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In re RFC and ResCap Liquidating Trust Action

United States District Court, D. Minnesota

July 25, 2019

In Re RFC and ResCap Liquidating Trust Action
v.
Primary Residential, Mortg., Inc., No. 16-cv-4070 (SRN/HB) This document relates to ResCap Liquidating Trust

          ORDER RE: PRMI'S MOTION FOR A JURY TRIAL

          SUSAN RICHARD NELSON UNITED STATES DISTRICT JUDGE

         This matter is before the Court on PRMI's motion for a jury trial under Fed.R.Civ.P. 39(b). For the following reasons, the Court denies the motion.

         I. BACKGROUND

         On December 2, 2016, Plaintiff ResCap Liquidating Trust (“ResCap”) sued Defendant Primary Residential Mortgage, Inc. (“PRMI”) for breach of contract and for indemnification. (See Compl., No. 16-cv-4070 [Doc. No. 1].) The lawsuit was part of a “second wave”[1]of lawsuits that ResCap filed against mortgage lender defendants, based on residential mortgage-backed securities transactions that occurred in the run-up to the 2008 financial crisis. ResCap did not request a jury trial in its Complaint.

         The Court Clerk's office received ResCap's Complaint, and, in line with its typical practice, randomly assigned the case to a judge of this District, Senior District Court Judge David S. Doty. In light of the fact that ResCap's lawsuit against PRMI was related to the ongoing RFC and ResCap Liquidating Trust consolidated litigation in this District, see generally No. 13-cv-3451, almost immediately after initially assigning the case to Judge Doty, the Clerk's office then reassigned the case to the undersigned. The Clerk's office noted the reassignment with the following docket entry: “Case reassigned to Judge Susan Richard Nelson and Magistrate Judge Hildy Bowbeer for all further proceedings In Re: RFC and RESCAP Liquidating Trust Litigation. Senior Judge David S. Doty, Magistrate Judge Becky R. Thorson no longer assigned to case.” (See PRMI Clarification Letter [Doc. No. 2103], Ex. C (emphasis added).)

         Shortly thereafter, on January 6, 2017, PRMI's counsel[2] filed a “clarification letter” requesting that the docket entry be corrected to accord with the then-prevailing “Consolidation Order” in the wave one litigation. (Id.) That is, PRMI requested that the docket entry be clarified to state that its case was only consolidated with the other ResCap matters for “pretrial purposes, ” that the undersigned's involvement in the case was solely on a “temporary basis, ” and that, when the time came for summary judgment and trial, the case would be “transferred back to” Judge Doty. (Id.; accord PRMI Consolidation Order at 2-3 (“[PRMI's case] will hereby be consolidated before Judge Susan Richard Nelson and Magistrate Judges Jeffrey J. Keyes and Hildy Bowbeer for all pretrial purposes, including the coordination of all discovery matters, settlement discussions, non-dispositive motions and dispositive motions, other than summary judgment and trial. . . . At such time as Judge Susan Richard Nelson deems appropriate, the cases will be transferred back to their original District Judge and Magistrate Judge for summary judgment, if appropriate, and trial.”).)

         A few weeks later, on January 23, 2017, the Court amended the December 2, 2016 docket entry to reflect the Consolidation Order, as PRMI requested. (See No. 16-cv-4070 [Doc. No. 5] (“AMENDED Administrative Order consolidating In Re: RFC and ResCap Liquidating Trust Litigation cases, for pretrial purposes, into Civil File No. 13-cv-3451 (SRN/HB). All consolidated cases are reassigned, on a temporary basis, to Judge Susan Richard Nelson and Magistrate Judge Hildy Bowbeer.”) (emphasis added).)

         “In reliance on” this amended docket entry (PRMI Br. in Support of Jury Trial [Doc. No. 5114] (“PRMI Br.”) at 4), PRMI then made the strategic decision to forgo its Seventh Amendment right to a civil jury trial, and instead pursue a bench trial. (See PRMI An. [Doc. No. 2156] (containing no demand for a jury trial); see also Fed. R. Civ. P. 38(c) (“A party waives a jury trial unless its demand is properly served and filed, ” i.e., “no later than 14 days after the last pleading directed to the issue is served”).)

         As “wave one” of the consolidated litigation proceeded through 2017 and 2018, however, the judges of this District determined that, for a variety of reasons, the undersigned should preside over all remaining cases through summary judgment and trial. Indeed, at multiple case management conferences between July 2017 and August 2018, this Court kept the parties fully apprised of the bench's decision in this regard. (See, e.g., May 18, 2017 Hr'g Tr. [Doc. No. 2621] at 47-48 (announcing the Court would be handling all “common-issue summary judgment motions, ” regardless of original case assignments); July 20, 2017 Hr'g Tr. [Doc. No. 2718] at 103-04 (clarifying that, “I think the bench is going to reasonably expect here that I will try the first case”); Aug. 24, 2017 Hr'g Tr. [Doc. No. 2758] at 32-34 (expanding upon the Court's earlier statement, and noting that, in response to the “guidance from the bench, ” the Court would be trying at least the first three cases); Aug. 23, 2018 Hr'g Tr. [Doc. No. 4338] at 231 (acknowledging that “at the beginning, the deal with the bench was that I was going to give [the cases] back to my colleagues for summary judgment and trial, ” but “now I have them through summary judgment and trial”); see also ResCap Br. in Opp. to Jury Trial Demand [Doc. No. 5122] (“ResCap Br.”) at 4-7 (collecting additional citations).)

         Although PRMI's counsel was present at these case management conferences and the related proceedings (by virtue of their related representations, see supra n.2), PRMI never sought to re-assert its Seventh Amendment right to a jury trial at the time. Rather, PRMI remained silent, even as the Court entertained consolidated argument on summary judgment and Daubert motions in mid-June 2018, and then rendered a 182-page “common issues” summary judgment order two months later. More striking still, PRMI remained silent as this Court and the parties spent the fall of 2018 preparing for the first (and, to date, only) trial in the consolidated ResCap litigation: the Home Loan Center (“HLC”) jury trial. (See generally HLC Attorneys' Fees Decision [Doc. No. 5132] at 10-11 (noting the numerous HLC pre-trial conferences the Court held from August through October 2018).) This silence was notable because PRMI was represented by the same counsel as HLC (see supra n.2), and because HLC, like PRMI, was originally supposed to return to a different judge in this District for summary judgment and trial, Judge Donovan W. Frank. Yet, in line with the discussions at the case management conferences, it did not. Thus, by the start of the HLC trial in mid-October 2018, PRMI's counsel understood that PRMI's trial would be handled by the undersigned.

         The Court then presided over the HLC trial, from October 15 to November 7, 2018. Along the way, the Court resolved evidentiary disputes, heard witness testimony, and instructed the jury on the law. At the end of the trial, after the Court had rendered decisions on several pre-verdict motions for judgment as a matter of law, the jury deliberated and returned a $28.7 million verdict in favor of ResCap. Again, at no point during the HLC trial did PRMI suggest that it, too, wanted a jury trial.

         On May 9, 2019, however, after the conclusion of the HLC trial, and near the close of fact discovery for the (two remaining) “second wave” cases, PRMI's counsel informed the Court, for the first time, that PRMI understood that its case would return to Judge Doty for summary judgment and a bench trial. (See May 9, 2019 Hr'g Tr. [Doc. No. 5105] at 70-71.) PRMI based this belief solely on the two-year-old, January 23, 2017 amended administrative docket entry. (Id.) After being reminded that the bench had long ago determined that it would be most efficient for the undersigned to oversee the few remaining ResCap cases through trial, [3] PRMI's counsel announced, “in that case, [PRMI will] also be filing a jury trial demand.” (Id. at 72.)

         PRMI filed its motion and accompanying brief shortly thereafter. (See PRMI Br.) ResCap filed a brief in opposition. (See ResCap Br.) The Court then entertained oral argument at the July 11, 2019 case management conference.

         II. ...


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