Schneider et al v. CitiMortgage, Inc. et al
MEMORANDUM AND ORDER denying without prejudice 61 Motion for Summary Judgment. See order for details. Signed by U.S. District Senior Judge Sam A. Crow on 10/22/14. (msb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
RANDALL A. SCHNEIDER
and AMY L. SCHNEIDER
CITIGROUP, INC., and
PRIMERICA FINANCIAL SERVICES
HOME MORTGAGES, INC.
MEMORANDUM AND ORDER
This case comes before the court on the motion of Citigroup, Inc. and
Primerica Financial Services Home Mortgages, Inc. for summary judgment.
These defendants contend that they should be granted summary judgment
because Plaintiff has not met its burden to show they can be held liable for
the breach of contract or Kansas Consumer Protection Act claims made in
Citigroup is a parent company to Citicorp Trust Bank, fsb (“Citicorp”),
now known as Citibank, N.A., and apparently to Primerica. See Dk. 62, Exh.
F. Defendants establish that neither of them was a signatory to the contract
allegedly breached,1 and assert that Citigroup was sued simply because it is
a parent company to Citibank.
But Citigroup has not shown that it cannot be held liable as a parent
company. See Anderson v. Abbott, 321 U.S. 349, 361–62, 64 S.Ct. 531,
537, 88 L.Ed. 793 (1944) (noting that limited liability is the general rule but
that exceptions exist); Frank v. U.S. West, Inc., 3 F.3d 1357, 1362 & n. 2
(10th Cir. 1993) (recognizing four tests to determine whether a parent
corporation should be held liable for the acts of a subsidiary). In fact,
Defendants do not attempt to produce evidence disproving their potential
liability for Plaintiff’s claims, and assert they need not do so. Dk. 62, p. 7.
Instead Defendants contend they “need only “point out” that “there is an
absence of evidence to support [the Schneiders’] case.” Id. But a good
reason exists for that absence of evidence - discovery is ongoing and
discovery requests on the disputed issue are outstanding.
Plaintiffs’ counsel has filed a “Rule 56 declaration” stating that she
“cannot present facts essential to justify opposition” to the motion. Dk. 95,
p. 11. states:
If a nonmovant shows by affidavit or declaration that, for
specified reasons, it cannot present facts essential to justify its
opposition, the court may:
(1) defer considering the motion or deny it;
In an earlier motion to dismiss, Defendants contended that the note which was allegedly
breached was not a valid contract between Plaintiffs and Citicorp because Citicorp never
signed that document. The Court disagreed. Plaintiffs’ underlying concern about shifting
corporate liability thus finds some support. And despite numerous arguments in that motion
to dismiss, neither of these defendants argued that it was not a proper party to the case.
See Dk. 7.
(2) allow time to obtain affidavits or declarations or to take
(3) issue any other appropriate order.
Fed.R.Civ. Pro. 56(d). “The purpose of the affidavit is to ensure that the
nonmoving party is invoking the protections of Rule 56(f) in good faith and
to afford the trial court the showing necessary to assess the merit of a
party's opposition.” (Citation omitted.)” Committee For The First Amendment
v. Campbell, 962 F.2d 1517, 1522 (10th Cir. 1992). This rule (previously
56(f)) grants discretion to the district court to defer ruling on a summary
judgment motion while the opposing party conducts additional discovery.
Estate of Ricci v. Salt Lake City Corp., 180 Fed.Appx. 810 (10th Cir. 2006).
Defendants have not alleged that counsel’s declaration is procedurally
insufficient. See 28 USC § 1746. Accordingly, the Court asks whether the
substantive requirements of the rule are met.
The party requesting additional discovery must present an affidavit
that identifies the probable facts not available and what steps have
been taken to obtain these facts. The nonmovant must also explain
how additional time will enable him to rebut the movant's allegations
of no genuine issue of material fact.... Speculation cannot support a
Rule 56(d) motion.
F.D.I.C. v. Arciero, 741 F.3d 1111, 1116 (10th Cir. 2013) (interior quotation
and citation omitted). And conclusory declarations are inadequate to justify
relief under Rule 56(d). Abdulhaseeb v. Calbone, 600 F.3d 1301, 1310 (10th
Counsel’s affidavit states the following: she has issued discovery
requests; she believes the relationship of the parties to each other is key to
their liability; entities not named in the mortgage documents “could be” part
of the fee sharing alleged in the petition; CitiMortgage controls its owner,
CitiBank’s documents; Defendants have produced only some of the records
referring to her client’s 2010 loan application; Citigroup owns and manages
“each of the entities”; she has hired an expert to evaluate the documents;
and the necessary documents are in Defendants’ control. Dk. 95, p. 11-15.
Liberally read, counsel’s affidavit is sufficient to show a plausible basis
for her belief that outstanding discovery may lead to evidence sufficient to
raise a genuine issue whether either of these companies is liable for the acts
alleged in the complaint. ‘Unless dilatory or lacking in merit, the motion
should be liberally treated.’ ” Committee For The First Amendment, 962 F.2d
at 1522 (quoting James W. Moore & Jeremy C. Wicker, Moore's Federal
Practice ¶ 56.24 (1988)). Although Rule 56 sets out stricter standards for
materials offered on the merits of a summary judgment motion, those
standards do not apply to proffers under Rule 56(d). See Committee for First
Amendment, 962 F.2d at 1522.
Defendants note that summary judgments may be entered before
discovery is complete, and this is so in certain circumstances. See Public
Service Co. of Colorado v. Continental Cas. Co., 26 F.3d 1508 (10th Cir.
1994) (finding no outstanding discovery, no Rule 56(f) affidavit, no showing
of specific evidence expected to be obtained, and only partial summary
judgment sought). But those circumstances are not present here.
In the exercise of its discretion, the Court finds the motion for
summary judgment to be premature so permits the Plaintiffs the opportunity
to discover the unusual facts necessary to hold these Defendants liable. In
the event such evidence is not shown, the Court will not hesitate to grant a
similar summary judgment motion after the close of discovery.
IT IS THEREFORE ORDERED that Defendants’ motion for summary
judgment (Dk. 61) is denied without prejudice to its refiling at a later date.
Dated this 22nd day of October, 2014 at Topeka, Kansas.
s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge
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