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1
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DEFENDANTS RESPONSE IN OPPOSITION TO MOTION TO COMPEL
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EXTRACTED KEY WORDS
PRIVILEGE DEFENDANTS COUNSEL MOTION COURT DOVENMUEHLE PRIVILEGED MATTER DELAWARE BANK PRODUCTION WITHHELD PARTNERS PARTNERSHIP METROPOLITAN REGENCY SAVINGS BANK COMPEL PRODUCTION DOVENMUEHLE MORTGAGE LIMITED PARTNERS LLC LITIGATION FIDUCIARY DUTY EXCEPTION TRANSACTION MUTUALITY WORK PRODUCT GENERAL PARTNER TRUST COMPANY MEMORANDUM WORK PRODUCT DOCTRINE COMMUNICATIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
X
Metropolitan Bank and Trust Company
and Regency Savings Bank F.S.B.
(Successor to Calumet Bancorp. Inc.) : Civil Action No. 18023NC
Plaintiffs,
V.
Dovenmuehle Mortgage, Inc. and
Tranche X, L.L.C.
Defendants. ; : >J
X : __ `.L'
- *
DEFENDANTS' RESPONSE IN OPPOSITION TO PLAII&FS'
MOTION TO COMPEL PRODUCTION OF PRIVILEGED DO&MEN;;
1. Defendants Dovenmuehle Mortgage, Inc. ("Dovenmuehle") and Tranche X,
LLC (the "LLC"), hereby submit this opposition to the Motion to Compel Production of
Documents Withheld by Defendants as Privileged, tiled by plaintiffs Metropolitan Bank and
Trust Company ("Metropolitan") and Regency Savings Bank F.S.B. ("Regency") on February 6,
200 1 (the "Motion").
2. Out of over 2,200 pages of responsive documents identified by defendants
for production on December 22, 2000, only 13 documents were withheld as privileged and 6
were redacted for privileged matter. These were all listed on defendants' Privilege and
Redaction Logs. Of those 19 documents, plaintiffs' Motion seeks production of 16. Defendants
have now produced four of those documents to plaintiffs' counsel, leaving only 12 which are the
subject of this Motion.'
3. Plaintiffs do not dispute that the documents are privileged. Rather, they argue
that, as limited partners of the partnership that sought legal advice and developed the privileged
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2
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DEFENDANTS REPLY IN SUPPORT OF CROSS-MOTION FOR CONFIDENTIALITY ORDER
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EXTRACTED KEY WORDS
PLAINTIFFS CONFIDENTIALITY COURT MOTION RESPONSE CHANCERY ENTRY PROTECTIVE ORDER COOKSON TRANCHE BUSINESS COUNSEL REQUEST PARTY CHANCERY RULE CROSS-MOTION MORTGAGE LOANS COOKSON PIGMENTS REGENCY SAVINGS BANK DEFENDANTS DOVENMUEHLE DISCOVERY COOKSON AMERICA TRADE SECRETS OPPOSITION SUBSERVICING SUMMARY JUDGMENT PRODUCTION INTERROGATORIES MISAPPROPRIATION |
g-\. :-
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE \:. r F i
IN AND FOR NEW CASTLE COUNTY
X
Metropolitan Bank and Trust Company
and Regency Savings Bank F.S.B.
(Successor to Calumet Bancorp, Inc.) : Civil Action No. 18023NC
Plaintiffs,
V. I)
CJZ E?:
Dovenmuehle Mortgage, Inc. and ST.6 M" m
a: -,`
-2:: !i'.,
Tranche X, L.L.C. p1;o
T - z g-
? `-**
Defendants. 3r; c;
I-7::
-i. ._ 2
X . . . ,
-u ::-
w r-j `??
Xf'l u-l
DEFENDANTS' REPLY IN SUPPORT OF THEIR - 2 a
CROSS-MOTION FOR ENTRY OF CONFlDENTIALITY ORDER
On January 11, 2001, defendants Dovenmuehle Mortgage, Inc. ("Dovenmuehle")
and Tranche X, L.L.C. ("Tranche x") filed their cross motion for entry of a confidentiality order.
Plaintiffs Metropolitan Bank and Trust Company and Regency Savings Bank F.S.B. (successor
to Calumet Bancorp, Inc.) tiled their response in opposition to defendants' motion on or about
February 1, 2001 (hereinafter, "PO"). Defendants respectfully submit this reply in further
support of their motion.
A. Background.
Defendant Dovenmuehle is in the business of servicing and subservicing
mortgage loans for clients around the country. Included among those clients are limited
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3
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MEMORANDUM IN SUPPORT OF MOTION TO COMPEL
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EXTRACTED KEY WORDS
PRIVILEGE PARTNERSHIP BANK TRANSACTION GENERAL PARTNER ATTORNEY-CLIENT PRIVILEGE COURT PARTNERSHIP AGREEMENT DOVENMUEHLE DELAWARE TRANCHE MEMORANDUM PLAINTIFFS DOCUMENTS WITHHELD PRODUCTION DEFENDANTS PRIVILEGE LOG SERVICING RIGHTS FIDUCIARY DUTY PORTFOLIO WORK PRODUCT WORK PRODUCT DOCTRINE COMMUNICATIONS AFFILIATE CONSUMMATE LITIGATION SUB-DEBT TRANSACTION COMPEL PRODUCTION DOCUMENT PRODUCTION REQUEST |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
Metropolitan Bank and Trust Company, et al., *
* L
V. Civil Action No. 18023 I';
_...
_I-7:. r
Dovenmuehle Mortgage, Inc., et al., * <.?
-`I,:
. . ~.
-. :.-;
4.
Defendmts. *
MEMORANDUM IN SUPPORT OF MOTION TO COMPEL PRODUCTION OF
DOCUMENTS WITHHELD BY DEFENDANTS AS PRIVILEGED
I.
INTRODUCTION
This is an action brought by two limited partners, both derivatively and individually,
the general partner of the limited partnership and an affiliate of the general partner. The suit is
upon the general partner's having caused the limited partnership to consummate a transaction for the
benefit of the general partner and to the detriment of the limited partners. Plaintiffs have alleged
claims for breach of the general partner's fiduciary duty and for breach of the partnership
and have requested both damages and a recasting of the transaction between the partnership and the
affiliate.
In response to a document production request, Defendants refused to produce certain
documents listed on a privilege log based on attorney-client privilege and the work product
Plaintiffs contest this refusal and have moved pursuant to Chuncery Rule 37(a) for an order
compelling production of the withheld documents. As is more fully discussed hereafter, the
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4
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REPLY TO DEFENDANTS OPPOSITION TO MOTION TO COMPEL
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EXTRACTED KEY WORDS
PLAINTIFFS REQUEST PARTNERSHIP RESPONSE PRODUCTION COURT MOTION DISCOVERY TRANCHE COMPEL FAILURE PRIVILEGE POSSESSION BANK OPPOSITION SANCTIONS OBLIGATIONS LIKEWISE FORMATION EXTENSIONS CORRESPONDENCE TRUST COMPANY SAVINGS WHOLESALE FAILURE FILING PRIVILEGE LOG COMMON SENSE DOCUMENTS RELATING SALE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
Metropolitan Bank and Trust Company, et LZ~., *
Plaintiffs, *
V. * Civil Action No. 18023
Dovenmuehle Mortgage, Inc., et al., *
Defendants. *
* * * * * * * * * * c * * *
3
Y TO DEFENDANT S OPPOSITION
,
TO PIjAINTIFFS MOTION TO COMPELDISCOVERY
FOR RULE 37 SANCTIONS
Plaintiffs, Metropolitan Bank and Trust Company and Regency Savings Bank, F.S.B., reply
to Defendants' Opposition to Plaintiffs' Motion to Compel Discovery and for Rule 37 Sanctions as
follows:
Defendants use their Opposition to attempt to shift the focus of this Court away from
inexcusable course of conduct by setting forth an irrelevant and false accounting of events. In
contrast, Plaintiffs now redirect the attention of the Court to the inescapable facts that prove
Defendants' wholesale failure to abide by its discovery obligations.
The facts at issue are indisputable. Beginning in August 2000, Plaintiffs granted
time extensions to Defendants in the interest of cooperative discovery. When dates for responses
and production were set, Defendants simply ignored them or sought further extensions. After the
last date came and went, Plaintiffs filed the present Motion to Compel, as Defendants would clearly
not produce documents without Court intervention. In fact, it was not until the day after this
Motion's filing that Plaintiffs were notified by letter when they could expect to receive the
S iLJC?~l83')1~~Plcad1n~s:reply.~ompel wpd
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5
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MEMORANDUM IN SUPPORT OF MOTION TO COMPEL
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EXTRACTED KEY WORDS
REQUESTS PRODUCTION PLAINTIFFS COURT MOTION AWARD CHANCERY RULE COUNSEL RESPONSE DAVIS DELAWARE CHANCERY RULE DEVERY PARTY EXPENSES DISCOVERY JUSTIFICATION FAITH EFFORT INSPECTION AWARD UNJUST TELEPHONE CONVERSATION FAILS PERMIT INSPECTION REASONABLE EXPENSES SANCTIONS INTERVENTION EXHIBIT WRITTEN RESPONSES EXTENSION DEADLINE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
Metropolitan Bank And Trust Company, et al., *
Pluintiffs, *
V. c Civil Action No. 18023
Dovenmuehle Mortgage, Inc., et al., 4
Defendants. 1;
* * * * * * * * * * * * * *
MEMORANDUM IN SUPPORT OF MOTION TO COMPEL
AND FOR RULE 37 SANCTIONS
I&oduction
This Motion has been tiled because of the total failure of Defendants to produce any of the
documents called for by the Requests for Production of Docume:nts ("Requests for Production")
served upon them by Plaintiffs. Prior to filing this Motion, Counsel for Plaintiffs, Lawrence J.
Gebhardt and Jennifer R. Devery, repeatedly attempted in good faith lo obtain the requested
documents from Defendants without the necessity ofjudicial intervention. Defendants have never
refused to produce their documents and have repeatedly assured Plaintiffs that documents will be
produced. Yet Defendants have produced nothing but further assurances. Plaintiffs have come to
the point where they have no choice but to move for an order compelling discovery.
The Requests For Production
On July 24,2000,' Plaintiffs served the Requests for Production on the Defendants. A copy
of the Request for Production is attached as Exhibit A. In accordance with Delaware Chancery Rule
34(b), Plaintiffs requested that the documents be produced thirty days following service. In
' The Requests for Production were sent to Counsel for the Defendants via Federal Express.
Therefore, counsel received the Requests for Production on July 25,200O.
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6
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ANSWER
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EXTRACTED KEY WORDS
ALLEGATIONS DENIES COMPLAINT ADMITS TRANCHE PARTNERSHIP MORTGAGE BANK PLAINTIFFS FIRST SENTENCE DOVENMUEHLE SECOND SENTENCE AGREEMENT SERVICING REFERS INFORMATION SUFFICIENT MORTGAGE LOANS LIMITED PARTNERS REGENCY SAVINGS BANK SAVINGS BANK DENIES KNOWLEDGE TRUTH RESIDENTIAL MORTGAGE LOANS SERVICING RIGHTS SUBORDINATED DEBT REPEATS INCORPORATES REFERENCE RESPONSES |
:\ .,:, ;, '
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- X
Metropolitan Bank and Trust Company
and Regency Savings Bank F.S.B.
(Successor to Calumet Bancorp. Inc.) ..T.,
: Civil Action No. 18023NC :L
Plaintiffs,
V.
Dovenmuehle Mortgage, Inc. and
Tranche X L.L.C.
Defendants.
X
ANSWER
Defendant Dovenmuehle Mortgage, Inc. ("Dovenmuehle"), by its attorneys,
Morris, Nichols, Arsht & Tunnel1 and Kramer Levin Naftalis & Frankel LLP, answers the
Complaint filed in this action by plaintiffs Metropolitan Bank and Trust Company
("Metropolitan") and Regency Savings Bank F.S.B. ("Regency") as alleged successor to
Calumet E&UKZO~I Inc. ("Calumet") (together "Plaintiffs"), as follows:
1. Denies knowledge or information sufficient to form a belief as to the truth
of the allegations of paragraph 1 of the Complaint.
2. Denies knowledge or information sufficient to form a belief as to the truth
of the allegations of paragraph 2 of the Complaint.
3. Admits the allegations of the first sentence of paragraph 3 of the
Complaint. Denies the allegations of the second sentence of paragraph 3, except admits that part
of Dovenmuehle's business is subservicing residential mortgage loans for clients, including
investment limited partnerships for which Dovenmuehle is the general partner.
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7
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ANSWER
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EXTRACTED KEY WORDS
ALLEGATIONS COMPLAINT DENIES INFORMATION SUFFICIENT DENIES KNOWLEDGE TRUTH TRANCHE LLC RESPONSE PLAINTIFFS ADMITS FIRST SENTENCE SAVINGS BANK PARTNERSHIP CALUMET BANCORP REGENCY SAVINGS BANK SECOND SENTENCE DOVENMUEHLE REFERS REPEATS INCORPORATES REFERENCE METROPOLITAN SUCCESSOR MORTGAGE THIRD SENTENCE PARTNERSHIP AGREEMENT DOCTRINE FIRST EAST |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
X
Metropolitan Bank and Trust Company
and Regency Savings Bank F.S.B.
(Successor to Calumet Bancorp. Inc.)
: Civil Action No. 18023N&`, :
Plaintiffs,
V.
Dovenmuehle Mortgage, Inc. and
Tranche X L.L.C. -,,,, -1
_
Defendants.
X
ANSWER
Defendant Tlranche X LLC, by its attorneys, Morris, Nichols, Arsht & Tunnel1
and Kramer Levin Naftalis & Frankel LLP, answers the Complaint filed in this action by
plaintiffs Metropolitan Bank and Trust Company ("Metropolitan") and Regency Savings Bank
F.S.B. ("Regency") as alleged successor to Calumet Bancorp Inc. ("Calumet") (together
"Plaintiffs"), as follows:
1. Denies knowledge or information sufficient to form a belief as to the truth
of the allegations of paragraph 1 of the Complaint.
2. Denies knowledge or information sufficient to form a belief as to the truth
of the allegations of paragraph 2 of the Complaint.
3. Admits the allegations of the first sentence of paragraph 3 of the
Complaint. Denies the allegations of the second sentence of paragraph 3, except admits that part
of the business of Dovenmuehle Mortgage, Inc. ("Dovenmuehle") is subservicing residential
mortgage loans for clients, including investment limited partnerships for which Dovenmuehle is
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8
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COMPLAINT
|
EXTRACTED KEY WORDS
DOVENMUEHLE BANK SERVICING GENERAL PARTNER METROPOLITAN PARTNERSHIP MORTGAGE CALUMET LIMITED PARTNERS SUBORDINATED DEBT LLC SERVICING RIGHTS SAVINGS BANK PARTNERSHIP AGREEMENT SUBORDINATED DEBT INSTRUMENT SUBORDINATED DEBT TRANSACTION PURCHASE PRICE MORTGAGE COMPANY FIDUCIARY DUTY REGENCY SAVINGS BANK PLAINTIFFS SUB-SERVICING FEES CAUSED TRANCHE MORTGAGE LOANS MARKET CONDITIONS OPPORTUNE TIME OBLIGATIONS FINANCIAL COVENANTS OHIO CHARTERED BANKING |
F1":,: ii- `, `,
.. :, &Z
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
Metropolitan Bank And Trust Company *
and Regency Savings Bank F.S.B.
(Successor to Calumet Bancorp. Inc.) * F
Plaintiffs, *
*
V. Civil Action No.[JO 23 Ni
Dovenmuehle Mortgage, Inc. and *
Tranche X L.L.C.
Defendants. *
COMPLAINT
Plaintiffs, Metropolitan Bank and Trust, individually and derivatively on behalf of
Dovenmuehle Mortgage Company L.P., and Regency Savings Bank, F.S.B. (successor to Calumet
Bancorp., Inc.), individually, by their undersigned counsel, sue Dovemuuehle Mortgage, Inc. and
Tranche X L.L.C. and state as follows:
1. Plaintiff, Metropolitan Bank and Trust ("Metropolitan"), is an Ohio chartered banking
institution located in Maytield Heights, Ohio.
2. Plaintiff, Regency Savings Bank, F.S.B., is a federally chartered savings bank
in Illinois and is the successor by merger to Calumet Bancorp. Inc., an Illinois chartered bank
corporation. For ease of reference, Regency Savings Bank, F.S.B., hereafter shall be referred to as
"Calumet."
3. Defendant, Dovenrnuehle Mortgage, Inc. ("Dovenmuehle"), is a Delaware corporation
located in the State of Illinois. Dovenmuehle is engaged in the business of servicing residential
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