Case 1:15-cv-00293-LTS-RWL Document 412 Filed 06/18/19 Page 1 of 4

FOSTER, WALKER & DI MARCO

ATTORNEYS AT LAW

June 18, 2019

VIA ECF and Federal Express
Hon. Robert W. Lehrburger
Magistrate Judge
United States District Court
Southern District of New York
Daniel Patrick Moynihan Courthouse
500 Pearl Street
New York, New York 10007-1312

Re: S & A Capital Partners, Inc., et al. v. JPMorgan Chase Bank, N.A., et al.
No. 15-cv-00293-LTS-RWL

Dear Judge Lehrburger:

We write on behalf of Plaintiffs in accordance with Rules II.D and III.B of Your Honor’s
Individual Practices, and respectfully submit this letter motion to resolve the serious discovery
deficiencies only recently discovered during summary judgment briefings. These matters first
came to light in May 2019. By letter, dated June 4, 2019, MRS sought to resolve this dispute,
but Chase’s response on June 11, 2019, as well as Chase’s answers given during the subsequent
telephone conference, was unreasonable and unacceptable. Such response necessitated the filing
of this letter motion. See June 4, 2019 letter annexed hereto as Exhibit A and June 11, 2019
response letter annexed hereto as Exhibit B. As the issues raised are somewhat complex and/or
require explanation, we respectfully request a teleconference as soon as practicable.

Background: After significant litigation, including motions to compel further fact

discovery, non-expert discovery was ordered to be complete by June 11, 2018. See Dkt. No. 297
(Pre-Trial Scheduling Order). The source of ongoing discovery issues has stemmed from
Plaintiffs’ position that Chase failed to provide relevant information central to Plaintiffs’ causes
of action with regard to the loans at issue in this case. Chase has argued, both in open Court and
in written submissions, that between the iVault documents and the loan information
“spreadsheet”, Chase has produced “all” loan information in its possession for the loans in
question, an argument disbelieved by Plaintiffs and now obliterated by recent events.

In Chase’s opposition to Plaintiffs’ summary judgment motion, Chase’s counsel brazenly

argued “there is no evidence demonstrating that any such [insurance] payment was ever made to
or received by Chase.” (Dkt. No. 384, p. 21). Plaintiffs contemporaneously filed its opposition
to Chase’s summary judgment motion and demonstrated that Chase in fact did receive and retain
an insurance payment. Plaintiffs’ proof, in part, was based on a truncated portion of an email
produced by Chase during regular discovery (JPMC-MRS-00005516). Chase, caught making a
misrepresentation to the Court, produced the remainder of the truncated email chain (JPMC-
MRS-00387338) the day before reply memoranda were to be filed. The email confirmed that
Chase both retained the insurance payment and actively tried to conceal the receipt of that
payment from Plaintiffs. Chase’s excuse for failing to provide the entire email chain during
discovery was that it had been “mistakenly tagged as non-responsive and therefore not produced
Foster, Walker & Di Marco, P.C. │ 350 Main Street, Third Floor, Malden, MA 02148
T 781-322-3700 │ F 781-322-3757 │ www.fwdlaw.net
 Case 1:15-cv-00293-LTS-RWL Document 412 Filed 06/18/19 Page 2 of 4
Hon. Robert W. Lehrburger
June 18, 2019
Page 2 of 4

at the time of our initial disclosure.” (Dkt. No. 404, p 3). At no time did or has Chase explained
how the truncated version of the email was separated from the extended version, and how Chase
produced one but marked the other as “non-responsive.”

During this time, Plaintiffs also discovered that the “Swinehart Loan” had been paid and
cancelled before Chase sold it to MRS under the MLPA at issue in this case. (Dkt. No. 404).
The borrower, Mr. Swinehart, contacted MRS in April at the direction of Chase. Mr. Swinehart
produced two Chase letters from August 2007, that unequivocally establish that Mr. Swinehart
satisfied the lien in November 2006. (Dkt No. 404; SA00468846). Clearly, Chase breached the
MLPA with Plaintiffs when it included the non-existent Swinehart Loan in the 2009 loan pool
sale. Neither Swinehart letter was produced during discovery, despite representations that the
iVault system Chase purports to have turned over “contained all loan documents.” (Exhibit A).

The above untimely disclosures required Plaintiffs to ask permission to exceed the page
limitations for their reply memorandum, which Chase did not oppose for obvious reasons. Then,
in a continuing effort to understand how not one, but two sets of documents, both clearly
supporting Plaintiffs’ claims, were omitted from Chase’s purported full disclosure, Plaintiffs sent
their June 4, 2019 “meet and confer” letter to Chase. (Exhibit A). Therein, Plaintiffs outlined a
reasonable process by which Plaintiffs could ensure that all loan documents and information in
Chase’s possession have been delivered. These documents are central to Plaintiffs’ case and
were properly sought in discovery. Chase, both in writing and during a telephone call, refused to
provide any further discovery or to offer any middle ground. Instead, Chase claimed such
requests were untimely, conveniently ignoring its own untimely disclosures.

Argument: This Court has the authority to reopen discovery where same would “remedy
the prejudice that [Plaintiffs] have suffered.” Rivera v. United Parcel Service, 325 F.R.D. 542,
548 (S.D.N.Y. 2018). The record clearly shows that Chase failed to disclose two (2) pieces of
evidence that not only prove Plaintiffs’ breach of contract claims, but support their argument that
Chase’s Statute of Limitations argument must be denied because Chase sought to actively
conceal its breaches of the Agreement. Such dilatory acts, at the very least, support the
reopening of discovery, and further, an award of sanctions. See Coene v. 3M, 303 F.R.D. 32, 45-
46 (W.D.N.Y. 2014) (reopening discovery where a party made untimely discovery disclosures);
Boyde v. Monroe County, 2011 WL 4457668 at *4 (W.D.N.Y. 2011) (reopening discovery where
document central to proving Plaintiffs’ case was not timely disclosed in violation of F.R.C.P.
26(e)). New York Appellate Courts have held that the denial of a motion to reopen is “reversible
error if it unduly restricts the moving party’s right to relevant information.” Milone v. General
Motors Corp., 461 N.Y.S.2d 631 (1983) (citation omitted).

As articulated above, and within Plaintiffs’ letter motion seeking to exceed the page limit
for their reply (Dkt. No. 404), the 1) untimely production of incriminating emails, and 2)
discovery of letters rendering loans non-existent after both parties filed summary judgment
motions, has prejudiced the Plaintiffs. This is especially true in this case where Chase falsely but
affirmatively stated in its summary judgment motion that Plaintiffs had “no evidence” that Chase
retained insurance payments, and thus warrants the reopening of discovery. See Ritchie Risk-
Linked Strategies Trading (Ireland), LTD. V. Coventry First, LLC, 280 F.R.D. 147, 161

FOSTER, WALKER & DI MARCO

ATTORNEYS AT LAW
 Case 1:15-cv-00293-LTS-RWL Document 412 Filed 06/18/19 Page 3 of 4
Hon. Robert W. Lehrburger
June 18, 2019
Page 3 of 4

(S.D.N.Y. 2012) (supplementation of discovery must be “timely” and disclosure made “nearly a
year after the close of fact discovery is not ‘timely,’ by any definition”).

Moreover, the magnitude of Chase’s actions, while refusing to work with Plaintiffs on
any reasonable compromise, warrants the imposition of sanctions, and a District Court has
“broad authority to impose sanctions for violations of discovery obligations.” See R.F.M.A.S.,
Inc. v. So, 271 F.R.D. 13 (S.D.N.Y. 2010). Rule 37 permits such sanctions to be awarded, and
requires that the sanction issued be just. F.R.C.P. 37(b)(2)(A). In Boyde, the Court held “the
district court has wide discretion in punishing failure to conform to the rules of discovery.” 2011
WL 4457668 at *4. In Ritchie, the Court awarded costs and fees to the moving party, including
the cost of having to bring the motion, as well as the additional discovery costs incurred as a
result of the late disclosure. 280 F.R.D. at 162. Where, as here, preclusion is not a viable
sanction because the information sought is critical to Plaintiffs’ case, the appropriate sanction is,
as in Ritchie, the reasonable attorneys’ fees incurred in having to seek this relief, as well as any
and all costs incurred while conducting additional fact discovery, which costs would not have
been born by Plaintiffs but for Chase’s failure to comply with Rule 26(e) in a timely manner.

In denying the production of View Activity screens during motion practice (Dkt. No.
279), the Court admitted it was a “closer call”, basing its decision on declarations of Chase
employees, in court statements from Chase’s counsel and timeliness. As articulated in our June
4 correspondence (Exhibit A), and contrary to Chase’s representations, the “spreadsheets”
produced by Chase do not contain “all payments” received. Clearly the insurance payment is not
on the spreadsheet. Importantly, Launi Solomon’s Declaration indicates that the View Activity
screens “might contain information on [post sale payments].” (Dkt. No. 271, para. 10). In fact,
in Chase’s responses to Plaintiff’s Statement of Facts, Chase doubles down and says “Chase
produced to Plaintiffs data that would record any payments received by Chase on any of the
MLPA loans after they were sold to Plaintiffs. For the Kevorkyants loan, the data does not show
any post-sale payments received by Chase.” (Dkt. No. 385, para. 139) (emphasis added).

Where Chase affirmatively stated multiple times in its filings (See also Dkt. 350, page
21) that there is “no evidence” of Chase retaining payments, only to then turn over an
incriminating email contradicting that declaration after Plaintiffs demonstrated it was
disingenuous, the Court must permit Plaintiffs to obtain discovery that could evidence further
misrepresentations, whether mistaken or intentional. This is especially true where Chase failed
to produce certain letters during discovery that were drafted by Chase regarding loans sold to
Plaintiffs that prove Chase sold Plaintiffs a non-existent lien. Plaintiffs have argued throughout
this case that the View Activity screens are the most comprehensive compilation of all activity
on the subject loans. In light of recent events, whether timely or not, the View Activity screens
are relevant and necessary discovery items to which Plaintiffs should be entitled, regardless of
the costs to Chase, as well as a 30(b)(6) deposition to enable Plaintiffs to finally understand what
documents Chase has, where such documents exist, and how they can be reproduced.

Conclusion: Accordingly, for good cause shown, Plaintiffs respectfully request that the
Court grant all of those portions of the discovery sought within Plaintiffs’ June 4, 2019 letter to
Chase that it deems just and proper. (Exhibit A).

FOSTER, WALKER & DI MARCO

ATTORNEYS AT LAW
 Case 1:15-cv-00293-LTS-RWL Document 412 Filed 06/18/19 Page 4 of 4
Hon. Robert W. Lehrburger
June 18, 2019
Page 4 of 4

Respectfully submitted,
s/ Roberto L. Di Marco
Roberto L. Di Marco
Foster, Walker & Di Marco, P.C.
350 Main Street, Third Floor
Malden, MA 02148
(781) 322-3700
rdimarco@fwd-law.com

cc: All counsel of record (via ECF)

FOSTER, WALKER & DI MARCO

ATTORNEYS AT LAW