DeAtley et al v. Keybank National Association et al
Filing
67
ORDER granting 52 Motion to Compel; denying 59 Motion to Stay. Status Conference set for 11/8/2013 08:30 AM in Courtroom A 401 before Magistrate Judge Boyd N. Boland. by Magistrate Judge Boyd N. Boland on 10/28/13.(bnbcd, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 12-cv-02973-PAB-BNB
ALAN DEATLY,
NAPI (Colorado) LLC, a Washington limited liability company, and
15 CORPORATIONS, INC., a Washington limited liability company,
Plaintiffs,
v.
KEYBANK NATIONAL ASSOCIATION, an Ohio corporation,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the following:
(1)
Keybank Motion for Sanctions for Failure to Appear at a Deposition [Doc. #
52, filed 6/21/2013] (the “Motion to Compel”); and
(2)
Plaintiff DeAtley’s Motion for Stay [Doc. # 59, filed 7/12/2013] (the “Motion to
Stay”).
The Motion to Stay [Doc. # 59] is DENIED, and the Motion to Compel [Doc. # 52] is
GRANTED.
Two claims remain pending following the Order [Doc. # 65] of the district judge:
plaintiffs’ Fourth Claim, against Keybank, alleging breach of contract in connection with
Keybank’s loan modification documents; and plaintiffs’ Fifth Claim, against Keybank, alleging
fraud in connection with an unsecured loan. Order [Doc. # 65] at pp. 5-6. In this case, the
plaintiffs are represented by counsel. In a separate matter pending in this court--DeAtley v.
Stuart, 13-cv-01140-REB-BNB--Mr. DeAtley proceeds pro se in an action alleging malpractice
against lawyers hired to represent him in a related criminal proceeding. Scheduling Order [Doc.
# 23 (13-cv-01140)] at Part 3.
Keybank noticed the deposition of Mr. DeAtley to occur on June 7, 2013. At the request
of Mr. DeAtley’s attorney, and based on the representation that Mr. DeAtley was undergoing “a
medical procedure performed on the same day,” Keybank cancelled the deposition. In fact, Mr.
DeAtley underwent a consultation, not a medical procedure, on June 6, 2013. Although a
medical procedure was scheduled to occur on June 24, 2013, Mr. DeAtley’s counsel stated in his
Response, filed on July 12, 2013, that Mr. DeAtley’s “condition is unresolved and now impaired
due to his total lack of financial resources.” Response [Doc. # 56] at ¶3. Apparently, at least as
of July 12, Mr. DeAtley had not undergone the anticipated procedure.1 In addition, Mr. DeAtley
appeared, pro se and by telephone, for a scheduling conference in 13-cv-01140 on July 23, 2013,
during which no mention was made of his health condition or of any medical procedures recently
undergone or pending.
Keybank is entitled to take discovery in this case, including the deposition of Mr.
DeAtley, in order to prepare its defense. The testimony of Mr. DeAtley certainly will be
1
I was provided, under restriction, with a medical record from a Dr. Tanwani indicating
that Mr. DeAtley’s medical condition is “off-and-on difficulty swallowing” that is “very
intermittent.” The anticipated procedure is described as an “EDG,” which I assume to be an
esophagogastroduodenoscopy.
By raising his medical condition as a basis for cancelling his deposition, Mr. DeAtley has
waived any right to privacy on that matter. Consequently, there is no basis to restrict access to
the medical record. In addition, no motion to restrict access to the medical record was filed, see
D.C.COLO.LCivR 7.2D, and more than 14 days has expired since its filing. The medical record
[Doc # 57] shall be unrestricted and open to public inspection.
2
relevant to matters in dispute and may lead to the discovery of admissible evidence. There is no
evidence of undue burden in requiring Mr. DeAtley to appear for his deposition in Denver,
where the action is pending.
Independently of his asserted health issues, Mr. DeAtley requests a stay of the action
“against him, pending resolution of related allegations in both (1) a prior criminal case against
him in Denver County District Court and (2) a prior civil action in the Jackson County District
Court.” Motion for Stay [Doc. # 59] at p. 1. Mr. DeAtley, claiming to be “mindful of [his] Fifth
Amendment rights,” argues that “there is no practical way to move forward on any of the civil
cases [including this one] . . . while the criminal case is pending.” Id. at p. 2.
The chronology of events is important. Keybank argues, without dispute by Mr.
DeAtley, that a Denver grand jury returned an indictment against Mr. DeAtley on October 6,
2010. Indictment [Doc. # 24-1 (13-cv-01140)]. Nearly two years later, and without regard for
the pending criminal charges, Mr. DeAtley commenced this action against Keybank on July 3,
2012, after Keybank commenced a foreclosure action concerning Mr. DeAtley’s real property in
Jackson County, Colorado. Verified Motion for Order Authorizing Sale [Doc. # 24-13 (13-cv01140)]. The present action proceeded without objection by Mr. DeAtley through the pleading
stage, a scheduling conference, and into discovery. Mr. DeAtley agreed to sit for his deposition
on June 3, 2013, and cancelled that deposition based solely on asserted health issues. He did not
seek to stay this case until faced with the Motion to Compel [Doc. # 52].
Meanwhile, there have been proceedings in the Colorado state courts in connection with
the indictment. On July 30, 2011, Mr. DeAtley engaged Martin Stuart as defense counsel.
Complaint [Doc. # 3 (13-cv-01140)] at p. 1; Fee Agreement [Doc. # 42-2 (13-cv-01140)]. On
3
October 31, 2012, Mr. DeAtley wrote directly to the state trial judge complaining about the
representation provided by Mr. Stuart. Letter [Doc. # 42-3 (13-cv-01140)]. Mr. Stuart was
made aware of the letter and moved to withdraw. Motion to Withdraw [Doc. # 42-2 (13-cv01140)]. That motion to withdraw resulted in the following:
[T]he District Attorney filed an opposition to the Motion to
Withdraw. The District Attorney’s Opposition argued that
withdrawal of Defense Counsel was not in the best interest of
judicial economy or efficiency, and it had been filed as a delay
tactic to avoid proceeding to trial.
* * *
At the conclusion of the December 3, 2012 proceedings the Court
denied Defense Counsel’s Motion to Withdraw until new counsel
entered an appearance on Defendant’s behalf. Defendant waived
his right to a speedy trial and the Court continued the trial date to
allow Defendant to retain new counsel. The Court stated however,
it was, “likely that it would find that there is a conflict of interest at
this point that would preclude presentation of an adequate defense.
. . .”
* * *
On January 16, 2013, the Court entered an Order captioned
“Clarification Regarding Withdrawal” (“January 16th Order”).
The January 16the Order states:
“The Court deferred ruling on the request to withdraw, but held
that withdrawal will be permitted if, and only if, the Defendant is
able to secure a new attorney who can be prepared to try the case
before June of this year [2013] or if the Defendant elects to
represent himself. If this does not occur, the Defendant’s present
counsel will have to represent the Defendant at trial.”
* * *
A hearing was held on January 17, 2013. . . . Mr. DeAtley
explained that he had meetings scheduled with two attorneys to
discuss taking over his representation. . . .
On January 31, 2013, the parties appeared before the Court for a
status hearing at which time Defendant was to have new counsel
enter an appearance. However, Defendant stated to the Court that
he had contacted over thirty (30) attorneys all of whom had a
conflict or were concerned about the trial deadline. . . .
4
At the January 31, 2013 hearing, Defendant handed Defense
Counsel a complaint captioned Alan DeAtley v. Martin Stuart and
Jolie Masterson, 13-cv-3014-EFS, in the United States District
Court for the Eastern District of Washington (“Legal Malpractice
Complaint”). The Legal Malpractice Complaint was ultimately
filed in the Eastern District of Washington on February 12, 2013.
* * *
On February 15, 2013, . . . Defendant again asserted that all of the
attorneys he contacted to represent him were concerned about their
ability to prepare for the trial within the Court’s time frame.
. . . Defense Counsel stated that they were not aware of any
substantial attempts by Defendant to obtain an attorney and that
only one other attorney had contacted them on behalf of Defendant
regarding taking over representation.
* * *
The Court then again addressed Defense Counsel’s Motion to
Withdraw. The Court admitted that a conflict existed, but denied
the motion, stating:
“As I’ve indicated there is a conflict and we have discussed that
and some of that’s off the record, was ex parte given the nature of
the request to withdraw and I’m not going to go into the conflict
beyond that prior record because of that. But it is a conflict that
certainly is being imposed by Mr. DeAtley. I’m not saying created
by Mr. DeAtley but it is imposed through his actions particularly
in addition to the prior record the fact that there is an action that
has been filed against his counsel.”
* * *
The Court provided three options to Defendant: (1) accept
representation of current Defense Counsel; (2) proceed pro se; or
(3) retain new counsel with the understanding that he/she may
request an extension of the trial date but that such request will
more likely be denied. Defendant chose the third option.
Motion for Reconsideration of Defense Counsels’ Motion to Withdraw [Doc. # 42-5 (13-cv01140)] at pp. 2-6 (internal citations omitted). The malpractice action filed in the Eastern
District of Washington later was transferred to this court and is 13-cv-01140.
No new counsel entered its appearance, and on April 9, 2013, Mr. Stuart filed a Petition
5
in the Colorado Supreme Court (the “Petition”) seeking extraordinary relief.2 The Petition is
pending.
The cases cited by Mr. DeAtley in support of his Motion to Stay all concern stays
requested by parties who are targets or defendants in criminal proceedings and defendants in
related civil proceedings. That is not the case here.
It is apparent to me that Mr. DeAtley is engaged in abusive litigation tactics for the
improper purpose of manipulating the judicial system to delay both Keybank’s attempts to
pursue its foreclosure action and the state criminal prosecution. Mr. DeAtley has refused to
engage substitute defense counsel in the state criminal prosecution, bringing that action to a stop.
In the meantime, he commenced this action alleging misconduct by Keybank, which resulted in
Keybank’s withdrawal of its foreclosure action. Now Mr. DeAtley seeks to postpone
indefinitely this action until resolution of the criminal case, progress of which he has stymied. I
do not intend to facilitate Mr. DeAtley’s improper manipulation of the judicial system.
Under analogous facts, the Fifth Circuit Court of Appeals ruled in Wehling v. Columbia
Broadcasting System, 608 F.2d 1084, 1088 (5th Cir. 1979):
We recognize, of course, that Wehling [plaintiff in the civil action,
defendant in a criminal matter] is not the only party to this action
who has important rights that must be respected. As we have
observed, CBS should not be required to defend against a party
who refuses to reveal the very information which might absolve
defendant of all liability. “While it may be true that an individual
should suffer no penalty for the assertion of a constitutional right,
neither should third parties sued by that individual who have no
apparent interest in the criminal prosecution, be placed at a
2
The Petition requests that the Supreme Court “enter an Order to Show Cause against . . .
Judge John W. Madden IV, why Defense Counsel should not be permitted to withdraw as
counsel for DeAtley in the Underlying Action.” Petition [Doc. # 42-6 (13-cv-01140)] at p. 31.
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disadvantage thereby.” Therefore we emphasize that a civil
plaintiff has no absolute right to both his silence and his lawsuit.
(Quoting Jones to B.C. Christopher & Co., 466 F. Supp. 213, 227 (D. Kan. 1979).)
The court in Wehling disapproved the dismissal of the plaintiff’s civil claims as a
sanction for invoking his Fifth Amendment right against self incrimination, Wehling, 608 F.2d at
1087,3 suggesting instead that a stay of the civil action should have been granted. Id. at 1089.
There was no suggestion or finding there, however, as there is here, that Wehling was attempting
to improperly manipulate the judicial system.
In Mid-America’s Process Service v. Ellison,767 F.2d 684 (10th Cir. 1985), our circuit
court refused mandamus review of a trial court’s order refusing to stay civil discovery until after
the resolution of a criminal investigation against the petitioners.4 Instead, the circuit court ruled
that “the law does not require postponement of civil discovery until fear of criminal prosecution
is gone. The propriety of postponement is a matter for the exercise of the trial court’s
discretion.” Id. at 687. In addition, the court noted:
The individual petitioners unquestionably may assert a Fifth
Amendment privilege in this civil case and refuse to reveal
information properly subject to the privilege, in which event they
may have to accept certain bad consequences that flow from that
action. Appellate review of the civil judgment could correct any
impermissible consequences if petitioners’ silence is improperly
used to obtain the civil judgment.
In deciding whether to testify petitioners act at their peril in
3
Similarly, in Mid-America’s Process Service v. Ellison,767 F.2d 684, 685 (10th Cir.
1985), the Tenth Circuit Court of Appeals stated that “[u]sing threats of serious economic
reprisal to compel a person to waive the Fifth Amendment and testify is unconstitutional.”
4
Importantly, the petitioners in Mid-America’s were defendants in the civil action, not
plaintiffs as Mr. DeAtley is here.
7
assessing whether the alleged coercion here is the type of threat of
serious economic reprisal that is unconstitutional. . . . Because
they can obtain meaningful appellate review at a later stage, we
should not here render an advisory opinion, under the guise of
mandamus, on whether their privilege has been adequately
protected.
Id. at 686 (internal citations omitted).5
This case bears similarities to Federal Trade Comm. v. Parade of Toys, Inc., 1997 WL
688752 (D. Kan. Oct. 15, 1997). There, the district court refused to stay civil discovery despite a
pending parallel criminal investigation, finding:
The public interest in prosecuting the civil action outweighs
Boukhout’s [the witness/target] interest in avoiding the dilemma of
invoking his Fifth Amendment privilege. The FTC is seeking an
injunction to prevent defendants from deceptively offering and
selling purportedly profitable business ventures to the public. The
enforcement of consumer protection laws and the prevention of
fraud substantially invoke the public interest. Conversely,
Bouckhout may assert his Fifth Amendment privilege in the civil
suit without totally disabling the defense of that suit.
Id. at *2. Similarly in this case the public interest in preventing Mr. DeAtley from manipulating
the judicial system to delay both Keybank’s attempts to pursue its foreclosure action and the
state criminal prosecution outweigh the potential difficulties which may result from his assertion
in this civil action, which he commenced, of his Fifth Amendment right.
IT IS ORDERED:
(1)
The medical record [Doc. # 57] shall not be restricted and shall be open to public
5
Keybank has not suggested that it would use Mr. DeAtley’s assertion of his Fifth
Amendment right as a basis to dismiss this action. If Mr. DeAtley asserts his right and refuses to
give civil discovery, there are other remedies short of dismissal which might cure any resulting
prejudice to Keybank, including precluding Mr. DeAtley from testifying at the trial of the civil
case or allowing the jury to draw an adverse inference from his assertion of that right. See
Baxter v. Palmigiano, 425 U.S. 308, 318 (1976).
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inspection.
(2)
The Motion to Stay [Doc. # 59] is DENIED.
(3)
The Motion to Compel [Doc. # 52] is GRANTED. Mr. DeAtley must appear for
his deposition at a date and time as the parties may agree.
(4)
A status conference to address any modifications to the case schedule which may
be necessary is set for November 8, 2013, at 8:30 a.m., in Courtroom 401, 4th floor, Alfred A.
Arraj United States Courthouse, 901 19th Street, Denver, Colorado. Counsel shall be prepared
to discuss the date of Mr. DeAtley’s deposition at that conference. If they are able to agree, I
may make their agreement an order of the court. Otherwise, I will set the date of the deposition
in my discretion.
Dated October 28, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge
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