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Robert V. Peyton and Marie T. Peyton v. Option One Mortgage Corporation

October 17, 2011

ROBERT V. PEYTON AND MARIE T. PEYTON, PLAINTIFFS,
v.
OPTION ONE MORTGAGE CORPORATION, A CALIFORNIA CORPORATION, N/K/A SAND CANYON CORPORATION; AND DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR HSI ASSET SECURITIZATION CORPORATION TRUST 2006-OPT3, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OPT3, DEFENDANTS.



The opinion of the court was delivered by: Susan Oki Mollway Chief United States District Judge

ORDER DENYING PLAINTIFFS' MOTION UNDER RULES 59 AND 60 OF THE FEDERAL RULES OF CIVIL PROCEDURE

ORDER DENYING PLAINTIFFS' MOTION UNDER RULES 59 AND 60 OF THE FEDERAL RULES OF CIVIL PROCEDURE

I. INTRODUCTION.

This case arose out of an October 2005 residential

mortgage loan by Defendant Option One Mortgage Corporation to Robert and Marie Peyton. Option One, now known as Sand Canyon Corporation, subsequently assigned the loan to Deutsche Bank National Trust Company, as Trustee for HSI Asset Securitization Corporation Trust 2006-Opt3, Mortgage Pass-Through Certificates, Series 2006-Opt3. Plaintiffs' First Amended Complaint alleged that Sand Canyon and Deutsche Bank violated the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667, by failing to provide the Peytons with sufficient disclosures when they obtained their mortgage loan in 2005 and by failing to honor an October 11, 2008, rescission notice. The First Amended Complaint sought damages and rescission of the loan.

In March 2011, the court granted in part and denied in part a motion for summary judgment filed by Sand Canyon. See ECF No. 42, March 31, 2011. The court held that Sand Canyon could not be sued for rescission or cancellation of the loan, as it no longer owned the loan and therefore lacked the authority to effectuate either rescission or cancellation of the loan. Id. Although TILA damage claims against Sand Canyon based on alleged failures to properly disclose information concerning the loan were time-barred, the court ruled that Sand Canyon had not demonstrated entitlement to summary judgment on the TILA damage claims against Sand Canyon based on an alleged failure to honor the Peyton's request for rescission. Id.

On June 15, 2011, Sand Canyon again moved for summary judgment on the remaining claims asserted against it. See ECF No. 51. That same day, Deutsche Bank moved for summary judgment on all claims asserted against it. See ECF No. 53. On August 1, 2011, the court granted both motions without a hearing. See Order Granting Motions for Summary Judgment in Favor of Defendants on All Remaining Claims, ECF No. 64, Aug. 3, 2011.

On August 31, 2011, Plaintiffs filed a motion pursuant to Rules 59(e), 60(b)(1), and 60(b)(6) of the Federal Rules of Civil Procedure. That motion is denied without a hearing pursuant to Local Rule 7.2(d).

II. BACKGROUND.

On June 15, 2011, Sand Canyon filed a motion for summary judgment and a concise statement in support of its motion. See ECF Nos. 51 and 52. That same day, Deutsche Bank filed its own motion for summary judgment and concise statement in support of its motion. See ECF Nos. 53 and 54. On June 16, 2011, the court issued a notice of hearing for both motions, setting the motions for hearing on August 1, 2011. See ECF No. 55. Later in the day on June 16, 2011, both Sand Canyon and Deutsche Bank filed redacted versions of exhibits to their respective concise statements. See ECF Nos. 56 and 57.

On July 11, 2011, Plaintiffs filed an opposition to Sand Canyon's motion for summary judgment, as well as a concise statement in opposition to the motion. See ECF Nos. 58 and 59. Plaintiffs did not timely file an opposition to Deutsche Bank's motion for summary judgment. One of the attorneys for Plaintiffs, Gary Victor Dubin, indicates that he was unaware of Deutsche Bank's motion, noting that "perhaps . . . the motion papers went into my email spam box," which is "cleared automatically every thirty days." See Declaration of Gary Victor Dubin ¶ 3, ECF No. 67-1, Aug. 31, 2011. Dubin's statement, by itself, is insufficient to demonstrate that Plaintiffs lacked notice of Deutsche Bank's motion.

The record reflects that Plaintiffs are represented by four attorneys associated with the Dubin Law Offices, Benjamin Ruel Brower, Frederick J. Arensmeyer, Long Huy Vu, and Dubin. The record further reflects that Notices of Electronic Filing ("NEF") for Deutsche Bank's motion and concise statements were sent electronically to Brower, Arensmeyer, and Dubin at their respective email addresses and to Vu via U.S. mail at the address of record for the Dubin Law Offices. See NEFs for ECF Nos. 53, 54, 57. The Certificates of Service for the same documents indicate that they were served on Dubin and Arensmeyer through CM/ECF and served on Brower and Vu through U.S. mail. See ECF Nos. 53-2, 54-15, 57-8. Brower, Arensmeyer, and Vu do not submit declarations indicating that they had no notice of Deutsche Bank's motion. Accordingly, on the present record, it appears that Plaintiffs had notice of Deutsche Bank's motion.

Plaintiffs' timely filing of their opposition to Sand Canyon's motion twenty-one days before the scheduled hearing indicates that Plaintiffs knew about the hearing on that motion, as the deadline for such oppositions is twenty-one days before the scheduled hearing. See Local Rule 7.4. Because the hearing for Sand Canyon's motion was set in the same filing as the hearing for Deutsche Bank's motion, see ECF No. 55, Plaintiffs are unconvincing in implying that they had no notice of Deutsche Bank's motion in mid-June 2011, when that motion was filed.

Plaintiffs' counsel says that he was in the process of preparing a motion seeking leave to file an untimely opposition to Deutsche Bank's motion when the court, through a law clerk, contacted counsel about that opposition. Plaintiffs' counsel says that he "fully explained the situation to the law clerk, who said that he would talk to the Judge and call [him] back." In paragraphs 4 and 5 of his declaration, Plaintiffs' counsel says that this court instructed him to file a single-page opposition to Deutsche Bank's motion that incorporated by reference previous arguments raised by Plaintiffs. Plaintiffs' counsel then accuses the court of ...


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