Akowskey v. Nationstar Mortgage LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 21-14487-CIV-CANNON/MAYNARD

JOSEPH P. AKOWSKEY,

individually and as assignee of Pauline Chin

f/k/a Pauline E. Akowskey,

Plaintiff,

v.

NATIONSTAR MORTGAGE, LLC, et al.,

Defendants.

___________________________________________/

ORDER ON PLAINTIFF’S MOTION TO COMPEL BETTER ANSWERS TO

INTERROGATORIES (“MOTION TO COMPEL”) (DE 115)

THIS CAUSE is before me upon the above referenced Motion to Compel filed on

November 21, 2022. DE 115. Having reviewed the Motion to Compel, the Response (DE 118)

and the record in this case, and being otherwise duly advised, the Motion to Compel is

GRANTED.

BACKGROUND

Plaintiff sues Defendants Nationstar Mortgage LLC (“Nationstar”), Federal National

Mortgage Association (“FNMA”), MTGLQ Investors, L.P. (“MTGLQ”), Selene Finance L.P.

(“Selene”) (collectively, the “Financial Defendants”), and the law firm of Robertson, Anschutz,

Schneid, Crane & Partners, PCCL (“RASC”) based on foreclosure actions Defendants brought

against him in Florida state court. DE 104 at ¶1. Plaintiff alleges that Defendants’ attempts to

foreclose on his home were unlawful and in willful disregard of a modification of his mortgage,

which modification a state court confirmed.1 DE 42 at ¶¶44-46. Defendant RASC is the law firm

that represented the Financial Defendants in the underlying state foreclosure actions. DE 42 at

¶¶20, 28-32, 39-41. Plaintiff’s claims in federal court include Count I – Violation of the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et seq. against Nationstar; Count II – Violation of the

Fair Credit Consumer Protection Act, Fla. Stat. § 559.72 et seq. against Nationstar and FNMA;

and Count III – Malicious Prosecution against all Defendants.

The present discovery motion pertains to interrogatories Plaintiff propounded upon RASC

in July 2022. DE 115 at 1-2. RASC served amended answers to the interrogatories on November

11, 2022. Id. at 2. RASC objected, however, to Interrogatory Numbers 3, 6, 7, 8, 9, and 12 on the

basis that they seek information protected by the attorney-client privilege. DE 115-1. RASC also

objected to Interrogatory Number 3 on grounds of work-product privilege. De 115-1.

Plaintiff seeks to compel better responses from RASC for Interrogatory Numbers 3, 6, 7,

8, 9, and 12.2 Specifically, Plaintiff contends that protections afforded by the attorney-client and

work-product privileges have been waived because the Financial Defendants have asserted the

advice of counsel defense in this litigation. Plaintiff also seeks his expenses in bringing the motion

to compel. Id. at 1-2, 5.

In a separate filing, Plaintiff moves to strike the Financial Defendants’ assertion of the

advice of counsel defense. DE 94. Plaintiff argues that the advice of counsel defense should be

1 The Honorable William L. Roby stated the following on the record at a non-jury trial held on November 16, 2016 in

relation to Defendants’ foreclosure suit against the Plaintiff: "There was a modification, and it was highly inequitable

for the plaintiff [(Nationstar)] to fail to comply with the terms of the modification. Accepting 12 --13 months of

payments and then trying to just give him the money back after the lawsuit was filed, I think, is evidence of inequitable

conduct on the part of the bank, as servicer[ ]." DE 42-4 at 167:18-24 (the state court trial transcript).

2 Plaintiff’s Motion to Compel contains a scrivener’s error as to the interrogatories at issue. See DE 115 at ¶4 (referring

to interrogatories Nos. 3, 5, 7, 8, 9, and 12) and page 4 (referring to interrogatories Nos. 3, 6, 7, 8, 9, and 12). Because

interrogatory No. 5 does not assert attorney-client privilege, and interrogatory No. 6 does, it is obvious that Plaintiff

intended the Motion to Compel to apply to interrogatory No. 6 and not interrogatory No. 5.

stricken as conclusory, barebones, and insufficient as a matter of law. Alternatively, Plaintiff seeks

a ruling that the Financial Defendants have waived attorney-client privilege by asserting the advice

of counsel defense. Plaintiff’s motion to strike has not been referred to me and is pending before

the District Judge.

In responding to Plaintiff’s motion to compel, RASC argues that the motion is premature

because the pending motion to strike the advice of counsel defense has not been ruled upon. RASC

contends that if the motion to strike the advice of counsel defense is granted, issues regarding

waiver of privilege are rendered moot. RASC also points out that the attorney-client privilege

belongs to the client not the lawyer, and until RASC receives an express waiver of privilege from

its clients (which, in this case, are the Financial Defendants) it cannot disclose protected

information without a court ruling that privilege has been waived. RASC also argues that the

advice of counsel defense is issue specific, so until its precise contours are known in this case it

cannot be determined which privileged communications must be disclosed.

In responding to Plaintiff’s motion to strike the advice of counsel defense, the Financial

Defendants notably do not address Plaintiff’s argument that the defense waives privilege. DE 109.

Rather, the Financial Defendants avoid discussing the waiver issue altogether by stating that RASC

is the party asserting privilege in response to discovery, not the Financial Defendants. The

Financial Defendants maintain that they did not instruct RASC to assert attorney-client privilege,

are not responsible for RASC’s decision to do so, and should not be held responsible for privileges

RASC asserted. They insist that “Plaintiff’s fight is with RASC,” id. at 3, and has nothing to do

with them. Thus, they contend that Plaintiff’s motion to strike the advice of counsel defense should

be denied.

DISCUSSION

As an initial matter, I do not agree that the pending motion to strike justifies denying the

Motion to Compel. While I agree with RASC that an order striking the Financial Defendants’

advice of counsel defense would render RASC’s privilege objections moot because advice of

counsel will not be “at issue,” I also note that the discovery deadline of January 30, 2023 is fast

approaching and a ruling on this discovery issue is needed if the parties are to meet their obligations

under the Scheduling Order. DE 81. In addition, the fact that Plaintiff has moved to strike the

advice of counsel defense does not change the fact that the defense has been affirmatively invoked

by the Financial Defendants, which is what matters under the relevant case law. Accordingly, I

decline to deny Plaintiff’s motion to compel based on the pending motion to strike.

Having fully reviewed the record, I also observe that the Defendants in this case are putting

Plaintiff in an untenable place by taking inconsistent positions on whether attorney-client privilege

has been waived. The law firm (RASC) takes the position that the attorney-client privilege belongs

to their clients (the Financial Defendants) and they cannot disclose privileged material until the

Financial Defendants expressly waive attorney-client privilege and instruct RASC to disclose.

Meanwhile, the clients (the Financial Defendants) take no position whatsoever on attorney-client

privilege or waiver thereof, saying only that they are not asserting any privilege so Plaintiff’s fight

is with their lawyers, not with them. That said, the Financial Defendants apparently have not

advised RASC that they waive privilege by relying on advice of counsel and have not instructed

RASC to disclose the requested information. With these maneuvers, RASC and the Financial

Defendants have effectively blocked Plaintiff’s access to information he needs to respond to the

advice of counsel defense.

When a party asserts an advice of counsel defense, the party waives the attorney-client

privilege as to the subject matter of that advice. See Cox v. Adm’r United States Steel, 17 F.3d

1386, 1417-21 (11th Cir. 1994) (“[c]ourts have found waiver by implication … when a client

asserts reliance on an attorney’s advice as an element of a claim or defense’”); Immuno Vital, Inc.

v. Telemundo Group, Inc., 203 F.R.D. 561, 564 (S.D. Fla. 2001) (“It is well-established that when

a party asserts a defense, such as the advice of counsel defense, that makes an attorney’s advice an

issue in the litigation, that party waives the attorney-client privilege.”). In determining the scope

of the waiver, the overriding consideration is fairness, or avoidance of prejudice to the opposing

party. Cox, 17 F.3d at 1417 (“Courts have generally not found waiver where the party attacking

the privilege has not been prejudiced.”); Beneficial Franchise Co., Inc. v. Bank One, N.A., 2001

WL 492479, at *5 (N.D. Ill. 2001) (“The overriding principle is one of fairness.”). A court will

not allow parties to introduce evidence of privileged communications to establish advice of

counsel, while asserting attorney-client privilege for communications that may be unfavorable to

the advice of counsel defense. Immuno Vital, 203 F.R.D. at 564. The privilege was “intended as

a shield, not a sword.” Cox, 17 F.3d at 1418. “Having opened the door to certain privileged

information in an effort to advance its cause, as a matter of fairness a party must disclose other

privileged materials involving the subject matter of the disclosed communications.” Beneficial

Franchise, 2001 WL 492479 at *4.

The Financial Defendants have each asserted advice of counsel as an affirmative defense

to Count III of Plaintiff’s Complaint in their Answers. Nationstar, for example, states as follows

in its Answer:

292. FIRST AFFIRMATIVE DEFENSE: ADVICE OF COUNSEL (Count III).

Nationstar made a full and honest disclosure of relevant facts concerning the Loan

to RAS[C]. Nationstar relied on the advice of counsel, specifically RAS[C], in

bringing the first foreclosure case, having been advised that the failure of Plaintiff’s

wife to execute the loan modification meant that the loan was not actually modified.

This was in part supported by the loan modification document itself, which required

the signature of Plaintiff and his wife to be effective.

293. Nationstar made a full and honest disclosure of relevant facts concerning the

Loan to RAS[C]. Since RAS[C] prosecuted the first foreclosure case, including the

non-jury trial, it was privy to all relevant facts including the rulings and judgment

of the court. Nationstar relied on the advice of counsel, specifically RAS[C], in

bringing the second foreclosure, having been advised that the final judgment in the

first foreclosure case did not contain any rulings or findings that the Loan was

considered modified. Further, that because Plaintiff’s wife had not executed the

loan modification the loan was not considered modified. (Second Amended

Complaint, Doc. 42, ¶72 and Exhibit C). Nor was it countersigned by BOA. This

was in part supported by the loan modification document itself, which required the

signature of Plaintiff and his wife to be effective.

294. Indeed, examination of the BOA payment shows that the unpaid principal

balance was not set to the newly modified amount of $99,975.54. (Second

Amended Complaint, Doc. 42, ¶72 and Exhibit C, ¶3(B)). Consequently,

Nationstar could conclude that BOA never considered the loan effectively

modified.

295. As a result of this advice, Nationstar believed it had probable cause to bring

the first foreclosure action and continue the second foreclosure action.

296. Advice of counsel is a complete bar to a malicious prosecution claim. Royal

Trust Bank, N.A. v. Von Zamft, 511 So.2d 654, 655-56 (Fla. 3rd DCA 1987).

DE 90 at 26-27. The other Financial Defendants all make similar claims.3

Financial Defendants therefore assert a broad advice of counsel defense that they believed,

based on legal advice from RASC, that their actions in bringing the first and second foreclosure

cases were lawful. This defense “necessarily implicates all of the [legal] information at [their]

disposal” regarding justification for the foreclosure lawsuits, whether the loan was “actually

3 Each Financial Defendant argues in similar fashion to Nationstar with the following distinctions: (i) FNMA contends

that it did not authorize the acts complained of and, therefore, makes its advice of counsel affirmative defense in the

alternative (DE 85 at ¶332); (ii) Selene argues in its otherwise identical ¶293 that, in the alternative, RASC “failed to

inform [it] of the First Final Judgment and the rulings of Judge Roby despite having participated in that trial” (DE 86

at ¶293) and adds that the subject loan was “not marked as ‘modified’” when it entered the loan into its system of

records (DE 86 at ¶294); and (iii) MTGLQ qualifies the same arguments that Nationstar makes by stating that it “relied

on the advice of RAS[C], through Selene” and received its information about the facts asserted pertaining to the advice

of counsel defense through Selene (DE 87 at ¶¶291-296).

modified,” and whether any legal rulings or findings from the first foreclosure lawsuit impacted

these issues. Cox, 17 F.3d at 1418. In Immuno Vital, the Court held that “when the advice of

counsel defense is raised, the party raising the defense must permit discovery of any and all legal

advice rendered on the disputed issue.” Immuno Vital, 203 F.R.D. at 564 (emphasis added). In

Immuno Vital, the defendants refused to answer deposition questions about advice given by outside

counsel. The Court found that it would be “manifestly unfair” to the plaintiff to allow defendants

to assert and present evidence about an advice of counsel defense while blocking discovery about

the advice. Id. Similarly, the Defendants here are using advice of counsel as the foundation for

their position that their foreclosure lawsuits against Plaintiff did not amount to malicious

prosecution. Their choice to do so mandates a finding that they have impliedly waived the

attorney-client privilege on matters concerning the advice RASC provided to them about the

propriety of bringing the foreclosure lawsuits. See generally Securities & Exch. Comm’n v. Wall

Street Capital Funding, LLC, 2011 WL 2295561, at *7 (S.D. Fla. June 10, 2011) (“Defendants

cannot assert the advice of counsel defense while simultaneously and strategically selecting which

communications to disclose for self-serving purposes and which communications to retain as

confidential.”). Under these circumstances it would be manifestly unfair to prevent Plaintiff from

obtaining full discovery on the very advice Financial Defendants are relying upon to prove that

they did not prosecute him maliciously. I therefore conclude that Financial Defendants waive by

implication attorney-client privilege regarding these matters.

Having found that Financial Defendants have waived attorney-client privilege by asserting

the advice of counsel defense, I consider the specific interrogatories at issue in Plaintiff’s motion

to compel.

NUMBER INTERROGATORY RASC’S RESPONSE

3 Describe, detail, and/or explain the Objection, this interrogatory as phrased

investigation you undertook that lead clearly seeks information protected by the

to your belief that the claims filed in attorney-client and/or work-product

the Second Foreclosure Case were privileges as the investigation conducted

tenable. involved discussions with RASCP clients.

RASCP further objects to this interrogatory

request as ambiguous, vague, irrelevant and

overbroad as Plaintiff failed to define the

term “claims” and more clearly narrow this

request. Wash v. Quest Diagnostics, Inc., 08-

61863-CIV, 2010 WL 11504243, at *2 (S.D.

Fla. Jan. 6, 2010) (ruling “Defendant's

objection that Requests 1, 3, 7, 8, 9, 10, 16,

and 17, are vague and ambiguous is

sustained”). RASCP is uncertain as to what

“claims” Plaintiff is referring to in order to

properly provide the most responsive and

accurate information. Waziry v. HR Club

Mgmt., LLC, 13-60333-CIV, 2013 WL

12009696, at *3 (S.D. Fla. Oct. 7, 2013)

(“The objection is sustained. The request is

overly broad and not narrowly tailored as to

subject matter.”).

6 If NATIONSTAR MORTGAGE Objection, this interrogatory as phrased

LLC d/b/a MR. COOPER (“Mr. clearly seeks information protected by the

Cooper”) authorized you to seek to attorney-client privileges. Diamond Resorts

enforce the original, unmodified U.S. Collection Dev., LLC v. US Consumer

subject debt from Plaintiff at any Attorneys, P.A., 519 F. Supp. 3d 1184, 1220

point after November 30, 2016, (S.D. Fla. 2021), reconsideration denied,

identify all policies, procedures, 9:18-CV-80311, 2021 WL 4482837 (S.D.

servicing guidelines, and loan level Fla. Feb. 24, 2021(objection sustained, the

instructions and directions given to information is “protected from disclosure

you by Mr. Cooper which authorized because they are privileged under the

you to seek to collect the original, attorney-client privilege”).

unmodified subject debt.

7 If MTGLQ INVESTORS, L.P. Objection, this interrogatory as phrased

(“MTGLQ”) authorized you to seek clearly seeks information protected by the

to enforce the original, unmodified attorney-client privileges. Diamond Resorts

subject debt from Plaintiff at any U.S. Collection Dev., LLC v. US Consumer

point after November 30, 2016, Attorneys, P.A., 519 F. Supp. 3d 1184, 1220

identify all policies, procedures, (S.D. Fla. 2021), reconsideration denied,

servicing guidelines, and loan level 9:18-CV-80311, 2021 WL 4482837 (S.D.

instructions and directions given to Fla. Feb. 24, 2021) (objection sustained, the

you by MTGLQ which authorized information is “protected from disclosure

you to seek to collect the original, because they are privileged under the

unmodified subject debt. attorney-client privilege”).

8 If SELENE FINANCE, L.P. Objection, this interrogatory as phrased

(“Selene Finance”) authorized you to clearly seeks information protected by the

seek to enforce the original, attorney-client privileges. Diamond Resorts

unmodified subject debt from U.S. Collection Dev., LLC v. US Consumer

Plaintiff at any point after November Attorneys, P.A., 519 F. Supp. 3d 1184, 1220

30, 2016, identify all policies, (S.D. Fla. 2021), reconsideration denied,

procedures, servicing guidelines, and 9:18-CV-80311, 2021 WL 4482837 (S.D.

loan level instructions and directions Fla. Feb. 24, 2021) (objection sustained, the

given to you by Selene Finance information is “protected from disclosure

which authorized you to seek to because they are privileged under the

collect the original, unmodified attorney-client privilege”).

subject debt.

9 If Fannie Mae, Mr. Cooper, Selene Objection, this interrogatory as phrased

Finance or MTGLQ ever instructed clearly seeks information protected by the

or directed you not to seek to enforce attorney-client privileges. Diamond Resorts

the original, unmodified subject debt U.S. Collection Dev., LLC v. US Consumer

from Plaintiff at any point during the Attorneys, P.A., 519 F. Supp. 3d 1184, 1220

Second Foreclosure Case, identify all (S.D. Fla. 2021), reconsideration denied,

policies, procedures, servicing 9:18-CV-80311, 2021 WL 4482837 (S.D.

guidelines, and loan level Fla. Feb. 24, 2021) (objection sustained, the

instructions and directions given to information is “protected from disclosure

you in this regard. because they are privileged under the

attorney-client privilege”).

12 Describe, detail, and/or explain the Objection, this interrogatory as phrased

investigation you undertook, if any, clearly seeks information protected by the

after the filing of the Second attorney-client privileges. Diamond Resorts

Foreclosure Case that lead to your U.S. Collection Dev., LLC v. US Consumer

continued belief that the claims filed Attorneys, P.A., 519 F. Supp. 3d 1184, 1220

in the Second Foreclosure Case were (S.D. Fla. 2021), reconsideration denied,

tenable. 9:18-CV-80311, 2021 WL 4482837 (S.D.

Fla. Feb. 24, 2021) (objection sustained, the

information is “protected from disclosure

because they are privileged under the

attorney-client privilege”).

RASCP further objects to this interrogatory

request as ambiguous, vague, irrelevant and

overbroad as Plaintiff failed to define the

term “claims” and more clearly narrow this

request. RASCP is uncertain as to what

“claims” Plaintiff is referring to in order to

properly provide the most responsive and

accurate information. Wash v. Quest

Diagnostics, Inc., 08-61863-CIV, 2010 WL

11504243, at *2 (S.D. Fla. Jan. 6, 2010)

(ruling “Defendant's objection that Requests

1, 3, 7, 8, 9, 10, 16, and 17, are vague and

ambiguous is sustained”). Waziry v. HR Club

Mgmt., LLC, 13-60333-CIV, 2013 WL

12009696, at *3 (S.D. Fla. Oct. 7, 2013)

(“The objection is sustained. The request is

overly broad and not narrowly tailored as to

subject matter.”).

DE 115-1.

Interrogatory Numbers 3 and 12 seek to have RASC describe its investigation at various

times leading to its belief that the Financial Defendants’ claims filed in the second foreclosure case

were viable. These interrogatories implicate the Financial Defendants’ advice of counsel defense

to the degree RASC’s investigation and resulting beliefs were communicated to the Financial

Defendants. As previously discussed, it is manifestly unfair to not allow discovery pertaining to

RASC’s communications to the Financial Defendants based on RASC’s investigation of the

propriety of bringing the foreclosure actions, whether the loan was modified and what the rulings

entailed from the first foreclosure lawsuit. Neither does work product privilege shield Plaintiff’s

ability to obtain discovery on these matters except to the extent that work product represents “pure

legal opinion not communicated to the client.” United States v. Bachynsky, No. 04-20250-CR-

TORRES, 2007 WL 1521499, at *3 (S.D. Fla. May 22, 2007) (“A client's assertion of an advice

of counsel defense also waives work product immunity as to all work product concerning the

subject matter at issue other than pure legal opinion not communicated to the client.”). Therefore,

RASC’s objections to Interrogatory Numbers 3 and 12 are overruled as to attorney-client privilege.

Also, RASC’s objection to Interrogatory Number 3 on grounds of work product privilege is

overruled except with respect to any pure legal opinions that were not communicated to the

Financial Defendants.

Interrogatory Numbers 6, 7, 8, and 9 seek to have RASC “identify all policies, procedures,

servicing guidelines, and loan level instructions and directions” that a particular Financial

Defendant provided to authorize collection of the debt at issue after November 16, 2016 or at any

point during the second foreclosure case. In other words, Plaintiff requests discovery of

information the Financial Defendants provided to RASC to support authorization to collect on the

Loan. This information is relevant because RASC’s legal advice only shields the Financial

Defendants from Plaintiff’s malicious prosecution claim if the advice was “predicated on a correct,

full, and fair statement of all material facts[.]”. Duval Jewelry Co. v. Smith, 102 Fla. 717, 721

(1931). To establish advice of counsel, the Financial Defendants will have to prove “that they (1)

fully disclosed to their attorney all material facts relevant to the advice for which the attorney was

retained to provide and (2) relied in good faith on the advice given.” United States v. Donaldson,

767 F. App’x 903, 910 (11th Cir. 2019) (citing United States v. Vernon, 723 F.3d 1234, 1269 (11th

Cir. 2013)). The Financial Defendants acknowledge this requirement in invoking the advice of

counsel defense. See DE 90 at ¶¶ 292 and 293; DE 85 at ¶¶333 and 334; DE 86 at ¶¶292 and 293;

DE 87 at ¶¶291 and 2924 (stating that they “made a full and honest disclosure of relevant facts

concerning the loan to RAS[C]”). Plaintiff is therefore entitled to discovery what information the

Financial Defendants provided to RASC to determine whether it was a “full, correct, and fair

statement of all material facts.”

Accordingly, RASC’s objections are overruled. Because I find that Financial Defendants

waive attorney-client privilege by implication, I do not address the parties’ other arguments.

4 MTGLQ qualifies that it relied upon the full and honest disclosure by Selene to RASC. DE 87 at ¶¶ 291 and 292.

Under Federal Rule of Civil Procedure 37, a party seeking discovery is entitled to its

reasonable expenses in making a motion if the Court grants the motion and the opposing party’s

nondisclosure lacked substantial justification, absent other circumstances making an award of

expenses unjust. Fed. R. Civ. P. 37(a)(S)(A). Here, I do not find that sanctions are warranted.

RASC’s position was not unreasonable that the attorney-client privilege belongs to the client and

that it was justified in asserting the privilege on behalf of its client absent express client waiver or

a court order finding waiver. Even though RASC did not prevail in withholding the protected

information, I do not find that it lacked substantial justification for attempting to do so. Therefore,

I decline to award Plaintiff his expenses incurred in filing the instant motion.

ACCORDINGLY, Plaintiff's Motion to Compel (DE 115) is GRANTED to the extent

that he seeks better answers to the interrogatories at issue. RASC shall serve amended responsive

answers to Interrogatory Numbers 3, 6, 7, 8, 9, and 12 on or before Friday, January 13, 2023.

DONE AND ORDERED in Chambers at Fort Pierce, Florida, this 5th day of January,

2023.

Seoaie Vouge

SHANIEK MILLS MAYNARD

U.S. MAGISTRATE JUDGE

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