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)

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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 Page 6 of 6

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