Kirby et al v. Bank of America, NA et al

Filing 104

ORDER granting 82 Motion to Substitute Party. BAC Home Loan Servicing, L.P. terminated; denying 94 Motion to Strike; granting Plaintiffs 30-day limited discovery. Signed by Honorable David C. Bramlette, III on 12/6/2011 (PL)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
HATTIESBURG DIVISION
CLINTON E. KIRBY AND MARTHA B. KIRBY
VERSUS

PLAINTIFFS

CIVIL ACTION NO: 2:09-cv-182-DCB-JMR

BANK OF AMERICA, N.A. ET AL.

DEFENDANTS
ORDER

This matter comes before the Court on the Plaintiffs’ Motion
to Strike Note [docket entry no. 94] and Defendants’ Motion to
Substitute Party [docket entry no. 82]. Having considered said
Motions, the Parties’ responses thereto, applicable statutory and
case law, and being otherwise fully advised in the premises, the
Court finds and orders as follows:
After reviewing the Defendants’ response to this Court’s Show
Cause

Order,

the

Court

is

satisfied

with

the

Defendants’

explanation as to why there are two different versions of the Note
in the Court’s record. Nevertheless, the Court questions the
Defendants’ explanation that they believed they could rely on
affidavits of their employees in lieu of producing the endorsed
version of the Note, particularly when the Defendants appear to
recognize the legal importance of an endorsed Note. See Defendants’
Memo. in Response to Motion to Strike, docket entry no. 101, pg. 5.
Without this crucial document, the Defendants’ present Motion for
Summary Judgment would have failed, at least with respect to the
Kirbys’ quiet title claim.

As to whether the Defendants violated Federal Rule of Civil
Procedure 26 by failing to disclose the most recent version of the
Note, the Court finds that the Defendants did indeed violate the
Rule

but

finds

this

violation

harmless.

See

FED . R. CIV . P.

37(c)(1). The Defendants’ initial disclosure was enough to satisfy
the

mandates

of

Rule

26(a)(1)(A)(ii),

but

by

introducing

an

incomplete “copy” of the Note in their Motion for Summary Judgment,
the Defendants were under an obligation to notify the Court and the
Kirbys when it discovered the different, endorsed version of the
Note. See FED . R. CIV . P. 26(e). Under a Rule 36(c)(1) factorial
analysis, however, there is no question that the failure was
harmless. See Tex. A&M Research Found. v. Magna Transp., Inc., 338
F.3d 394, 402 (5th Cir. 2003) (outlining the four factors the Court
should consider: “(1) the importance of the evidence; (2) the
prejudice to the opposing party of including the evidence; (3) the
possibility of curing such prejudice by granting a continuance; and
(4) the explanation for the party's failure to disclose.”).
First,
disclose

is

the

Defendants’

plausible,

explanation

although

the

for

their

Defendants

failure
should

to

have

recognized that the Note attached to their Summary Judgment Motion
was incomplete because it did not bear any of the endorsements
necessary for the Defendants to enforce it. See Defendants’ Motion
for Summary Judgement, docket entry no. 76. The Kirbys stated this
problem in their pending Motion to Limine. See docket entry no. 83,

2

pg.1 (“The Plaintiffs know, and the Defendants are undoubtedly
aware, that this lack of indorsement and lack of allonge presents
an insurmountable problem for the Defendants . . . .”). Secondly,
both Parties now agree that the latest version of the Note is
important, if not crucial, to this case as Mississippi case law
makes clear that the holder of the note endorsed in blank is “prima
facie presumed to be the bona fide owner of it.” Sivley v.
Williamson, 72 So. 1008, 1008 (Miss. 1916); see also Defendants’
Memo. in Response Motion to Strike, docket entry no. 101, pg. 5.
Thirdly, the Kirbys will suffer no prejudice from the Note being
accepted into evidence. While the Defendants bear most of the
responsibility for the oversight, the Kirbys could have requested
the

original

Note

earlier

but

failed

to

do

so.

Finally,

a

continuance in this case is not necessary because the trial date is
sufficiently in the future for the Kirbys to adequately address
this new evidence. Nevertheless, it would be prejudicial to the
Kirbys to not allow them to inquire into the origin and history of
the endorsed Note, particularly as they openly doubt its validity.
In light of this recent development, the Court will hold the
Defendants’ Motion for Summary Judgment in abeyance and permit the
Kirbys thirty (30) days to engage in limited discovery regarding
the endorsements. The Kirbys vigorously challenge the authenticity
of

these

endorsements,

suggesting

that

the

Defendants’

late

production of the original Note is evidence of unethical business

3

practices and misbehavior on the part of the Defendants. See, e.g.,
Plaintiffs’ Rebuttal Memo., docket entry no. 103, pgs. 1-2. The
Kirbys go so far as to allege that the Defendants have been less
than forthcoming in their dealings with this Court. See id. at pgs.
14-16. Yet, the Kirbys have produced no evidence to support these
conclusory allegations and instead draw these conclusions from
various magazine articles and holdings of other courts related to
the fraudulent behavior of one or more of the Defendants.1
As said, due to the late production of the endorsed Note, the
Court will at least allow the Kirbys the opportunity to gather
evidence to support their allegations regarding the authenticity of
the endorsements or the veracity of the Defendants’ recently
produced

declarations,

including

but

not

limited

to,

the

opportunity to depose Defendant employees regarding their knowledge
of the various transactions. See FED . R. CIV . P. 56 (d). The Kirbys
will

then

be

able

to

present

any

discovered

evidence

in

a

supplemental response to the Defendants’ Summary Judgment Motion.
Accordingly,
IT IS HEREBY ORDERED THAT the Defendants’ Motion will be held
IN ABEYANCE. The Plaintiffs have thirty (30) days from the

1

In particular, the Court rejects the Kirbys’ suggestion that
the Defendants’ varying explanations as to Fannie Mae’s status or
the late production of the Note is “evidence” of foul play. See
Plaintiffs’ Rebuttal Memo., docket entry no. 103, pgs. 1-3.
Instead, the Court views these as mistakes or oversights which can
be rectified by proper application of the Federal Rules of Civil
Procedure.
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filing of this Order to conduct limited discovery regarding
the endorsements. Discovery should be strictly tied to the
endorsed version of the Note produced by the Defendants.
IT IS FURTHER ORDERED THAT the Plaintiff’s Motion to Strike
Note [docket entry no. 94] is DENIED.
IT

IS

FURTHER

ORDERED

THAT

the

Defendants’

Motion

to

Substitute Party [docket entry no. 82] is GRANTED pursuant to
Federal Rule of Civil Procedure 25(c). The Court relies on the
declaration of Michele Sjolander stating that BAC has merged
with BANA. See docket entry no. 100-1 ¶ 6.
SO ORDERED AND ADJUDGED, this the _6th_ day of December 2011.

/s/ David Bramlette
UNITED STATES DISTRICT JUDGE

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