Mazza v. Quicken Loans, Inc.

• Decision Date: 24 May 2013
• Docket Number: Civil Action No: 1:12 CV 142
• Parties: CARLA D. MAZZA, Plaintiff, v. QUICKEN LOANS, INC., GREEN TREE SERVICING, LLC, and JOHN DOE HOLDER, Defendants.
• Court: U.S. District Court — Northern District of West Virginia

CARLA D. MAZZA, Plaintiff,

v.QUICKEN LOANS, INC., GREEN TREE SERVICING, LLC, and JOHN DOE HOLDER, Defendants.

Civil Action No: 1:12 CV 142

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

Dated: May 24, 2013

MEMORANDUM OPINION AND ORDER

This matter is before the Court as Plaintiff's Motion To Compel Defendant Quicken Loans, Inc., To Produce Complete Responses To Plaintiff's Combined Discovery Requests [DE 64]. For the reasons stated herein, the undersigned GRANTS THE MOTION IN PART AND DENIES THE MOTION IN PART.

I.History

Plaintiff brought this predatory lending suit against Defendants claiming Defendant Quicken Loans, Inc. [Quicken] induced her "to procure an unwise high interest, adjustable rate, second lien mortgage based on misrepresented terms and a dramatically inflated automated computer valuation that resulted in a loan that when added to her primary mortgage loan far exceeded the actual fair market balue of the home. Then, six months later, Quicken induced Plaintiff to refinance the previous loan and procure another unwise high interest loan that was again based on misrepresented terms and a dramatically inflated automated computer valuation and that contained a baloon payment of over $56,000 due in fifteen years, which term was never adequately explained or disclosed during the solicitation process." DE 64. Plaintiff's claims assert Unconscionable Contract, Illegal Loan andFraud against Defendant Quicken Loans, Inc. Id.

December 11, 2012 Plaintiff filed her first combined discovery requests on Defendants. DE 36. Defendant Quicken reponded on January 31, 2013 by objecting but producing no documents. Quicken's objections were that the document requests 4, 18, and 19 sought information that was not relevant and unduly burdensome to produce.

Plaintiff initiated discussions concerning the lack of document production on February 14, 2013. The negotiations by mail and electronic mail continued until March 18, 2013 when Quicken advised in writing that it would not produce any information responsive to Interrogatories 4, 18 and 19. During the negotiations the parties came close to reaching agreement on production of documents requested by Interrogatories 4, 18 and 19. Defendant offered to produce documents responsive to Interrogatories 4, 18 and 19 limited in geographic and temporal scope to other West Virginia borrowers whose loans were originated by Quicken Loans in 2006 using the same automated valuation model that was used on Plaintiff's loan provided Plaintiff withdrew her request for responses to Interrogatories 4, 18 and 19. February 22, 2013 Plaintiff counter offered to withdraw the request if Quicken would produce information regarding West Virginia borrowers with Quicken Loans for the years 2005 and 2006 where automated computer valuations as opposed to appraisals were used. Quicken responded on March 1, 2013 saying it would produce for one year [a 12 month period] but not longer as "search and review of records for a two year period would simply be too burdensome for Quicken." Plaintiff counter offered on March 4, 2013 limiting the search to an 18 month period of time between July 1, 2005 and November 30, 2006. March 18, 2013 Quicken withdrew its offers and stated it would not produce any information responsive to Interrogatories 4, 18 and 19.

Notwithstanding its claims of burdensomeness, Quicken was able to identify 76 loans thatwere originated by it in West Virginia and in which an automated valuation process was used between July 1, 2005 and Novembe 30, 2006.

Having failed in "good faith negotiations" Plaintiff filed the subject motion to compel. The undersigned finds that Plaintiff complied with L.R.Civ.P. 26.01 (c).

II.Contentions

Plaintiff:

1. The information sought in Interrogatories 4, 18 and 19 are relevant.

2. The Plaintiff and Defendant reached agreement on limiting the geographic and subject matter scope of the information sought by Interrogatories 4, 18 and 19 and were close to an agreement on temporal scope [12 months v. 18 months].

3. Search for the documents and loans responsive to Interrogatories 4, 18 and 19 is not burdensome as Quicken has already located 76 such files fitting the geographic and subject matter scope limitations agreed to during the meet and confer.

Defendant:

1. The information sought in Interrogatories 4, 18 and 19 are not relevant.

2. The burden on Quicken to search for the information being sought outweighs the value of the information given its lack of relevance.

3. No agreement was reached during the meet and confer.

III.Discussion

The following three interrogatories are at issue¹ :

Interrogatory 4 seeks: "Please list the name, address and telephone number of each West Virginia borrower who applied for a loan from Quicken and for which application a computer valuation of the home was obtained and / or utilized by Quicken."

Interrogatory 18 seeks: "Please list the names, addresses, and phone numbers of the borrowers for each loan originated by Defendant using the appraiser and/or valuation service used for the origination of the subject loan."

Interrogatory 19 seeks: "Please list all West Virginia appraisers and/or valuation services used for the origination of loans by Defendant during the year in which Plaintiff's loan was originated."

Scope

It is indisputable that Interrogatory 4 and Interrogatory 18 are not temporally limited as orginally propounded. It is indisputable that Interrogatory 18 is not geographically limited as originally propounded. It is indisputable that Interrogatory 19 is temporally limited but is not geographically limited as originally propounded. Overall Interrogatories 4, 18 and 19 are not limited in scope to: 1] loans made by Quicken 2] to West Virginia borrowers 3] for a reasonable time periodprior to the date of Plaintiffs last Quicken Loan 4] and which used an automated computer valuations system as opposed to the full residential real estate appraisal approach to valuation of the property borrowed against.

As written, the Court concludes Plaintiff's disputed three interrogatories are overbroad and were properly objected to by Quicken. Plaintiff is not entitled to unlimited discovery. Tooley v. Napolitano, 556 F.3d 836 (D.C.Cir. 2009).

Relevancy

Plaintiff originated her complaint against Quicken and the other Defendants in the Circuit Court of Harrison County, West Virginia. Quicken removed to this Court. The complaint alleges: 1] Unconscionable Contract; 2] Illegal Loan in violation of W.Va. Code Ch. 31, Art. 17, Sections 8(m)(3) and 8(m)(8) and Ch. 31, Art. 17, Sec. 17; and 3] Fraud against Quicken. Defendant asserts any alleged violation of the West Virginia consumer credit and protection laws was unintentional or the result of a bona fide error of fact in its Seventh Defense.

F.R.Civ.P. 26(b)(1) limits scope of discovery to "any nonprivileged matter that is relevant to any party's claim or defense...." The information sought through discovery must be relevant to the issues in the action or useful in uncovering the existence of information relevant to the issues in the case. In re Cooper Tire & Rubber Co., 568 F.3d 1180, 1189 (10th Cir. 2009). The evidence sought need not be admissible at trial. However, "discovery of matter not reasonably calculated to lead to discovery of admissible evidence is not within the scope of Rule 26(b)(1)." Oppenheimer Fund v. Sanders, 437 U.S. 340, 352 (1978).

Unconscionableness

The burden of proof of unconscionableness relative to a contract term is on the party asserting it. Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W.Va. 646, 724 S.E.2d 250, 287(2011)("Brown I"). "Under West Virginia law, the court will analyze unconscionability of a contract term in terms of two component parts: procedural unconscionability and substantive unconscionability." Id. "Substantive unconscionability involves unfairness in the contract itself - 'overall imbalance, one-sidedness, laesio enormis, and 'the evils of the resulting contract."' "We hold that the doctrine of substantive unconscionability involves unfairness in the contract itself and whether a contract term is one-sided and will have an overly harsh effect on the disadvantaged party. The factors to be weighed in assessing substantive unconscionability vary with the content of the agreement. Generally, courts should consider the commercial reasonableness of the contract terms, the purpose and effect of the terms, the allocation of the risks between the parties, and public policy concerns. The sources for these 'public policy concerns' can include 'our federal and state constitutions, our public statutes, our judicial decisions, the applicable principles of the common law, the acknowledged prevailing concepts of the federal and state governments relating to and affecting the safety, health, morals and general welfare of the people for whom government - with us - is factually established.'" Id. 288.

"Procedural unconscionability addresses inequities, improprieties, or unfairness in the bargaining process and the formation of the contract. 'Procedural unconscionability has been described as the lack of a meaningful choice, considering all the circumstances surrounding the transaction including 'the [t]he manner in which the contract was entered,' whether each party had 'a reasonable opportunity to understand the terms of the contract,' and whether 'the important terms [were] hidden in a maze of fine print[.]' 'Procedural unconscionability involves a 'variety of inadequacies, such as ... literacy, lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the particular setting existing during the contract formation process.' Determining procedural unconscionability also 'requires the court to focus on the 'real and voluntarymeting of the minds' of the parties at the time that the contract was executed and consider factors such as: (1) relative bargaining power; (2) age; (3) education; (4) intelligence; (5)...