United States District Court, W.D. Virginia, Charlottesville Division
K. MOON SENIOR UNITED STATES DISTRICT JUDGE.
matter is before the Court upon Defendants' renewed
motions for summary judgment. (Dkts. 142, 144). For the
reasons stated herein, the Court will grant the motions.
Facts & Procedural History
Court's February 16, 2018 opinion adequately outlined the
standard of review on summary judgment, (dkt. 95 at 3-4), as
well as the facts of this case. (Id. at 1, 4 - 6).
The Court incorporates by reference these portions of its
February 16 opinion. Nonetheless, a brief summation of the
factual background and procedural history of the case is in
Woodson purchased a home in Gordonsville, Virginia in January
2005. She financed the purchase with a mortgage issued by a
predecessor of Defendant Beneficial Financial I, Inc.
(“Beneficial”). Approximately one year later,
Woodson received a second loan from Beneficial based on her
equity in the home. Beneficial sold this second loan to
Defendant Ditech Financial, LLC (“Ditech”).
Woodson eventually fell behind in making payments on these
loans. For fiscal year 2012, Beneficial completed a Form
1099-C for the second loan, indicating that Woodson's
mortgage debt had been discharged. Beneficial presents
evidence that it subsequently issued a corrected Form 1099-C
for fiscal year 2012. When Woodson defaulted on the second
loan by failing to make any payments after January 2012,
Beneficial marked her second loan account as “charged
off, ” which Beneficial maintains is an internal
notation reflecting an unlikelihood of repayment.
died in 2015, and the three plaintiffs (“the
heirs”) inherited the home. Due to delinquencies on the
loan, Beneficial moved to foreclose on the property in August
2016. The heirs filed suit in state court to stop the
foreclosure proceedings. (Dkt. 1). Defendants removed the
case to federal court based on diversity jurisdiction. Judge
Conrad transferred the case to me in December 2017. (Dkt.
87). During the pendency of this suit, Carrington Mortgages
Services, LLC (“Carrington”), who is not a party
to the suit, purchased the first mortgage from Beneficial.
their quiet title action, the heirs asked the Court to
determine whether Beneficial discharged the home equity loan
(Count One). The heirs sought the removal of a lien related
to this loan (Count Two) and compensatory damages based on
Beneficial's refusal to remove the lien (Count Three).
The heirs sought declaratory judgments preventing foreclosure
and the imposition of related costs (Counts Four and Five).
Lastly, the heirs sought a declaratory judgment on the
balance of the mortgage loan and a related lien (Count Six).
February 16, 2018, this Court granted Defendants' motions
for summary judgment and denied the heirs' motion to
compel discovery as moot by operation of Judge Conrad's
scheduling order. (Dkt. 96). However, on May 2, 2018, the
Court granted the heirs' motion for reconsideration after
the heirs offered e-mail correspondence showing that the
motion to compel was not moot. (Dkt. 111). The Court vacated
its previous orders in part, reinstated the case on its
active docket, reopened the motions to compel and for summary
judgment, and referred the motion to compel to U.S.
Magistrate Judge Joel C. Hoppe. (Id. at 3).
Hoppe granted the motion to compel in part, permitting the
heirs to reopen their deposition of Beneficial in light of
six newly-produced pages of account notes and requiring
Beneficial to, if possible, produce a letter corresponding to
an entry in the aforementioned account notes. (Dkt. 118).
Judge Hoppe subsequently allowed the heirs to serve three
additional interrogatories on Beneficial “requesting
information about the steps Beneficial took to uncover”
156 pages of documents “Beneficial's counsel
belatedly produced” and “the steps Beneficial has
taken to ensure it has produced all non-privileged
documents” requested by the heirs and relevant to the
case. (Dkt. 139 at). The sole question now is whether any of
this discovery added new evidence that changes the
Court's previous conclusion that Defendants' motions
for summary judgment should be granted.
heirs contend that it would be premature to grant summary
judgment because discovery remains outstanding under Judge
Hoppe's order permitting additional interrogatories. The
heirs further argue that the Court should deny summary
judgment on substantive grounds because a genuine dispute of
material fact exists about whether Defendants cancelled the
home equity loan. Defendants' arguments with respect to
outstanding discovery are without merit, and the Court again
concludes that no reasonable jury could find that the home
equity loan was discharged. Thus, the Court will grant
Defendants' renewed motions for summary judgment.
The Heirs' Discovery-Related Arguments
heirs assert that it would be “premature” to
grant summary judgment because Beneficial's responses to
the three additional interrogatories authorized by Judge
Hoppe were “woefully deficient.” (Dkt. 148 at 4,
18-20). Specifically, the heirs contend that Beneficial
“refused to identify” all of the
“technology systems that it used” from January
2005 to June 2018 “to produce under Bates numbers the
documents it produced in discovery”; “refused to
provide any meaningful facts as to when, where, or how it
searched available sources of information”; and
“refused to provide any information concerning its
[document retention accessibility] policies and
practices.” (Id. at 4). In a declaration, the
heirs' counsel maintains that Beneficial “should be
required to answer” these interrogatories, and
“Plaintiffs should be allowed to re-open and fully
depose” Beneficial regarding irregularities in
Defendants' production of documents. (Dkt. 148-25 at 2).
Court notes at the outset that Judge Hoppe already denied the
heirs' motion to reopen and extend their deposition of
Beneficial. (Dkt. 139). Moreover, the Court has reviewed
Beneficial's responses to the heirs' interrogatories,
(dkt. 148-3), and finds Beneficial's answers responsive
and in compliance with Judge Hoppe's ...