No. Civ.972068 DWF/SRN
United States District Court, D. Minnesota
November 09, 2001
C. Neal Pope, Teresa Pike Tomlinson, Barry G. Reed, and Richard H. Gill, on behalf of Plaintiffs.
Robert J. Pratt, Alan H. Maclin, Margaret K. Savage, and Neal T. Buethe, on behalf of Defendant Standard Federal Bank.
*1 The above-entitled matter came before the undersigned United States Magistrate Judge on Plaintiffs' Second Motion To Enforce The Court's Order Of March 20, 2001 [Docket No. 374] and Defendant Standard Federal Bank's Motion to Continue Plaintiffs' Second Motion To Enforce The Order of March 20, 2001 [Docket No. 385]. This Order addresses those motions.
On September 26, 2000, Plaintiffs propounded the following request for production of documents to Defendant Standard Federal Bank:
1. Produce all or any HUD–1 forms from September 12, 1996, forward wherein the borrower received a credit toward closing costs in the block 200 portion of the borrower's HUD–1 form for the premium fee Standard Federal paid the broker.
Plaintiffs' Second Request for Production to Standard Federal, No. 1.
On October 26, 2000, Standard Federal responded to Plaintiffs' request as follows:
Standard Federal's Response to Plaintiffs' Second Request for Production, No. 1.
Plaintiffs contacted Standard Federal in October 2000 and asked for the production of the HUD–1s for inspection and photocopying to no avail. On February 7, 2001, Plaintiffs filed a Motion To Compel Standard Federal's Production of Documents pursuant to Plaintiffs' Second Request. On March 20, 2001, the Court, in a written Order, granted Plaintiffs' Motion to Compel as to Plaintiffs' Second Request for Production No. 1. Pursuant to the Court's Order, documents responsive to this request were to be produced no later than April 2, 2001. On that date, Defendant Standard Federal produced certain documents, including HUD–1 forms in response to other requests, but provided no written supplemental responses, nor did they submit any additional documents in response to Plaintiffs' Request No. 1.
On April 5, 2001, Plaintiffs filed a Motion to Enforce the Court's Order of March 20, 2001, which was heard by the Court on April 19, 2001. On April 25, 2001, Defendant Standard Federal served the following Supplemental Response to Plaintiffs' Second Request No. 1:
Standard Federal objects to this Request on the grounds it is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Standard Federal further objects to this Request on the grounds that it is unduly burdensome. Further responding, Standard Federal states that this Request relates to the claims of the nationwide class, currently on appeal to the United States Court of Appeals for the Eighth Circuit, as to which this Court lacks jurisdiction.
At the April 19, 2001 hearing, Plaintiffs' counsel suggested that one possible approach to assisting Standard Federal in its production of the credit-against-closing-costs documents would be for Defendants to search their computer data, including fields 108 and 115 which are labeled as being a record of such credits. It is the Court's understanding, during discovery conferences, that Defendant Standard Federal took the position that credit information is not available on its computer systems and that since the production of all above-par HUD–1s are needed for damages and class eligibility purposes, Defendant Standard Federal would produce those HUD–1s only at the expense of the Plaintiffs.
On May 11, 2001, the Court ordered additional briefing to address the issue of portfolio wide HUD–1 production and whether there were available alternatives to the production of all the HUD–1s in hard copy. The Court asked the parties to address alternatives to a protracted and expensive portfolio wide HUD–1 production. Specifically, the Court asked the Defendant Standard Federal to determine whether its current computer system could retrieve information regarding damages, offsets and class member eligibility.
In its briefing to the Court, Defendant Standard Federal takes the position that there is no alternative way to produce this information short of portfolio wide production of HUD–1s in hard copy. Defendant's proposals all involve extraordinary delay, excessive burden and staggering costs to the Plaintiffs. Defendant takes the position that at such time as the HUD–1s are produced, Plaintiffs will be able to determine which HUD–1s contain the credit information they seek responsive to this outstanding request.
In its Memorandum In Opposition to Plaintiffs' Motion to Enforce the Court's Order of March 20, 2001, and in Support of Its Motion to Continue Plaintiffs' Motion, Defendant argues that the information contained in the block 200 portion of the borrower's HUD–1 form is not the only evidentiary support for Standard Federal's contention that, properly utilized, a yield spread premium is to be applied to broker compensation and/or other closing costs. Standard Federal contends that the question of whether a yield spread premium was properly used as compensation for legitimate goods, facilities and services can only be answered by looking at numerous loan-specific factors.
*3 Every effort has been made by this Court to determine whether there is a more feasible and economic electronic means by which the subject HUD–1 information can be produced. The Court is advised that no such means exists nor is there programming which can be done to achieve that end. Accordingly, to the extent that the Defendants intend to introduce evidence at trial regarding a credit toward closing costs received by the borrower, whether from block 200 of the borrower's HUD–1 form or from any other source, the Defendants must produce all such evidence, documentary, electronic or otherwise, upon which they intend to rely in accordance with Judge Frank's Final Discovery And Trial Management Order. To the extent that any expert witnesses will rely upon such information in reaching their expert conclusions, such documentary evidence must be produced or accompany any supplemental expert's report on or before January 2, 2002. To the extent that there is documentary evidence, electronic or otherwise, upon which the Defendants intend to rely or intend to introduce at trial, regardless of whether it forms the basis of any expert's opinion, such evidence must be produced no later than January 2, 2002. To the extent such evidence is not disclosed in a timely fashion, Defendants will be precluded from pursuing this issue at trial.
Based on the foregoing and all the facts, records and proceedings herein,
IT IS HEREBY ORDERED that:
1. Plaintiff's Second Motion To Enforce The Court's Order of March 20, 2001 [Docket No. 374} is GRANTED IN PART and DENIED IN PART as set forth in this Order. Defendant's Motion To Continue Plaintiffs' Motion To Enforce This Court's Order of March 20, 2001 [Docket No. 385] is DENIED AS MOOT.
End of Document.