Robinson v. Quicken Loans, Inc.

Filing 73

MEMORANDUM OPINION AND ORDER granting Plaintiff's 62 MOTION to Convert Portions of Motion to Quash Subpoenas to a Motion for Protective Order; granting in part and denying in part Plaintiff's 46 MOTION to Quash or for Protective Order; denying Plaintiff's 46 MOTION to quash the subpoena in its entirety but directing the Defendant to modify its subpoena to Plaintiff's former employer, Highmark West Virginia Inc., as more fully set forth herein; granting Plaintiff's motion for a protective order, in part, and directing the Defendant to reissue subpoenas duces tecum to the financial institutions, which incorporate the following limitations, as more fully set forth herein. Signed by Magistrate Judge Cheryl A. Eifert on 12/5/2012. (cc: attys; any unrepresented party) (mkw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
JANET R. ROBINSON,
Plaintiff,
v.

Case No.: 3:12-cv-00981

QUICKEN LOANS, INC.,
WELLS FARGO BANK, N.A., and
JOHN DOE HOLDER,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court is the Plaintiff’s Motion to Quash Subpoenas (ECF No.
46) and Request to Convert Portions of Said Motion to a Motion for Protective Order
(ECF No. 62). The Court GRANTS the Motion to Convert (ECF No. 62) and addresses
the substance of the unresolved discovery issues below. The parties have fully briefed
the issues, and the undersigned finds that additional oral argument is unnecessary for
their resolution. Accordingly, for the reasons that follow, the Court GRANTS, in part,
and DENIES, in part, Plaintiff’s Motion to Quash or for Protective Order (ECF No. 46)
as set forth herein.
I.

Analysis
This civil action arises from Plaintiff’s claim that she was the victim of a

predatory lending scheme carried out by the Defendants in the form of an unwise highinterest home-financing agreement entered into by Plaintiff in November 2003.
According to Plaintiff, she was an unsophisticated consumer who was induced by
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Defendant Quicken Loans, Inc. to refinance her home mortgage for an amount far in
excess of its value and pursuant to misleading and unconscionable terms that were
significantly detrimental to Plaintiff’s financial interests.
In the course of discovery, Quicken Loans served subpoenas duces tecum on ten
financial institutions and one former employer of Plaintiff seeking a variety of records.
Plaintiff moved to quash the subpoenas or for a protective order prohibiting Defendant
from obtaining in toto the records sought by the subpoenas.
In regard to employment records, Defendant seeks any employment contracts; all
documents reflecting payments made to Plaintiff, including deductions and
withholdings; all documents reflecting hire and termination dates; and all documents
showing the dates and lengths of any unpaid leaves of absence taken by Plaintiff.
Defendant seeks these records for the period of June 1, 1995 through the present. (ECF
No. 46-3 at 3). In regard to financial records, Defendant seeks all applications for credit;
all documents showing the terms and conditions of credit extended; all documents
showing payment history of any credit extended; all documents pertaining to loans
given to Plaintiff and secured by her home; all documents pertaining to the valuation of
the home; all communications with appraisers of the home; all documents exchanged
with Plaintiff; all documents reflecting communications with Plaintiff; and all account
statements for various credit cards obtained by Plaintiff.1 Defendant placed no time
parameters on most of the financial information, except for limiting the credit card
account information to January 1, 2003 through the present. (ECF No. 46-1 at 3-4, 15).

1 Defendant served three different versions of subpoenas on the financial institutions. The first set was
served primarily on mortgage lenders and requested 9 categories of documents (“Type 1 subpoenas”).
(ECF No. 46-1 at 3-4). The second set was served primarily on credit card lenders and requested 5
categories of documents (“Type 2 subpoenas”). (ECF No. 46-1 at 22). The final subpoena was served on
PNC Bank and requested 16 categories of documents (“PNC subpoena”).

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Defendant argues that these documents are relevant to the issues of Plaintiff’s financial
sophistication in November 2003, the nature and extent of her injuries, and her duty to
mitigate damages. Plaintiff responds that the requests seek irrelevant information, are
overly broad and burdensome, and are designed to harass her.
“Before addressing the merits of Plaintiff’s Motion, the Court must first
determine whether Plaintiff has standing to attempt to quash the applicable subpoenas
duces tecum.” Singletary v. Sterling Transport Company, Inc., 2012 WL 5449687
(E.D.Va. Nov. 7, 2012) (discussing the basis for standing and collecting cases). The
undersigned concludes that Plaintiff has a personal right or privilege in her employment
records and, thus, has standing to move to quash the subpoena duces tecum seeking
those records. However, Plaintiff arguably has no personal right or privilege in her
financial records and, thus, no standing to move to quash the subpoenas for banking
and financial records. See Robertson v. Cartinhour, 2010 WL 716221 *2 (D.Md. Feb. 23,
2010) (citing United States v. Miller, 425 U.S. 435, 440, 96 S.Ct. 1619, 48 L.Ed.2d 71
(1975). Nonetheless, Plaintiff has now modified her motion to include a request for a
protective order; consequently, the undersigned will consider the validity of all of the
subpoenas under Federal Rule of Civil Procedure 26. Singletary, 2012 WL 5449687.
Rule 26(b)(1) permits a party to obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense. “While the Federal Rules of Civil
Procedure do not define ‘relevant information,’ the Federal Rules of Evidence define it
as ‘evidence having any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less probable than it
would be without the evidence.’” Boykin Anchor Co., Inc. v. Wong 2011 WL 5599283 at
* 2 (E.D.N.C. November 17, 2011), citing United Oil Co., v. Parts Assocs., Inc, 227 F.R.D.
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404. 409 (D.Md. 2005). Still, admissibility under the Federal Rules of Evidence is not
the guideline for relevancy in the context of discovery. Relevancy in discovery is broad in
scope, because “[d]iscovery is of broader scope than admissibility, and discovery may be
had of inadmissible matters.” King v. Conde, 121 F.R.D. 180, 194 (E.D.N.Y. 1988); see,
also, Caton v. Green Tree Services, LLC, 2007 WL 2220281 (N.D.W.Va.) (the “test for
relevancy under the discovery rules is necessarily broader than the test for relevancy
under Rule 402 of the Federal Rules of Evidence.”); Carr v. Double T Diner, 272
F.R.D.431, 433 (D.Md.) (“The scope of relevancy under discovery rules is broad, such
that relevancy encompasses any matter that bears or may bear on any issue that is or
may be in the case”). For purposes of discovery, then, information is relevant, and thus
discoverable, if it ‘“bears on, or ... reasonably could lead to other matter[s] that could
bear on, any issue that is or may be in the case. Although ‘the pleadings are the starting
point from which relevancy and discovery are determined ... [r]elevancy is not limited
by the exact issues identified in the pleadings, the merits of the case, or the admissibility
of discovered information.’ Rather, the general subject matter of the litigation governs
the scope of relevant information for discovery purposes. Therefore, courts broadly
construe relevancy in the context of discovery.” Kidwiler v. Progressive Paloverde Ins.
Co., 192 F.R.D. 193, 199 (N.D.W.Va. 2000) (internal citations omitted).
Discovery that seeks relevant information may nevertheless be restricted or
prohibited if necessary to protect a person or party from annoyance, embarrassment,
oppression, or undue burden or expense. Fed. R. Civ. P. 26(c). Likewise, on motion or
sua sponte, the court may limit the frequency and extent of discovery when the “burden
or expense of the proposed discovery outweighs its likely benefit, considering the needs
of the case, the amount in controversy, the parties’ resources, the importance of the
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issues at stake in the action, and the importance of the discovery in resolving the issues.”
Fed. R. Civ. P. 26(b)(2)(C)(iii). The party opposing discovery has the obligation to
submit evidence supporting its claims that the requests are unduly burdensome,
oppressive, or improperly invasive. To prevail on the grounds of burdensomeness or
breadth, the objecting party must do more to carry its burden than make conclusory and
unsubstantiated arguments. Convertino v. United States Department of Justice, 565 F.
Supp.2d 10, 14 (D.D.C. 2008) (the court will only consider an unduly burdensome
objection when the objecting party demonstrates how discovery is overly broad,
burdensome, and oppressive by submitting affidavits or other evidence revealing the
nature of the burden); Cory v. Aztec Steel Building, Inc., 225 F.R.D. 667, 672 (D.Kan.
2005) (the party opposing discovery on the ground of burdensomeness must submit
detailed facts regarding the anticipated time and expense involved in responding to the
discovery which justifies the objection); Bank of Mongolia v. M & P Global Financial
Services, Inc., 258 F.R.D. 514, 519 (S.D. Fla.2009) (“A party objecting must explain the
specific and particular way in which a request is vague, overly broad, or unduly
burdensome. In addition, claims of undue burden should be supported by a statement
(generally an affidavit) with specific information demonstrating how the request is
overly burdensome.”). However, under Fed. R. Civ. P. 45(c)(3), the “undue burden
category ‘encompasses situations where the subpoena seeks information irrelevant to
the case.’” Singletary, 2012 WL 5449687 (citing Cook v. Howard, 2012 WL 3634451 *6,
n. 7 (4th Cir. Aug. 24, 2012). Accordingly, a party opposing discovery sought by
subpoena may also demonstrate undue burden by sufficiently articulating how the
requested information is irrelevant, even when accounting for the expansiveness of
permissible discovery. With this framework in mind, the undersigned has assessed the
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subpoenas duces tecum for relevancy, burdensomeness, breadth, oppressiveness,
annoyance, and embarrassment.
II.

Order
A.

Employment Records

Defendant seeks Plaintiff’s employment contracts, wage information, dates of
employment, and dates of unpaid leave, arguing that they are relevant on the issues of
Plaintiff’s sophistication and damages. Defendant emphasizes Plaintiff’s allegations that
the home-financing agreement offered by Quicken Loans was unconscionable and that
the financial burden created by the illegal, fraudulent, and unconscionable terms of the
agreement caused her to suffer worry, stress, annoyance, and inconvenience. In
Defendant’s view, by making these claims, Plaintiff’s employment and financial histories
become fair game for discovery.
Certainly, when examining whether a contract is unconscionable under West
Virginia law, the Court must assess the relative sophistication of the parties. See
Quicken Loans, Inc. v. Brown, __ S.E.2d __, 2012 WL 5897495 (W.Va. Nov. 21, 2012);
Herrod v. First Republic Mortgage Corp. Inc., 218 W.Va. 611, 625 S.E.2d 373, 379
(W.Va. 2005). Although the undersigned can find no case outlining the precise factors
that are probative of a party’s sophistication, common sense dictates that the terms and
conditions of a party’s employment may have some bearing on that individual’s level of
financial intelligence. Therefore, the undersigned finds that employment contracts are
relevant. Plaintiff has not claimed any privilege in these contracts, and employment
agreements seldom contain embarrassing or highly personal provisions that would
provide a separate basis for prohibiting their discovery. In light of Plaintiff’s
representation that she can recall no employment contracts, the undersigned further
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finds that requesting their production is not overly burdensome or oppressive to
Plaintiff.
In addition, the dates of Plaintiff’s employment and her wage information are
relevant to her ability to pay the amounts due under the home-financing agreement;
information that arguably bears on the degree of stress, worry, inconvenience and
annoyance suffered by Plaintiff. Conceivably, the greater Plaintiff’s income, the greater
her ability to meet financial obligations and, consequently, the less intensely she should
worry about making the payments under the home-financing agreement. Accordingly,
the undersigned finds that documents reflecting Plaintiff’s income during the relevant
time frame are also discoverable.
On the other hand, the undersigned agrees with Plaintiff that documents
detailing every deduction, every reimbursement, and every day of unpaid leave are not
particularly relevant to either party’s claims or defenses. Any substantial deductions or
unpaid leave should be reflected in the 1099 or W-2 forms documenting Plaintiff’s
wages. Given that Defendant will have access to Plaintiff’s wage information since the
inception of the home-financing loan, any significant discrepancies can be identified and
explored with Plaintiff at her deposition. Moreover, the potential for embarrassment or
oppression from the disclosure of irrelevant or confidential information contained in
other employment-related records, including documentation of unpaid leave, outweighs
the apparent benefits of the information; particularly, when considering the needs of the
parties and the importance of the documents in resolving the issues.
Therefore, the Court DENIES Plaintiff’s motion to quash the subpoena in its
entirety but ORDERS the Defendant to modify its subpoena to Plaintiff’s former
employer, Highmark West Virginia Inc., as follows:
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1.

Documents related to payments, withholdings, deductions and unpaid

leave shall be limited to a request for Plaintiff’s 1099 and/or W-2 forms for the years of
2003-2011;
2.

Documents showing dates of hire and termination shall be limited to a

request for a simple written verification by Plaintiff’s former employer of her dates of
hire and termination;
3.

Employment contracts may be requested as originally stated in the

subpoena; and
4.

Requests for the remaining documents outlined in the subpoena are

prohibited at this time.
Should discovery of this information give rise to a good faith belief that additional
documentation is needed from the employer, Defendant shall request leave of court to
serve a supplemental subpoena. In the motion for leave, Defendant shall state with
specificity the documentation sought and the basis for the request. Plaintiff will have
seven (7) days thereafter to contest the motion for leave.
B.

Financial Information

Defendant again argues that applications for credit, information involving loans
secured by Plaintiff’s home, and the terms and conditions of any loan agreement or
credit extended to Plaintiff are relevant to Plaintiff’s level of financial sophistication and
her duty to mitigate damages. Defendant further contends that valuations of the
relevant property, both by Plaintiff and third parties, are relevant to the Defendant’s
statute of limitations defense and touch on the legitimacy of Plaintiff’s claim that
Quicken Loans used a fraudulently inflated property assessment to induce Plaintiff to
refinance her home mortgage. Finally, Defendant asserts that account payment
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histories, as well as credit card transaction records, are relevant to Plaintiff’s duty to
mitigate damages. To the contrary, Plaintiff contends that none of this information is
relevant and the document requests are overly burdensome, invasive, and intended to
harass her.
Under the broad understanding of relevancy in discovery, Plaintiff’s financial
history “bears on ... or reasonably could lead to other matter[s] that could bear on, any
issue that is or may be in the case.” Kidwiler, 192 F.R.D. at 199. Moreover, Plaintiff has
not identified a particular privilege that attaches to these documents. Plaintiff argues
that she had no duty to mitigate damages in view of the nature of the wrongs allegedly
committed by Defendants, but Plaintiff supplies no legal authority directly on point or
unconditionally supportive of such a position. However, the undersigned agrees with
Plaintiff that the subpoenas, as written, are unnecessarily broad and intrusive and,
therefore, should be limited to effect the ends of justice.2 Defendant has failed to place
reasonable time limitations on many of the requests and seeks documents, such as
detailed credit card transaction records, that are unlikely to result in the discovery of
admissible evidence. Moreover, to the extent that Defendant seeks voluminous records
of Plaintiff’s credit card purchases, the proportionality analysis of Fed. R. Civ. P.
26(b)(2)(C)(iii) should be considered. The undersigned finds that the benefit of such
discovery is far outweighed by the likelihood that predominantly irrelevant, highly
personal, and potentially embarrassing information will be disclosed, thus resulting in
an undue burden on Plaintiff.
The undersigned does not find persuasive Plaintiff’s argument that the discovery requests should be
prohibited in their entirety because they will result in her counsel expending excessive time and expense
in reviewing the produced documents. Plaintiff fails to provide any evidentiary foundation for such a
claim. Convertino v. United States Department of Justice, 565 F. Supp.2d 10, 14 (D.D.C. 2008). In
addition, given that Plaintiff is not the party required to produce the requested documentation, an
argument based on undue expense is naturally more difficult to support.
2

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Therefore, the Court GRANTS Plaintiff’s motion for a protective order, in part,
and ORDERS the Defendant to reissue subpoenas duces tecum to the financial
institutions, which incorporate the following limitations:
1.

Credit applications and documents reflecting the terms and conditions of

credit extended to Plaintiff, as set forth in paragraphs 1 and 2 under “Documents
Requested,” in the Type 1 subpoenas and the PNC subpoena, shall be limited to the time
period of January 1, 1998 through June 30, 2011;
2.

Credit applications and documents reflecting the terms and conditions of

credit extended to Plaintiff, as set forth in paragraphs 3 and 5 under “Documents
Requested,” in the Type 2 subpoenas, shall be limited to the time period of January 1,
2003 through June 30, 2011;
3.

Defendant shall not request the production of detailed account statements

or records of credit card transactions. Instead, Defendant shall limit its request for
documents pertaining to payments of credit cards or other credit obligations of Plaintiff
to payment histories or similar account summaries and shall be further limited to the
time period of January 1, 2004 through June 30, 2011. (To replace paragraph 3 under
“Documents Requested” in the Type 1 subpoenas and the PNC subpoena; paragraphs 1,
2, and 4 under “Documents Requested” in the Type 2 subpoenas);
4.

Defendant shall not request all loan documents pertaining to the Subject

Property; instead, Defendant shall limit its request to (1) applications completed by or
on behalf of Plaintiff for loans to be secured by the Subject Property; (2) documents
showing the terms and conditions of any such loan given; and (3) the payment history of
each such loan. (To replace paragraph 4 under “Documents Requested” in the Type 1
subpoenas and the PNC subpoena);
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5.

Documents reflecting the estimated or appraised value of the Subject

Property, regardless of the source of the valuation, may be requested. (To replace
paragraphs 5, 6, and 7 under “Documents Requested” in the Type 1 subpoenas and
paragraphs 5, 6, 7, 12, 13, 14, 15, and 16 under “Documents Requested” in the PNC
subpoena); and
6.

Defendant shall not make blanket requests for the remaining documents.

(Eliminates paragraphs 8 and 9 under “Documents Requested” in the Type 1 subpoenas
and paragraphs 8, 9, 10, and 11 under “Documents Requested” in the PNC subpoena).
Should discovery of this information give rise to a good faith belief that additional
documentation is needed from some or all of the financial institutions, Defendant shall
request leave of court to serve a supplemental subpoena. In the request for leave,
Defendant shall state with specificity the documentation sought and the basis for the
request. Plaintiff will have seven (7) days thereafter to contest the motion for leave.
The Clerk is instructed to provide a copy of this Order to all counsel of record.
ENTERED: December 5, 2012.

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