Sultan et al v. BAC Home Loans Servicing, L.P. f/k/a Countrywide Home Loans, Inc.

Filing 58

ORDER entered by Judge Nanette Laughrey. Defendant's Motion for Leave to File Answer [Doc. # 44] is GRANTED and Plaintiffs' Motion to Deny Leave Regarding Defendant's Untimely Answer [Doc. # 42] is DENIED. (Kanies, Renea)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION

WANDA R. SULTAN and,
MOHAMED Y. SULTAN,
Plaintiffs,
v.
BAC HOME LOANS SERVICING L.P.
f/k/a COUNTRYWIDE HOME LOANS,
INC.,
Defendant.

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Case No. 2: 10-cv-04271-NKL

ORDER
Before the Court are Defendant’s Motion for Leave to File Answer [Doc. # 44] and
Plaintiffs’ Motion to Deny Leave Regarding Defendant’s Untimely Answer [Doc. # 42]. For
the following reasons, the Court grants Defendant’s Motion and denies Plaintiffs’ Motion.
I.

Background
On December 17, 2010, Plaintiffs filed their Complaint in the Court. On January 12,

2011, Defendant timely filed its Motion to Dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). On April 25, 2011, the Court denied Defendant’s Motion to Dismiss in
part and granted it in part. Pursuant to Federal Rule of Civil Procedure 12(a)(4)(A),
Defendant’s responsive pleading was due to be filed on or before May 9, 2011. Defendant
filed its answer on October 3, 2011. On October 6, 2011, Plaintiff filed a Motion to Deny
Leave for Defendant to file its answer, and Defendant filed its Motion for Leave to File on
October 14.

Defendant claims its delay was caused by medical emergencies affecting both of its
attorneys of record. Defendant states that the supervising attorney was out of the office due
to serious illness from May 6, 2011 to May 23, 2011, and thereafter placed on emergency
medical leave, during which time she withdrew from the matter. Defendant also claims that
the other attorney of record was periodically out of the office from late April until early May
due to serious illness including some hospitalization. Defendant claims that upon the return
of the second counsel to work, she overlooked that an answer had not been filed due to a
clerical mistake in which the response date was not docketed on either attorney’s calendar.
Defendant further claims that it was not until a recent review of the pleadings that the current
attorneys of record realized an answer had never been filed. [Doc. # 45 at 1-2].
II.

Discussion
Under Federal Rule of Civil Procedure 6(b)(1)(B), a court may grant a party leave to

file a pleading after the original deadline has expired “if the party failed to act because of
excusable neglect.” As stated by the Eighth Circuit, “[e]xcusable neglect is an elastic
concept that empowers courts to accept, where appropriate, . . . late filings caused by
inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the
party’s control.” Chorosevic v. Metlife Choices, 600 F.3d 934, 946 (8th Cir. 2010) (internal
citations omitted). The determination of whether neglect is excusable “is at bottom an
equitable one, taking account of all relevant circumstances surrounding the party's omission.”
Id. at 946, citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395
(1993). Among the factors to be analyzed include reasons for the delay; the length of the
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delay and the possible impact of such a delay on judicial proceedings; the possibility of
prejudice to the other party; and whether the party acted in good faith. Id. at 946.
Here, the Court finds that Defendant has provided sufficient evidence of excusable
neglect to warrant permission to file its answer out of time. Defendant has provided sworn
depositions by three attorneys stating that the failure to timely file was caused by the medical
emergencies and clerical oversight discussed above. Defendant’s delay of five months also
has not had a negative impact on the judicial proceedings, as Defendant has already put
Plaintiffs on notice of most of their affirmative defenses through their previous motions to
dismiss. The Court finds reasonable the explanation by Defendant that its remaining
affirmative defense of unclean hands arose too late to include in a motion to dismiss, as it
appears to stem from the Plaintiffs’ deposition testimony in October, which Defendants are
offering as evidence that Plaintiffs “signed loan applications containing false information for
the loans at issue in this case and in which they contradicted various allegations made in their
Complaint.”1 [Doc. # 46-2 at 2].
Because Defendant has already been put on notice of the majority of the affirmative
defenses, and the remaining affirmative defense only arose as a result of recent deposition

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Plaintiff’s apparent argument that the assertion of the unclean hands defense requires
Defendant to produce additional discovery regarding Defendant’s alleged inequitable conduct is
without merit, as Defendant’s defense relates to the conduct of Plaintiffs, not Defendant. See
Feinstein v. Cubur Corp., 721 S.W.2d 763, 766 (Mo. Ct. App. 1986) (“One who has engaged in
inequitable activity regarding the very matter for which he seeks relief will find his actions
barred by his own misconduct.”) Plaintiff’s fear that an assertion of this defense will entitle
Defendant to new discovery is also unfounded, as the deadline for written discovery has passed
and the Court will not permit additional discovery on this defense.
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testimony, the Court finds that Plaintiffs have not suffered prejudice by the filing delay.
Plaintiffs have also presented no evidence suggesting that Defendant has acted in bad faith
in filing a late answer.
Plaintiffs appear also to argue that Defendant’s answer should be struck for inaccuracy
and insufficiency. Striking a pleading is an “extreme and disfavored measure.” WRIGHT &
MILLER, FEDERAL PRACTICE & PROCEDURE § 1382 (3d ed. 2004). To strike a responsive
pleading, Plaintiffs must show that the material in the answer is redundant, immaterial,
impertinent, or scandalous. See Fed. R. Civ. Proc. 12(f). Plaintiffs argue first that the
affirmative defense of unclean hands should be struck for insufficiency because it is
essentially a claim for fraud, requiring pleading with particularity according to Federal Rule
of Civil Procedure 9(b). However, Plaintiffs provide no authority for their apparent claim
that the defense of unclean hands should be treated as an affirmative claim for fraud
governed by Rule 9(b) rather than a defensive rule barring litigants from being granted
equitable relief as it is interpreted in Missouri case law. See Reyner v. Crawford, 334 S.W.3d
168, 174 (Mo. Ct. App. 2011).

Plaintiffs also make various allegations2 of inaccuracy

against Defendant’s pleadings in which Defendant states that it is without sufficient
knowledge or information about various activities and property ownership of Plaintiffs prior

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For example, Plaintiffs argue that Defendant should not be permitted to state in its
Answer that it is without sufficient knowledge to admit or deny that “Plaintiffs appeared for a
closing of the home loan for 1700 Sycamore on May 30, 2007, and signed some of the closing
documents, including a deed of trust.” Plaintiff also points to Defendant’s pleading that it is
without sufficient information to admit or deny that “prior to May 31, 2007, Plaintiffs owned 313
Brown, Hallsville free and clear of any mortgages or other similar encumbrances.” [Doc. # 42 at
4].
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to May 31, 2007.3 However, given that the recent deposition testimony of Plaintiffs appears
to raise a possible dispute regarding the accuracy of the dates of the signings and closings at
issue, the Court will not strike these pleadings for inaccuracy or insufficiency.
Plaintiffs also appear to argue in their reply that Defendant’s eighth affirmative
defense, which states that Plaintiffs’ claim for rescission is barred by their failure to tender
the amount owed, should be stricken. Plaintiffs base this position upon the argument that the
tender requirement is “unfounded” and that “defendant has claimed no discovery regarding
its inequitable conduct is [sic] allowed...yet...an unfounded tender requirement...puts
defendant’s inequitable conduct squarely at issue.” [Doc. # 47 at 2]. However, Eighth
Circuit case law has permitted district courts to impose a tender requirement upon a
consumer seeking rescission. See Federal Deposit Ins. Corp. v. Hughes Dev. Co., 938 F.2d
889 (8th Cir. 1991). Plaintiffs have also not provided binding case law indicating that
inequitable conduct by Defendants would cancel any tender requirement imposed by the
Court. Given the state of the law, therefore, Defendant’s affirmative defense is a colorable
and will not be stricken.
Plaintiffs also appear to argue that Defendant’s second affirmative defense should be
struck, which states that “Plaintiff’s damages, if any, were caused in whole or in part by
persons over which Defendant had no control, including Plaintiffs.” [Doc. # 51 at 3].

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Plaintiffs also appear to allege that Defendant’s pleading inaccurately states that it lacks
sufficient information or knowledge as to whether notices of the right to cancel were provided.
However, Defendant’s answer clearly concedes that these notices were provided. [Doc. # 38 at
3].
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Plaintiff’s argument appears to rest upon the fact that “defendant has claimed no discovery
is allowed regarding identifying the owner of this loan or defendant’s communications to the
owner concerning rescission.” [Doc. # 47 at 2]. The Court does not understand the
relationship between Plaintiff’s discovery requests concerning ownership of the loans, and
their unjust enrichment claim. Thus the Court will not strike this affirmative defense and will
address Plaintiff’s argument, if necessary, once a factual record is established. If there is a
discovery dispute, it should be addressed by phone.
III.

Conclusion
Accordingly, it is hereby ORDERED that Defendant's Motion for Leave to File

Answer [Doc. # 44] is GRANTED and Plaintiffs’ Motion to Deny Leave Regarding
Defendant's Untimely Answer [Doc. # 42] is DENIED.

s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: December 21, 2011
Jefferson City, Missouri

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