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Collins v. First Financial Services, Inc.

United States District Court, E.D. North Carolina, Southern Division

September 7, 2017

MARY ANN COLLINS, Plaintiff,
v.
FIRST FINANCIAL SERVICES, INC.; GATEWAY FUNDING DIVERSIFIED MORTGAGE SERVICES, L.P.; PHH MORTGAGE; KYLE DILLON SMITH; JENNIFER SANFORD PUGLIESE; SHAWN MARIE CARNI; SANDRA S. FADEL; ELIZABETH WEBSTER; DONALD N. LANDGRAFF; FEDERAL HOME LOAN MORTGAGE CORPORATION; Defendants.[1]

          ORDER

          LOUISE W. FLANAGAN, UNITED STATES DISTRICT JUDGE.

         This matter is before the court on motions for sanctions filed by defendant First Financial Services, Inc. (“FFSI”) (DE 187); defendants PHH Mortgage (“PHH”) and Freddie Mac (DE 189); and defendant Gateway Funding Diversified Mortgage Services, L.P. (“Gateway”) (DE 191). Plaintiff untimely filed a response regarding the motions. In this posture, the issues raised are ripe for ruling. For the following reasons, the instant motions are granted in part as set forth herein.

         STATEMENT OF THE CASE

         Plaintiff and former plaintiff Cathleen Bryant filed an original complaint in this action on December 12, 2014, a first amended complaint on February 13, 2015, and second amended complaint with leave of court on April 8, 2015, asserting claims arising out of an alleged mortgage lending scheme involving defendants, related to plaintiff Collins's purchase of a home.

         Plaintiff asserted claims under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2605, 2607; the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; the North Carolina Good Funds Settlement Act, N.C. Gen. Stat. Chapter 45A; the North Carolina Uniform Commercial Code, N.C. Gen. Stat. Chapter 25 Article 3; the North Carolina Mortgage Debt Collection and Servicing Act, N.C. Gen. Stat. § 45-90 et seq.; the North Carolina Debt Collection Act, N.C. Gen. Stat. Chapter 75, Article 2; the Unfair and Deceptive Practices Act, N.C. Gen. Stat. § 75-1.1; as well as state common law claims for negligence, gross negligence, fraud, constructive fraud, breach of contract, and quiet title. Plaintiff sought relief including compensatory, statutory, and punitive damages, as well as declaratory judgment that the purchase note is void or unenforceable, and declaratory judgment quieting title; costs; and trial by jury.

         In April and May, 2015, PHH, Freddie Mac, Gateway, as well as former defendant Georgia Banking Company (“GBC”), filed motions to dismiss all claims against them in their entirety.[2]Meanwhile, on August 10, 2015, defendant FFSI and individual defendants, who are affiliated with FFSI (collectively, the “FFSI defendants”), filed an answer, as well as a motion to dismiss for lack of proper service, and, in part, for failure to state a claim upon which relief can be granted. On October 23, 2015, the court denied that part of the FFSI defendants' motion to dismiss for improper service, and held in abeyance that remaining part of the motion to dismiss, pertaining to former plaintiff Bryant. The court also directed plaintiff and former plaintiff Bryant to show cause why former defendant Julie Patel should not be dismissed for failure to effectuate service.

         On February 10, 2016, the court granted former defendant GBC's motion to dismiss, and dismissed all claims against former defendant GBC. The court granted in part and denied in part defendant PHH's motion to dismiss, and dismissed all claims against defendant PHH except the following asserted by plaintiff Collins:

a. RESPA (“Count XI”)
b. UCC (“Count II”)
c. Mortgage Debt Collection and Servicing Act (“Count III”)
d. Breach of contract (“Count IX”)

         The court granted in part and denied in part defendant Freddie Mac's motion to dismiss, dismissing all claims except plaintiff Collins's quiet title claim (“Count XIV”) against defendant Freddie Mac. The court denied defendant Gateway's motion to dismiss and allowed plaintiff Collins's claims against defendant Gateway to proceed premised only on liability on the part of defendant FFSI, in accordance with the limitations set forth therein. The portion of the FFSI defendants' motion to dismiss previously held in abeyance was granted and former plaintiff Bryant was dismissed for lack of standing, while claims brought by plaintiff Collins against the FFSI defendants remain. Defendant Julie Patel was dismissed for failure to effectuate service.

         In case management order entered March 25, 2016, the court directed the parties except for defendant Gateway to exchange by April 1, 2016, the information required by Federal Rule of Civil Procedure 26(a)(1). The court directed that proceedings with respect to liability of defendant Gateway shall commence only after a determination of liability as to defendant FFSI, as anticipated in the court's February 10, 2016, order, with defendant Gateway reserving its right to participate in discovery and motions practice. The court directed that all discovery shall be commenced or served in time to be completed by November 16, 2016. The court stated that each defendant Gateway, PHH, and Freddie Mac may serve up to 25 interrogatories to plaintiff, and that responses are due 30 days after service of those interrogatories.

         On September 19, 2016, granting motion to compel by defendant FFSI, the court ordered plaintiff to make initial disclosures and responses to FFSI interrogatories within 21 days from the date of the order. The court also ordered plaintiff to pay all costs and reasonable attorneys' fees incurred by defendant FFSI in bringing the motion to compel.

         Per defendant FFSI's motion for sanctions filed October 31, 2016, plaintiff failed to comply with the court's September 19, 2016, order. Defendant FFSI sought in such motion dismissal of the action with prejudice due to plaintiff's failure to comply with the court's order. On November 23, 2016, the court held in abeyance address of defendant FFSI's motion for sanctions. Noting plaintiff's prior diligence in the case, the court upon review of its prior September 19, 2016, order, amended the order to ...


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