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Schneider v. Citimortgage, Inc.

United States District Court, D. Kansas

February 17, 2017

CITIMORTGAGE, INC., et. al., Defendants.


          Sam A. Crow, U.S. District Senior Judge.

         This case comes before the court on the following motions: Plaintiff Schneiders' motion for review (Dk. 392) the Magistrate Judge's Order of October 31, 2016, (Dk. 390); Plaintiff Schneiders' motion for review (Dk. 396) the Magistrate Judge's Order of November 3, 2016, (Dk. 391); and the Plaintiffs' motion to file exhibits under seal (Dk. 421). Besides deciding these three motions, this order will reiterate some of the Magistrate Judge's concerns over the lack of cooperation in this case. The case began when the Schneiders' 28-page complaint filed in the District Court of Jefferson, County, Kansas, in May of 2013, was removed by the defendants to this court on August 14, 2013. (Dk. 1). The defendants thereafter filed a motion to dismiss which this court granted and denied in part. The magistrate judge has described correctly the plaintiffs' claims as involving “the defendants' alleged misconduct in handling the Schneiders' residential mortgage loan and their 2010 loan refinance” (Dk. 390, p. 1) and as seeking relief for violations under the Kansas Consumer Protection Act (“KCPA”) and for breach of contract regarding interest and overcharges within the five-year limitations period (Dk. 273, p. 2). “The Schneiders allege that they were wrongfully assessed overcharges and fees and were denied a loan refinance for which they were qualified.” (Dk. 275, p. 1).

         Before addressing the pending matters, the district court will make several observations. The docket report does not paint a favorable Rule 1 impression of this case. The Magistrate Judge rightfully expressed his frustration (Dk. 390, p. 2) with how all parties have “failed to assist the court in the ‘just, speedy, and inexpensive' disposition of this case.” The Magistrate Judge concluded his observations with the hope that his “order will put this litigation on a path to a conclusion.” Id. The pending motions show that hope to be delayed. Neither side should be pleased with the state of the record, and nor should they expect to benefit from it. From this point forward, the district court wants both sides to realize that joint efforts by all parties will be expected to improve and will be accounted for as this case moves forward expeditiously.

         MOTION TO FILE UNDER SEAL (Dk. 421)

         The plaintiffs filed an earlier motion seeking leave to file certain discovery produced in December of 2016 as exhibits under seal. (Dk. 411). The district court summarily denied this motion as insufficient on its face to meet the requirements for sealing. (Dk. 415). The plaintiff now files a four-page motion and a nine-page memorandum in support. (Dks. 421 and 422). Citing the terms of their agreed protective order (Dk. 54), the plaintiffs describe themselves as “in a pickle” and requesting leave to file under seal. The plaintiffs' present motion complies with their protective order (Dk. 54, ¶ 6), and the plaintiffs alternatively argue the documents should be filed without sealing them. Absent the defendants coming forward with arguments in support of sealing, the court agrees with the plaintiffs and denies the plaintiffs' motion to file under seal. The plaintiffs may file these documents absent an intervening motion to seal by the defendants.


         Rule 72 of the Federal Rules of Civil Procedure allows a party to provide specific, written objections to a magistrate judge's order. A magistrate judge's order addressing non-dispositive pretrial matters is not reviewed de novo, but it is reviewed under the more deferential standard in which the moving party must show the order is “clearly erroneous or contrary to the law.” First Union Mortg. Corp. v. Smith, 229 F.3d 992, 995 (10th Cir. 2000) (quoting Ocelot Oil Corp. v. Sparrow Industries, 847 F.2d 1458, 1461-62 (10th Cir. 1988)); see Fed.R.Civ.P. 72(a). For factual findings, the court applies the clearly erroneous standard which “requires that the reviewing court affirm unless it on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” See Ocelot Oil, 847 F.2d at 1464 (citation omitted). For legal determinations, “the Court conducts an independent review and determines whether the magistrate judge ruling is contrary to law.” In re Motor Fuel Temperature Sales Practices Litigation, 707 F.Supp.2d 1145, 1148 (D. Kan. 2010) (citations omitted), interlocutory appeal dismissed, 641 F.3d 470 (10th Cir. 2011), cert. denied, 132 S.Ct. 1004 (2012). “Under this standard, the Court conducts a plenary review and may set aside the magistrate judge decision if it applied an incorrect legal standard or failed to consider an element of the applicable standard.” Id.


         The plaintiffs filed a seven-page motion to review (Dk. 392), then filed two-weeks' later a 20-page memorandum in support (Dk. 402), and finally filed two months' later a 21-page reply memorandum (Dk. 416). This typifies the excessive and extended filings and briefing in this case. Of note is that the movants fail to cite the standards governing their motion and to argue a consistent and proper application of them. Instead, the plaintiffs' motion and memoranda offers up headings and argues points lacking coherency, organization, citations, references, and especially clarity. To make plain this point, court will address every separate heading found in this particular motion.

         With leave of the court, the plaintiffs were given additional time to file a reply brief. The court's leave, however, did not authorize the plaintiffs to argue matters for the first time in their reply brief. “The general rule in this circuit is that a party waives issues and arguments raised for the first time in a reply brief.” See Reedy v. Werholtz, 660 F.3d 1270, 1274 (10th Cir. 2011). The plaintiffs' reply is the first time they argue that new discovery produced in December of 2016 convinces them that the defendants have failed to produce or identify other requested discovery. This new discovery is the subject of the plaintiffs' motion to file exhibits under seal. (Dk. 421). After reviewing these exhibits and the plaintiffs' accompanying arguments, the court will not suspend the rule of waiver against arguments first raised in reply. From this recent discovery, the plaintiffs want to argue inferences that the defendants have not provided complete and accurate discovery responses to date. What the plaintiffs argue as inferences, however, does not appear to put the court in any better “position to determine the accuracy or completeness of the information produced.” (Magistrate Judge's Order, Dk. 390). Nonetheless, should the plaintiffs want to make this argument, it first must be made to the Magistrate Judge who is most familiar with the discovery and rulings to date. The district court is not in a position now to second-guess the Magistrate Judge's original conclusion on whether this new discovery now puts the court in a position to determine this issue. Thus, this court will not consider the plaintiffs' arguments based on discovery produced in December of 2016.

         “Citigroup's Failure to Appear at the Noticed Deposition” (Dk. 402, p.1)

         Under this heading, the plaintiffs argue the “Magistrate [Judge] clearly erred when finding that Plaintiffs were not entitled to relief because the Defendants had neither complied and come to depositions prepared for the topics not in dispute which would not have been contrary to the Court's finding of their instruction to the Defendants, nor had they met the automatic stay.” (Dk. 402, p. 2). The plaintiffs' use of “clear error” presumes a factual finding, but their motion fails to isolate this finding. The plaintiffs mention pages 14 and 15 of the Magistrate Judge's order which addressed Citigroup's motion for protective order and the plaintiffs' objection that Citigroup's motion was untimely. In rejecting the plaintiffs' timeliness objection, the Magistrate Judge first recognized “that this aspect of plaintiffs' response is moot because the court directed the parties to conduct the depositions on the topics where agreement could be reached.” (Dk. 390). In short, the Magistrate Judge first rejected the plaintiffs' timeliness argument as moot, because he had directed the depositions to occur on the agreed topics. The Magistrate Judge also denied the timeliness argument because a motion for protective order under Fed.R.Civ.P. 26(c) is not subject to the filing requirements of D. Kan. Rule 26.2(b)(2). The plaintiffs do not show the Magistrate Judge's reading and application of this rule to be wrong. In short, the court has no basis for finding any error in the Magistrate Judge's rulings at pages 14 and 15 of his order.

         “Pattern & Repeat Strategy to Avoid Depositions” (Dk. 402, p. 3)

         At page three of their memorandum, the plaintiffs employ this section title to then label and attack as tactical and dilatory the defendants' efforts to narrow down the scope of the Rule 30(b)(6) deposition. (Dk. 402, p. 3). This typifies the repeated finger pointing of blame and of delay replete in this case. There is nothing under this title that serves as a viable factual or legal argument or objection for review.

         “Support for Response Opposing Citigroup Protective Order” (Dk. 402, p.3)

         Under this heading, the plaintiffs ramble through different filings, highlight isolated arguments, and criticize general rulings without an organizing theme and without any clear direction on what they regard as error and why it would be error. The court presumes the following rulings to be in issue and the following arguments to be made.

         The Magistrate Judge rejected the plaintiffs' contention that Citigroup's discovery answers were not believable because the “trailing document” is proof that their loan was securitized. The Magistrate Judge first noted that this “is a document in which CitiMortgage was the custodian.” (Dk. 390, p. 4). He then found that the plaintiffs have “no claim in this case based upon the securitization of plaintiffs' 2007 loan” and that there was no “improper conduct by Citigroup or the other defendants concerning this document.” (Dk. 390, p. 4). Nothing presented in the plaintiffs' objections points to any error in this ruling, and the court finds none.

         The plaintiffs also complain that the Magistrate Judge kept them from deposing on the new topic of securitization as a way of showing Citigroup's connection to their loan transaction. Before the Magistrate Judge, the plaintiffs, however, “acknowledged that these topics are not for a new cause of action, but are designed to “ferret out” a discovery violation by Citigroup.” (Dk. 390, p. 16). Thus, the Magistrate Judge was not persuaded that “this was a proper use of discovery given the allegations here” and concluded that the topics were not within “the scope of this litigation.” Id. The plaintiffs' changing reasons ...

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