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Michael Drouin and Kathleen Drouin v. American Home Mortgage Servicing

April 8, 2013

MICHAEL DROUIN AND KATHLEEN DROUIN
v.
AMERICAN HOME MORTGAGE SERVICING, INC., WELLS FARGO BANK, N.A., AND OPTION ONE MORTGAGE CORPORATION



The opinion of the court was delivered by: Joseph N. Laplante United States District Judge

Opinion No. 2013 DNH 056

MEMORANDUM ORDER

This case comes before the court on a motion to dismiss under Federal Rule of Civil Procedure 41(b). Defendants American Home Mortgage Servicing, Inc. ("AHMSI") and Wells Fargo Bank, N.A. assert that plaintiffs Michael and Kathleen Drouin have failed to respond to discovery requests, in direct violation of an order of this court, and have failed to attend their depositions. Although they were given ample opportunity to respond to defendants' motion, the Drouins did not do so.

After careful consideration, this court---which has diversity jurisdiction over this matter under 28 U.S.C. § 1332---grants the motion to dismiss. The court does this with great reluctance, as dismissal is a drastic sanction that should be used sparingly. The Drouins' conduct in prosecuting this action has, however, fallen unacceptably short of what is required by the Rules of Civil Procedure, this court's orders, and any objective standard of litigation conduct. They have offered no explanation or excuse for their conduct, which has harmed defendants and appears to be calculated to frustrate the progress and resolution of this action, and have expressed no regret over it. Dismissal is the only appropriate sanction for the Drouins' inexcusable course of conduct.

I. Applicable legal standard

Under Rule 41(b) of the Federal Rule of Civil Procedure, "[i]f the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it." Dismissal under this rule is generally "appropriate only when [the] plaintiff's misconduct is serious, repeated, contumacious, extreme, or otherwise inexcusable." Bachier-Ortiz v. Colon-Mendoza, 331 F.3d 193, 195 (1st Cir. 2003). The court "must look to the totality of the circumstances" to determine whether to dismiss the action, id., considering "substantive elements of the sanction, including the severity of the party's violation, mitigating excuses, and repetition of the violations, as well as procedural elements such as notice and the opportunity to be heard," Torres-Alamo v. Puerto Rico, 502 F.3d 20, 25 (1st Cir. 2007). Dismissal may be warranted where the plaintiff has exhibited "a pattern of delay or willful behavior," but should not be granted based upon a single instance of misconduct "as long as some plausible excusatory circumstances exist." Bachier-Ortiz, 331 F.3d at 195.

II. Background

Plaintiffs Michael and Kathleen Drouin filed this action in Rockingham County Superior Court, seeking to enjoin AHMSI, Wells Fargo, and their co-defendant Option One Mortgage Corporation from foreclosing on the property securing their mortgage loan. Plaintiffs successfully obtained a preliminary injunction against foreclosure from the Superior Court, which also ordered them to "maintain with [their] attorney an interest bearing escrow account which shall include monthly payments commencing 1/1/12 of $1272.68" (the amount of the Drouins' monthly mortgage payment, which they had stopped making prior to filing suit) and set a final hearing on plaintiffs' petition for February 16, 2012. Before that hearing could occur, defendants removed the action to this court. See 28 U.S.C. § 1441.

This court held a preliminary pretrial conference on July 25, 2012, at which plaintiffs' counsel conceded that his clients had not established the escrow account contemplated by the Superior Court's order, which remained in place following removal. See id. § 1450. In its July 26, 2012 scheduling order, this court therefore ordered plaintiffs to establish that account, and warned that failure to do so would "result in the preliminary injunction against foreclosure being lifted." Plaintiffs subsequently moved for reconsideration of that order, which the court denied. Order of Nov. 2, 2012.

Several months after the discovery period commenced, plaintiffs, in accordance with this court's standard discovery dispute resolution procedure, see Order of July 26, 2012, requested a conference call with the court to discuss several issues that had arisen. During the conference call---in which plaintiffs personally participated, through their presence in the office of their counsel--it emerged that plaintiffs had not established the escrow account as ordered. Plaintiffs' counsel represented that plaintiffs had not complied with the order because (1) they felt it unfair to force them to make escrow payments for the benefit of defendants, who they believed had no legal right to such payments, and (2) they wished to use the funds available to them to pay him instead of complying with the order.*fn1 The court explained that the purpose of the escrow was not to benefit defendants, but to ensure that plaintiffs were making payments for the benefit of the actual holder of their mortgage and associated promissory note---whoever that might be---and that, if defendants failed to establish that they held the mortgage and note, the funds in the account would be returned to plaintiffs. Following the call, the court granted plaintiffs until January 11, 2013 to establish the escrow account. See Order of Dec. 10, 2012. The court also extended the close of discovery to January 11, 2013. See id.

Before long, additional discovery issues arose, and the court held another conference call to attempt to resolve them (although, by that time, the January 11 close of discovery had already passed). On the second call, two issues of relevance to the present motion came to light: first, plaintiffs had still failed to establish the escrow account as ordered; and second, AHMSI and Wells Fargo had, during the discovery period, propounded interrogatories to which plaintiffs had announced their intention not to respond. As to the first issue, the court ordered that the preliminary injunction against foreclosure be lifted. See Order of Jan. 23, 2013. And, as to the second issue, the court ordered plaintiffs to provide objections and/or responses to AHMSI's and Wells Fargo's interrogatories by February 19, 2013 (nearly a month later than the response deadline mandated by Rule 30(b)(2)). Id.

The court's order did not require plaintiffs to answer all of the interrogatories, but allowed AHMSI and Wells Fargo to select a total of 24 interrogatories to which they desired responses. AHMSI and Wells Fargo ultimately requested responses to only 18 interrogatories. Notwithstanding this reduced number, and despite the court's order, plaintiffs provided neither substantive responses nor objections to those interrogatories by the February 19, 2013 deadline.

Meanwhile, prior to the call (and prior to the January 11, 2013 close of discovery), AHMSI and Wells Fargo had also noticed depositions of both plaintiffs. To accommodate the schedule of plaintiffs' counsel, those depositions were scheduled for February 22, 2013. At 5:04 p.m. on the eve of the depositions, plaintiffs' counsel sent an e-mail to counsel for AHMSI and Wells Fargo, stating:

Michael and Kathleen Drouin have informed me that they do not intend to appear for the depositions scheduled to take place in Concord, NH tomorrow. ...


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