING, LLC,
SUCCESSOR SERVICER TO SAXON
MORTGAGE SERVICES

DEFENDANTS

MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Motion to Dismiss (Doc. 10)
and Plaintiffs’ Response and Memorandum of Support.
24).

(Docs. 23,

Also before the Court is the parties’ Joint Motion to

Continue the Trial Date (Doc. 29).

For the reasons set out

below, Defendant’s Motion to Dismiss (Doc. 10) is DENIED and the
Motion for Continuance (Doc. 29) is DENIED.
I.

Background
On March 2, 2011, Defendants issued a Mortgagee’s Notice of

Default and Intention to Sell Plaintiffs’ home pursuant to the
Arkansas Statutory Foreclosure Act of 1987, Ark. Code Ann. §§
18-50-101, et seq.

On March 9, 2011, Plaintiff Curtis Balcom

Page 1 of 6

filed a chapter 13 bankruptcy petition, ending that non-judicial
foreclosure.

On

May

6,

2011,

foreclosure

sale,

Plaintiffs

restraining

order

from

Arkansas,

preventing

the

the

the

sought

and

Circuit

sale.

scheduled
received

Court

(Doc.

date

of

a

of

temporary

Garland

24).

In

the

County,

addition

to

seeking a TRO, the Complaint also alleged breach of contract,
gross

negligence

and

violation

of

the

Arkansas

Fair

Debt

Collection Act and Arkansas Deceptive Trade Practices Act.

The

Defendants

has

removed

the

matter

remained since June 6, 2011.
In

October

24,

2011,

to

this

Court,

where

it

(Doc. 1).
counsel

for

Defendants

contacted

counsel for Plaintiffs via email to discuss resolution of the
matter.

Plaintiffs’ counsel replied the state court action was

necessary

because

would

executed

be

of

fear

even

in

the

non-judicial

the

wake

triggered by the chapter 13 filing.
any

settlement

Trustee.

would

have

to

be

of

foreclosure

the

automatic

sale
stay

They further advised that

approved

by

the

chapter

13

On November 18, 2011, Defendants’ counsel approached

Plaintiffs’ counsel with an offer to provide a letter reflecting
Defendants would not proceed with the foreclosure without the
bankruptcy court’s authorization.
respond.
since

(Docs. 10, 24).

November

18,

Plaintiffs’ counsel did not

The parties have not communicated

2011.

There

has

been

no

Rule

26(f)

conference, no discovery and no additional settlement attempts.
Page 2 of 6

On January 19, 2012, Defendants filed a Motion to Dismiss
the action pursuant to Federal Rule of Civil Procedure 41(b),
describing

Plaintiffs’

complaint

as

“frivolous.”

(Doc.

10).

Plaintiffs responded that it is not in the best interests of the
public, the unsecured creditors, the bankruptcy estate or the
Plaintiffs for the pending litigation to be dismissed. (Doc.
24).
II.

Standard of Review
Under

Federal

Rule

of

Civil

Procedure

41(b),

if

the

plaintiff fails to prosecute or comply with the rules or a court
order, a defendant may move to dismiss the action or any claim
against it.

Unless the dismissal order states otherwise, a

dismissal under this subdivision operates as adjudication on the
merits.

Dismissal for failure to prosecute is appropriate when

there has been “a clear record of delay or contumacious conduct
by the plaintiff.”

Garland v. Peebles, 1 F.3d 683, 686 (8th

Cir. Ark. 1993)(citing Brown v. Frey, 806 F.2d 801, 803 (8th
Cir.

1986)).

sanction”

that

A

dismissal

should

be

under
used

this
only

rule
in

is

cases

an
of

“extreme
willful

disobedience of a court order or where a litigant has exhibited
a pattern of intentional delay.

Arnold v. ADT Sec. Services,

Inc., 627 F.3d 716, 722 (8th Cir. 2010).

Plaintiff need not

have acted in bad faith to warrant dismissal with prejudice for
failure to prosecute, but the court must find that the plaintiff
Page 3 of 6

“acted

intentionally

involuntarily.”

as

opposed

advance

irrevocably

accidentally

or

Id. (quoting Hunt v. City of Minneapolis, 203

F.3d 524, 527 (8th Cir. 2000)).
to

to

its

burdened

extinguishing

The Court must weigh its need

docket
the

against

the

litigant’s

consequence

claim

and

of

consider

whether a less severe sanction could remedy the effect of the
litigant’s

transgressions

on

the

prejudice to the opposing party.
F.3d

402,

405

(8th

Cir.

court

and

the

resulting

Smith v. Gold Dust Casino, 526

2008).

The

sanction

proportionate to the litigant’s transgressions.
403 F.3d 986, 990 (8th Cir. 2005).

must

be

Doe v. Cassel,

Dismissal of a complaint for

failure to prosecute is a drastic and extremely harsh sanction.
In re Popkin & Stern, 196 F.3d 933, 938 (8th Cir. 1999).

What

constitutes “failure to prosecute,” justifying dismissal, is not
fixed by settled rules but depends on the particular facts and
circumstances

in

a

case.

Navarro

v.

Chief

of

Police,

Des

Moines, Iowa, 523 F.2d 214, 217. (8th Cir. 1975).
III. Discussion
Defendants filed their Motion to Dismiss on January 19,
2012. (Doc. 10).

The Plaintiffs requested two extensions of

time in which to respond.
In

their

motions

(Docs. 18, 20).
for

extensions,

Plaintiffs

cited

the

judicial economy of waiting for resolution of “identical” issues
in

two

pending

cases.

After

initiating

Page 4 of 6

this

lawsuit,

Plaintiffs’ attorneys filed a class action in the United States
Bankruptcy Court, Eastern District of Arkansas.

Mhoon, et al.

v. Deutsche National Bank Trust Company, No. 3:AP-01252.
18,

20).

This

matter

was

stayed

on

April

17,

(Docs.

2012,

voluntarily dismissed by Plaintiffs on May 29, 2012.

and

In the

second related lawsuit, Deutsche National Bank Trust Company v.
Collins, Plaintiffs’ attorneys had pending a Petition to Appeal
the

remand

order

from

the

Western

District

of

Arkansas

(Texarkana Division) back to the Circuit Court of Miller County.
No. CV2010-292-1.

(Docs. 18, 20).

Plaintiffs maintained that

no action could be taken to consolidate the present case with
Collins until the Eighth Circuit ruled on the pending motion.
Since

then,

the

Eighth

Circuit

permission to appeal the remand.

has

denied

the

petition

for

No. 12-8007, April 11, 2012.

A jury trial in this matter is scheduled for July 16, 2012,
but

the

parties

have

conducted

no

discovery

and

recently

requested to reschedule their settlement conference, originally
scheduled for June 20, 2012.
The two related cases have now been concluded and the Court
can find no reason for further delay in this matter.

The Court

finds that the Plaintiffs’ conduct has not been so contemptuous
as to warrant the dismissal of this action.
imposed later as determined to be appropriate.

Page 5 of 6

Sanctions may be

IV.

Conclusion
For the foregoing reasons, IT IS HEREBY ORDERED that

the parties are to hold their Rule 26(f) conference and file
their report within ten (10) days.

The Court will issue a Final

Scheduling Order immediately thereafter.

IT

IS

FURTHER

ORDERED that Defendants’ Motion to Dismiss (Doc. 10) is DENIED
and

the

parties’

Joint

Motion

for

Continuance

(Doc.

29)

is

DENIED.
IT IS SO ORDERED this 22nd day of June, 2012.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

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