Kent v. Kyanite Services, Inc. et al

Filing 63

ORDER ON DISCOVERY DISPUTE. Signed on 2/2/18 by Chief District Judge Greg Kays. (Strodtman, Tracy)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
KELLY W. KENT,
Plaintiff,
v.
SETERUS, INC., LERETA, LLC, and
QUICKEN LOANS INC.,
Defendants.

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No. 4:17-CV-00257-DGK

ORDER ON DISCOVERY DISPUTE
This case arises out of unpaid real estate taxes. Plaintiff Kelly Kent (“Plaintiff”) alleges
that he made payments to his mortgage company, including amounts for real estate taxes, but
Defendants failed to forward these payments to the taxing authority. Plaintiff is suing the
mortgagor, the loan servicer, and the company that provided property tax reporting and
monitoring services on his loan.
Now before the Court is a discovery dispute concerning Plaintiff’s response to one of
Defendant Seterus, Inc.’s (“Seterus”) interrogatory questions.

After reviewing the parties’

memoranda regarding the discovery dispute (Docs. 58 and 61) and hearing argument from
counsel during a teleconference on January 31, 2018, the Court denies Seterus’s request to
compel a response from Plaintiff.
Background
Plaintiff purchased a condo in Chicago, Illinois in 2007. As part of that purchase, he
obtained a mortgage on the property and later refinanced that loan with Quicken Loans Inc.
(“QLI”). Plaintiff arranged with QLI an escrow account whereby he made monthly payments

into the account with the understanding that those monies would be applied to his annual
property tax obligation. Seterus is a loan servicer and serviced Plaintiff’s loan with QLI. In
2012, QLI sold or transferred Plaintiff’s loan to Federal National Mortgage Association,
(“Fannie Mae”). In 2016, Plaintiff learned the property taxes on his condo were not timely paid,
causing one years’ tax account to be sold at the county’s annual tax sale and an assessment of
late penalties on his account.
Initially, Plaintiff sued Seterus and Lereta, LLC, for violations of the Real Estate
Settlement Practices Act, the Missouri Merchandising Practices Act, various common law
negligence claims, and breach of contract. On December 7, 2017, the Court granted in part
Seterus’s motion to dismiss (Doc. 42). While the motion to dismiss was pending, Plaintiff
amended his complaint adding QLI1 as a party.
On December 28, 2017, Plaintiff filed a motion to file a second amended complaint to
add Fannie Mae as a party and to amend the scheduling order. Seterus and Lereta opposed the
motion. Nonetheless, the Court granted the motion and in doing so, extended the deadline for
discovery to April 2, 2018 (Doc. 60).
Seterus served interrogatories on Plaintiff, including No. 11 which requested the amount
of financial damages along with an explanation of how those damages were calculated. In his
initial response, Plaintiff objected asserting “attorney-client privilege and/or work product
doctrine” and stated that the amount of damages would require an expert opinion and the
findings of a jury. (Doc. 58-3 at 4). Later, Plaintiff filed a supplemental answer providing the
same response as his initial answer, but attached a Privilege Log.

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Plaintiff alleges he could not name QLI has a party at the outset of this lawsuit because, according to the agreement
between QLI and Plaintiff, Plaintiff was required to provide QLI a notice of intent to sue prior to initiating a lawsuit.

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Discussion
Initially, Seterus complained of two issues, but now agrees that the first issue, related to
the delivery of Plaintiff’s expert report, is moot given the Court’s amended scheduling order. As
to the second issue, Seterus complains that Plaintiff has not provided it with a “full and complete
explanation of the means by which each category [of damages] were calculated as requested” in
Seterus’s Interrogatory No. 11. (Doc. 58 at 4).
Plaintiff states that he intends to supplement his initial response to Seterus’s Interrogatory
No. 11 after additional discovery is complete. Plaintiff states that he learned during mediation
additional facts that—if true—modify his actual damages calculation. Plaintiff also states that
his actual and future damages are dependent on input from his retained expert.
Federal Rule of Civil Procedure 26 requires that a party must provide a computation of
each category of damages claimed. Fed. R. Civ. P. 26(a)(1)(iii). It also permits supplementing
disclosures and responses when a party learns that some material is incomplete or incorrect. Fed.
R. Civ. P. 26(e).
Defendant cites to Gillespie v. Block Maint. Sols., to support its position that Plaintiff is
required to immediately provide the means by which he calculates his damages. No. 12-947CV-W-DGK, 2013 WL 6199198, at *1 (W.D. Mo. Nov. 27, 2013). The Court in Gillespie
ordered the plaintiff to identify the amount of damages sought, explain how that value was
derived, and provide documentation to support that computation. However, this order was issued
only after the time for discovery had ended, and after the Court had granted the defendant’s
motions to compel that information.
Here, the parties agree that Plaintiff is required to provide the information Seterus is
requesting; this dispute centers on the timing of this disclosure. Because the Court has amended

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the scheduling order, the parties now have two full months of discovery remaining. Plaintiff
states this discovery is necessary in order to provide Seterus with its requested information. It is
reasonable to believe that Plaintiff will file supplemental answers as to his damages calculation
when he has the necessary information because he has already done so once. Accordingly,
Seterus’s motion to compel Plaintiff to provide an explanation of how its actual and future
damages are calculated is denied without prejudice. If the parties complete discovery and
Plaintiff has not provided the disclosures as required by Rule 26, the parties can revisit this issue.
Finally, the Court’s impression of this dispute is that it is one that should have been
resolved by the parties through a genuine effort to meet and confer. Moving forward, the Court
encourages the parties to work together to resolve these disputes without judicial intervention.
IT IS SO ORDERED.
Date:

February 2, 2018

/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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