Capital One, National Association v. SFR Investments Pool 1, LLC et al

Filing 372

ORDER Granting in Part and Denying in Part 367 Joint Proposed Amendments to Scheduling Order as modified in the Order. The Court further Denies 368 Discovery Plan and Scheduling Order. Rocktop and Wilmington to produce non-privileged document s responsive to the United States' current requests Re: 352 Motion to Compel: Deadline is 4/20/2021. Discovery due by 6/10/2021. Motions due by 7/12/2021. Signed by Magistrate Judge Brenda Weksler on 4/5/2021. (Copies have been distributed pursuant to the NEF - DRS) Modified Judge's signature date on 4/6/2021 (SLD).

Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 1 of 9

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DAVID A. HUBBERT
Acting Assistant Attorney General

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E. CARMEN RAMIREZ
TY HALASZ
Trial Attorneys, Tax Division
U.S. Department of Justice
P.O. Box 683
Washington, D.C. 20044
T: [phone] (Ramirez)
T: [phone] (Halasz)
F: [phone]
[e-mail]
[e-mail]
[e-mail]

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Attorneys for the United States of America
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KIM GILBERT EBRON
DIANA S. EBRON Nev. Bar No. 10580
JACQUELINE GILBERT Nev. Bar No. 10593
KAREN L. HANKS Nev. Bar No. 9578
7625 Dean Martin Drive, Ste. 110
Las Vegas, Nevada 89139
Attorneys for SFR Investments Pool 1, LLC
LIPSON NEILSON, COLE, SELTZER &
GARIN, P.C.
J. WILLIAM EBERT Nev. Bar No. 2697
JANEEN V. ISAACSON Nev. Bar No. 6429
9900 Covington Cross Dr., Ste. 120
Las Vegas, Nevada 89144
Attorneys for Anthem Country Club Community
Association

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IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEVADA
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Plaintiff,
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v.
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SFR INVESTMENTS POOL 1, LLC, a
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Nevada limited liability company; and
ANTHEM COUNTRY CLUB COMMUNITY, )
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ASSOCIATION, a Nevada nonprofit
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corporation,
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Defendants.
_______________________________________ )
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SFR INVESTMENTS POOL 1, LLC, a
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Nevada limited liability company,
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Counterclaimant/Crossclaimant,
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v.
CAPITAL ONE, NATIONAL
ASSOCIATION, a national banking
association,

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Case No. 2:17-cv-00604-RFB-BNW
consolidated with
Case No. 2:17-cv-00916-KJD-BNW
JOINT PROPOSED AMENDMENTS
TO SCHEDULING ORDER BY THE
ANTHEM COUNTRY CLUB
COMMUNITY ASSOCIATION, SFR
INVESTMENTS POOL 1, LLC, AND
THE UNITED STATES

Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 2 of 9

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CAPITAL ONE, NATIONAL
ASSOCIATION, a national banking
Association; LEON BENZER, an individual;
UNITED STATES OF AMERICA

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Cross-Defendants,
Counter-Defendants.

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_______________________________________

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UNITED STATES OF AMERICA,

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Plaintiff,

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v.

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LEON BENZER;
SFR INVESTMENTS POOL 1, LLC;
CAPITAL ONE, N.A.; ROCKTOP
PARTNERS, LLC; WILMINGTON SAVINGS
FUND SOCIETY, FSB, AS TRUSTEE OF
STANWICH MORTGAGE LOAN TRUST A;
ANTHEM COUNTRY CLUB
COMMUNITY ASSOCIATION; and
REPUBLIC SILVER STATE DISPOSAL INC.,
Defendants.
_______________________________________

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CAPITAL ONE, NATIONAL ASSOCIATION
a national banking association,
Counter-Claimant/Cross-Claimant,
v.
UNITED STATES OF AMERICA;
LEON BENZER, an individual;
SFR INVESTMENTS POOL 1, LLC,
a Nevada limited liability company; and
ANTHEM COUNTRY CLUB
ASSOCIATION, a Nevada corporation,

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Counter-Defendant/Cross-Defendants.
_______________________________________

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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 3 of 9

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The Court granted the United States’ motion to compel discovery and directed the parties

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to propose a revised schedule. (ECF No. 364). Anthem Country Club Community Association

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(“Anthem”), SFR Investments Pool 1, LLC (“SFR”), and the United States ask that the Court

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adjust the dates currently in effect (see ECF No. and ECF Nos. 339-1 (proposed schedule) and

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341 (order approving schedule)) to reflect the new deadlines discussed below. Before filing this

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motion, the movants’ counsel met and conferred by telephone with the counsel for Rocktop

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Partners LLC (“Rocktop”) and Wilmington Savings Fund Society (“Wilmington”). The parties

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agree on most dates but were unable to agree to the scope of discovery going forward.

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MEMORANDUM
The parties, including Rocktop and Wilmington, generally agreed on the timing proposed

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below, except for the discovery cutoff. At the core of the dispute is the fact that because

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Rocktop and Wilmington refused to produce any documents until the Court granted the United

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States’ motion to compel, the movants have lost at least 51 days of the 95-day discovery period

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the Court previously granted. (Rocktop and Wilmington still have not produced the documents,

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though they say they will do so by April 20, 2021.) The movants believe they are entitled to a

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discovery period that approximates the initial 95-day period. Rocktop and Wilmington disagree.

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As the Court is aware, discovery was re-opened because Rocktop and Wilmington

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created and produced new documents in July of 2020, months after discovery was intended to

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have closed. Although the Court declined to exclude the new documents, it reasoned it would be

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“manifestly unjust” to deny the other parties discovery concerning the issues the July 2020

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production raised. (ECF No. 327 at 20)). The movants asked the Court for a 95-day discovery

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period, and the Court granted that request. (ECF No. 342 at 19).

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However, the movants have not had the benefit of that 95-day period because Rocktop

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and Wilmington objected to the movants’ discovery requests. The United States promptly issued

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requests for production, pursuant to Rule 34. This would have allowed the United States time to
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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 4 of 9

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review the production, and then ask tailored interrogatories and requests for admission pursuant

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to Rules 33 and 36, as follow-up. SFR initially waited to send its own requests. Waiting until it

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had the documents the United States had requested would have allowed SFR to avoid duplication

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and to issue more targeted inquiries, if needed, based on what it learned from the production.

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However, Rocktop and Wilmington objected to the government’s requests on February 3, 2021,

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so the United States promptly moved to compel production. When it became clear the motion to

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compel could not be decided right away, SFR issued a round of discovery to avoid any

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suggestion of waiver. Rocktop and Wilmington have objected to those requests as well; the

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parties are currently conferring regarding that dispute.

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The Court has now granted the United States’ motion to compel (ECF No. 364), and

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Rocktop and Wilmington say they will produce documents by April 20, 2021. But that means

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the movants lost 51 days, the time between February 3, 2021, the day Rocktop and Wilmington

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should have produced the documents, and March 26, 2021, the day discovery was to have closed.

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And that 51-day figure does not include the time that may be lost before Rocktop and

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Wilmington respond to SFR’s requests. The discovery cutoff should therefore be extended at

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least 51 days from the time that Rocktop and Wilmington comply with all of the outstanding

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discovery requests, unless the Court ultimately sustains all of their objections to SFR’s requests.

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(If so, the 51 days should count from the date of such order.)

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The movants did not set out to extend discovery past March 2021. This situation exists

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because Rocktop and Wilmington waited until after the close of discovery to create and produce

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new materials, and then spent the next several months fighting reasonable discovery. Under the

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circumstances, a discovery cutoff date that reduces the 95-days the Court granted would penalize

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the movants even as they prevail over the objections. It is true that discovery may end up

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requiring more than 51 days, depending on when Rocktop and Wilmington’s dispute with SFR is

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resolved. But any such extension will be because of Rocktop and Wilmington’s initial
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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 5 of 9

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objections. There was little point in issuing further written requests while the objection was

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pending. The movants had no initial production to follow-up on, and the futility of issuing

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requests before a ruling was demonstrated by Rocktop and Wilmington’s across-the-board

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objections to the requests SFR ultimately issued. The objections halted the discovery process for

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everyone, and it is impractical to set different cutoffs for the different parties.

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However, based on the meet and confer, it appears that Rocktop and Wilmington wish to

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shorten the 95-day period because on the theory that the movants are entitled to only one round

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of written discovery each. For example, because the United States issued one round of requests

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for production after the Court re-opened discovery, they say the United States cannot review the

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production and issue any follow up interrogatories or requests for admission.
Rocktop and Wilmington’s counsel did not point to anything in the Court’s prior orders

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or the discovery rules that set forth such a one-and-done policy. The Federal Rules generally

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allow 30 days for a party to respond to written discovery (with an additional three days for

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service by mail, though the parties have agreed to electronic service). See, e.g., Fed. R. Civ. P.

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34 (b)(2). The 95-day period would have been enough time to issue a round of discovery, and

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then issue a second round, or take depositions, or both, depending on what turned up in the first

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round. The Rules do not mandate any one strategy within the timeframe allowed.

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Rocktop and Wilmington’s counsel asserted that it was his practice to issue a single

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round of discovery, so there is no need for the other parties’ counsel to do anything differently.

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But the other counsel are not obligated to follow his preferred legal strategies. He also suggested

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that no written discovery beyond the United States’ three requests for production could be useful,

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because he could not think of any questions to ask. But Rocktop and Wilmington continue to

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hold all the cards—they still have not produced any documents related to the new requests. The

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movants should not waive their rights to issue further discovery while blind. Plus, forcing parties

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to issue all written discovery at once encourages a scorched-earth approach to discovery, seeking
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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 6 of 9

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anything and everything for fear of leaving something unanticipated out, which is inconsistent

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with the Rules’ admonition that parties take care to make their requests “proportional to the

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needs of the case”. Fed. R. Civ. P. 26(b)(1).
Next, Rocktop and Wilmington’s counsel suggested that there was no need for a 95-day

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discovery period because the movants had already had the chance to ask whatever questions they

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needed, and could have done so “in 2017.” That ship has sailed. The Court rejected very similar

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arguments already, most recently in granting the United States’ motion to compel. (ECF No.

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264). The movants cannot be faulted for not previously asking questions about, or prompted by,

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documents that they have never before seen.
Finally, Rocktop and Wilmington suggested that about 30 days would be enough time to

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review the production, and then notice and take a deposition. Even if the Court retracts the 95-

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day period it initially granted, or rules that the movants are limited to one round of written

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discovery each, 30 days is aggressive. Scheduling a deposition at a time that works for the

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deponent and four sets of lawyers is no easy feat, even excluding the time needed to obtain

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transcripts and even assuming only one deposition is needed.
Therefore, the movants propose the following dates:

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Event
Rocktop and Wilmington
to produce privilege log

Current Date
N/A

Proposed Deadline
April 6, 20211

Any objections to
privilege log

N/A

14 days from the production of the log, with
the opposing party’s response due 3 days later

Rocktop and Wilmington
to produce non-privileged
documents responsive to
the United States’ current
the motion to compel at
requests for production
ECF No. 352.

February 3,
2021

April 20, 2021

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The discussion during the meet and confer was vague as to this date, but the minute order at
ECF No. 364 states that the log should be produced within 7 days of March 30, 2021.
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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 7 of 9

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Event
Any motions concerning
SFR’s current discovery
requests
Discovery cutoff

Current Date
N/A

Proposed Deadline
April 12, 2021, for any motion, with any
response due by April 16, 2021

March 26, 2021

June 10, 2021, if Rocktop and Wilmington
produce all documents responsive to the
pending discovery
United States and SFR’s current discovery
requests by April 20, 2021.2

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If either party requires discovery after the
If Rocktop and Wilmington do not produce
all, or 10, 2021, deadline, then they must
June substantially all, the documents by
April motion or stipulation forare any
file a 20, 2021 and/or if there the Court's
unresolved discovery disputes as of June 10,
consideration.
2021, the deadline will be automatically be
extended by 30 days. The parties will work
together to propose a new schedule in light of
such disputes.

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Dispositive motions

April 26, 2021

The later 2021 days after the Discovery
July 12, of 30 (i.e., 30 days after the
Cutoff, or 30 days after the resolution of any
discovery cutoff).
open discovery-related motion, or 30 days after
last date of production or response (assuming
the production or response does not generate
further motions practice).

Joint pretrial order

May 26, 2021,
or 30 days from
the date of the
last decision on
any dispositive
motions

30 days from the date of the last decision on
any dispositive motions.

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Finally, the movants note that the United States’ motion for leave to amend the operative
answer (ECF No. 357) is also currently pending. The parties understand that this motion is under
Judge Weksler’s jurisdiction. At this time, the parties have not agreed to any specific changes to
the schedule based on the when or how that motion is resolved.

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WHEREFORE, the Court should enter the deadlines proposed above.

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This affords the parties approximately the same amount of follow-up time as they would have
had if Rocktop and Wilmington had produced the documents on February 3.
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Case 2:17-cv-00604-RFB-BNW Document 367 Filed 04/02/21 Page 8 of 9

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Respectfully submitted April 2, 2021 [Signatures below]
ORDER

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IT IS SO ORDERED

On the basis of good cause IT IS ORDERED that ECF No. 367 is GRANTED in part
and DENIED in part as modified in this order (see page 4, lines 21 to 24; page 5, lines
3 to 13). IT IS FURTHER ORDERED that ECF No. 368 is DENIED.
_________________
IT IS SO ORDERED
12:55 States District Judge
DATED: Unitedpm, April 05, 2021 or
United States Magistrate Judge

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Submitted by:

BRENDA WEKSLER
UNITED STATES MAGISTRATE JUDGE

LIPSON, NEILSON, COLE, SELTZER & GARIN,
P.C.

KIM GILBERT EBRON
By: /s/
Diana S. Ebron
Nevada Bar No. 10580
Jacqueline Gilbert
Nevada Bar No. 10593
Karen L. Hanks
Nevada Bar No. 9578
7625 Dean Martin Drive, Ste. 110
Las Vegas, Nevada 89139

By: /s/
J. William Ebert
Nevada Bar No. 2697
Janeen V. Isaacson
Nevada Bar No. 6429
9900 Covington Cross Dr., Ste. 120
Las Vegas, Nevada 89144
Attorneys for Anthem Country Club
Community Association

Attorneys for SFR Investments Pool 1,
LLC

By: /s/ Ty Halasz
David A. Hubbert
Acting Assistant Attorney General
E. Carmen Ramirez
Ty Halasz
Trial Attorneys, Tax Division
U.S. Department of Justice
P.O. Box 683
Washington, DC 20044
Attorneys for United States

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