Case Name:   Salma Merritt, et al. v. Angelo R. Mozilo, et al.

 

Case No.:       1-09-CV-159993

 

1. Motion by Defendants Countrywide Financial Corporation, Countrywide Home Loans, Inc., Bank of America, N.A., Angelo Mozilo, David Sambol, Kenneth Lewis, and Michael Colyer for Judgment on the Pleadings against Plaintiffs David Merritt and Salma Merritt

 

The notice of motion does not identify the pleading to which it is addressed, but the memorandum of points and authorities refers to a Fourth Amended Complaint.  The Request for Judicial Notice filed with the motion identifies Exhibit A as the “Fourth Amended Complaint, dated March 8, 2012”, but the attached Exhibit A (which is indeed dated March 8, 2012) is entitled “Updated Third Amended Complaint”.  The court will refer to Exhibit A as “4AC”.  The causes of action set forth are:

 

(1)            Conspiracy to Commit Fraud-Misrepresentation, Deceit, Concealment

(2)            Negligent Misrepresentation (labeled “Count II” and alleged only against Wells Fargo: 178:23)

(3)            Conspiracy to Commit Unfair Business Practices

(4)            Conspiracy to Commit Unfair Business Practices (Violation of Bus. & Prof. §17200)

(5)            Conspiracy to Commit Unfair Business Practices (Untrue or Misleading Advertising)

 

In 188 pages of text and 374 numbered paragraphs, Plaintiffs allege a multitude of fraudulent representations, improper disclosures, and predatory/discriminatory lending practices relating to their application for a loan to purchase a townhouse located at 660 Pinnacles Terrace in Sunnyvale (“Subject Property”) and the subsequent origination, issuance, and servicing of the loan.

 

Defendants request judgment on the pleadings as to each of the five causes of action.  As the second cause of action, by its own terms is not alleged against any of the moving Defendants, so the motion is denied as to that cause of action.

 

Defendants’ request for judicial notice is granted as to Exhibits A-F and denied as to Exhibits G and H.  Plaintiffs’ request for judicial notice is granted.

 

1. First Cause of Action: Conspiracy to Commit Fraud

 

            1.  Statute of Limitations

 

Defendants contend the first cause of action for conspiracy to commit fraud, which accrued no later than March 28, 2006 and was filed on December 22, 2009, is barred by the statute of limitations.  Defendants argue that Plaintiffs’ attempt to plead around the statute by alleging a subsequent loan modification as a more recent “last overt act” fails as a matter of law because the alleged act occurred after the primary purpose of the alleged conspiracy (selling Plaintiffs a subprime loan) had been realized and was not itself wrongful.

 

“When a ground for objection to a complaint, such as the statute of limitations, appears on its face or from matters of which the court may or must take judicial notice, a demurrer on that ground is proper.” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 746.) Code of Civil Procedure section 338, subdivision (d) specifies a three year statute of limitations for actions grounded in fraud or mistake. Code of Civil Procedure section 338, subdivision (d) also specifically states, “The cause of action … is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”  (Code Civ. Proc. §338, subd. (d).)  Although the first cause of action is for conspiracy, “The statute of limitations that applies to an action is governed by the gravamen of the complaint, not the cause of action pled.” (City of Vista v. Robert Thomas Securities, Inc. (2000) 84 Cal.App.4th 882, 889.)

 

The first cause of action alleges, in relevant part, that “on or about March 14, 2006, defendant Colyer, acting on the aforementioned authority of defendant Mozilo and Countrywide Board of Directors, promised [Plaintiffs] that he could guaranty [sic] to provide them with a loan which was FHA 30-year fix with monthly payments of $2,200 or less.” (4AC, ¶308.) Defendants contend the cause of action accrued no more than two weeks later on March 28, 2006 when Plaintiffs “read portions of loan documents and were able to make out what seemed to be two loans that were issued and did not see anything about FHA or payments. … Finally, after [Plaintiff David Merritt] repeatedly asked him, Colyer told [Plaintiffs] that loans were over 4,569. [¶]  [Plaintiffs] became surprised and concerned… .” (4AC, ¶¶225 – 226.)

 

Thus, according to Defendants, Plaintiffs had until March 28, 2009 to assert their claim for conspiracy to commit fraud.  Defendants acknowledge Plaintiffs timely filed a federal action on March 18, 2009.  However, the federal action was dismissed on October 28, 2009.  Pursuant to City of Los Angeles v. County of Kern (2014) 59 Cal.4th 618, Title 28, United States Code, Section 1367, subdivision (d) “affords parties a grace period, allowing claims that would otherwise have become barred to be pursued in state court if refiled no later than 30 days after federal court dismissal.”  Thus, Plaintiffs had until November 27, 2009 to refile their action in state court, but they did not do so until December 22, 2009.

 

However, Plaintiffs’ fraud allegations are not limited to the 2006 false promise of an “FHA 30-year fix [loan] with monthly payments of $2,200 or less.”  As noted at the outset, Plaintiffs allege a multitude of fraudulent representations. The fraud is alleged to have occurred into 2009. (See, e.g.,  4AC, ¶¶295, 317.)  “The running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred. [Citation.]  If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer.  The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment . . . .’  [Citation.]”  (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324 – 325.)

 

Accordingly, the first cause of action is not barred by the statute of limitations.

 

2.  Implied Waiver

 

As an alternative argument, Defendants contend the first cause of action fails based upon the implied waiver rule.  “[A] plaintiff claiming to have been induced into signing a contract by fraud or deceit is deemed to have waived a claim of damages arising therefrom if, after discovery of the alleged fraud, he enters into a new contract with the defendant regarding the same subject matter that supersedes the former agreement and confers upon him significant benefits.” (Oakland Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th 1175, 1185 (Oakland Raiders).)

 

Defendants contend the implied waiver rule should be applied here as a matter of law based upon Plaintiffs’ allegation and inclusion of executed modification agreements which ratify the purported fraudulently induced loan agreements and which provided Plaintiffs with substantial benefits, including a reduction of the interest rate.

 

However, “the existence of waiver is ordinarily a question of fact. [Citations.]  But this does not mean it can never be a question of law… .  Implied waiver, especially where it is based on conduct manifestly inconsistent with the intention to enforce a known right, may be determined as a matter of law where the underlying facts are undisputed [citation], or the evidence is susceptible of only one reasonable conclusion. [Citations.]”  (Oakland Raiders, supra, 144 Cal.App.4th at p. 1191.)  The court in Oakland Raiders applied the implied waiver rule, but did so after considering the evidence presented at trial.  Here, on a motion for judgment on the pleadings, Plaintiffs’ allegations concerning misrepresentations in connection with the loan modification are deemed to be true. (See, e.g., 4AC, ¶275.)

 

Accordingly, the first cause of action is not barred by application of the implied waiver rule.  The motion as to the first cause of action is DENIED.

 

1. Third Cause of Action: Unfair Practices (Cartwright) Act

 

Plaintiffs’ third cause of action asserts a violation of the Unfair Practices (Cartwright) Act for which a three year statute of limitation applies.  Generally, the third cause of action alleges that Defendants conspired to provide loans at below cost to induce borrowers, including Plaintiffs, to terminate relations with other prospective lenders/ mortgage brokers. (See 4AC, ¶¶339 – 340.)  The third cause of action further alleges Defendants conspired to falsely inflate property values in order to increase commissions. (See 4AC, ¶¶344 – 345.)

 

“The Cartwright Act is contained in Business and Professions Code section 16700 et seq. Sections 16720 and 16726 generally codify the common law prohibition against restraint of trade.” (G.H.I.I. v. MTS, Inc. (1983) 147 Cal.App.3d 256, 264 (MTS).)  “Recovery is provided under the Cartwright Act ‘where the activities of a combination result in a restraint of trade.’ [Citation.]  In order to maintain a cause of action for such combination in restraint of trade, the complaint must allege: the formation and operation of the conspiracy; the illegal acts done pursuant thereto; a purpose to restrain trade; and the damage caused by such acts. [Citation.]” (MTS, supra, 147 Cal.App.3d at p. 265.)

 

“Since the Unfair Practices Act contains no specific statute of limitations, the general statute of limitations must be consulted.  Code of Civil Procedure section 338, subdivision 1 provides a three-year period of limitations for ‘[an] action upon a liability, created by statute, other than a penalty of forfeiture…’” (Id. at p. 276.)

 

Defendants contend the cause of action accrued on March 28, 2006.  As the court in MTS stated, “It is only when a complaint shows on its face that it is necessarily barred, rather than possibly, that a demurrer on such grounds will be sustained.”  (Id. at p. 279; italics original.) Defendants do not adequately establish that the third cause of action is necessarily barred.

 

Alternatively, Defendants contend that Plaintiffs lack standing to assert the third cause of action because the purpose of the Unfair Practices Act is designed to protect competitors rather than consumers.  Defendants concede there are no published state decisions addressing this issue. Instead, Defendants rely upon a federal trial court decision.  However, “we are not bound by the decisions of the lower federal courts.” (Tully v. World Savings & Loan Assn. (1997) 56 Cal.App.4th 654, 663; see also Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th 1242, 1250, fn. 7.)   “A written trial court ruling has no precedential value.”  (Santa Ana Hospital Med. Ctr. v. Belshe (1997) 56 Cal.App.4th 819, 831.)

 

Accordingly, Defendants’ motion for judgment on the pleadings of the third cause of action is DENIED.

 

1. Fifth Cause of Action: False Advertising

 

Defendants understand the fifth cause of action to assert a claim for conspiracy to violate Business and Professions Code section 17500 which prohibits false advertising. Defendants contend there is no specific statute of limitations regarding a violation of Business and Professions Code section 17500 so a three-year statute of limitation applies pursuant to Code of Civil Procedure section 338, subdivision (a).  However, it is not clear that Plaintiffs are pursuing the fifth cause of action expressly under Business and Professions Code section 17500 as opposed to as a violation of section 17200.  “[T]he fifth ‘wrong’ proscribed by §17200 is ‘[a]ny act prohibited by … Section 17500 [et seq.].’ [Bus. & Prof. C. §17200] Thus, ‘[a]ny violation of the false advertising law … necessarily violates the UCL.”  (Stern, BUS. & PROF. C. §17200 PRACTICE (The Rutter Group 2014) ¶4;14, p. 4-5 citing Kasky v. Nike, Inc. (2002) 27 Cal.4th 939.)

 

If the fifth cause of action is asserted as a violation of Business and Professions Code section 17200, the applicable statute of limitations is Business and Professions Code section 17208 which states, “Any action to enforce any cause of action pursuant to this chapter shall be commenced within four years after the cause of action accrued.” Thus, it is not clear from the face of the 4AC that the fifth cause of action is barred by the statute of limitations.

 

Accordingly, Defendants’ motion for judgment on the pleadings of the fifth cause of action on the ground that it is barred by the statute of limitations is DENIED.

 

1. Fourth and Fifth Causes of Action

 

                        1.         Implied Waiver Rule

 

As to the fourth and fifth causes of action, Defendants reiterate their earlier argument that the claims are barred by the implied waiver rule. For the same reasons discussed earlier, Defendants’ motion for judgment on the pleadings of the fourth and fifth causes of action on the ground that they are barred by application of the implied waiver rule is DENIED.

 

2.  Unavailability of Rescission Remedy

 

As a final argument, Countrywide Financial Corporation (“CFC”), Michael Colyer (“Colyer”), Angelo Mozilo (“Mozilo”), and David Sambol (“Sambol”) contend that Plaintiffs cannot maintain the fourth and fifth causes of action against them because Plaintiffs allege only that they paid money to defendants Countrywide Home Loans, Inc. (“CHL”) and Bank of America, N.A. (“Bank”) (See 4AC, ¶251.)  These defendants argue that, as against them, restitution is not available since they did not obtain any of Plaintiffs’ money or property.

 

However, Plaintiffs have sued each of these defendants under a conspiracy theory. “Civil conspiracy is not an independent tort.  Rather, it is a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.  The major significance of a conspiracy cause of action lies in the fact that it renders each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing from the wrong regardless of the degree of his activity. The essence of the claim is that it is merely a mechanism for imposing vicarious liability; it is not itself a substantive basis for liability.  Each member of the conspiracy becomes liable for all acts done by others pursuant to the conspiracy, and for all damages caused thereby.” (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823.)

 

Accordingly, CHL, Colyer, Mozilo, and Sambol’s motion for judgment on the pleadings of the fourth and fifth causes of action on the ground that defendants CHL, Colyer, Mozilo, and Sambol did not obtain any of plaintiffs’ money or property is DENIED.

 

1. Plaintiffs’ Motion to Compel Production and Inspection of Documents, Sixth Set, from CHL and Request for Order Awarding Sanctions

 

Plaintiffs’ notice of motion refers to Code of Civil Procedure section 2013.310, which applies if the party to whom a document demand is sent does not respond.  The notice of motion does not reference Code of Civil Procedure section 2031.310 (motion to compel further responses), and although Plaintiffs’ motion by its title seeks production and inspection of documents, the notice also does not refer to section 2031.320 (motion to compel compliance).  Because CHL did serve a response to the demand and Plaintiffs are seeking production notwithstanding that response, the court will treat this motion as made pursuant to section 2031.310, seeking further responses to the request for production of documents, set six, propounded on CHL.

 

There is a further difficulty in discerning exactly what Plaintiffs are seeking on this motion.  The Separate Statement sets for the text of what Plaintiffs call “Original Request”, Defendants’ Response, and later a “Modified Request”.  It does not appear that Plaintiffs are requesting enforcement of the “Original Request” and it does not appear that the “Modified Request” was ever been propounded pursuant to section 2031.

 

In any event, Plaintiffs have failed to establish good cause as required by Code of Civil Procedure section 2031.310.  A motion for an order compelling further responses “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (CCP, § 2031.310, subd. (b)(1); Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98.)  To establish “good cause,” the burden is on the moving party to show by competent evidence both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Sup. Ct. (1997) 53 Cal.App.4th 1113, 1117.)  To meet this good cause requirement, evidence is required and mere conclusions do not suffice.  (Fireman’s Fund Ins. Co. v. Superior Court (1991) 233 Cal.App.3d 1138, 1141; Grannis v. Board of Medical Examiners (1971) 19 Cal.App.3d 551, 564.)

 

In support of the motion, Plaintiffs provides the unelaborated conclusion that, in the opinion of Plaintiff David Merritt, each document request “as modified… is within the subject matter of the complaint.”  (Declaration of David Merritt, at paragraph 16.)  This conclusion is not sufficient to meet Plaintiffs’ burden.

 

Although not required to do so given Plaintiffs’ failure to meet their burden, CHL has presented record evidence and argument that the discovery in question duplicates previous discovery sought by Plaintiffs as to which the court has already denied motions to compel. Plaintiffs are not entitled to propound and enforce duplicative requests. (See Professional Career Colleges v. Superior Court (1989) 207 Cal.App.3d 490.)  Moreover, CHL’s overbreadth objection is well taken, and the requests relating to other borrowers violate their privacy rights without direct relevance.

 

Plaintiff’s motion is DENIED.  Plaintiffs are not entitled to sanctions.

 

In its opposition, CHL requested that the court impose on Plaintiffs monetary sanctions in the amount of $3,500 representing attorney fees incurred in connection with opposing the motion.

 

The Legislature has designed the Discovery Act so that, when the parties fail to resolve a discovery dispute informally and the court is required to rule on a discovery motion, the default circumstance is the imposition of monetary sanctions on the losing party.  (E.g., Code of Civil Procedure section 2031.310(h).)  “ ‘There is no requirement that misuse of the discovery process must be willful for a monetary sanction to be imposed.’ … ‘Whenever one party’s improper actions—even if not ‘willful’—in seeking or resisting discovery necessitate the court’s intervention in a dispute, the losing party presumptively should pay a sanction to the prevailing party’.” (Clement v. Alegre (2009) 177 Cal.App.4th 1277, 1287 [internal citations omitted].)

 

An exception pertains if the court finds that the losing party acted with substantial justification.  “Substantial justification” is generally defined as being justified to a degree that could satisfy a reasonable person, or stated another way, that it has a reasonable basis both in law and fact.  The burden for proving “substantial justification” for failing to comply with a discovery order is on the losing party claiming that it acted with “substantial justification.”  (Doe v. U.S. Swimming, Inc. (2011) 200 Cal.App.4^th 1424, 1434-1435.)  The justification must be “well-grounded in both law and fact”.  (Diepenbrock v. Brown (2012) 208 Cal.App.4^th 743, 747 [citations omitted].)

 

Plaintiffs have not met their burden concerning substantial justification, and no other circumstances make an award of sanctions unjust.  Moreover, CHL has established facts showing that Plaintiffs made the motion without substantial justification.  Accordingly, CHL’s request for monetary sanctions is GRANTED. Plaintiffs are ordered to pay defendant CHL the sum of $3,500 within fifteen days from notice of entry of this order.  Failure to comply timely with this order may result in the imposition of evidentiary, issue or terminating sanctions.

 

1. Defendants’ Motion to Compel Further Responses and Production of Documents Pursuant to Defendants’ 18 Sets of Form Interrogatories, Requests for Admissions, Requests for Production of Documents, and Special Interrogatories, and for Terminating Sanctions by Defendants Countrywide Financial Corporation, Bank of America, N.A., Angelo Mozilo, David Sambol, Kenneth Lewis, and Michael Colyer

 

Defendants move to compel further responses from Plaintiffs to the following discovery requests:

 

(1)            Bank’s Form Interrogatories, Set One

(2)            CFC’s Form Interrogatories, Set One

(3)            Colyer’s Form Interrogatories, Set One

(4)            Lewis’ Form Interrogatories, Set One

(5)            Mozilo’s Form Interrogatories, Set One

(6)            Sambol’s Form Interrogatories, Set One

 

(7)            Bank’s Request for Admissions, Set One

(8)            CFC’s Request for Admissions, Set One

(9)            Colyer’s Request for Admissions, Set One

(10)         Lewis’ Request for Admissions, Set One

(11)         Mozilo’s Request for Admissions, Set One

(12)         Sambol’s Request for Admissions, Set One

 

(13)         Bank’s Special Interrogatories, Set One

(14)         CFC’s Special Interrogatories, Set One

(15)         Lewis’ Special Interrogatories, Set One

(16)         Mozilo’s Special Interrogatories, Set One

(17)         Sambol’s Special Interrogatories, Set One

 

(18)         CFC’s Request for Production of Documents, Set One

 

            A.        Plaintiffs’ Supplemental Responses Do Not Render Motion Moot

 

Plaintiffs provided supplemental responses to some of these requests by email dated July 27, 2014, approximately 10:00 p.m., the day before Defendants filed this motion. (See ¶26 to the Declaration of Thomas Lee in Support; ¶¶54 – 73 of the Declaration of David Merritt in Support of Plaintiffs’ Opposition, etc.)   Such service is improper in the absence of an agreement among the parties.  In any event, there is no evidence that Plaintiffs provided a supplemental response to CFC’s Request for Production of Documents, Set One.

 

Plaintiffs assert in an unauthorized surreply that the eleventh-hour service of supplemental responses moots this motion, relying on outdated and superseded law.  Plaintiffs’ tardy service of responses does not, in fact, divest the court of authority to consider and rule on Defendants’ motion.  (Sinaiko Healthcare v. Pacific Healthcare (2007) 148 Cal.App.4th 390, 405 (Sinaiko).)  Although Sinaiko dealt with interrogatories, the logic applies with equal force to the other forms of discovery at issue here:

 

“To accept [responding party]’s interpretation would remove an important incentive for       parties to respond to discovery in a timely fashion. Under [responding party]’s theory, a          party to whom interrogatories were directed could wait until the hearing on a section            2030.290 motion was imminent, then serve a set of evasive and incomplete responses,       and thereby unilaterally deprive the trial court of authority to hear the motion. Even though the responding party had waived all objections to the discovery, the burden would shift to the propounding party, first to meet and confer, and then to demonstrate the          impropriety of the responding party’s responses. The statutory language does not suggest      such a result.”

 

(Sinaiko, supra, 148 Cal.App.4th at 408.)  For example, Plaintiffs’ last-minute supplemental responses continue to include objections, and the substance of these responses will not change the determination of whether the objections have long since been waived.

 

B.        Waiver of Objections

 

Each of these discovery requests was served by mail on April 17, 2014, so that responses were due on May 22, 2014.  Plaintiffs failed to timely respond, but instead on May 19, 2014, filed a motion for a protective order and calendared the hearing almost two months out, on July 11, 2014.  There was no pre-filing conference, as required by the court.  Defendants filed opposition to the protective order motion on May 23, 2014, and made an ex parte application to have the hearing advanced to June 5, 2014, when other motions were scheduled.  Plaintiffs opposed the ex parte application to advance, but at the June 5 hearing, the court advanced the July 11, 2014 hearing to June 26, 2014.  Then, on June 24, 2014, after the deadline for Plaintiffs’ reply passed with no reply having been filed, Plaintiffs withdrew the protective order motion.

 

Plaintiffs’ failure to respond within thirty-five days waived all objections.  Although Plaintiffs assert that the filing of their protective order motion “precluded them from having to respond to discovery” and that “[t]his fact of law [sic] cannot be disputed” (Opposition, at 6:11-12), they provide no authority for this proposition.  In fact, the filing of the protective order motion, subsequently withdrawn, did not toll the time in which to make objections.  Although there is one case (not cited by Plaintiffs) holding that failure to object within thirty days does not necessarily preclude later issuance of a protective order concerning the discovery request (Stadish v. Superior Court (1999) 71 Cal.App.4^th 1130, 1144 (relating to document request)), that case has no application here.  Plaintiffs withdrew or abandoned their request for a protective order.  Nor have Plaintiffs moved for relief from waiver, as provided in Code of Civil Procedure sections 2030.290(a), 2031.300(a), and 2033.280(a).

 

Plaintiffs’ objections to these discovery requests have been waived.

           

1. Special Interrogatories

 

Lewis, Sambol, Mozilo and Bank have each propounded special interrogatories in an attempt to learn which of Plaintiffs’ allegations are supported by facts as to their individual involvement.   In addition, CFC propounded special interrogatories concerning Plaintiffs’ damages claim.  Plaintiffs’ responses consisted only of objections which have all been waived. In any event, the objections are not well taken, for the reasons set forth in the moving papers.

 

Accordingly, the motion to compel further responses from Plaintiffs to Special Interrogatories is GRANTED.  Plaintiffs are ordered to serve verified code-compliant responses, without objections, within fifteen days of notice of entry of this order. Failure to comply timely with this order may result in the imposition of evidentiary, issue or terminating sanctions.

 

1. CFC’s Request for Production of Documents, Set One

 

Plaintiffs’ objections have been waived.  However, CFC has not provided evidence demonstrating good cause.

 

Accordingly, the motion to compel further responses from Plaintiffs to Request for Production of Documents, Set One is DENIED.

 

1. Requests for Admissions and Related Form Interrogatories

 

Each of these six moving defendants properly pursued discovery to attempt to discern what, if any, facts warrant the allegations lumping them all together and assuming that each of them committed acts and is responsible in precisely the same way.  This discovery was appropriately pursued by means of requests for admissions and related Form Interrogatories 17.1, seeking facts to support denial of a request for admissions.

 

Plaintiffs’ objections have been waived.  Instead of providing reasonable and code-compliant answers, Plaintiffs have refused to respond in the manner required by statute or to provide any meaningful information about their contentions.

 

Accordingly, the motion to compel further responses from Plaintiffs to Request for Admissions and Form Interrogatory 17.1 is GRANTED.  Plaintiffs are ordered to serve verified code-compliant responses, without objections, within fifteen days of notice of entry of this order. Failure to comply timely with this order may result in the imposition of evidentiary, issue or terminating sanctions.

 

1.       Sanctions

 

Plaintiffs’ request for monetary sanctions is denied.

 

Plaintiffs have sued many defendants, asserting many varied wrongdoings.  Yet they have repeatedly refused to provide reasonable discovery, including significantly discovery which would allow each defendant to understand specifically the facts which Plaintiffs contend establish liability of that defendant.  Plaintiffs’ delay in providing supplemental responses necessitated the filing of this motion, and their opposition to this motion is not based on substantial justification.  Clearly, at a minimum, monetary sanctions are warranted.  Plaintiffs are ordered to pay Defendants the sum of $4,000 within fifteen days from notice of entry of this order.  This sum is in addition to the monetary sanctions awarded to Defendants on Plaintiffs’ motion.  Failure to comply timely with this order may result in the imposition of evidentiary, issue or terminating sanctions.

 

Defendants also seek limited terminating sanctions in the form of dismissal of Plaintiffs’ actions against CFC, Mozilo, Sambol, Colyer, Lewis and Bank.  Defendants have previously requested terminating sanctions, and so far the court has declined to impose such sanctions, electing instead to impose lesser sanctions.  The court has previously imposed monetary sanctions on Plaintiffs, but this has not changed Plaintiffs’ approach to discovery.  This is in part because Plaintiffs apparently have decided that they do not have to comply with these orders by paying the sanctions.  In the hopes of obtaining compliance, the court took further action to monitor Plaintiffs’ discovery activities by directing that discovery matters be heard before the pretrial judge and requiring pre-filing conferences.  Plaintiffs have similarly flouted this order and filed without seeking a pre-filing conference.  Because neither monetary sanctions nor imposition of pre-filing procedures has succeeded in modifying Plaintiffs’ behavior to accomplish compliance with discovery rules, the court raised the stakes and imposed evidentiary sanctions on June 5, 2014.

 

Although Defendants on this motion have argued in general terms Plaintiffs’ history of discovery abuse, there does not appear to be argument identifying specific violations of court orders, particularly with respect to those defendants named in the request for terminating sanctions: CFC, Mozilo, Sambol, Colyer, Lewis and Bank.  Also, there is not adequate argument as to why such limited terminated sanctions “fit the crime”.  Accordingly, the court declines to order such terminating sanctions at this time.