Wells Fargo Bank, National Association, Trustee v. Moskoff, et al

Filing 135

ORDER granting 113 Partially Assented to MOTION to Compel Non-Parties Leone, McDonnell & Roberts, to Produce Documents Subpoenaed and Compel Keeper of Records and Firm Partner, Paula J. Daley Deplanche, to Testify Relative to Such Records. Documents to be produced as outlined on or before January 7, 2019. So Ordered by Judge Joseph N. Laplante.(jb)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Wells Fargo Bank, National
Association, as Trustee for
Option One Mortgage Loan Trust
2007-2, Asset-Backed Certificates,
Series 2007-2
v.

Civil No. 17-cv-136-JL
Opinion No. 2018 DNH 258

David B. Moskoff, Daphne M.N.
Fotiades, Stewart Title Guaranty
Company
ORDER
Through this action, plaintiff Wells Fargo seeks to
foreclose on a mortgage agreement that it alleges defendants
David B. Moskoff and Daphne M.N. Fotiades entered into in 2006.1
It alleges that these defendants defaulted on their payments due
under the mortgage loan beginning in September 2012.2

These

defendants claim, in response, that they never signed the
mortgage agreement or note, and that the mortgage is a fraud.3
Wells Fargo now seeks to compel production of copies of
these defendants’ tax returns held by non-party accounting firm
Leone, McDonnell & Roberts (LMR) and testimony from a partner of
1

Amended Compl. (doc. no. 3) ¶¶ 14-15.

2

Id. ¶ 25.

3

E.g. id. ¶ 26.

that firm as a keeper of records.4

As both Wells Fargo and LMR

observe, LMR is prohibited by statute from disclosing this
information without either these defendants’ permission or a
court order.5

See 26 U.S.C. § 7216; 26 C.F.R. § 301.7216-2(f)).

These defendants have withheld their permission,6 leading Wells
Fargo to seek a court order.
Wells Fargo seeks the records for the purpose of
determining whether David B. Moskoff and Daphne M.N. Fotiades
“claimed mortgage interest deductions that coincide with
interest reported to the IRS by the mortgagee (including its
predecessors-in-interest) or by its mortgage servicer(s) on IRS
Form 1098 . . . .”7

This evidence is relevant to the question of

whether these defendants acknowledged the mortgage, despite
their disavowal of it beginning in 2012.
As LMR observes, the subpoena is unnecessarily broad
insofar as it seeks “[a]ll records for” each defendant “for tax
years 2005 to 2013.”8

4

Wells Fargo, however, has clarified that

Mot. to Compel (doc. no. 113).

Contrary to defendant Daphne M.N. Fotiades’s suggestion, see
Fotiades Supp. Obj. (doc. no. 133) ¶¶ 5-7, it would not
constitute a crime for LMR to produce these documents pursuant
to a court order. See 26 U.S.C. § 7216(b)(1)(B).
5

6

LMR Obj. (doc. no. 116) ¶ 14.

7

Mem. in Supp. of Mot. to Compel (doc. no. 113-2) at 2.

8

LMR Obj. (doc. no. 116) ¶ 16; Subpoena Ex. 1 (doc. no. 116-1).

2

it seeks only information relevant to what mortgage interest
deduction, if any, these defendants claimed for the years 2005
through 2012 and in connection with which, if any, mortgage the
defendants claimed such a deduction.9

This limited set of

information is unquestionably relevant to the claims and
defenses raised in this action, and must be produced.

The

remaining information on these defendants’ tax returns, which is
not relevant to this action, may be redacted.
Defendants Daphne M.N. Fotiades and David B. Moskoff object
to the production of this information.10

These objections make

clear that the information sought by Wells Fargo is relevant
both to Wells Fargo’s claims and these defendants’ defenses.
Specifically, these defendants argue against production on the
grounds that they are victims of synthetic identity fraud and
that they did not take out the mortgage on which Wells Fargo
seeks to foreclose.11

9

Whether these defendants claimed a

Mem. in Supp. of Mot. to Compel (doc. no. 113-2) at 8.

Moskoff Obj. (doc. no. 123); Fotiades Obj. (doc. no. 124);
Fotiades Supp. Obj. (doc. no. 133); Moskoff Supp. Obj. (doc.
no. 134). David B. Moskoff and Daphne M.N. Fotiades originally
objected on grounds that they were not served a copy of the
motion to compel. See Fotiades Obj. (doc. no. 124) ¶¶ 1, 26.
On December 10, 2018, the court afforded these defendants an
opportunity to file supplemental objections to the motion after
receiving a copy.
10

Moskoff Obj. (doc. no. 123) ¶¶ 6-10; Fotiades Obj. (doc.
no. 124) ¶¶ 5-8, 15-16; Fotiades Supp. Obj. (doc. no. 133) ¶ 20.
11

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mortgage interest deduction in the same amount as appears in
Wells Fargo’s records is probative of that issue.
These defendants raise three objections that bear
addressing.

First, these defendants object on the grounds that

the complaint names an individual other than Daphne M.N.
Fotiades as a mortgagor and defendant, and that LMR has no
records connected with that individual.12

On June 8, 2018, and

with Daphne M.N. Fotiades’s agreement, the court ordered the
complaint amended to name Daphne M.N. Fotiades as a defendant in
place of the individual that Daphne M.N. Fotiades refers to as
“aka-aka.”13

This forecloses any objection based on the idea

that the complaint names an individual other than Daphne M.N.
Fotiades or that Daphne M.N. Fotiades is not a defendant in this
action.
Second, these defendants contend that Wells Fargo is
improperly circumventing the discovery process established by
Federal Rule of Civil Procedure 26(b)(1) by seeking these tax
records through a subpoena instead of from its own records or
these defendants directly.14

As these defendants observe, Wells

E.g., Fotiades Obj. (doc. no. 124) ¶¶ 5-16; Fotiades Supp.
Obj. (doc. no. 133) ¶¶ 11-14, 18-20, 25-26, 34, 63.
12

13

June 8, 2018 Hrg. Tr. (doc. no. 92) at 5, 7-10.

Fotiades Supp. Obj. (doc. no. 133) ¶ 36-37, 41-45; Moskoff
Supp. Obj. (doc. no. 134) ¶¶ 4-7, 10-11, 14-18.
14

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Fargo has moved to compel this tax information from David B.
Moskoff and Daphne M.N. Fotiades15 because they failed to produce
it in response to discovery requests.

These defendants cannot

stonewall traditional discovery and then complain when the
plaintiff seeks the same information from another source.
Third, these defendants argue that production of these tax
documents would violate certain privileges afforded to
communications between a taxpayer and his or her certified
public accountant.

They invoke New Hampshire state law, under

which, “[e]xcept by permission of the client,” a certified
public accountant “shall not voluntarily disclose information
communicated to [the accountant] by the client relating to and
in connection with services rendered to the client by [the
accountant].”16

N.H. Rev. Stat. Ann. § 309-B:18.

That section

further provides, however, that those restrictions shall not “be
construed . . . as prohibiting disclosures in court proceedings
. . . in instances where a subpoena or summons has been issue .
. . .”

Id.

Thus, production of the tax documents in response

See Mot. to Compel Fotiades to Produce Documents (doc.
no. 129) (sealed); Mot. to Compel Moskoff to Produce Documents
(doc. no. 131) (sealed).
15

See Fotiades Supp. Obj. (doc. no. 133) ¶ 9; Moskoff Supp. Obj.
(doc. no. 134) ¶ 12.
16

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to a subpoena, for use in these court proceedings, would not
violate this statute.
Nor would it violate the privilege afforded to
communications between a taxpayer and a federally authorized tax
practitioner.17

See 26 U.S.C. § 7525(a)(1).

That privilege is

limited to “noncriminal tax matter[s] before the Internal
Revenue Service” and “noncriminal tax proceeding[s] in Federal
court brought by or against the United States,” id § 7525(a)(2).
This proceeding falls in neither of those categories.
These defendants’ remaining objections generally concern
the attorneys representing LMR18 and Wells Fargo’s unrelated
transactions.19

The plaintiffs also suggest the subpoena is

invalid because Attorney McNicholas signed it prior to making an
appearance in this action.20

Though it would have been better

practice to appear before signing the subpoena, that procedural
wrinkle does not invalidate the subpoena.

Nor do any of these

defendants’ remaining objections bar production of the requested
documents or deposition testimony.

17

See Moskoff Supp. Obj. (doc. no. 134) ¶ 13.

Fotiades Obj. (doc. no. 124) ¶¶ 31-32; Fotiades Supp. Obj.
(doc. no. 133) ¶¶ 2, 50-51; Moskoff Supp. Obj. (doc. no. 134)
¶¶ 2(i)-(j), 3, 11.
18

19

Fotiades Obj. (doc. no. 124) ¶¶ 31-32.

Fotiades Obj. (doc. no. 124) ¶ 29; Moskoff Supp. Obj. (doc.
no. 134) ¶ 9.
20

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Accordingly, Wells Fargo’s motion to compel21 is GRANTED.
LMR shall produce copies of defendants David B. Moskoff’s and
Daphne M.N. Fotiades’s tax returns for the years 2005 through
2013, inclusive.

LMR shall redact all information not relevant

to whether a mortgage interest deduction was taken, for how much
it was taken, and in connection with which mortgage loan it was
taken.

These records shall be produced on or before January 7,

2019.
SO ORDERED.

Joseph N. Laplante
United States District Judge
Dated:
cc:

21

December 21, 2018

John S. McNicholas, Esq.
David B. Moskoff, pro se
Daphne M.N. Fotiades, pro se
Peter M. Solomon, Esq.
Thomas Kincaid McCraw, Jr., Esq.

Document no. 113.

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