The employees who rejected a reinstatement check are overseas. They still have to testify
West Virginia’s highest court has told PHH Mortgage it cannot use international treaty procedures to shield overseas employees from depositions.
The Supreme Court of Appeals denied a writ of prohibition sought by PHH on November 9, ruling that two servicer employees - one in India, one in the Philippines - must sit for depositions without Hague Convention procedures.
The case starts with a foreclosure gone sideways. After defaulting on their mortgage in Charles Town, West Virginia, the borrowers received a sale notice. The husband mailed a cashier’s check to PHH to cure the default on May 1, 2023. He says it arrived May 4.
When he called PHH on May 11, a representative said the check had not been received. He heard the same on May 25 and June 2. During that last call, he was told to stop payment and that wiring instructions would follow. While he waited, the home sold at a rescheduled foreclosure sale on June 8 - without his knowledge.
The couple counterclaimed against the buyer and filed third-party claims against PHH, the sale firm, and the bank, alleging breach of contract, tortious conduct, and violations of the West Virginia Consumer Credit Protection Act. They seek damages and to void the sale.
Discovery zeroed in on what happened to the check. PHH had produced documents, turned over recorded calls, and made a corporate representative available for a six-hour-plus deposition. But the couple wanted the employees who actually handled the payment - two of whom are overseas.
PHH argued Hague Convention procedures were required and the depositions duplicative. The circuit court disagreed, finding both qualified as “managing agents” - one rejected the couple’s reinstatement payment of more than $22,000, the other investigated and resolved the payment dispute. As managing agents, they could be deposed on notice alone.
Justice Flanigan, writing for the court, denied the writ and adopted a four-factor test for managing agent status - a first in West Virginia. Courts should consider: discretionary authority vested in the person; dependability in following employer directions; whether the individual identifies with the corporation or the adverse party; and supervisory authority in areas relevant to the litigation.
The employees “possess the information about what occurred because they made the decisions in that regard,” the court wrote.
For servicers with offshore operations, the message is direct: employees who make key decisions on borrower accounts can be treated as managing agents for discovery, wherever they sit.
This is a slip opinion and may be subject to correction before official publication.
