Schneider et al v. CitiMortgage, Inc. et al, No. 5:2013cv04094 - Document 595 (D. Kan. 2018)
Court Description: MEMORANDUM AND ORDER denying 588 Motion to Alter Judgment. See order for details. Signed by U.S. District Senior Judge Sam A. Crow on 11/16/18.(msb)
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Schneider et al v. CitiMortgage, Inc. et al Doc. 595 I N THE UNI TED STATES DI STRI CT COURT FOR THE DI STRI CT OF KANSAS RANDALL A. SCHNEI DER and AMY L. SCHNEI DER Plaint iffs, v. No. 13- 4094- SAC CI TI MORTGAGE, I NC., et . al., Defendant s. MEMORANDUM AND ORDER The case com es before t he court on t he plaint iffs’ filing of Oct ober 17, 2018, ent it led, “ Mot ion t o Reconsider Sum m ary Judgm ent as t o t he Consum er Prot ect ion Act .” ECF# 588. This m ot ion addresses t he court ’s order filed Sept em ber 19, 2018, t hat decided all pending m ot ions. ECF# 586. The court ’s ruling, in part , grant ed sum m ary j udgm ent for defendant s on t he plaint iffs’ claim s under t he Kansas Consum er Prot ect ion Act ( “ KCPA” ) , K.S.A. 50- 623 et . seq. I d. at pp. 8- 20, 48- 54. Specifically, t he court ’s ruling j oined a growing num ber of ot hers t o conclude t hat t he Act clearly and unam biguously defines “ supplier” t o expressly exclude regulat ed banks. Despit e it s t it le, t he plaint iffs’ m ot ion does not ask t he court t o reconsider t his ruling. Nor does t he m ot ion assert t he court erred in so ruling, as t he plaint iffs explicit ly not e in t heir reply. ECF# 594, p. 3. I nst ead, Dockets.Justia.com t he plaint iffs essent ially seek t he court ’s leave t o go forward wit h t heir consum er prot ect ion claim s as if brought under t he laws of Delaware, not Kansas. They couch t heir request on anot her part of t he court ’s sum m ary j udgm ent order which enforced a choice- of- law provision found in t he 2007 Addendum t o t heir prom issory not e and so applied Delaware law t o t he breach of cont ract claim s. To t he plaint iffs, t he court ’s ruling is an “ int ervening change in cont rolling law” under D. Kan. Rule 7.3( b) ( 1) which j ust ifies seeking relief t o alt er or am end j udgm ent under Fed. R. Civ. P. 59( e) . They also ask t hat t heir filing be read as alt ernat ively assert ing unfair surprise and ot her reasons for relief under Fed. R. Civ. P. 60( b) ( 1) and ( 6) . No m at t er t he procedural avenue, t he plaint iffs’ prem ise is t he sam e, t he court ’s “ sum m ary j udgm ent ruling effect ively changed t he law t he case would be decided under or alt ernat ively t o prevent m anifest inj ust ice where a consum er has pursued t heir claim s and t he conduct is act ionable under t he Delaware st at ut ory const ruct .” ECF# 588, p. 2. Wit hout analyzing t he applicable legal aut horit ies, and relying principally on t heir views of fairness, t he plaint iffs cont end t hat if Delaware law applies t o som e of t heir claim s, “ t hen all claim s should be det erm ined under Delaware law rat her t han have t he Defendant benefit from select ive applicat ion t o som e legal issues and not ot hers wit h t he choice of law provision t hey creat ed, ident ified, and enforced.” I d.; see ECF# 589, pp. 2- 3, 5. The plaint iffs cit e no aut horit ies for t his argum ent . I n short , t heir m ot ion lacks a cogent legal 2 basis for now assert ing Delaware law as t he basis for t heir prior Kansas consum er prot ect ion law claim s. The plaint iffs cent er t heir claim s of fairness on t he defendant s’ delay in raising t he Delaware choice- of- law provision. The defendant s respond first by observing t hat t he plaint iffs’ m ot ion goes beyond asking for reconsiderat ion but act ually seeks t o am end t he pret rial order as referenced in t he plaint iffs’ prayer for relief, “ allow am endm ent , furt her briefing, and a new pret rial order for rem edy for consum er prot ect ion . . . .” ECF# 588, p. 2. I n reply, t he plaint iffs agree wit h t his reading. The pret rial order present ly provides t hat t he “ part ies believe and agree t hat t he subst ant ive issues in t his case are governed by t he following law.” ECF# 519, p. 2. And part icularly, t he plaint iffs’ claim s for violat ions of KCPA, decept ive and unconscionable act s and pract ices, “ are governed by Kansas law.” I d. The part ies recorded t herein t heir disagreem ent over whet her Kansas or Delaware law governed t heir separat e breach of cont ract claim s. I d. The part ies, however, did not record, reserve or reference any issue over Delaware law governing t he plaint iffs’ consum er prot ect ion claim s, including in t he event of a lat er ruling of Delaware’s applicabilit y t o t he breach of cont ract claim s. The pret rial order is t o “ cont rol t he subsequent course of t he act ion unless m odified by consent of t he part ies and court , or by an order of t he court t o prevent m anifest inj ust ice.” D. Kan. Rule 16( b) ; see Fed. R. Civ. P. 16( e) ( “ The court m ay m odify t he order issued aft er a final pret rial 3 conference only t o prevent m anifest inj ust ice.” ) . “ The burden of dem onst rat ing m anifest inj ust ice falls upon t he part y m oving for m odificat ion.” Koch v. Koch I ndust ries, I nc., 203 F.3d 1202, 1222 ( 10t h Cir.) , cert . denied, 531 U.S. 926 ( 2000) . The plaint iffs have not carried t heir burden. They st ipulat ed t o Kansas law governing t heir consum er prot ect ion claim s and neglect ed t o t im ely preserve any issue over t he applicabilit y of anot her st at e law. See id. at 1223 ( “ This court should also consider whet her t he part y favoring am endm ent of t he pret rial order form ally and t im ely m oved for such m odificat ion in t he t rial court .” ) . The prej udice t o t he defendant s is plain. The defendant s pursued discovery, briefed and prevailed at sum m ary j udgm ent on t he plaint iffs’ Kansas consum er prot ect ion claim s by relying significant ly on t he KCPA’s st at ut ory t erm s, including it s unique definit ion of “ supplier.” The am endm ent would require defendant s t o relit igat e t hese consum er prot ect ion claim s under a new st at e st at ut ory schem e. The plaint iffs m ake no persuasive show ing t hat Delaware law and Kansas law are so parallel as t o require no m ore t han an ident ical present at ion of t he sam e fact s and argum ent s. Even if t hey had m ade t his showing, t he court would not be inclined t o call t he prej udice t o t he defendant s m inim al or insubst ant ial. Considering t he prot ract ed and cont ent ious hist ory t o t his case, allowing t he plaint iff t o lose under Kansas law and t o t ry again under Delaware law is cert ainly inefficient and lacks t he t enor of good fait h. The circum st ances m oving t he plaint iffs t o seek t his 4 am endm ent do not const it ut e m anifest inj ust ice. The court denies t he plaint iffs’ effort s t o am end t he pret rial order. The plaint iffs com e forward w it h no viable argum ent for how t he court ’s choice- of- law findings on t heir breach of cont ract claim s now changes t he law governing t heir consum er prot ect ion claim s. This is not an int ervening change in t he cont rolling law, as t he choice- of- law provision in t he prom issory not e does not govern, and was never argued by t he part ies as governing, t he plaint iffs’ allegat ions of KCPA violat ions. The court ’s ruling as t o t he choice- of- law did not address, let alone change, t hat t he KCPA governed t he plaint iffs’ consum er prot ect ion claim s. I nst ead, t he alleged consum er prot ect ion violat ions t ook place in Kansas, and t he part ies properly agreed t hat Kansas is t he place of t he wrong and t hat t he KCPA governed. See Griffin v. Securit y Pacific Aut om ot ive Financial Services Corp., 25 F. Supp. 2d 1214, 1216- 17 ( D. Kan. 1998) ; cf. St one St . Services, I nc. v. Daniels, 2000 WL 1909373, at * 4 ( E.D. Pa. 2000) ( KCPA t rum ps choice of law provision) . There is no unfair surprise in t he court deciding t he applicabilit y of t he choice- of- law provision in t he part ies’ prom issory not e concerning t he m eaning, operat ion and enforcem ent of t he not e. This issue was raised and preserved in t he pret rial order. The plaint iffs present no viable grounds for relief under Rules 59( e) or 60( b) . 5 I T I S THEREFORE ORDERED t hat t he plaint iffs’ “ Mot ion t o Reconsider Sum m ary Judgm ent as t o t he Consum er Prot ect ion Act ” ( ECF# 588) is denied. Dat ed t his 16t h day of Novem ber, 2018 at Topeka, Kansas. s/ Sam A. Crow Sam A. Crow, U.S. Dist rict Senior Judge 6
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