Ex parte Ocwen Federal Bank, FSB

• Decision Date: 28 March 2003
• Citation: 872 So.2d 810
• Parties: Ex parte OCWEN FEDERAL BANK, FSB. (In re Lee Dowdle and Kimberly Dowdle v. Aurora Loan Services, Inc., et al.)
• Court: Alabama Supreme Court

872 So.2d 810

Ex parte OCWEN FEDERAL BANK, FSB.

(In re Lee Dowdle and Kimberly Dowdle v. Aurora Loan Services, Inc., et al.)

1002225.

Supreme Court of Alabama.

March 28, 2003.

As Modified on Denial of Rehearing August 29, 2003.

Forrest S. Latta, Goodman G. Ledyard, W. Perry Hall, and Michael D. Strasavich of Pierce, Ledyard, Latta, Wasden & Bowron, P.C., Mobile; and Charles A. Langley of Holder, Moore, Lawrence & Langley, P.C., Fayette, for petitioner.

R. Cooper Shattuck and Jane L. Calamusa of Rosen, Cook, Sledge, Davis, Cade & Shattuck, P.A., Tuscaloosa, for respondent.

SEE, Justice.

Ocwen Federal Bank, FSB ("Ocwen"), petitions this Court for the writ of mandamus directing Judge James Moore of the Fayette Circuit Court to vacate his order, dated August 15, 2001, denying Ocwen's motion for a protective discovery order. Ocwen argues that the trial court erred (1) by ordering "pattern and practice" discovery, and/or (2) by failing to tailor the discovery order to protect Ocwen's interests and those of its customers. We deny the petition.

I.

On June 24, 1998, Lee Dowdle and Kimberly Dowdle executed a promissory note, secured by a mortgage on their home, to Johnson & Associates Mortgage Company, Inc. ("Johnson"). The truth-in-lending disclosure statement they received in connection with the execution of the note provided that a penalty would not be assessed if they paid the loan off before its maturity date.¹ Johnson assigned its rights under the promissory note and mortgage to Morcap, Inc. ("Morcap"). Aurora Loan Services, Inc. ("Aurora"), began to service the Dowdles' loan on Morcap's behalf. In April 1999, the Dowdles decided to refinance their loan with a different lender. In order to refinance, the Dowdles had to pay off their original note before its maturity date. When the Dowdles received the payoff balance from Aurora, it included a prepayment penalty. The Dowdles sent a check to Aurora for the payoff balance after deducting an amount for the prepayment penalty. Aurora returned the check to the Dowdles because, it stated, the amount of the check was insufficient to pay off their loan. The Dowdles sent the check to Aurora again. This time, Aurora accepted it but stated that it would continue to seek collection of the prepayment penalty.

On July 23, 1999, the Dowdles sued Aurora, Southern Pacific Funding Corporation,² Johnson, Morcap, and other fictitiously named defendants. As amended, the Dowdles' complaint alleges misrepresentation; suppression; breach of contract; breach of fiduciary duty; negligence; wantonness; intentional infliction of emotional distress; violations of Alabama's Mini-Code, § 5-19-1 et seq., Ala. Code 1975; conspiracy; money paid by mistake; conversion; and defamation. The Dowdles also sought to certify a class.

In September 1999, after Ocwen replaced Aurora as the servicer of the Dowdles' loan, the Dowdles began receiving statements from Ocwen. The first statement the Dowdles received from Ocwen showed that they owed $3,948.63; that amount included interest in the amount of $933.49. After receiving the statement, the Dowdles contacted Ocwen to inform it that the debt was the subject of a legal action and that they were represented in that action by legal counsel. On October 19, 1999, the Dowdles' attorney sent a letter to Ocwen, explaining that the debt it was attempting to collect from the Dowdles was disputed and was the subject of pending litigation. Nonetheless, Ocwen continued to send the Dowdles monthly statements, increasing the past-due amount by $1,091.49 each month³ and assessing the Dowdles a late charge. Ocwen also contacted certain credit agencies to inform them that the Dowdles were delinquent in paying the amounts they owed it.

On May 2, 2000, the Dowdles amended their complaint to add Ocwen as a defendant. On June 2, 2000, the Dowdles submitted interrogatories and document requests to all the defendants. On June 28, 2000, Ocwen moved for a protective order to stay discovery; the trial court conditionally granted the order on September 11, 2000, pending receipt of discovery from the remaining defendants. The trial court lifted the stay on February 6, 2001. On March 19, 2001, the trial court entered a discovery scheduling order, requiring the completion within 120 days of all discovery concerning the merits of the Dowdles' claims and the certification of the purported class.

On May 14, 2001, Ocwen filed a response to the Dowdles' June 2, 2000, discovery request. That response contained a general objection to each of the Dowdles' requests. On May 21, 2001, Ocwen moved for a protective order to stay discovery until the trial court decided whether to certify the purported class. On May 31, 2001, the Dowdles moved to compel Ocwen to respond to the outstanding discovery request. On August 15, 2001, the trial court denied Ocwen's motion for a protective order and granted, with limitations,⁴ the Dowdles' motion to compel. On September 26, 2001, Ocwen petitioned this Court for the writ of mandamus. On October 22, 2001, we ordered answer and briefs.

II.

Mandamus is an extraordinary remedy and will be granted only where there is "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala.1991). This Court will not issue the writ of mandamus where the petitioner has "`full and adequate relief'" by appeal. State v. Cobb, 288 Ala. 675, 678, 264 So.2d 523, 526 (1972) (quoting State v. Williams, 69 Ala. 311, 316 (1881)).

Discovery matters are within the trial court's sound discretion, and this Court will not reverse a trial court's ruling on a discovery issue unless the trial court has clearly exceeded its discretion. Home Ins. Co. v. Rice, 585 So.2d 859, 862 (Ala. 1991). Accordingly, mandamus will issue to reverse a trial court's ruling on a discovery issue only (1) where there is a showing that the trial court clearly exceeded its discretion, and (2) where the aggrieved party does not have an adequate remedy by ordinary appeal. The petitioner has an affirmative burden to prove the existence of each of these conditions.

Generally, an appeal of a discovery order is an adequate remedy,⁵ notwithstanding the fact that that procedure may delay an appellate court's review of a petitioner's grievance or impose on the petitioner additional expense; our judicial system cannot afford immediate mandamus review of every discovery order. See Walker v. Packer, 827 S.W.2d 833, 842 (Tex.1992)

("Mandamus disrupts the trial proceedings, forcing the parties to address in an appellate court issues that otherwise might have been resolved as discovery progressed and the evidence was developed at trial."). In certain exceptional cases, however, review by appeal of a discovery order may be inadequate, for example, (a) when a privilege is disregarded, see Ex parte Miltope Corp., 823 So.2d 640, 644-45 (Ala. 2001) ("If a trial court orders the discovery of trade secrets and such are disclosed, the party resisting discovery will have no adequate remedy on appeal."); (b) when a discovery order compels the production of patently irrelevant or duplicative documents, such as to clearly constitute harassment or impose a burden on the producing party far out of proportion to any benefit that may obtain to the requesting party, see, e.g., Ex parte Compass, 686 So.2d 1135, 1138 (Ala.1996) (request for "every customer file for every variable annuity" including annuity products the plaintiff did not purchase); (c) when the trial court either imposes sanctions effectively precluding a decision on the merits or denies discovery going to a party's entire action or defense so that, in either event, the outcome has been all but determined, and the petitioner would be merely going through the motions of a trial to obtain an appeal; or (d) when the trial court impermissibly prevents the petitioner from making a record on the discovery issue so that the appellate court cannot review the effect of the trial court's alleged error. The burden rests on the petitioner to demonstrate that its petition presents such an exceptional case—that is, one in which an appeal is not an adequate remedy. See Ex parte Consolidated Publ'g Co., 601 So.2d 423, 426 (Ala.1992). We deny Ocwen's petition because Ocwen has not demonstrated to this Court that an appeal would not afford it a full and adequate remedy.

III.

Ocwen argues first that "pattern and practice" discovery is inappropriate and overly burdensome in this case because, Ocwen claims, the Dowdles have no sustainable fraud claim against it. Thus, mandamus is arguably appropriate because the discovery order compels the production of patently irrelevant or duplicative documents, such as to clearly constitute harassment or impose a burden on the producing party far out of proportion to any benefit that may obtain to the requesting party.

Ocwen contends it did not commit fraud in regard to the Dowdles because the undisputed evidence in the case shows that the Dowdles could not have reasonably relied on Ocwen's alleged misrepresentation. The Dowdles' failure to offer evidence of their reliance on Ocwen's allegedly false representations, however, is a basis on which Ocwen could have moved for a summary judgment on the Dowdles' misrepresentation claim.⁶ Therefore, granting Ocwen's petition for a writ of mandamus on this basis would be the functional equivalent of this Court's entering an unsolicited summary judgment for Ocwen on the Dowdles' misrepresentation claim. Moreover, because the trial court has not made any findings of fact as to this argument, issuing the writ of mandamus on the basis that the Dowdles failed to offer evidence of their reliance on Ocwen's misrepresentations would be substituting our judgment for that of the trial...