Roundpoint Mortgage Servicing Corporation v. Five Brothers Mortgage Company Services and Securing, Inc.
Filing
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ORDER granting 41 Motion to Compel Testimony of Defendant's Rule 30(b)(6) Corporate Designee Witness. Defendant shall produce an appropriate Rule 30(b)(6) witness prepared to provide full and complete answers to Topics 9 and 12 of Plaintiff's deposition notice on or before November 18, 2016. This limited deposition may be conducted by telephone. Signed by Magistrate Judge David Keesler on 11/8/16. (mga)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:15-CV-559-RJC-DCK
ROUNDPOINT MORTGAGE SERVICING
CORPORATION,
Plaintiff,
v.
FIVE BROTHERS MORTGAGE COMPANY
SERVICES AND SECURING, INC.,
Defendant.
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ORDER
THIS MATTER IS BEFORE THE COURT on “Plaintiff’s Motion To Compel
Testimony Of Defendant’s Rule 30(b)(6) Corporate Designee Witness” (Document No. 41). This
motion has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b), and
is ripe for disposition. Having carefully considered the motion and the record, the undersigned
will grant the motion.
BACKGROUND
Roundpoint Mortgage Servicing Corporation (“Plaintiff” or “Roundpoint”) initiated this
action with the filing of a “Complaint” (Document No. 1) on November 18, 2015. The Complaint
alleges that Five Brothers Mortgage Company Services And Securing, Inc. (“Defendant” or “Five
Brothers”) breached a contract with Plaintiff by failing to indemnify it for losses incurred related
to a lawsuit filed by Anette M. Hayes, on or about August 26, 2013, against Roundpoint and Five
Brothers. (Document No. 1). Defendant Five Brothers filed its “…Answer To Plaintiff’s
Complaint” (Document No. 8), including a counterclaim for breach of contract based on events
related to the same underlying Hayes lawsuit.
On April 22, 2016, the Court issued a “Pretrial Order And Case Management Plan”
(Document No. 23) including, inter alia, the following deadlines: discovery completion – October
7, 2016; mediation report – October 21, 2016; dispositive motions – November 4, 2016; and a
bench trial – March 6, 2017.
On August 9, 2016, the Court denied without prejudice Defendant’s “Motion To Quash Or
In The Alternative Motion For Protective Order” (Document No. 29). (Document No. 33). In
doing so, the undersigned noted that Defendant had failed to abide by the Local Rules of this Court
and advised Defendant “that failure to abide by the “Pretrial Order And Case Management Plan”
(Document No. 23) or the Local Rules may result in sanctions.” (Document No. 33 p.3). The
undersigned took “Plaintiff’s request for attorney’s fees and costs under advisement.” (Document
No. 33, p.2).
On September 9, 2016, “Plaintiff’s Motion To Compel Discovery From Defendant”
(Document No. 31) was granted in part, and denied in part. (Document No. 36). The undersigned
denied without prejudice Plaintiff’s request for fees and expenses incurred in bringing the motion.
Id.
The Court granted “Defendant’s Motion To Amend Pretrial Order And Case Management
Plan…” (Document No. 44) on October 20, 2016, extending the deadlines for a mediation report
and the filing of dispositive motions to November 21 and December 2, 2016, respectively.
(Document No. 46).
On October 28, 2016, the Court granted “Roundpoint’s Motion To Compel The Production
Of Insurance Documents By The Defendant” (Document No. 37) and denied as moot “Plaintiff’s
Motion For A Protective Order And/Or To Quash Or Modify Defendant’s Subpoena Duces Tecum
To Plaintiff’s Expert Witness” (Document No. 39). (Document No. 47). The Court further ordered
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Defendant to reimburse Plaintiff for the reasonable expenses incurred preparing and filing
Document Nos. 37, 38, 39, and 40 – pursuant to Fed.R.Civ.P. 37(a)(5)(A). Id.
Now pending is “Plaintiff’s Motion To Compel Testimony Of Defendant’s Rule 30(B)(6)
Corporate Designee Witness” (Document No. 41). “Defendant’s Response…” was timely filed
on October 20, 2016; and Plaintiff’s “Reply Memorandum…” (Document No. 48) was filed on
October 28, 2016. As such, the pending motion to compel is ripe for review and disposition.
STANDARD OF REVIEW
Rule 26 of the Federal Rules of Civil Procedure provides that:
Parties may obtain discovery regarding any nonprivileged matter
that is relevant to any party’s claim or defense and proportional to
the needs of the case, considering the importance of the issues at
stake in the action, the amount in controversy, the parties’ relative
access to relevant information, the parties’ resources, the importance
of the discovery in resolving the issues, and whether the burden or
expense of the proposed discovery outweighs its likely benefit.
Information within this scope of discovery need not be admissible
in evidence to be discoverable.
Fed.R.Civ.P. 26(b)(1). The rules of discovery are to be accorded broad and liberal construction.
See Herbert v. Lando, 441 U.S. 153, 177 (1979); and Hickman v. Taylor, 329 U.S. 495, 507
(1947). However, “[t]he court may, for good cause, issue an order to protect a party or person
from annoyance, embarrassment, oppression or undue burden or expense.” Fed.R.Civ.P. 26(c)(1).
Whether to grant or deny a motion to compel is generally left within a district court’s broad
discretion. See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th
Cir. 1995) (denial of motions to compel reviewed on appeal for abuse of discretion); Erdmann v.
Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988) (noting District Court’s substantial
discretion in resolving motions to compel); and LaRouche v. National Broadcasting Co., 780 F.2d
1134, 1139 (4th Cir. 1986) (same). A party’s failure to provide or permit discovery may result in
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sanctions including the following: reasonable expenses caused by the failure; default judgment
against the disobedient party; or treating as contempt of court the failure to obey any order. See
Fed.R.Civ.P. 37(a) - (d).
DISCUSSION
“Plaintiff’s Motion To Compel Testimony Of Defendant’s Rule 30(b)(6) Corporate
Designee Witness” (Document No. 41) contends that a deposition of Defendant’s Rule 30(b)(6)
corporate designee was held on September 28, 2016; however the designee was not prepared to
testify as to the subject matter of Topics 9 and 12 of the deposition notice. (Document No. 41);
see also (Document No. 42-1, pp.5-6). Plaintiff now seeks an order from the Court compelling
Defendant to present a “corporate designee witness who can testify knowledgeably regarding the
subject matter set forth in Topics 9 and 12.” (Document No. 42, p.1). Topics 9 and 12 direct that
an appropriate representative of Defendant testify under oath regarding the following:
9.
Communications between Five Brothers and any person or
entity concerning the settlement or resolution of the disputes in
Hayes v. Self Help Credit Union, et al., No. 1:13-cv-00880 in the
United States District Court for the Middle District of North
Carolina, including any claims that Five Brothers submitted to any
insurance company.
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12.
Any effort that Five Brothers made to reduce the dollar
amount of its alleged damages, including any claims that Five
Brothers submitted to any insurance company to pay for defense or
indemnity related to RoundPoint’s lawsuit against Five Brothers.
(Document No. 42-1, pp.5-6).
Plaintiff contends that Defendant’s designated witness “testified that she had little to no
knowledge of those topics and that prior to the deposition, she had not taken the reasonable steps
to review the documents associated with those topics or to gain knowledge of Defendant’s
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information concerning those topics.” (Document No. 42, pp.3-4) (citing Document No. 42-2);
see also, (Document Nos. 43 and 43-1). Plaintiff concludes that Defendant has failed to meet its
“obligation to ‘produce a witness prepared to testify to the subject matter described in the notice.’”
(Document No. 42, p.4).
In response, Defendant first disputes whether Plaintiff satisfied the consultation
requirement of Local Rule 7.1(B). Defendant contends that Plaintiff sent an email to its counsel
noticing its intention to file the instant motion just a few hours before actually filing the motion.
(Document No. 45). Defendant suggests the parties never discussed the motion, although Plaintiff
contends it “conferred in good faith with counsel for the Defendant.” Id.; see also (Document No.
41, p.2). Plaintiff does not appear to address this first argument in its reply brief. As such, it
appears doubtful that the parties consulted as envisioned by the Local Rules and the “Pretrial Order
And Case Management Plan” (Document No. 23, p.5).
Next, Defendant argues that Plaintiff failed to produce any independent or objective
evidence to support its motion; however Defendant appears to ignore Document Nos. 42-1, 42-2,
43, and 43-1, which include a transcript of the deposition of Defendant’s Rule 30(b)(6) witness,
Rebecca Sutton (“Sutton”). (Document No. 45, p.2). Defendant goes on to conclude that Sutton
was as prepared as she could be, and that she “is the one non-attorney individual most qualified to
answer Roundpoint’s Notice of Deposition topics nine (9) and twelve (12).” (Document No. 45,
p.4).
Defendant seems to take the position that Topics 9 and 12 involve questions or
communications that would have been handled by its attorneys, and therefore, such inquires could
have or should have been made to Defendant’s counsel, instead of Sutton as the 30(b)(6) designee.
(Document No. 45, pp.3-4).
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In reply, Plaintiff asserts that Defendant has mistakenly asserted a version of Rule 30(b)(6)
that does not exist that would allow a “corporation to present a corporate designee deposition
witness who has no knowledge of the designated topic and who made no reasonable effort to gain
knowledge of the topic and later successfully justify this conduct by arguing that the party seeking
the testimony questioned the wrong witness.” (Document No. 48, p.1). Defendant argues that
“Rule 30(b)(6) does not work that way.” Rather, Plaintiff contends that Rule 30(b)(6) obligates
Defendant Five Brothers to “produce such number of persons as will satisfy the request [and] more
importantly, prepare them so that they may give complete, knowledgeable and binding answers on
behalf of the corporation.” Id. (quoting Poole v. Textron, Inc., 192 F.R.D. 494, 504 (D.Md. 2000)
(quoting Marker v. Union Fidelity Life Ins. Co., 125 F.R.D. 121, 126 (M.D.N.C. 1989)).
The undersigned notes that the Poole decision further states:
“Counsel for the entity should prepare the designated witness to be
able to provide meaningful information about any designated area(s)
of inquiry.” ABA Standards, 19(f) (Duty to Prepare the Witness).
The individual(s) so deposed are required to testify to the knowledge
of the corporation, not the individual. United States v. J.M. Taylor,
166 F.R.D. 356, 361 (M.D.N.C. 1996). See also SEC v. Morelli,
143 F.R.D. 42, 44 (S.D.N.Y. 1992) (holding that Rule 30(b)(6)
designees need not have first-hand knowledge of the events in
question, but if designated must be adequately prepared to field and
answer such questions). It necessarily follows that the corporation
has a duty “to prepare the designees so that they may give
knowledgeable and binding answers for the corporation” and that
this duty “goes beyond matters personally known to the designee or
to matters in which that designee was personally involved.” Taylor,
166 F.R.D. at 361.
Upon notification of a deposition, the corporation has an
obligation to investigate and identify and if necessary prepare a
designee for each listed subject area and produce that designee as
noticed.
Poole, 192 F.R.D. at 504.
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Plaintiff asserts that Defendant’s witness did not have knowledge of the claims that Five
Brothers submitted to any insurance company and had not made a reasonable effort to become
knowledgeable of that deposition topic. (Document No. 48, pp.3-4) (citing Document No. 48-1,
pp.7, 10, 13-14, and 17).
The undersigned is satisfied that Plaintiff has identified sufficient evidence, along with
relevant legal authority, to support its motion. It does not appear that Defendant’s 30(b)(6) witness
was adequately qualified and/or prepared to answer all the topics identified in the notice of
deposition. See (Document Nos. 41 and 48).
CONCLUSION
IT IS, THEREFORE, ORDERED that “Plaintiff’s Motion To Compel Testimony Of
Defendant’s Rule 30(b)(6) Corporate Designee Witness” (Document No. 41) is GRANTED.
Defendant shall produce an appropriate Rule 30(b)(6) witness prepared to provide full and
complete answers to Topics 9 and 12 of Plaintiff’s deposition notice on or before November 18,
2016. This limited deposition may be conducted by telephone.
SO ORDERED.
Signed: November 8, 2016
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