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Los Alamos National Bank N.A. v. Fidelity Bank

United States District Court, D. New Mexico

June 3, 2019




         THIS MATTER comes before the Court on Los Alamos National Bank's Motion to Compel Interrogatory Answers. [Doc. 62]. The Court, having considered the parties' submissions, the relevant law, and being otherwise fully advised in the premises finds that the Motion is well taken and should be granted.


         This case arises out of alleged breaches of a Mortgage Loan Servicing Rights Purchase Agreement (Agreement) by which Los Alamos National Bank (LANB) sold Fidelity Bank (Fidelity) the servicing rights to approximately 4, 500 mortgage loans on real property in northern New Mexico. [Doc. 30-1]. The Agreement provides Fidelity several options in the event of a defect with any of the mortgages whose servicing rights Fidelity purchased. [Doc. 30-1, p. 31]. According to Fidelity, claims by the Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque that certain county roads built by the County of Santa Fe trespass on tribal land impact the access roads to approximately 240 real properties subject to mortgages now serviced by Fidelity by virtue of the Agreement with LANB. [Doc. 4, pp. 9-11]. Fidelity further contends that the disputed access roads cloud title to the mortgaged properties. [Id., p. 10].

         On April 11, 2018, Fidelity wrote to LANB asserting that the Pueblos' Access Claims clouded title to approximately 240 mortgaged properties, rendering those mortgage loans defective within the meaning of the Agreement. [Doc. 30-2]. Fidelity demanded that LANB repurchase the defective loans. [Id.]. LANB refused and filed this declaratory judgment action, seeking a declaration that LANB did not cause a defect in the mortgage loans or servicing rights, has no obligation to repurchase the mortgage loans or servicing rights, and did not breach the Agreement. [Doc. 1]. Fidelity brought contractual and tort counterclaims against LANB, specifically, breach of contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, fraud by silence, and negligent misrepresentation. [Doc. 4, pp. 4-17].

         On February 6, 2019, LANB served its First Set of Interrogatories and Requests for Production on Fidelity. [Doc. 46]. LANB's First Set of Interrogatories consisted of five enumerated interrogatories, three of which contained subparts. [Doc. 61-1, pp. 1-10]. Fidelity asserted various objections to each interrogatory and did not provide any substantive answers. [Id.]. On March 26, 2019, the Court held an informal discovery conference to address the parties' discovery disputes, including disputes concerning Fidelity's objections to LANB's interrogatories. [Doc. 51].

         Counsel for Fidelity represented that Fidelity had engaged Consensus Planning, Inc. to help it identify the mortgages whose servicing rights were impacted by the Pueblos' Access Claims and that it anticipated being able to provide information responsive to LANB's interrogatories by April 12, 2019. [Doc. 50; Doc. 53]. The parties agreed that Fidelity would accordingly supplement its discovery responses by April 12, 2019, LANB would wait to file any Motion to Compel until after the April 12, 2019 supplementation promised by Fidelity, and the remaining pretrial deadlines would be extended to accommodate the additional time provided for discovery. [Id.]. The Court memorialized these parties' stipulations in an Order Granting Extension of Time [Doc. 52] and an Amended Scheduling Order [Doc. 54].

         On April 12, 2019, Fidelity supplemented its answers to LANB's First Set of Interrogatories. [Doc. 58]. The April 12, 2019 supplementation included additional objections to LANB's interrogatories but did not include any responsive answers. [Compare Doc. 62-1, pp. 1-10 with Doc. 62-2, pp. 1-10]. In making its additional objections, pertaining to Interrogatory Nos. 2, 3, and 5, Fidelity asserted the information sought would be the subject of expert testimony and would be provided in or supplemented concurrently with its expert disclosures. [Doc. 62-2, pp. 1-10]. LANB filed the instant Motion on April 19, 2019. [Doc. 62]. LANB challenges the validity of certain of Fidelity's objections and requests that the Court compel Fidelity to fully answer each of LANB's interrogatories. [Id., pp. 5-8]. LANB also seeks to recover attorneys' fees associated with bringing the Motion. [Id., pp. 8-9].


         Federal Rule of Civil Procedure 26(b)(1) governs the scope of discovery, providing that “[p]arties 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.” Fed.R.Civ.P. 26(b)(1). Relevant evidence is that which “has any tendency to make a fact more or less probable than it would be without the evidence; and the fact is of consequence in determining the action.” Fed.R.Evid. 401. However, “[i]nformation within [the] scope of discovery need not be admissible in evidence to be discoverable.” Fed.R.Civ.P. 26(b)(1); see Regan-Touhy v. Walgreen Co., 1');">526 F.3d 641, 649 (10th Cir. 2008) (“Under our rules, parties to civil litigation are given broad discovery privileges.”). Nonetheless, the Court is not required to permit the parties to engage in fishing expeditions in the hope of supporting their claims or defenses. See Landry v. Swire Oilfield Servs., L.L.C., 323 F.R.D. 360, 375 (D.N.M. 2018).

         Key considerations in determining the scope of permissible discovery include “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.” Fed.R.Civ.P. 26(b)(1). Ultimately, “[c]ounsel bears the responsibility of propounding proper discovery requests, and expecting counsel to fulfill this responsibility is neither capricious nor unfair.” Punt v. Kelly Services, 1040');">862 F.3d 1040, 1047 (10th Cir. 2017).

         Parties may propound interrogatories and requests for production pursuant to Federal Rules of Civil Procedure 33 and 34, provided that such requests are within the scope of Rule 26(b). See Fed. R. Civ. p. 33(a); Fed.R.Civ.P. 34(a). “[A]n evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer or respond.” Fed.R.Civ.p. 37(a)(4). A party may move to compel a response if good faith attempts to secure the answer are unsuccessful. Fed.R.Civ.p. 37(a)(3)(B)(iv). The party moving to compel discovery has the burden of proving the opposing party's answers were incomplete. See Daiflon, Inc. v. Allied Chem. Corp., 1');">534 F.2d 221, 227 (10th Cir. 1976).

         III. ANALYSIS

         A. Fidelity's Objections to ...

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