United States District Court, D. New Hampshire
Wells Fargo Bank, National Association, as Trustee for Option One Mortgage Loan Trust 2007-2, Asset-Backed Certificates, Series 2007-2
David B. Moskoff, Daphne M.N. Fotiades, Stewart Title Guaranty Company
S. McNicholas, Esq., David B. Moskoff, pro se, Daphne M.N.
Fotiades, pro se, Peter M. Solomon, Esq., Thomas Kincaid
McCraw, Jr., Esq.
N. Laplante United States District Judge
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.It alleges that these defendants defaulted
on their payments due under the mortgage loan beginning in
September 2012. These defendants claim, in response, that
they never signed the mortgage agreement or note, and that
the mortgage is a fraud.
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 that firm as a keeper of records. 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. See 26 U.S.C.
§ 7216; 26 C.F.R. § 301.7216-2(f)). These
defendants have withheld their permission,  leading Wells
Fargo to seek a court order.
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 . . . .” This evidence is relevant to the
question of whether these defendants acknowledged the
mortgage, despite their disavowal of it beginning in 2012.
observes, the subpoena is unnecessarily broad insofar as it
seeks “[a]ll records for” each defendant
“for tax years 2005 to 2013.” Wells Fargo,
however, has clarified that 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. 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.
Daphne M.N. Fotiades and David B. Moskoff object to the
production of this information. 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. Whether these
defendants claimed a mortgage interest deduction in the same
amount as appears in Wells Fargo's records is probative
of that issue.
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. 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.” 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.
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. As these
defendants observe, Wells Fargo has moved to compel this tax
information from David B. Moskoff and Daphne M.N.
Fotiades 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.
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].” 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 to a subpoena, for use in
these court proceedings, would not violate this statute.
would it violate the privilege afforded to communications
between a taxpayer and a federally authorized tax
practitioner. 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
defendants' remaining objections generally concern the
attorneys representing LMR and Wells Fargo's
unrelated transactions. The plaintiffs also suggest the
subpoena is invalid because Attorney McNicholas signed it
prior to making an appearance in this action. 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
Wells Fargo's motion to compel 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.