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U.S. Bank National Association v. Poblete

United States District Court, District of Columbia

February 14, 2017

U.S. BANK NATIONAL ASSOCIATION, Plaintiff,
v.
LUIS IVAN POBLETE, et al., Defendants.

          MEMORANDUM OPINION

          BERYL A. HOWELL, CHIEF JUDGE

         The plaintiff, U.S. Bank National Association (“U.S. Bank”), initiated this action against Luis Ivan Poblete, two trusts, and the “unknown occupants” of a commercial property foreclosed by U.S. Bank in 2010, alleging that the defendants unlawfully trespassed upon, converted, and interfered with the legal title of the foreclosed property. See generally Compl., ECF No. 1. Pending before the Court are U.S. Bank's motion for discovery sanctions against Poblete, motion to modify the scheduling order, and motion to enter default judgment against the two trusts. See Pl.'s Mot. Discovery Sanctions, Modify Sched. Order, & Enter Default J. (“Pl.'s Mot.”), ECF No. 41. For the reasons set forth below, U.S. Bank's motion for sanctions and motion for default judgment are granted, and U.S. Bank's motion to modify the scheduling order is granted as described below and is otherwise moot.

         I. BACKGROUND

         The background of this case is described in this Court's prior Memorandum Opinion regarding U.S. Bank's motion to dismiss Poblete's counterclaims and motion for partial summary judgment and, consequently, will be summarized only briefly here. See U.S. Bank Nat'l Assoc. v. Poblete (Poblete I), Civil Action No. 15-312 (BAH), 2016 WL 1089217 (D.D.C. Mar. 18, 2016). In 2004, Poblete purchased commercial real estate located at 1921 Rosedale Street N.E., Washington, D.C. (the “Property”). Id. at *1. On June 22, 2007, a first notice of foreclosure was recorded against him for the Property, and a second notice followed on November 21, 2007. Id. at *2. In an effort to prevent foreclosure, in 2008 Poblete filed a lawsuit in D.C. Superior Court alleging fraud (“2008 Lawsuit”). Id. While that lawsuit was pending, Poblete signed a deed transferring the Property from himself to Warmoesstraat Trust, as trustee for 1921 Rosedale Street Trust, (collectively, the “Trust Defendants”), but he did not record the deed until February 26, 2010, after a third and final notice of foreclosure was sent to Poblete on January 29, 2010. Id. The Property was foreclosed upon by U.S. Bank on March 4, 2010, and the following day, Poblete stipulated to dismissal of the 2008 Lawsuit, apparently believing that his purported transfer of the deed to the Property to a trust would prevent its foreclosure. Id.

         In October 2010, U.S. Bank filed a lawsuit in D.C. Superior Court against Poblete and the two Trust Defendants to enjoin Poblete from trespassing upon the Property, which he continued to claim as his own. Id. In March 2011, the Superior Court entered judgment against Poblete for damages arising from the trespass. Id. Shortly thereafter, however, Poblete filed another lawsuit in Superior Court to evict tenants renting the Property from U.S. Bank. Id. U.S. Bank intervened in that action to assert its rightful ownership of the Property. Id. at *3. The Superior Court dismissed the case with prejudice, holding that U.S. Bank is the rightful owner of the Property. Id. Undeterred, 1921 Rosedale Street Trust filed a lawsuit in D.C. Superior Court claiming that it was the rightful owner on the ground that Poblete conveyed the Property to the trust prior to the foreclosure sale. Id. Affirming the Superior Court's dismissal of the case, the D.C. Court of Appeals noted that the deed Poblete relied upon had not been recorded and thus was not effective. Id.

         Notwithstanding these three judgments in favor of U.S. Bank, Poblete continued to assert ownership over the Property by recording an additional deed, preventing U.S. Bank's representatives from accessing the Property, and removing U.S. Bank's locks on the Property and installing new ones. Id. In response to these actions, U.S. Bank filed the instant lawsuit against Poblete and the Trust Defendants, seeking to enjoin the defendants from filing claims relating to the Property without leave of Court and recording instruments pertaining to the Property, a declaratory judgment as to the ownership of the Property, ejectment of the defendants, and to quiet title against the defendants, as well as damages for their conversion, slander of title, and trespass of the Property. See generally Compl. While the Trust Defendants have never appeared in this action, Poblete responded to the Complaint, filing an answer and counterclaims against U.S. Bank and nine third-party defendants, including U.S. Bank's counsel, as well as a motion for recusal and motion to be heard by the Chief Judge. The latter two motions were denied, and U.S. Bank requested entry of an order of default from the Clerk of Court against the Trust Defendants, which default was entered on July 29, 2015. Poblete I, 2016 WL 1089217, at *4.[1]

         U.S. Bank then filed a motion for partial summary judgment on its claims to quiet title against the defendants and to eject the defendants from the Property, see Id. at *10 & n.9, and, jointly with one third-party defendant, a motion to dismiss Poblete's counterclaims, which motions were granted, see Id. at *1, *4.

         Pursuant to the Court's Order on U.S. Bank's motion to dismiss and for partial summary judgment, the parties were directed to meet and confer in accordance with Local Civil Rule 16.3 and file a report by April 1, 2016. See Order at 1-2, ECF No. 25. Seeking to comply with the Court's Order, U.S. Bank sent a letter to Poblete's address of record, which was delivered on March 22, 2016. See Pl.'s LCvR 16.3(D) Report, Ex. 2, ECF No. 27-2. In response, Poblete emailed U.S. Bank's counsel on March 28, 2016, and the parties proceeded to exchange a series of emails over the course of the next few days, in which Poblete requested U.S. Bank's consent to an extension until April 20, 2016, and U.S. Bank offered to consent to an extension of one week, which offer Poblete refused. See id., Ex. 3, ECF No. 27-3. On March 30, 2016, U.S. Bank filed its own report with the Court, see id., and Poblete filed a motion for an extension of time for forty-five days, see Mot. Extend Time Respond/Comply Order & Mem. Op., ECF No. 28. Poblete's motion was denied “in light of the plaintiff's timely filed [report] and the defendant's failure to confer in a timely manner with the plaintiff.” Min. Order, dated Apr. 1, 2016. In that Order, the Court also issued a Scheduling Order, as required by Federal Rule of Civil Procedure 16(b), providing that “fact discovery shall be completed by June 30, 2016” and “caution[ed] all parties that failure to comply with discovery requests may result in sanctions, pursuant to Fed.R.Civ.P. 37, including the drawing of negative inferences and awarding of default judgment against the non-complying party.” Id.

         Rather than focusing on completing discovery within the three-month period set out in the Scheduling Order, Poblete began generating multiple miscellaneous and frivolous motions consuming the resources of this Court and opposing counsel. For example, on April 25, 2016, Poblete filed a “Motion for Miscellaneous Relief, ” ECF No. 30, which was construed as a motion to dismiss under Fed.R.Civ.P. 12(b)(6). In denying the motion, the Court explained it was untimely and, in any event, that its argument “that ‘the Plaintiff's attorney has brought his action under a statutory scheme' that amounts to ‘an act of Treason' is groundless.” Min. Order, dated Apr. 27, 2016. Then, on May 24, 2016, U.S. Bank filed a Motion to Compel Defendant to Respond to Discovery. See Pl.'s Mot. Compel Def. Resp. Discovery, ECF No. 31. In support of that motion, U.S. Bank explained that it “served interrogatories and document requests on Poblete on April 13, 2016, ” and “Poblete had until April 16, 2016 to respond to those discovery requests” under the applicable rules. Id. at 1. On May 19, 2016, U.S. Bank's counsel “sent Poblete an email inquiring as to the status of the responses and offering a brief extension if Poblete contacted counsel by close of business the following day and agreed to provide complete responses.” Id. Receiving no response, U.S. Bank's counsel sent a further email on May 23, 2016, advising Poblete that U.S. Bank intended to file a motion to compel Poblete to respond to discovery. In response, Poblete sent an email stating, “Thank you [U.S. Bank's counsel] [b]ut I am going to be doing an appeal.” Id., Ex. 5, ECF No. 31-5.

         On the same day that U.S. Bank filed its motion to compel, Poblete filed with the Court two documents, both entitled “Praecipe to File UCC Affidavit of Publication, ” see ECF Nos. 32- 33, which were stricken because they were “irrelevant to the resolution of this matter, ” Min. Order, dated May, 26, 2016. In addition, Poblete filed a notice of appeal of the Court's Minute Order of April 27, 2016, denying Poblete's Motion for Miscellaneous Relief, see Notice Appeal, ECF No. 34, which appeal was dismissed by the D.C. Circuit on November 21, 2016, for lack of prosecution, see ECF No. 49-1. In the absence of any response from Poblete to the motion to compel, on June 13, 2016, the Court directed Poblete to show cause by June 24, 2016, why U.S. Bank's motion to compel should not be granted as conceded, as well as “why appropriate sanctions should not be imposed on the defendant for failure to comply with his discovery obligations.” Min. Order, dated June 13, 2016. In that order, Poblete was specifically warned that “multiple sanctions are authorized to be imposed against a disobedient party for failure to obey a Discovery Order, including the award of default judgment.” Id.

         Instead of responding to the Court's order to show cause, Poblete filed or attempted to file a number of documents with the Court, each of which was either unintelligible, repetitive, or irrelevant. For example, on June 28, 2016, Poblete filed a “Writ of Error” stating, inter alia, that he is “claiming trespassing against the Respondents, ” as well as “that the Respondents were involved in executing Fraud and Distortion in the foreclosure proceeding, ” ECF No. 37, which the Court construed as a motion for reconsideration of the dismissal of Poblete's counterclaims and denied “for the reasons already stated” in the Court's prior Memorandum Opinion in this matter, Min. Order, dated June 28, 2016. The next day, Poblete mailed to the Court two documents, a “Praecipe to File Revocation of Power of Attorney, ” for which this Court denied leave to file, see ECF No. 38, and an “Amended Writ of Error, ” see ECF No. 39, repeating language from the earlier document entitled Writ of Error, ECF No. 37, which the Court again construed as a motion for reconsideration and denied, see Min. Order, dated June 29, 2016.

         Having received no response to its order to show cause, on July 11, 2016, the Court granted U.S. Bank's motion to compel as conceded and provided that “the defendant shall respond to the plaintiff's propounded interrogatories and document requests by July 21, 2016. If the defendant fails to do so, appropriate sanctions shall be imposed, pursuant to Fed.R.Civ.P. 37, which sanctions may include the drawing of negative inferences and the award of default judgment against the defendant.” Min. Order, dated July 11, 2016. Yet again, however, Poblete failed to respond to the Court's order and instead, on July 15, 2016, filed an unintelligible and irrelevant document: a “Judicial Notice to Clerk of Court” attaching documentation purportedly reflecting a “lien by Luis Ivan Poblete who is a Private American International Organization, holder in due course, with superior claim against LUIS IVAN POBLETE which is a U.S. Bankrupt Citizenship Organization” in the amount of $999, 999, 999, 999.00. ECF No. 40.

         On July 25, 2016, U.S. Bank filed a motion for sanctions against Poblete, a motion for default judgment against the Trust Defendants, and a motion for extension of time to file dispositive motions in light of Poblete's failure to respond to the discovery order. Pl.'s Mot. at 1-4. The Court ordered Poblete to respond to these motions by August 15, 2016, warning Poblete once again that “[f]ailure to comply in a timely manner will result in the imposition of appropriate sanctions, pursuant to Fed.R.Civ.P. 37, which sanctions may include the drawing of negative inferences and the award of default judgment against the defendants, ” and stayed the briefing schedule on dispositive motions pending the resolution of U.S. Bank's motions. Min. Order, dated July 25, 2016.

         Unfortunately, but in light of Poblete's actions thus far, perhaps unsurprisingly, Poblete failed to respond to this order, instead filing four irrelevant documents requiring the Court and U.S. Bank to expend resources unnecessarily. On August 19, 2016, he filed a “Judicial Notice to the Court, ” ECF No. 44, providing that he “filed for involuntary Chapter 7 bankruptcy” and “all activity in this court should be on stay, ” which the Court construed as an invocation of the automatic stay requirement of 11 U.S.C. § 362(a) and denied in view of the bankruptcy court's dismissal of the action as nonmeritorious, see Min. Order, dated Sept. 6, 2016. Also on August 19, 2016, Poblete filed a “Mandatory Judicial Notice, ” ECF No. 45, of the filing of a “WRIT OF MANDAMUS” in D.C. Superior Court against counsel for the plaintiff in this case, this Court, the United States Marshal for the District of Columbia, and the United States Attorney for the District of Columbia. Then, on September 1, 2016, Poblete filed a “Judicial Notice, ” ECF No. 47, stating that Poblete is “giving notice of Indigenous Standing” and that “[t]his court is the incorrect venue, because I am now protected by International Law, ” which filing was followed the next day, on September 2, 2016, by an “Amended Writ of Error”-substantially similar to the documents filed by Poblete at ECF Nos. 37 and 39-stating yet again that he is “claiming trespassing against the Respondents” and “that the Respondents were involved in executing Fraud and Distortion in the foreclosure proceeding, ” ECF No. 48. These motions were construed as motions for reconsideration and denied.

         U.S. Bank's motion for sanctions, motion for default judgment, and motion to stay the scheduling order are now ripe for consideration.

         II. LEGAL STANDARD

         A. Motion for Sanctions

         Federal Rule of Civil Procedure 37 provides that a district court may order sanctions, including a default judgment, for failure “to obey an order to provide or permit discovery.” Fed.R.Civ.P. 37(b)(2)(A). “[T]hree basic justifications . . . support the use of dismissal or default judgment as a sanction for misconduct.” Webb v. District of Columbia, 146 F.3d 964, 971 (D.C. Cir. 1998). “First, the court may decide that the errant party's behavior has severely hampered the other party's ability to present his case, ” i.e., “that the other party ‘has been so prejudiced by the misconduct that it would be unfair to require him to proceed further in the case.'” Id. (quoting Shea v. Donohoe Constr. Co., 795 F.2d 1071, 1074 (D.C. Cir. 1986)). A second justification is “the prejudice caused to the judicial system when the party's misconduct has put ‘an intolerable burden on a district court by requiring the court to modify its own docket and operations in order to accommodate the delay.'” Id. (quoting Shea, 795 F.2d at 1075). “[F]inally, the court may consider the need ‘to sanction conduct that is disrespectful to the court and to deter similar misconduct in the future.'” Id. (quoting Shea, 795 F.2d at ...


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