Deutsche Bank National Trust Company Americas v. Timothy Burley ( 2022 )

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
SELENA E. MOLINA LEONARD L. WILLIAMS JUSTICE CENTER
MASTER IN CHANCERY 500 NORTH KING STREET, SUITE 11400
WILMINGTON, DE 19801-3734
Final Report: November 29, 2022
Date Submitted: August 26, 2022
Seth Thompson, Esquire Timothy Burley, pro se
Parkowski, Guerke, & Swayze, P.A. 2209 Washington Street
1105 N. Market Street, 19th Floor Wilmington, DE 19802
Wilmington, DE 19801
AND
620 N. Broom Street
Wilmington DE, 19805
Re: Deutsche Bank National Trust Company Americas, as Trustee for
Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-
Through Certificates, Series 2007-QS6 v. Timothy Burley,
C.A. No. 2017-0912-SEM
Dear Counsel and Parties:
This decision addresses the motion to compel filed by Deutsche Bank Trust
Company Americas, as Trustee for Residential Accredit Loans, Inc., Mortgage
Asset-Backed Pass-Through Certificates, Series 2007-QS6 (the “Plaintiff”) and the
responses filed by Timothy Burley (the “Defendant”).1 I find the motion should be
granted as explained herein.
1
Docket Item (“D.I.”) 45, 49, 51–52.
Deutsche Bank National Trust Company Americas v. Timothy Burley
C.A. No. 2017-0912-SEM
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I. BACKGROUND
In this report I assume the reader’s familiarity with the facts of this case, which
were summarized in my May 6, 2020 final report, and adopted by Chancellor
Bouchard on May 21, 2020.2 In the interest of clarity, I will only address the
background directly relevant to my holdings herein.
On December 22, 2017, the Plaintiff filed a complaint seeking an in rem scire
facias sur mortgage foreclosure and equitable subrogation.3 The Defendant filed an
answer to the complaint on January 26, 2018.4 The Plaintiff then filed a motion for
partial judgment on the pleadings for its equitable subrogation claim on July 12,
2019.5 I issued a final report on May 6, 2020, denying that motion and finding the
“equitable issues at stake should be weighed and adjudged on a more-developed
factual record.”6 Neither party filed exceptions to my report and it was adopted as
an order of the Court on May 21, 2020.7
2
D.I. 34–35.
3
D.I. 1.
4
D.I. 6.
5
D.I. 15.
6
D.I. 34, p. 7.
7
D.I. 35.
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On March 18, 2022, the Defendant filed a motion to dismiss the case and
stated that the Defendant’s signature on the mortgage was forged, defeating the
Plaintiff’s claims.8 The Defendant further expressed that my final report on the
motion for partial judgment on the pleadings evidenced that the Plaintiff failed to
prove equitable subrogation.9 I denied this second attempt for a pleading-stage
dismissal on June 16, 2022.10 In my denial order, I explained that additional
discovery was necessary to resolve factual disputes and advised “[t]he parties shall
continue to work together to complete discovery.”11 To that end, I required the
Defendant to file a response to the Plaintiff’s May 5, 2022 motion to compel (the
“Motion”) by June 30, 2022.12
The relevant procedural posture of the Motion is as follows: The Plaintiff
served the Defendant a request for production of documents (the “RFP”) and
interrogatories (the “Interrogatories”) in June 2020.13 On July 31, 2020, having
8
D.I. 40.
9
Id. ¶ 9 (“The [p]laintiff failed to prove [e]quitable [s]ubrogation as per the Judge’s Final
Order.”).
10
D.I. 48. I stayed exceptions to this order pending a final decision on the merits. Id.
11
Id.
12
Id.
13
D.I. 45, ¶ 4; see D.I. 45, Exh. 1.; D.I. 45, ¶ 5; D.I. 45, Exh. 3.
Deutsche Bank National Trust Company Americas v. Timothy Burley
C.A. No. 2017-0912-SEM
November 29, 2022
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received no response, the Plaintiff wrote to the Defendant explaining that responses
were overdue, providing a link to the Court of Chancery Rules, offering an extension
until August 11, 2020, and warning that if the Defendant failed to respond, the
Plaintiff would move for relief and seek fees.14
Thereafter, on or about August 25, 2020, the Defendant responded to the RFP
and the Interrogatories (the “First Response”).15 The Plaintiff thereafter served the
Defendant with a request for admissions (the “RFA”) on or about June 24, 2021.16
To date, the Defendant has not answered any requests in the RFA.17
Concerned about the sufficiency of the First Response and the failure to
respond to the RFA, the Plaintiff sent the Defendant a deficiency letter on March 4,
2022 (the “Deficiency Letter”).18 In the Deficiency Letter, the Plaintiff identified
the purported deficiencies in detail, with citations to the Court of Chancery Rules.19
14
D.I. 45, Ex. 7.
15
D.I. 45, ¶ 4; see D.I. 45, Exh. 2.; D.I. 45, ¶ 5; D.I. 45, Exh. 4.
16
D.I. 45, ¶ 6; see D.I. 46, Exh. 5.
17
See D.I. 45, ¶ 6.
18
D.I. 45, Ex. 6.
19
Id. (“In an effort to clarify what is requested, I have detailed the various deficiencies
below and included a demand for you to take certain curative action to remedy the
deficiencies. If you have any questions or comments, please contact me within 10 days of
this letter’s date so that we can schedule a phone or office conference to address the issues
noted [in this letter.]”).
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For the RFP, the Plaintiff explained that the Defendant failed to produce any
documents and identified deficiencies with RFP # 2–5, 7, 9–11, and 14–15.20 The
Plaintiff also identified deficiencies with the Interrogatories.21 Specifically, the
Plaintiff called out Interrogatories # 9, 11–13, 15, 17, 20–21, 23–25, and 29–30.22
The Plaintiff asked for curative responses to the RFPs, document production, and
supplemental answers to the Interrogatories by March 23, 2022.23
The Plaintiff further notified the Defendant in the Deficiency Letter that
“failure to adequately respond to Plaintiff’s discovery requests may prompt the need
to file a Motion to Compel with the Court” and that the Defendant’s “failure to make
discovery can result in the Court ordering [him] to pay Plaintiff’s costs and
attorney’s fees with respect to noncompliance, . . . imposing other sanctions
(including monetary fines) on [him], or both.”24
The Defendant did not respond to the Deficiency letter, and the Plaintiff filed
the Motion on May 5, 2022.25 The Defendant did not promptly respond to the
20
Id.
21
Id.
22
Id.
23
Id.
24
Id.
25
D.I. 45.
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Motion, which led to my direction that he do so by June 30, 2022.26 He failed to
comply. Rather, the Defendant filed another answer to the RFP on July 13, 2022
(the “Second Response”).27 Therein, the Defendant acknowledged that his response
was untimely but averred “this case has become somewhat redundant. I have already
answered the questions presented by the Plaintiff.”28 Other than an initial recitation
of the Defendant’s theory of the case, the Second Response merely copied the earlier
responses to the RFP in the First Response.29
The Plaintiff replied on July 27, 2022 that the Defendant’s filing failed to
respond to the specific deficiencies identified by the Plaintiff in the Deficiency
Letter.30 Thereafter, on August 26, 2022, the Defendant filed an additional response
to the RFP (the “Third Response”).31 The Third Response provided more detail than
the prior versions and attached exhibits A–F containing information requests sent to
Chase Miller of McCabe, Weisberg, & Conway, P.C., mortgage payments to
OCWEN/GMAC Mortgage, borrower disbursements from Alan Hodesblatt, email
26
D.I. 48, ¶ 5; see D.I. 48, ¶ 4.
27
D.I. 49.
28
Id.
29
Compare id., with D.I. 45, Ex. 2.
30
See D.I. 51.
31
D.I. 52.
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communications purporting to show that the Defendant was denied an equity loan
due to the foreclosure, email communications purporting to show correspondence
about the Register of Deeds, and court filings identifying the date and time of Alan
Hodesblatt’s deposition.32 With this filing, I took the Motion under advisement.
II. ANALYSIS
Under Court of Chancery Rule 26, “[p]arties may obtain discovery regarding
any non-privileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case[.]”33 The scope of permissible discovery is
broad, and the burden is on the objecting party to show why the information is
improperly requested.34 Under Rule 37, if a motion to compel discovery responses
is granted or the requested discovery is later produced:
the Court shall, after affording an opportunity to be heard, require the
party or deponent whose conduct necessitated the motion or the party
or attorney advising such conduct or both of them to pay to the moving
party the reasonable expenses incurred in obtaining the order, including
the attorney’s fees, unless the Court finds that the opposition to the
motion was substantially justified or that other circumstances make an
award of expenses unjust.35
32
Id.
33
Ct. Ch. R. 26(b)(1).
34
See Prod. Res. Grp., L.L.C. v. NCT Grp., Inc., 863 A.2d 772, 802 (Del. Ch. 2004).
35
Ct. Ch. R. 37(a)(4)(A). Fee shifting goes the other direction if the motion is denied and,
if denied in part and granted in part, this Court “apportion[s] the reasonable expenses
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Under this guise, the Plaintiff seeks an order (1) compelling production of
documents and responses to the Interrogatories, (2) declaring that the requests in the
RFA are deemed admitted, and (3) shifting fees and expenses. I first address whether
the Defendant failed to respond adequately to the discovery requests, and then
whether fee shifting is appropriate.
A. The RFP
The Plaintiff argues that the Defendant failed to fully respond to the RFP
under Court of Chancery Rule 34. I agree. Under Court of Chancery Rule 34, the
Defendant was required to state, in response to each numbered item in the RFP:
that inspection and related activities will be permitted as requested,
unless the request is objected to, in which event the grounds and reasons
for objection(s) shall be stated with specificity. . . . If objection is made
to part of an item or category, the part shall be specified and inspection
permitted of the remaining parts.36
The First Response did not specify if production would be forthcoming or any
objections to the requests, in full or in part. Rather, it largely referenced unspecified
records filed in this Court and the Superior Court. As explained in the Deficiency
incurred in relation to the motion among the parties and the persons in a just manner.” Id.at (a)(4)(B)–(C).
36
Ct. Ch. R. 34(b).
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Letter, such responses left the Plaintiff guessing. Despite the detail in the Deficiency
Letter, the Defendant merely copied his First Response into the Second Response
after providing his theory of the case. These responses were deficient.
With the Third Response, however, the Defendant is now moving in the right
direction. Therein, the Defendant has made a good faith effort to respond to the
requests and identify responsive documents, several of which he attached to the
Third Response. It is unclear, however, if his production is complete. For example,
the Defendant references multiple emails with the Attorney General’s office, which
are not included in his exhibits. Given this uncertainty, the Defendant should be
compelled to produce all responsive, non-privileged documents within twenty (20)
days. The Defendant is warned that he may be foreclosed from relying on any
document that he does not produce within this twenty (20) day period, unless he
shows good cause.
B. The Interrogatories
The Plaintiff argues that the Defendant failed to fully respond to the
Interrogatories under Court of Chancery Rule 33. I agree. Under Court of Chancery
Rule 33, each interrogatory “shall be answered separately and fully in writing under
Deutsche Bank National Trust Company Americas v. Timothy Burley
C.A. No. 2017-0912-SEM
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oath, unless it is objected to, in which event the objecting party shall state the reasons
for objection and shall answer to the extent the interrogatory is not objectionable.”37
Many of the Defendant’s answers did not, however, fully respond to the
interrogatory. For example, in response to #11, the Defendant failed to identify
communications with the Plaintiff or its predecessors-in-interest, despite disclosing
various communications in his Third Response to the RFP. This deficiency was
brought to the Defendant’s attention through the Deficiency Letter. He has failed to
address it and the various other deficiencies noted. I find the Defendant should be
required to supplement his answers to the Interrogatories within twenty (20) days.
He should do so by answering each deficiency identified in the Deficiency Letter.
C. The RFA
The Plaintiff argues that the Defendant failed to respond to the RFA under
Court of Chancery Rule 36. Under Court of Chancery Rule 36, a request for
admission is deemed “admitted unless, within 30 days after service of the request,
or within such shorter or longer time as the Court may allow, the party to whom the
request is directed serves upon the party requesting the admission a written answer
or objection addressed to the matter, signed by the party or by the party’s
37
Ct. Ch. R. 33(b)(1).
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attorney[.]”38 The Defendant has failed to respond to the RFA; thus, all requests
should be deemed admitted.
D. Fees
Having found the Motion should be granted, I must also shift fees under Court
of Chancery Rule 37(a)(4)(A) unless the Defendant’s opposition to the Motion was
“substantially justified or . . . other circumstances make an award of expenses
unjust.”39 It is Defendant’s burden to prove his actions were justified or the
surrounding circumstances make the award unjust.40 In deciding whether the
Defendant met his burden, I remain cognizant that this Court views pro se filings
with forgiving eyes.41 But, even with forgiving eyes, I find fees should be shifted.
The Defendant argues that he “answered the questions honestly and to the best
of [his] ability based on the documentation [he has] received from public record, [the
Plaintiff’s] predecessors, the internet, and [his] own common sense.”42 But his
answers, instead, reflect an air of defiance. The Defendant does not see merit in this
38
Ct. Ch. R. 36.
39
Ct. Ch. R. 37(a)(4)(A).
40
See, e.g., Bader v. Fisher, 504 A.2d 1091, 1096 (Del. 1986) (citing Wileman v. Signal
Fin. Corp., 385 A.2d 689 (1978)).
41
See Hall v. Coupe, 2016 WL 3094406, at *2 (Del. Ch. May 25, 2016).
42
D.I. 49.
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action and has not shied away from stating as much.43 Directly in response to the
request for fee shifting, the Defendant argues: “it is completely absurd and an insult
for the Plaintiff to request for [the Defendant], a Victim of Fraud committed by their
predecessors, to cover the expenses they’ve incurred in an effort to concoct a case
of no substance.”44 But the Defendant’s ire is misplaced.
The request for fee shifting is justified and warranted under this Court’s rules.
The Defendant was warned of potential shifting in the Plaintiff’s initial letter in July
2020 and the Deficiency Letter, which was sent to the Defendant in March 2022. He
was reminded again in my June 2022 order that this action would not be dismissed
on the pleadings, that discovery would continue, and that the parties were expected
and required to work together to complete discovery. But he failed to heed the
Plaintiff’s warnings or rise to meet the Court’s expectations.
With forgiving eyes, perhaps I could accept the First Response as a product
of the Defendant’s pro se status and lack of familiarity with the Court’s rules and
discovery in general. But after the Plaintiff’s letters, which included direct citation
to the Court’s rules, the Defendant’s excuses deflate. Through those letters, the
43
For example, in his response to the Motion, the Defendant chastises the Court and the
Plaintiff for failing “to see the obvious.” D.I. 49.
44
D.I. 49.
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Defendant was provided detailed explanations of the alleged deficiencies and an
offer from the Plaintiff’s counsel to discuss. But, rather than work cooperatively
with the Plaintiff, the Defendant sat silent, delayed, and, when compelled by my
order to respond to the Motion, responded late and only in part. His partial response
fails to demonstrate that his conduct was substantially justified, nor does he identify
other circumstances that make an award of expenses unjust.
The Defendant should be required to pay the Plaintiff’s reasonable fees and
expenses incurred in connection with the Motion. Such payment should be stayed,
however, until a final decision on the merits of this action is issued. Within ten (10)
days of a final decision on the merits, the Plaintiff may file an affidavit under Court
of Chancery Rule 88; the Defendant may respond within ten (10) days of such filing.
A separate order will then be issued on the amount of fees and expenses to be shifted.
III. CONCLUSION
For the foregoing reasons, I find the Motion should be granted. The
Defendant shall produce all responsive documents and serve supplemental answers
to the Interrogatories within twenty (20) days, addressing all deficiencies noted in
the Deficiency Letter. All requests in the RFA are deemed admitted. The Plaintiff’s
fees and expenses incurred in connection with the Motion will be shifted in a
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reasonable amount to be determined after a decision on the merits and compliance
with Court of Chancery Rule 88.
The parties are further directed to meet and confer on scheduling and file a
proposed schedule, or competing schedules, within 45 days.
This is my final report and exceptions under Court of Chancery Rule 144 are
stayed until a final report is issued on the merits.
Respectfully submitted,
/s/ Selena E. Molina
Master in Chancery