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State v. Real Estate Law Center, P.C.

United States District Court, D. New Mexico

May 28, 2019

STATE OF NEW MEXICO, ex rel., HECTOR BALDERAS, Attorney General of New Mexico, Plaintiff,
v.
REAL ESTATE LAW CENTER, P.C., a California professional corporation; ERIKSON M. DAVIS, an attorney and resident of California, individually, and dba Real Estate Law Center, P.C., a California professional corporation; DEEPAK S. PARWATIKAR, an attorney and resident of California, individually, and dba Balanced Legal Group, an unidentified trade name or entity, dba www.pinnaclelawcenter.com; CHAD T. PRATT, an attorney and resident of California, individually, and formerly dba Real Estate Law Center, P.C.; the BALANCED LEGAL GROUP, an unidentified trade name or entity located in California, and PINNACLE LAW CENTER, P.C., a California professional corporation, Defendants.

          Hector H. Balderas, Attorney General of the State of New Mexico Angelica Anaya-Allen Assistant Attorney General of the State of New Mexico Santa Fe, New Mexico Attorneys for the Plaintiff

          Paul J. Kennedy Jessica M. Hernandez Elizabeth Harrison Kennedy, Hernandez & Associates, P.C. Albuquerque, New Mexico Attorneys for Defendants Pinnacle Law Center, PC, Balanced Legal Group, and Deepak S. Parwatikar

          Erikson M. Davis Newbury Park, California Defendant pro se

          Chad Thomas Pratt Los Angeles, California Defendant pro se

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) Plaintiff's Motion to Determine Sufficiency of Defendant Pratt's Responses to Plaintiff's Requests for Admission, filed January 23, 2019 (Doc. 107)(“Motion”); and (ii) Defendant Chad T. Pratt's Opposition to motion to determine sufficiency of requests for admission by state of new mexico, filed March 25, 2019 (Doc. 124)(“Second Response”).[1] The Court held a hearing on April 19, 2019. See Clerk's Minutes at 1, filed April 19, 2019 (Doc. 114). The primary issues are: (i) whether Mr. Pratt responds properly to Plaintiff State of New Mexico's Requests for Admission Nos. 1, 4, 5, 7, 8, 11, 12, 13, 14, and 15 when he does not admit, specifically deny, or make a reasonable inquiry into the Requests for Admission[2] as rule 36 of the Federal Rules of Civil Procedure requires; (ii) whether the Court should order Mr. Pratt to pay the reasonable attorney's fees and costs New Mexico incurred in pursuing the Motion; and (iii) whether the Court should sanction New Mexico for not serving Mr. Pratt a March 21, 2019, motion to compel.[3] The Court deems Mr. Pratt's responses improper and will grant the Motion. The Court orders that: (i) Mr. Pratt will re-respond to the Requests Nos. 1, 4, 5, 7, 8, 11, 12, 13, 14, and 15; (ii) Mr. Pratt will review the Court's discussions of requests for admission in S.E.C. v. Goldstone, 300 F.R.D. 505 (D.N.M. 2014)(Browning, J.), Brown v. Montoya, No. CIV 10-0081 JB/ACT, 2013 WL 1010390 (D.N.M. March 8, 2013)(Browning, J.); Stark-Romero v. National Railroad Passenger (AMTRAK), 275 F.R.D. 551 (D.N.M. 2011)(Browning, J.); and Radian Asset Assurance, Inc. v. Colleges of Christian Brothers of New Mexico, No. CIV 09-0885 JB/DJS, 2010 WL 5173571 (D.N.M. Nov. 11, 2010)(Browning, J.), and respond in accordance with the Court's previous rulings; and (iii) Mr. Pratt will pay New Mexico the reasonable attorney's fees and costs it incurred in pursuing the Motion. The Court will not grant Mr. Pratt's request for sanctions against New Mexico, because New Mexico did not file a March 21, 2019, motion to compel.

         FACTUAL BACKGROUND

         The Court recounted the facts in its Memorandum Opinion and Order, 2019 WL 1283002, filed March 19, 2019 (Doc. 116)(“MOO”). The Court incorporates those facts here:

The Court takes its facts from the Complaint for Violations of the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act (MFCFPA), Mortgage Assistance Relief Services (MARS) Rule, the New Mexico Unfair Practices Act (UPA) and Petition for Injunctive Relief, filed February 22, 2017 (Doc. 1)(“Complaint”). The Court provides these facts for background. It does not adopt them as the truth, and it recognizes that these facts are largely New Mexico's version of events.
This action arises from the activities of [Mr. Pratt], and Defendants Real Estate Law Center, P.C.; Erikson M. Davis; Deepak S. Parwatikar; . . . Balanced Legal Group; and Pinnacle Law Center, P.C. See Complaint ¶¶ 16-76, at 5-17. Davis, Pratt, and Parwatikar are residents of and attorneys licensed in [the State of] California. See Complaint ¶¶ 10-12, at 4-5. Neither Davis nor Pratt is licensed to practice law in New Mexico. See Complaint ¶¶ 10-11, at 4-5. Real Estate Law “is a Professional Corporation registered in California.” Complaint ¶ 9, at 4. Pratt owned and managed Real Estate Law from September, 2011 to September, 2013. See Complaint ¶ 37, at 8. Davis “assumed ownership of” Real Estate Law in 2013. Complaint ¶ 20, at 6. Real Estate Law “has an operating agreement or partnership agreement with Parwatikar and Pinnacle, ” which Parwatikar owns, Complaint ¶ 38, at 8, and Real Estate Law provides Pinnacle Law eighty percent of the fees that Real Estate Law receives, see Complaint ¶ 21, at 6. Balanced Legal “is a California law firm owned and/or managed by Parwatikar.” Complaint ¶ 14, at 5. Balanced Legal uses the same address -- 695 S. Vermont Ave., Los Angeles, California 90010 -- as Real Estate Law and Pinnacle Law. See Complaint ¶ 34, at 8.
The Defendants “created the fiction of . . . mass action joinder lawsuits to disguise . . . advance fees as legal fees.” Complaint ¶ 23, at 6. Real Estate Law provides “legal representation, mortgage foreclosure consulting and mortgage modification services to homeowners in New Mexico.” Complaint ¶ 16, at 5. “[Real Estate Law] has made direct telephone solicitations to New Mexico consumers and has advertised its services in filing mass joinder lawsuits and mortgage modifications.” Complaint ¶ 17, at 5. “[Real Estate Law] has filed dozens of frivolous mass joinder lawsuits against a variety of banks, enticing hundreds of homeowners, including at least 23 New Mexico homeowners, to join these lawsuits as a way to obtain better loan terms.” Complaint ¶ 18, at 5. Balanced Legal provides legal services via a website “accessible to New Mexico consumers.” Complaint ¶ 33, at 7-8.
On its website, Balanced says, in close proximity to the words “LOWER YOUR MORTGAGE PAYMENTS TODAY!!” that “[w]e work with litigation firms that sue lenders in individual or mass tort cases. Potential results of lawsuits can include but not limited to the following: -- Principal reduction -- Monetary damages -- Lowered interest rates. Cancellation of the loan if severe fraud was present”.
Complaint ¶ 35, at 8 (emphasis and alteration in Complaint). Real Estate Law has had “at least twenty-three . . . New Mexico consumers since 2013.” Complaint ¶ 58, at 13.

MOO at 2-4, 2019 WL 1283002, at *1-2.

         PROCEDURAL BACKGROUND

         The Court also recited the early procedural history in the MOO. The Court incorporates that recitation below:

         New Mexico alleges that: (i) Real Estate Law violated the Mortgage Assistance Relief Services Rule (“MARS”), 12 C.F.R. 1015.1 “Regulation O, ” by soliciting and accepting advance fees from New Mexico residents before “a mortgage modification agreement [was] finalized, ” Complaint ¶ 84, at 19; (ii) the Defendants violated the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act, N.M. Stat. Ann. §§ 47-15-1 to -8, by offering services to save “consumers' homes from foreclosure, ” requiring payment for services before completing the services, and not providing required “warnings, notices, and disclosures, ” Complaint ¶ 87, at 20; and (iii) the Defendants violated the New Mexico Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1 to -26 [(“NMUPA”)], by requiring “a large up-front fee . . . plus monthly maintenance fees, ” providing “no value to the consumers, ” and leading consumers to believe that the Defendants will help defend “a foreclosure lawsuit, ” Complaint ¶ 105, at 22.

MOO at 4, 2019 WL 1283002, at *2. On June 11, 2018, the Court entered a default judgment against Real Estate Law. See Default Judgment Against Real Estate Law Center(Doc. 75). On November 5, 2018, the Honorable Laura Fashing, United States Magistrate Judge for the United States District Court for the District of New Mexico, recommended entering a default judgment against Mr. Davis on issues of liability, reserving for litigation the issues of relief, see Proposed Findings and Recommended Disposition at 4 (Doc. 91), and, on January 18, 2019, the Court adopted Magistrate Judge Fashing's recommendation, see Memorandum Opinion and Order Adopting the Magistrate Judge's Proposed Findings and Recommended Disposition at 2, 9 (Doc. 106).

         In the Motion, New Mexico argues that Mr. Pratt responds improperly to its Requests Nos. 1, 4, 5, 7, 8, 11, 12, 13, 14, and 15. See Motion ¶ 2, at 2. New Mexico represents that it made, through a letter sent on January 7, 2019, a good faith effort to resolve the dispute with Mr. Pratt. See Motion ¶ 3, at 2. Mr. Pratt responded to New Mexico's efforts with additional objections that he outlines in the Letter from Chad Pratt to Hector Balderas and Angelica Allen (dated January 18, 2019), filed January 23, 2019 (Doc. 107)(“Good Faith Response”). See Motion ¶ 4, at 2. See Good Faith Response at 1-3. New Mexico received the Good Faith Response on January 23, 2019. See Motion ¶ 4, at 2.

         1. The Requests for Admission, Mr. Pratt's Responses, and Mr. Pratt's Objections.

         In Request No. 1, New Mexico writes: “Admit that You were the subject of disciplinary action by the State Bar of California, Nos. 12-O-16642-RAH, 13-O-12312-RAH, 13-O-12367, and 13-O-12757.” Motion ¶ 5, at 3. Mr. Pratt responds: “OBJECTION irrelevant, harassing, vexing and annoying all such alleged State bar action concerned California cases, with California properties, and California plaintiffs and shall NOT be admissible for any purpose(s) at trial for alleged/purported new mexico [sic] violations.” Motion ¶ 6, at 3 (sic added in Motion).[4] In the Good Faith Response, Mr. Pratt writes: “[S]tate bar action is irrelevant, objection presented, no scheme by state bar, ONLY three liars who state bar believed on individual basis period. If was [sic] a scheme RELC would have been SHUT DOWN. . . .” Motion ¶ 7, at 3 (ellipses in Good Faith Response)(quoting Good Faith Response ¶ 1, at 1;); Good Faith Response ¶ 1, at 1 (ellipses in Good Faith Response).

         In Request No. 4, New Mexico asks: “Admit that the Attorney-Client Fee Agreement used by Real Estate Law Center, copies attached as Exhibits A-001 to A-024, provides that [Real Estate Law Center] will receive two tenths of the retainer fee and the remaining percentage is paid to Defendant Pinnacle Law Center.” Motion ¶ 9, at 4. Mr. Pratt responds: “OBJECTION calls for legal conclusion and for expert testimony on ‘payment' of fees, if any such fees were paid.” Motion ¶ 10, at 4. Mr. Pratt writes in the Good Faith Response: “I do NOT have to do the MATH for you. I presented objection(s) period. This is irrelevant to the issues presented. No. new mexico [sic] code violations shown. State bar did NOT convict or care of such issue(s).” Motion ¶ 11, at 4 (quoting Good Faith Response ¶ 4, at 1;); Good Faith Response ¶ 4, at 1.

         In Request No. 5, New Mexico asks: “Admit that the Attorney Client Fee Agreements attached as Exhibits A-1 to A-024 contain a signature line for Real Estate Law Center, P.C. for You.” Motion ¶ 14, at 5. Mr. Pratt responds: “Objection unintelligible as to ‘signature line for YOU' [sic]. Unknown. OBJECTION unclear and un-intelligible.” Motion ¶ 15, at 5 (sic added in Motion). Mr. Pratt writes in the Good Faith Response: “Signature line, so what, I objected period. So what. This is irrelevant to the issues presented. No. new mexico [sic] code violations shown. State bar did NOT convict or care of such issue(s).” Motion ¶ 16, at 5 (quoting Good Faith Response ¶ 5, at 2;); Good Faith Response ¶ 5, at 2.

         In Request No. 7, New Mexico writes: “Admit that the Attorney Client Fee Agreement (Exhibits A and B) provide that the retainer fee is a one time nonrefundable fee ‘fully earned upon receipt.'” Motion ¶ 18, at 6. Mr. Pratt responses: “OBJECTION calls for legal conclusion, and for expert testimony on ‘payment' of fees, if any such fees were paid.” Motion ¶ 19, at 6. In the Good Faith Response, Mr. Pratt argues: “Not relevant to the issues, objection presented. This is irrelevant to the issues presented. No. new mexico [sic] code violations shown. State bar did NOT convict or care of such issue(s).” Motion ¶ 20, at 7 (quoting Good Faith Response ¶ 7, at 2); Good Faith Response ¶ 7, at 2.

         In Request No. 8, New Mexico asks Mr. Pratt: “Admit that consumers were required to pay fees to RELC by direct bank account withdrawal, credit card or check as set forth in Exhibit C.” Motion ¶ 22, at 7. Mr. Pratt responds: “OBJECTION irrelevant as to ‘consumers' who were NOT new mexico [sic] residents or clients. DENY.” Motion ¶ 23, at 7 (sic added in Motion). In the Good Faith Response, Mr. Pratt argues: “Not relevant to the issues, objection presented. This is irrelevant to the issues presented. No. new mexico [sic] code violations shown. State bar did NOT convict or care of such issue(s).” Motion ¶ 24, at 7 (quoting Good Faith Response¶ 8, at 2); Good Faith Response ¶ 8, at 2.

         In Request No. 11, New Mexico states:

Admit that You [sic] filed the following lawsuits in which one or more New Mexico residents is included as a plaintiff: Acevedo et al v. JPMorgan Chase Bank NA et al, BC512588 (Sup. Ct of CA for Los Angeles County) and 2:13-cv-03955-R-JC (Ctl. D. Calif.) (New Mexico consumer Larry Madrid); Aguayo et al v. Bank of America NA et al, BC522158 (Sup. Ct of CA for Los Angeles County)(New Mexico consumer Robert Alexander); Attygala et al v. Wells Fargo Bank NA et al, BC490700 (Sup. Ct. of CA for Los Angeles County) and 2:12-cv-10075-MMM-PLA (Ctl. D. Calif.)(New Mexico consumer Mike Maness); Holmes et al v. Bank of America NA et al, BC531535 (New Mexico consumers Creighton Maness and Roberta Marcelli); Simons et al v. Bank of America NA, BC531836 (Sup. Ct. of CA for Los Angeles County)(New Mexico consumer Lloyd Trujillo); Penn et al v. Bank of America NA et al, BC531639 (New Mexico consumer Rachel Silva).

Motion ¶ 26, at 8. Mr. Pratt responds: “DENY. DENY as I do NOT recall filing such lawsuits over 6 years ago. . . . mere filing of a lawsuit is NOT improper.” Motion ¶ 27, at 8. Mr. Pratt writes in the Good Faith Response: “DENY, I do NOT recall. . . . Alleged lawsuits were EIGHT years ago, and I have NO files books records, so I do NOT recall, thus object NO. That is proper.” Motion ¶ 28, at 8 (ellipses in Good Faith Response)(quoting Good Faith Response ¶ 11, at 2); Good Faith Response ¶ 11, at 2 (ellipses in Good Faith Response).

         In Request No. 12, New Mexico asks: “Admit that you voluntarily dismissed the following lawsuit(s) in which one or more New Mexico residents is a Plaintiff: Acevedo et al v. JPMorgan Chase Bank NA et al, BC512588 (Sup. Ct of CA for Los Angeles County) and 2:13-cv-03955-R-JC (Ctl. D. Calif.).” Motion ¶ 30, at 9. Mr. Pratt responds: “DENY. DENY as I do NOT recall dismissing such lawsuits over 6 years ago. Mere dismissing of a lawsuit is NOT improper.” Motion ¶ 31, at 9. Mr. Pratt writes in the Good Faith Response: “DENY, I do NOT recall. . . . Alleged lawsuits were EIGHT years ago, and I have NO files books records, so I do NOT recall, thus object NO. That is proper.” Motion ¶ 32, at 9 (ellipses in Good Faith Response)(quoting Good Faith Response ¶ 12, at 2); Good Faith Response ¶ 12, at 2 (ellipses in Good Faith Response).

         In Request No. 13, New Mexico requests: “Admit that the court dismissed the following lawsuit(s) in which one or more New Mexico residents is a Plaintiff: Attygala et al v. Wells Fargo Bank NA et al, 2:12-cv-10075-MMM-PLA (Ctl. D. Calif.).” Motion ¶ 34, at 9. Mr. Pratt responds: “DENY. DENY as I do NOT recall court dismissing lawsuits over 6 years ago.” Motion ¶ 35, at 9. Mr. Pratt writes in the Good Faith Response: “DENY, I do NOT recall. . . . Alleged lawsuits were EIGHT years ago, and I have NO files books records, so I do NOT recall, thus object NO. That is proper.” Motion ¶ 36, at 10 (ellipses in Good Faith Response)(quoting Good Faith Response ¶ 13, at 2); Good Faith Response ¶ 13, at 2 (ellipses in Good Faith Response).

         In Request No. 14, New Mexico writes: “Admit that every case filed by You (Chad Pratt and Real Estate Law Center) through Real Estate Law Center was voluntarily dismissed or dismissed by the court.” Motion ¶ 38, at 10. Mr. Pratt Responded: “OBJECTION irrelevant and immaterial as to any non-new mexico [sic] cases. DENY. DENY as totally false.” Motion ¶ 39, at 10 (sic added in Motion). In the Good Faith Response, Mr. Pratt writes: “I denied this as false (which it is), and presented objections. If it were true, which it clearly is NOT the state bar and all clients would ALL be suing and closing it all down. . . .” Motion ¶ 40, at 10 (ellipses in Good Faith Response)(quoting Good Faith Response¶ 14, at 2;); Good Faith Response ¶ 14, at 2 (ellipses in Good Faith Response).

         In Request No. 15, New Mexico asks: “Admit that RELC did not maintain a client trust account for the deposit of the retainer agreements paid by the New Mexico consumers.” Motion ¶ 42, at 11. Mr. Pratt responses: “OBJECTION totally irrelevant as no ‘attorney client' trust account was required for hourly cases. DENY and not required for fee cases.” Motion ¶ 43, at 11. Mr. Pratt writes in the Good Faith Response: “OBJECTION presented, and this is NOT the law in California which does NOT require retainers be placed in attorney client trust accounts. . . .” Motion ¶ 44, at 11 (ellipses in Good Faith Response)(quoting Good Faith Response ¶ 15, at 2); Good Faith Response ¶ 15, at 2.

         2. The Motion.

         In the Motion, New Mexico argues that Mr. Pratt's responds improperly to its Requests Nos. 1, 4, 5, 7, 8, 11, 12, 13, 14, and 15, and asks that the Court order Mr. Pratt to respond properly. See Motion ¶ 2, at 2. Regarding Request No. 1, New Mexico contends that, under rule 26 of the Federal Rules of Civil Procedure and rule 36, the request is relevant and proportional. See Motion ¶ 8, at 3. According to New Mexico, the evidence is relevant, because it shows that Mr. Pratt acted “in an unprofessional and unlawful manner in the handling of legal cases for his clients.” Motion ¶ 8, at 3. Moreover, New Mexico indicates that, contrary to Mr. Pratt's objections, whether the information is admissible at trial is irrelevant to the relevancy question. See Motion ¶ 8, at 3-4.

         Regarding Request No. 4, New Mexico argues that its request does not ask for a legal conclusion or expert testimony. See Motion ¶ 12, at 4. New Mexico indicates that the request references the retainer agreements that Mr. Pratt signed for Real Estate Law and that New Mexico attached the agreements as exhibits to its Requests for Admission. See Motion ¶ 12, at 4. According to New Mexico, Mr. Pratt signed these agreements during the time that he worked as Real Estate Law's lead attorney. See Motion ¶ 12, at 4. According to New Mexico, each retainer agreement's § 10 describes Real Estate Law and Pinnacle Law's division of attorney's fees, and Mr. Pratt should be capable of reading the section. See Motion ¶ 12, at 4. New Mexico adds that rule 36(a) permits New Mexico to request Mr. Pratt to admit the truth of any matter within Rule 26(b)(1)'s scope, and relevant to the case's facts, to the application of law to the facts, or to opinions on the facts or on application of the law to the facts. See Motion ¶ 13, at 4. New Mexico describes that, Request No. 4, it asks Mr. Pratt to admit a fact that establishes a relationship between Real Estate Law and Pinnacle Law. See Motion ¶ 13, at 4-5. New Mexico adds that information on Mr. Pratt, Real Estate Law, Parwatikar, and Pinnacle Law's fee-splitting arrangements helps establish whether the Defendants' engaged in a common enterprise. See Motion at 13. New Mexico characterizes Mr. Pratt's objection as “evasive and an effort to avoid answering a straightforward question.” Motion at 14.

         Regarding Request No. 5, New Mexico avers that the request is not unintelligible, because Mr. Pratt must know what a signature line is, and because the Requests for Admission defined “You” to refer to “Pratt” and “Real Estate Law Center.” Motion ¶ 17, at 5-6. New Mexico argues that Mr. Pratt must be capable of looking at the signature line. See Motion ¶ 17, at 6. Moreover, in New Mexico's view, Mr. Pratt's response does not follow rule 36(a)(4)'s requirements. See Motion ¶ 17, at 6. New Mexico argues that Mr. Pratt should be able to obtain the information to respond the question, because the response is in the Request for Admission's exhibits. See Motion ¶ 17, at 6. New Mexico describes Request No. 5 as relevant to the fee arrangements among Real Estate Law, Mr. Pratt, and New Mexico consumers. See Motion at 14. New Mexico complains that Mr. Pratt's objections whether the documents have a signature line for him and whether he signed the documents are baseless. See Motion at 14.

         Regarding Request No. 7, New Mexico contends that the request does not ask for a legal conclusion or for an expert testimony. See Motion ¶ 21, at 7. New Mexico notes that it provides Mr. Pratt with the exhibits that the request references, and that Mr. Pratt can presumably read the exhibits. See Motion ¶ 21, at 7. According to New Mexico, the exhibits state that clients will pay a non-refundable retainer and that Real Estate Law deems the retainer earned on receipt. See Motion ¶ 21, at 7. According to New Mexico, the same law that requires Mr. Pratt to respond to Request No. 5 requires him to response to Request No. 7. See Motion ¶ 21, at 7. New Mexico makes the same arguments about Request No. 7's relevance as it does about Request No. 5's relevance. See Motion at 14.

         Regarding Request No. 8, New Mexico avers that the request is not irrelevant, because the fees that New Mexico consumers paid are central to the dispute. See Motion ¶ 25, at 7. New Mexico characterizes Mr. Pratt's response as “obfuscatory, ” because the consumers to which the request refers could include New Mexico consumers. Motion ¶ 25, at 7. New Mexico argues that Mr. Pratt should have made a reasonable inquiry into the request and that a reasonable inquiry mandates at least reading the exhibit that Request No. 8 references. See Motion ¶ 25, at 7-8. New Mexico makes the same arguments about Request No. 8's relevance as it does about Request No. 5's relevance. See Motion at 14.

         Regarding Request No. 11, New Mexico contends that, pursuant to rule 36(a)(4), a party must make a reasonable inquiry into a request for admission. See Motion ¶ 29, at 8. According to New Mexico, if a party cannot find information relevant to the request for admission, the party must state that it made a reasonable inquiry and that it could not discover the information. See Motion ¶ 29, at 8. New Mexico argues that Mr. Pratt did not engage in a reasonable inquiry. See Motion ¶ 29, at 8-9. New Mexico avers that Mr. Pratt's contentions that he does not possess records of the court proceedings do not show that he engaged in a reasonable inquiry, because he could view the records on the courts' websites. See Motion ¶ 29, at 8-9; Motion at 14. New Mexico avers that Mr. Pratt's refusal to research the records is a refusal to engage in a reasonable inquiry. See Motion at 14.

         Regarding Request No. 12, New Mexico again argues that rule 36(a)(4) requires Mr. Pratt to reasonably inquire into the request for admission. See Motion ¶ 33, at 9. New Mexico argues that Mr. Pratt can verify online whether he dismissed a lawsuit. See Motion ¶ 33, at 9. In New Mexico's view, Mr. Pratt should have made such an inquiry. See Motion ¶ 33, at 9. New Mexico raises the same arguments about Mr. Pratt's alleged lack of records that it does in response to Mr. Pratt's Request No. 11 objections. See Motion at 14.

         Regarding Request No. 13, New Mexico makes arguments similar to its contentions regarding Requests Nos. 11 and 12. See Motion ¶ 36, at 10. According to New Mexico, Mr. Pratt should have made a reasonable inquiry into the request. See Motion ¶ 37, at 10. New Mexico avers that discovering whether a court dismissed a lawsuit requires only a reasonable inquiry. See Motion ¶ 37, at 10. New Mexico contends that Mr. Pratt should have undertaken this inquiry. See Motion ¶ 37, at 10. New Mexico raises the same arguments about Mr. Pratt's alleged lack of records that it raises in response to Mr. Pratt's Request No. 11 objections. See Motion at 14.

         Regarding Request No. 14, New Mexico argues that the request is “not irrelevant and immaterial[, ] because [the request] relates to New Mexico's theory of the case that Mr. Pratt and [Real Estate Law] knowingly filed bogus lawsuits on behalf of New Mexico residents and fraudulently collected fees from those victims.” Motion ¶ 41, at 10. New Mexico notes that the rest of Mr. Pratt's response “is nonsensical.” Motion ¶ 41, at 10. New Mexico argues that Mr. Pratt must admit or deny its request for admission. See Motion ¶ 41, at 10. New Mexico raises the same arguments about Mr. Pratt's alleged lack of records that it raises in response to Mr. Pratt's Request No. 11 objections. See Motion at 14.

         Regarding Request No. 15, New Mexico contends that the request is relevant, because New Mexico requires that attorneys deposit retainers from New Mexico consumers in client trust accounts that the attorneys maintain. See Motion ¶ 45, at 11 (citing N.M. Stat. Ann. § 16-115(c)). New Mexico argues that Mr. Pratt must admit or deny the relevant request, and that Mr. Pratt has access to the information. See Motion ¶ 45, at 11. New Mexico also indicates that Mr. Pratt's response and statement in the Good Faith Response “are unclear when read together and imply that the New Mexico cases were simultaneously ‘hourly' cases and ‘fee' cases.” Motion ¶ 45, at 11. New Mexico argues that, contrary to Mr. Pratt's contentions in the Good Faith Response, California's rules for client trust accounts are irrelevant. See Motion at 14.

         New Mexico also makes several arguments that are not aimed at specific Requests for Admission. See Motion at 14-15. New Mexico responds to Mr. Pratt's general objection that “the records attached to the Plaintiff's Requests for Admission contained ‘new retainers, new clients and new lawsuits, '” Motion at 14 (quoting Good Faith Response at 3), by noting that its Initial Disclosures[5] include several clients and lawsuits that the Requests for Admission address, see Motion at 14-15. New Mexico also contends that the Court should allow New Mexico to examine broadly Mr. Pratt's business dealings for the purposes of New Mexico's Regulation O violation claim. See Motion at 15. According to New Mexico, civil penalties under Regulation O are tied to the defendant's mental state and, in determining penalties, a court should consider “the financial resources and good faith of the defendant, the gravity of the violations, the severity of the risks to the consumers, any history of prior violations, and ‘such other matters as justice may require.'” Motion at 15-16 (quoting 12 U.S.C. § 5565(c)(3)). New Mexico argues that it asks for the highest penalties under Regulation O, because of the Defendants' “history of violations, bad faith and efforts to evade the law.” Motion at 16. New Mexico avers that the existence of prior bad acts is relevant to the Court's determination of which penalties are applicable. See Motion at 16. New Mexico adds that the UPA and the Mortgage Foreclosures Consultant Fraud Prevention Act similarly require a plaintiff to show that a defendant acted knowingly or willfully before the plaintiff can obtain the highest penalties against the defendant. See Motion at 16-17. In New Mexico's view, this requirement means that the Court should allow New Mexico to request information revealing whether Mr. Pratt engaged in a scheme of frivolous suits. See Motion at 17. New Mexico avers that whether Mr. Pratt engaged in a pattern and practice of willful conduct with non-New Mexican consumers is relevant to determining whether Mr. Pratt acted willfully. See Motion at 17.

         3. The First Response.

         Mr. Pratt responds. See Opposition to motion to determine sufficiency of requests for admission by state of new mexico, filed February 28, 2019 (Doc. 111)(“First Response”).[6]Mr. Pratt argues that the Motion is “un-necessary [sic], ” because his responses “were complete, proper, and sufficient.” First Response at 1. Mr. Pratt contends that he committed no Regulation O violation and no wrongdoing. See First Response at 2. He indicates that he has no records or other documents related to Real Estate Law. See First Response ¶ 2, at 2; id. ¶ 6, at 3. Mr. Pratt also notes that the State Bar of California disciplined him “when three (3) former clients came to state bar court and lied.” First Response at ¶ 3, at 3. According to Mr. Pratt, “such discipline had Nothing [sic] to do with new mexico [sic] or loan modifications, but such discipline precludes this lawsuit.” First Response ¶ 3, at 3. Mr. Pratt avers that he never performed loan modification work in New Mexico, and never communicated with any New Mexican resident about loan modification or any legal matter. See First Response ΒΆ 4-5, at 3. According to Mr. Pratt, he violated no New ...


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