Hutter v. Country Wide Bank, N.A.

Filing 237

OPINION & ORDER re: 212 FIRST MOTION to Dismiss filed by Watermark Capital Inc. For the foregoing reasons, Defendant's motion is DENIED. The Clerk of the Court is respectfully directed to terminate the motion at ECF No. 212. (Signed by Judge Nelson Stephen Roman on 1/9/2017) Copies Mailed By Chambers. (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
NANCE HUTTER,
Plaintiff,
No. 09 Civ. 10092 (NSR)

-against-

OPINION & ORDER

COUNTRYWIDE BANK, N.A., a subsidiary of
COUNTRYWIDE FINANCIAL CORPORATION;
WATERMARK CAPITAL, INC.; aud
EVOLUTION MORTGAGE, INC.,
Defendants.

NELSON S. ROMAN, United States District Judge
Plaintiff Nance Hutter, now proceedingpro se, is preparing to bring this action to trial on
the sole remaining claim that survived summary judgment. After expressing frustration at
Plaintiffs failure to meaningfully confer in anticipation of trial, Defendant submitted the
pending motion to dismiss pursuant to Rule 4 l(b) of the Federal Rules of Civil Procedure for
failure to prosecute this action. (ECF No. 212.) For the reasons set forth below, Defendant's
motion is DENIED.

BACKGROUND
This action was removed to federal court on the basis of original jurisdiction on
December 10, 2009, by former defendant Bank of America, N.A., a successor by merger of
named former defendant Countrywide Bank, N.A. (Notice of Removal, ECF No. 1.) After
many years of motion practice, including tin·ee amendments to the complaint, the sole remaining
claim over which the Court retains supplemental jurisdiction is for an alleged violation of New

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York Banking Law § 590(2)(b): “[n]o person, partnership, association, corporation or other
entity shall engage in the business of soliciting, processing, placing or negotiating a mortgage
loan” without being properly registered in New York. (See Opinion & Order of Sept. 14, 2015
(denying summary judgment for Defendant Watermark Capital, Inc., due to the genuine disputes
of material fact as to whether Watermark solicited, processed, or negotiated Plaintiff’s mortgage
loan despite not being the broker of record, and as to whether Watermark’s employees or agents
were properly authorized to work on the loan before closing), ECF No. 203.) 1
After Plaintiff’s attorney was sanctioned and subsequently withdrew from representing
her in this action, the Court directed her to either seek new counsel or proceed pro se. (See ECF
No. 204.) Two months later at a conference held on November 23, 2015, Plaintiff had not
secured new counsel. The Court, therefore, deemed her pro se and set a pre-trial schedule with
trial commencing on the week of June 20, 2016. Defendant Watermark filed the motion now
before the Court on May 27, 2016 (ECF No. 212), due to Plaintiff’s alleged failure to prosecute
the action, including her failure to communicate with defense counsel in order to comply with
the Court’s scheduling order. (See Def. Mem. in Supp. of Mot. to Dismiss (“Def. Mem.”), ECF
No. 214.) Plaintiff responded on June 10, 2016. (Pl. Obj. to Mot. to Dismiss (“Pl. Opp’n”), ECF
No. 218.) At a conference held that day, the Court rescheduled the trial for January 23, 2017.
While the motion was pending, Defendant alleged in correspondence with the Court and
Plaintiff that the same failures were ongoing. The Court granted Defendant’s request to
supplement its submission with those allegations. (See Order of Dec. 7, 2016 (“Dec. 7 Order”),

1

Former defendant Bank of America based the removal on this Court having original jurisdiction over
Plaintiff’s Truth in Lending Act, Real Estate Settlement Procedures Act, and RICO claims, with supplemental
jurisdiction over Plaintiff’s New York statutory and common law claims—which included alleged violations of New
York’s Deceptive Practices Act and Banking Law, as well as allegations of fraud in the inducement, civil conspiracy
to commit fraud, tortious interference, and breach of fiduciary duty.

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ECF No. 228.) The Court also takes into consideration all of Plaintiff’s actions in this matter
since November 23, 2015.
STANDARD ON A MOTION TO DISMISS
FOR FAILURE TO PROSECUTE
Pursuant to Rule 41(b) of the Federal Rules of Civil Procedure, “[i]f [a] plaintiff fails to
prosecute or to comply with the[] [federal] rules or a court order, a defendant may move to
dismiss the action or any claim against it.” “The ‘primary rationale’ for dismissal pursuant to
Rule 41(b) is ‘the failure of plaintiff in his duty to process his case diligently.’” Gonzalez v.
Comm’r of Social Security, No. 09 Civ. 10179 (RJS), 2011 WL 2207574, at *1 (S.D.N.Y. June 2,
2011) (quoting Lyell Theatre Corp. et al. v. Loews Corp. et al., 682 F.2d 37, 43 (2d Cir. 1982)).
“Unless the dismissal order states otherwise, a dismissal under [Rule 41(b)] . . . operates as an
adjudication on the merits.” Fed. R. Civ. P. 41(b). Dismissal is, therefore, “a harsh remedy to be
utilized only in extreme situations.” Alvarez v. Simmons Market Research Bureau, Inc., 839
F.2d 930, 932 (2d Cir. 1988) (quoting Theilmann v. Rutland Hospital, Inc., 455 F.2d 853, 855
(2d Cir. 1972) (per curiam)).
The decision to dismiss pursuant to Rule 41(b) is left to the discretion of the district
court. See Nita v. Connecticut Dep’t of Envtl. Protection, 16 F.3d 482, 485 (2d Cir. 1994); see
also Spencer v. Doe, 139 F.3d 107, 112 (2d Cir. 1998) (“Although not explicitly authorized by
[Rule 41(b)] dismissal may be made sua sponte”). There are several factors that a court should
consider in determining whether to dismiss a case for failure to prosecute:
(1) the duration of the plaintiff’s failure to comply with the court
order, (2) whether plaintiff was on notice that failure to comply
would result in dismissal, (3) whether the defendants are likely to be
prejudiced by further delay in the proceedings, (4) a balancing of the
court’s interest in managing its docket with the plaintiff’s interest in
receiving a fair chance to be heard, and (5) whether the judge has
adequately considered a sanction less drastic than dismissal.
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Lucas v. Miles, 84 F.3d 532, 535 (2d Cir. 1996). “‘Generally, no one factor is dispositive.’”
Shannon v. Gen. Elec. Co., 186 F.3d 186, 194 (2d Cir. 1999) (Sotomayor, J.) (quoting Nita, 16
F.3d at 485). But “district courts should be especially hesitant to dismiss for procedural
deficiencies where [] the failure is by a pro se litigant.” Lucas, 84 F.3d at 535.
DISCUSSION
It has been over seven years since this action was filed in state court. Since proceeding
pro se, Plaintiff has made limited progress in preparing for trial against the only remaining
Defendant in this action. The Court agrees that she has not diligently prosecuted the matter in
the same fashion that the Court would expect from trained legal counsel. (See Def. Mem. at 34.) Clearly, Plaintiff’s failures are traceable to her counsel’s withdrawal, given that the prior
prosecution of the action by her attorney was of a different tenor. See Alvarez, 839 F.2d at 932
(dismissal unwarranted where plaintiff had “timely complied with all requests of the court and
the defendants” prior to the first instance of delay attributable to plaintiff that led the court to
dismiss the action). Nevertheless, the Court is mindful of her pro se status, as well as her
claimed cognitive impairment. 2 Moreover, she has shown a desire to move forward with this
litigation despite her arguable shortcomings.
The Court is not convinced, however, that Plaintiff recognizes the strain that her actions
have placed on the Court and its docket. Each participant in a civil action plays a crucial role in
the shaping the outcome of the proceedings. See Doe v. C.I.A., 576 F.3d 95, 107 (2d Cir. 2009)
(explaining the fundamental nature of the adversarial process, which can “inform[] and sharpen[]

2
Plaintiff has submitted a letter from Dr. F. Carl Mueller, dated July 25, 2013, discussing her “notable
cognitive impairments,” including “memory difficulties, problems with executive functioning such as planning and
organization[,] and very severe mental fatigue,” and recommending that a six-hour deposition be conducted in twohour periods with at least one-hour breaks to allow Plaintiff to provide “rational testimony and suffer only minimal
trauma.” (See Attachment to Pro Bono Counsel Request: Letter from Dr. Mueller to Hon. J. Lefkowitz of the
Supreme Court for the State of New York, Westchester County, ECF No. 223.)

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the judicial inquiry” in an action and “assure[] each litigant a fair chance to explain, complain,
and otherwise be heard”). A plaintiff prosecutes the action, a defendant defends, and the Court
adjudicates. When a defendant fails to respond, a default judgment may be entered. Fed. R. Civ.
P. 55. And, when a plaintiff abandons or neglects a cause of action, it can be dismissed for want
of prosecution. Fed. R. Civ. P. 41(b).
As the Court recently explained, Plaintiff waited until less than two months before trial
was scheduled to commence—after proceeding without an attorney for over a year—to request
pro bono counsel to assist her in this action. (See Dec. 7 Order at 2.) In the Court’s assessment,
Plaintiff has also failed to meaningfully confer with defense counsel in the preparation of
materials for trial, such as the designation of exhibits and testimony as part of the joint proposed
trial order. (See ECF Nos. 221-236.) The proposed trial order finally submitted demonstrates
both a lack of understanding as to the narrowness of the issue for trial and an unwarranted level
of contentiousness on Plaintiff’s part. (See ECF No. 236, Ex. 1.)
The Court is satisfied that Plaintiff should have understood the consequences of failing to
meaningfully participate in the conferral process with defense counsel, but finds it would be a
draconian remedy to dismiss the action now on the basis of these failings. In considering the
appropriateness of imposing other sanctions in response to Plaintiff’s lack of diligence, the Court
finds monetary or alternative sanctions under Rule 16(f) would be inconsistent with Plaintiff’s
pro se and in forma pauperis status. Furthermore, the Court is unconvinced that the imposition
of a monetary fine in this case would result in materially improved performance by Plaintiff.
Therefore, Defendant’s motion to dismiss is denied, and the Court will not impose any
alternative sanctions. If Plaintiff is unprepared for trial, then that will be sanction enough.

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CONCLUSION

For the foregoing reasons, Defendant's motion is DENIED. The Clerk of the Court is
respectfully directed to terminate the motion at ECF No. 212.

Dated:

January j_, 2017
White Plains, New York

SO ORDERED:

Unite

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