Sims et al v. New Penn Financial LLC
OPINION AND ORDER denying without prejudice 48 Plaintiffs MOTION to Compel, denying without prejudice 61 Defendants MOTION for Protective Order and denying 62 Plaintiffs MOTION to Stay. The Court ORDERS the parties to meet and confer rega rding a proposed protective order. The parties may file a joint motion for protective order by 8/23/2017. Should the parties fail to reach agreement on a proposed protective order, Plaintiffs may file a renewed motion to compel and Defendants may sep arately file a renewed motion for protective order by 8/23/17. The Court ADVISES that any further evidence of obdurate, contumacious, or vituperative conduct or language directed to either party or this Court will influence any decision this Court mu st make should this discovery dispute not be resolved by the parties themselves. The Court now sua sponte EXTENDS the discovery deadline until 9/30/2017. Plaintiffs responses to Defendants Discovery Requests filed on 6/30/17 DE 60 are due 8/23/17. Signed by Magistrate Judge Michael G Gotsch, Sr on 8/2/17. (Copy mailed to pro se parties). (nal)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
MARIO L. SIMS, et al.,
NEW PENN FINANCIAL LLC d/b/a
SHELLPOINT MORTGAGE SERVICING,
CAUSE NO. 3:15-cv-263-MGG
OPINION AND ORDER
Before the Court are three discovery-related motions: Plaintiffs’ Motion to Compel
Defendant to Respond to Discovery [DE 48]; Defendant’s Motion for Protective Order [DE 61];
and Plaintiffs’ Motion to Stay Discovery [DE 62]. For the following reasons, the Court denies
Plaintiffs’ motion to compel and Defendant’s motion for protective order without prejudice. In
addition, the Court extends the discovery deadline and denies Plaintiffs’ motion to stay.
This cases arises out of Plaintiffs’ efforts to assume the mortgage loan of Defendant’s
borrower, John Tiffany. Plaintiffs purchased land on a land-sale contract from Tiffany who
stopped paying his mortgage payments to Defendant after executing the contract with Plaintiffs.
Plaintiffs attempted to assume the loan, but were not able to do so. Plaintiffs, proceeding pro se,
initiated this lawsuit alleging violations of the Equal Credit Opportunity Act (“ECOA”), 15
U.S.C. § 1691 et seq. Plaintiffs allege that Defendant made statements that discouraged them
from the credit application process and that Defendant discriminated against them based on race
by imposing different terms and conditions on assumption. 1
As part of their discovery related to the ECOA claim, Plaintiffs served Defendant with
their First Requests for Production of Documents on February 28, 2017. On March 30, 2017,
Defendant served responses and objections on Plaintiffs without including any of the requested
documents. Through e-mail on the same day, however, Defendant informed Plaintiffs that the
document production would be delivered shortly either by e-mail or on a CD via regular mail.
Production of the documents did not occur immediately resulting in e-mails and telephone calls
between Plaintiff, Mario Sims (“Mr. Sims”), and Defendant’s counsel regarding the discovery
requests. On April 6, 2017, Defendant’s counsel produced the documents provided to him by
Defendant. Finding the production incomplete, Mr. Sims exchanged additional emails with
Defendant’s counsel. Defendant’s counsel sent the last e-mail in the exchange on April 11,
2017, indicating that he would consult with his client about additional documents and would
supplement production as necessary as soon as possible. Still dissatisfied with Defendant’s
production and before any supplemental production was served, Plaintiffs filed the instant
motion to compel on April 26, 2017. In their motion, Plaintiffs contend that Defendant’s
production was untimely and incomplete. Plaintiffs also asked the Court to award them
reasonable expenses for the filing of the instant motion to compel.
Plaintiffs then stipulated to three extensions of Defendant’s deadline to respond to the
instant motion to compel, presumably to allow Defendant time to produce its supplemental
responses. On June 2, 2017, Defendant filed its supplemental responses totaling about 1,000
pages of information. [DE 56]. Through an e-mail to Mr. Sims dated June 6, 2017, Defendant’s
Counts 1–8 of Plaintiffs’ Third Amended Complaint were dismissed with prejudice by this Court on November 8,
2016. [DE 34]. Only Count 9 regarding violations of the ECOA remains before the Court.
counsel reported Defendant’s willingness to produce additional information, such as certain
confidential and proprietary documents namely its Fair Servicing Policy and its Subservicing
Agreement, and reminded Mr. Sims about the proposed protective order sent to Plaintiffs for
their approval about a week earlier. [DE 58-2 at 2]. Earlier in the same e-mail, Defendant’s
I write you to follow-up on your very brief telephone call to me early this
morning. Unfortunately, I was not afforded any opportunity to respond to your
general dissatisfaction with my discovery responses before you ended the call. I
am happy to discuss any specific disputes you may have about my client’s
document production. As you know, Rule 37 requires parties to meet and confer
about any discovery disputes. That did not occur. I find it most productive for
parties to discuss specific issues in the case rather than resorting to disparaging
remarks and angry demands. If you would like to have such a discussion, please
give me a call at your convenience.
Later the same day, Mr. Sims responded via e-mail (1) accusing Defendant’s counsel of
patronizing him; (2) disputing Defendant’s counsel’s interpretation of the Rule 37 meet and
confer requirement; (3) advocating for his legal position based on information found in
Defendant’s supplemental production; (4) advising Defendant’s counsel to read Rule 11; and (5)
reminding Defendant’s counsel that his discovery responses were not complete. [Id.]. In his email, Mr. Sims also stated: “I am not your [n-word], . . . .” and “We are not your [n-word]s.”
[Id.]. Mr. Sims then concluded:
Neither Chief Judge Simon, nor Magistrate [Judge] Gotsch would be happy with
this continuing dilatory behavior in light of the facts. We will no longer confer. I
do not trust you. We believe we have met the requirements. You may want to
counsel your client to take our last settlement offer. It will be off the table forever
after 5 p.m, [sic] June 15th.
On June 15, 2017, Defendant timely filed its response opposing the instant motion to
compel for four reasons. First, Defendant argues that Plaintiffs’ efforts to meet and confer
before filing the motion to compel did not satisfy the Rule 37(a) requirements. Second,
Defendant argues that Plaintiffs’ motion, and their correspondence with Defendant before filing
the motion, did not explain their opposition to Defendant’s discovery responses in sufficient
detail. Third, Defendant contends that its supplemental discovery responses on June 2, 2017,
rendered the instant motion to compel moot. And lastly, Defendant claims it acted in good faith
to resolve the parties’ discovery dispute such that sanctions in the form of costs related to the
instant motion should not be awarded to Plaintiffs.
On June 20, 2017, Plaintiffs timely filed their reply brief, which included no evidence of
any further efforts to resolve the discovery dispute with Defendant after its supplemental
discovery responses were served, and properly filed, on June 2nd. 2 In addition, Plaintiffs
reiterated the arguments originally set forth in their motion to compel and stated that Defendant
still had not produced documents responsive to their Request Nos. 12–26. Furthermore,
Plaintiffs cited documents produced by Defendant in support of arguments on the merits of their
ECOA claim. Plaintiffs also argued for sanctions against Defendant based on its alleged lies and
gamesmanship in this litigation.
On June 30, 2017, Defendant properly filed and served its First Set of Discovery
Requests Directed to Plaintiffs, which included interrogatories, requests for production of
documents, and requests for admission. Under Fed. R. Civ. P. 33(b)(2), 34(b)(2)(A), and
36(a)(3), Plaintiffs responses to Defendant’s discovery requests were due on July 30, 2017.
“All discovery material in cases involving a pro se party must be filed.” N.D. Ind. L.R. 26-2(a)(2)(A). None of the
parties’ discovery requests were filed as required before June 2, 2017, when Defendant filed its supplemental
responses to Plaintiff’s Request for Production of Documents [DE 56]. The Court ADVISES the parties to comply
with the Local Rules in their entirety going forward.
On July 12, 2017, Defendant then filed its Motion for Protective Order, without
agreement from Plaintiffs, seeking to facilitate discovery while maintaining the confidentiality of
certain materials containing proprietary information, trade secrets, financial data or other
confidential or commercially sensitive information. To date, Plaintiffs have filed no response to
Defendant’s motion for protective order. Instead, Plaintiffs filed their Motion to Stay Discovery
on July 27, 2017. Through their motion to stay, Plaintiffs ask the Court to stay all discovery—
including their responses to Defendant’s discovery requests served on June 2, 2017 and to
Defendant’s motion for protective order—until the Court rules on Plaintiff’s pending and ripe
motion to compel introduced above.
Fed. R. Civ. P. 26 (b)(1) permits discovery into
any nonprivileged 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.
This Court has broad discretion when deciding whether to compel discovery and may deny or
limit discovery to protect a party from oppression or undue burden. Fed. R. Civ. P. 26(c); Sattar
v. Motorola, Inc., 138 F.3d 1164, 1171 (7th Cir. 1998); Gile v. United Airlines, Inc., 95 F.3d 492,
495-96 (7th Cir. 1996). In ruling on a motion to compel, “a district court should independently
determine the proper course of discovery based upon the arguments of the parties.” Gile, 95 F.3d
Under Fed. R. Civ. P. 37(a)(1), a motion to compel “must include a certification that the
movant has in good faith conferred or attempted to confer with the person or party failing to
make disclosure or discovery in an effort to obtain it without court action.” Local Rule 37-1(a)
specifically requires that
[a] party filing any discovery motion must file a separate certification that the
party has conferred in good faith or attempted to confer with other affected parties
in an effort to resolve the matter raised in the motion without court action. The
certification must include:
the date, time, and place of any conference or attempted
the names of the parties participating in the conference.
Written, telephonic, or email communication satisfies Rule 37(a)(1) as long as the parties
personally engage in two-way dialogue and discuss meaningfully the discovery dispute “in a
genuine effort to avoid judicial intervention.” Vukadinovich v. Hanover Cmty. Sch. Corp., 2:13CV-144-PPS-PRC, 2014 WL 667830 (N.D. Ind. Feb. 20, 2014) (internal quotations omitted).
Here, the parties engaged in two-way dialogue via e-mail and telephone calls on multiple
occasions in April 2017 before Plaintiffs filed their instant motion to compel. Based on those
communications, Plaintiffs could have waited to file the instant motion to compel based on
Defendant’s representations that supplemental responses were forthcoming. With the motion
pending, however, Plaintiffs did continue conferring with Defendant about the promised
supplemental responses as evidenced by their stipulation to three extensions of Defendant’s
deadline to respond to the pending motion to compel. Nevertheless, none of Plaintiffs’
communications with Defendant specify which documents are missing from Defendant’s
production, why the missing documents are relevant, or why Defendant’s initial objections based
on privilege, relevance, and proportionality are insufficient. With a limited understanding of
Plaintiffs’ concerns, Defendant still served and filed its supplemental responses on June 2, 2017.
Through his June 6, 2017, Mr. Sims engaged in one last e-mail exchange with
Defendant’s counsel and asserted Plaintiffs’ objection to the supplemental responses as
incomplete. That e-mail exchange was a two-way communication, but cannot be viewed as good
faith dialogue for the purpose of resolving the parties’ remaining discovery dispute. While
Defendant demonstrated a willingness to produce more documents if a protective order were
issued, Mr. Sims refused to agree to any such protective order, accused Defendant of dilatory and
bad faith conduct, used racist terms, and explicitly asserted that “[Plaintiffs] will no longer
confer” and “do not trust [Defendant’s counsel].” [DE 58-2 at 2]. Moreover, Mr. Sims’s e-mail
still failed to specify the precise shortcomings of Defendant’s discovery responses.
Mr. Sims’s June 6, 2017, e-mail reveals many things, most of which need not be
addressed here. As relevant here, the e-mail confirms that Plaintiffs ended negotiations with
Defendant about the discovery dispute before addressing Defendant’s concern about maintaining
the confidentiality of documents Defendant agreed were relevant and was willing to produce
once a protective order was issued. As such, Plaintiffs can only blame themselves for any delay
in the production of these additional responsive documents, which would have likely resolved
the discovery dispute at the heart of Plaintiffs’ arguably premature motion to compel.
Accordingly, the Court cannot grant Plaintiffs’ motion to compel.
Furthermore, Plaintiffs’ refusal to confer further with Defendant about the discovery
dispute, in compliance with the letter and the spirit of Fed. R. Civ. P. 37(a)(1), forced Defendant
to file the now pending motion for protective order, which is a procedural device designed to
protect parties’ legitimate interests in confidentiality of particular information. Indeed, the Court
is open to issuing a protective order if Defendant demonstrates sufficient good cause as required
under Fed. R. Civ. P. 26(c). See also Fed. R. Civ. P. 26(c)(1)(G). Without an independent
determination of good cause, the Court must not issue a protective order to prevent public
disclosure of allegedly confidential information. Fed. R. Civ. P. 26(c); Citizens First Nat’l Bank
of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 944 (7th Cir. 1999). To do so would amount
to an improper grant of carte blanche to the parties to seal or protect whatever they desire.
Citizens, 178 F.3d at 944; see also Pierson v. Indianapolis Power & Light Co., 205 F.R.D. 646,
647 (S.D. Ind. 2002) (“Independent and careful evaluations of protective orders are especially
important because ‘[t]he judge is the primary representative of the public interest in the judicial
process . . . .’”) (quoting Citizens, 178 F.3d at 945).
When good cause exists, parties may “keep their trade secrets (or some other properly
demarcated category of legitimately confidential information) out of the public record, provided
the judge . . . satisfies himself that the parties know what a trade secret is and are acting in good
faith in deciding which parts of the record are trade secrets.” Citizens, 178 F.3d at 946.
However, proposed protective orders defining categories of confidential information only with
qualifiers such as “private,” “confidential,” or “proprietary” fail to assure the court that the
parties know what constitutes confidential information, “whether and under what circumstances
it may be sealed, or whether the parties will be making good faith and accurate designations of
information.” Pierson, 205 F.R.D. at 647. Therefore, when reviewing a proposed protective
order, a court must ensure that
(1) the information sought to be protected falls within a legitimate category of
confidential information, (2) the information or category sought to be protected is
properly described or demarcated, (3) the parties know the defining elements of
the applicable category of confidentiality and will act in good faith in deciding
which information qualifies thereunder, and (4) the protective order explicitly
allows any party and any interested member of the public to challenge the sealing
of particular documents.
Id. (citing Citizens, 178 F.3d at 946).
Regardless of any objection Plaintiffs may later put forth in response to Defendant’s
motion for protective order, the Court cannot issue the protective order Defendant has proposed
because it fails to satisfy the second and fourth prongs of the applicable Citizens standard. First,
Defendant’s proposed protective order relies upon improper general qualifiers when it defines
confidential information as “documents containing personal and corporate proprietary and/or
financial data.” [DE 61-1 at 3, ¶ 6]. In addition, the proposed protective order, if issued, would
essentially grant improper carte blanche to the parties to define additional categories of
confidential information when it states: “Additional documents may be later identified which
shall also be considered Confidential Information and such records shall be given similar
protections pursuant to this Protective Order as specifically designated by the Parties during the
course of this litigation.” [Id.]. Second, Defendant’s proposed protective order fails to explicitly
allow an interested member of the public to challenge the sealing of any of the documents
identified by the parties as confidential. See Pierson, 205 F.R.D. at 647 (citing Citizens, 178
F.3d at 945–46); see also Jessup v. Luther, 227 F.3d 993, 997 (7th Cir. 2000) (“The right to
intervene to challenge a closure order is rooted in the public’s well-established right of access to
In the end, both parties have contributed to the delay in resolution of this discovery
dispute. Defendant has not explained with sufficient particularity why all the responsive
documents were not provided to its counsel promptly for production to Plaintiffs within the
original 30-day response period provided under Fed. R. Civ. P. 34. More problematic, however,
is Plaintiffs’ failure to (1) confer meaningfully with Defendant regarding the proposed protective
order, which could have resolved the discovery dispute; (2) identify with specificity the alleged
shortcomings of Defendant’s production; and (3) Plaintiffs’ unsupported allegations of
sanctionable misconduct by Defendant and its counsel. Taking into account the totality of the
circumstances, the Court cannot grant Plaintiffs’ motion to compel. Moreover, the Court cannot
grant Defendant’s motion for protective order because its proposed protective order does not
satisfy prongs two and four of the Citizens standard.
Recognizing that Defendant is willing to produce additional documents responsive to
Plaintiffs’ discovery requests, the Court DENIES WITHOUT PREJUDICE Plaintiffs’ motion
to compel [DE 48] to allow the parties time to stipulate to a proposed protective order that allows
Defendant to supplement its production further. The Court also DENIES WITHOUT
PREJUDICE Defendant’s motion for protective order [DE 61] due to shortcomings of its
proposed protective order under the Citizens standard. The Court DECLINES to award
reasonable expenses under Fed. R. Civ. P. 37(a)(5) for either of these discovery motions.
However, the Court ORDERS the parties to meet and confer regarding a proposed
protective order. The parties may file a joint motion for protective order by August 23, 2017,
with a stipulated proposed protective order that satisfies the requirements of Citizens discussed
above. Should the parties fail to reach agreement on a proposed protective order, Plaintiffs may
file a renewed motion to compel and Defendants may separately file a renewed motion for
protective order by August 23, 2017. Responses to any such motions are due by August 30,
2017. No reply briefs will be allowed. The Court ADVISES that any further evidence of
obdurate, contumacious, or vituperative conduct or language directed to either party or this Court
will influence any decision this Court must make should this discovery dispute not be resolved
by the parties themselves.
To facilitate the parties’ resolution of this discovery dispute and responses to outstanding
discovery requests, the Court now sua sponte EXTENDS the discovery deadline until
September 30, 2017. Furthermore, Plaintiffs have failed to show good cause to stay discovery
despite this discovery dispute. Moreover, the parties and the Court remain obligated to secure a
“just, speedy, and inexpensive determination” of this action under Fed. R. Civ. P. 1. Therefore,
the Court DENIES Plaintiffs’ motion to stay discovery. [DE 62]. Plaintiffs’ responses to
Defendant’s Discovery Requests filed on June 30, 2017 [DE 60] are due August 23, 2017.
Dated this 2nd day of August 2017.
s/Michael G. Gotsch, Sr.
Michael G. Gotsch, Sr.
United States Magistrate Judge
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