Minter v. Wells Fargo Bank, N.A. et al

Filing 362

MEMORANDUM AND ORDER GRANTING IN PART AND DENYING IN PART (344) Motion to Consolidate Cases in 1:07-cv-03442-WMN, 1:08-cv-01642-WMN; GRANTING with respect to bifurcate cases into separate liability phases and damages phases for trial; DENYING with respect that cases be consolidated for trial; DIRECTING plaintiffs to file correspondence within 14 days. Signed by Judge William M Nickerson on 5/30/12. Associated Cases: 1:07-cv-03442-WMN, 1:08-cv-01642-WMN(hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
DENISE MINTER et al.
v.
WELLS FARGO BANK, N.A. et al.

BRADLEY PETRY et al.
v.
PROSPERITY MORTGAGE CO. et al.
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* Civil Action WMN-07-3442
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* Civil Action WMN-08-1642
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MEMORANDUM & ORDER

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The Plaintiffs in both the Minter and Petry cases have
filed a Motion to Consolidate Cases and Bifurcate Trial.
No. 344 in Minter and ECF No. 245 in Petry.

ECF

They urge the Court

to consolidate these cases for trial and then to bifurcate the
trial into separate liability and damages phases.

Defendants

oppose both aspects of this Motion.
Federal Rule of Civil Procedure 42 gives the Court broad
discretion to make decisions about how to most efficiently and
economically try cases on its docket while providing justice to
the parties.

See Wright & Miller, Federal Practice and

Procedure: Civil 3d § 2381.

The Rule provides that the Court

may consolidate actions that involve a common question or law or
fact, Fed. R. Civ. P. 42(a), and that the Court may order a
separate trial of one or more separate issues if convenient, to

avoid prejudice, or to expedite and economize, Fed. R. Civ. P.
42(b).
Plaintiffs urge the Court to consolidate these cases
because they involve identical defendants (and counsel), rely on
many of the same facts, will involve much of the same proof at
trial, and are based on seemingly-overlapping theories of
liability.

Defendants acknowledge that there will be shared

proof and that there are many apparent similarities between the
cases, but argue that consolidation is inappropriate because it
would unfairly prejudice the Petry defendants and lead to jury
confusion.
The Court agrees with Defendants that these two cases
should not be consolidated for trial.

Though it may be more

economical and certainly less time consuming to try these cases
together, the complexity of these class actions militates
against such an outcome.

The jury will hear voluminous evidence

related to the intricacies of the banking and lending industry
and the inner-workings of Prosperity.

They will be instructed

on the different legal theories of the case and the tolling
analysis that they must complete.
deliberate.

They will then be left to

The complexity and unfamiliarity of the subject

matter to most jurors will likely make this task difficult; even
if the factual evidence is strongly in favor of one side or the
other, unraveling the different legal theories will take some
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time and effort.

Because the cases are premised on similar but

distinct theories of liability, the task of deliberating would
become significantly more complicated if the cases were tried
together.

The jury would be charged with compartmentalizing

certain evidence that applies to one case but not the other and
attempting to keep straight the differences between liability
under RESPA, RICO and the FFA,1 not to mention the task of
determining tolling for two different periods of time.

It is

certainly foreseeable that the complexity of this task could
cause the jury to overlook or confuse certain nuances in the law
or facts and lead to an unjustly rendered verdict.

While the

Court does not savor the idea of sitting through much of the
same evidence twice, it is the Court’s job to do so in order to
ensure fairness for all parties before the tribunal.

As such,

the Court will exercise its discretion and deny Plaintiffs’
Motion to Consolidate.
Plaintiffs also propose that the trial of the class actions
be bifurcated into two phases: a liability phase and, if
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In their Opposition, Defendants noted that Plaintiffs did not
address the trial or bifurcation of their common law state
claims and questioned whether Plaintiffs intend to continue
pursuing these claims. See ECF No. 351 at 3 in Minter; ECF No.
251 at 3 in Petry. Plaintiffs did not respond to this inquiry
in their Reply. So that all parties are on the same page going
forward, the Court orders that, within 14 days of the date of
this Memorandum and Order, Plaintiffs file correspondence
indicating which claims they currently intend to pursue at
trial.
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Plaintiffs prevail in the liability phase, a damages phase.
Defendants’ primary argument in opposition concerns Plaintiffs’
proposal that evidence related to whether or not class members
paid greater than market value for their settlement services
should be part of the damages phase.

This evidence relates

directly to the RICO claim in Minter.

As pointed out by

Defendants, whether class members suffered a financial injury
bears directly on Defendants’ RICO liability because if class
members paid Prosperity settlement fees equivalent to what they
would have paid on the open market, then there was no financial
injury and Defendants cannot be liable under RICO.

Plaintiffs

appear to concede this argument, and in response amend their
initial bifurcation proposal so that evidence related to the
existence of financial injury to class members will be part of
the liability phase and evidence related to the amount of such
injury will be reserved for the damages phase.
In light of this amended proposal, the Court agrees that
bifurcation of the trials into separate liability and damages
phases is appropriate.

First, Defendants’ main concern

regarding the RICO evidence is not an issue that stands in the
way of bifurcating the Petry trial because the Plaintiffs have
not made a RICO claim in that case.

Second, Plaintiffs have

addressed Defendants’ concern regarding the Minter trial in

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their Reply.

This proposal resolves Defendants’ concerns

related to the appropriate bifurcation of the evidence.2
The Court recognizes that because of the size of the
classes and the complexity of the issues involved, these two
cases are rather unwieldy.

The Court will therefore exercise

its discretion to break them into manageable pieces for
consideration by a jury.

Bifurcating each trial into separate

liability and damages phases will allow the jury to focus
initially on the complex liability issues without the need to
also keep track of voluminous damages evidence, much of which
appears to be undisputed and may even be suitable for resolution
without a jury.

This will serve the interests of efficiency and

economy, particularly if the jury decides the liability phase in
favor of the Defendants.

Moreover, appropriately bifurcating

the case will not prejudice either party.

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Defendants raise a number of additional concerns, including
Plaintiffs’ standing to bring a RICO claim, the
constitutionality of the HUD Ten-Factor Test, the relevance of
evidence of “table-funding” to the FFA claim, and the
applicability of the HUD Ten-Factor Test to the Petry tolling
period. The Court notes that some of these issues, particularly
the constitutionality of the HUD Ten-Factor Test, have been
raised in the past and already resolved by the Court. See ECF
No. 253 at 40 in Minter and ECF No. 186 at 40 in Petry. As the
motion presently before the Court is limited to the issues of
Consolidation and Bifurcation, the Court will not engage these
extraneous arguments at this time.
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Accordingly, IT IS this 30th day of May, 2012, by the
United States District Court for the District of Maryland,
ORDERED:
1) That Plaintiffs’ Motion to Consolidate Cases and
Bifurcate Trial, ECF No. 344 in Minter and ECF No. 245
in Petry, is GRANTED in part and DENIED in part, such
that:
a. The Motion is GRANTED with respect to the request to
bifurcate the cases into separate liability phases
and damages phases for trial;
b. The Motion is DENIED with respect to the request
that the cases be consolidated for trial;
2) That, within 14 days of the date of this Memorandum and
Order, Plaintiffs file correspondence indicating which
claims in each case they currently intend to pursue at
trial; and
3) That the Clerk of the Court shall transmit a copy of
this Memorandum and Order to all counsel of record.

_______________/s/________________
William M. Nickerson
Senior United States District Judge

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