Homeowners’ Association Required to Pay Bank’s Legal Fees


This is a Rule 37 sanctions case for the failure by a Homeowners’ Association, Daisy Trust, to produce documents in response to JP Morgan’s discovery requests. The case is a simple one: the Homeowners’ Association moved to foreclose a single family residence. JP Morgan, which made a loan on the property, served discovery requests. The discovery requests were directed to issues of jurisdiction, and sought to determine the citizenship of the Trust.

The court granted the motion to compel and imposed sanctions by requiring the Daisy Trust to pay the bank’s legal fees. The court reasoned that the discovery requests were proper and that there was not a legitimate basis for refusing to respond.  The court’s explanation is provided in pertinent part:

“Daisy Trust must pay Chase’s reasonable attorney’s fees and expenses. Daisy Trust refused to provide adequate information contrary to Judge Jones’ order. In response to an interrogatory, Daisy Trust merely responded that it was a “trust” and that its trustee is Resources Group, LLC. (ECF No. 93 at 5). However, without information on the type of trust, the identity of the trustee is not enough to determine citizenship. Second, despite Chase’s attempt to meet to discuss the inadequate responses, Daisy Trust was unwilling to provide the necessary information even after they were directed to the court order requiring them to respond to jurisdictional discovery. This is impermissible. The discovery rules are designed to be self-executing to avoid unnecessary court involvement and the needless accrual of costs and expenses. See Goodman v. Staples, 644 F.3d 817, 827 (9th Cir. 2011) (stating that Rule 37 “gives teeth” to the rules’ discovery requirements). Here, Daisy Trust disregarded discovery requests served pursuant to the Court’s order to obtain information concerning Daisy Trust’s citizenship to proceed with this matter.”

Source: DAISY TRUST v. JP Morgan Chase Bank, NA, Dist. Court, D. Nevada 2017 – Google Scholar

Edward X. Clinton, Jr.

http://www.clintonlaw.net

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