Veloz v. Green Tree Servicing LLC
Filing
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ORDER granting 23 Motion to Amend/Correct. Signed by Judge David G Campbell on 11/21/2013.(DGC, nvo)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Maria Veloz,
No. CV-13-00915-PHX-DGC
Plaintiff,
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v.
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ORDER
Green Tree Servicing LLC,
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Defendant.
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Plaintiff Maria Veloz has filed a motion to amend her complaint. Doc. 23. The
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motion has been fully briefed. Docs. 23, 24, 27. No party has requested oral argument.
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For the reasons set forth below, the Court will grant Plaintiff’s motion.
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Plaintiff’s original complaint alleged violations of the Real Estate Settlement
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Procedures Act (“RESPA”), 12 U.S.C. § 2605 et seq., and the Arizona Consumer Fraud
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Act (“ACFA”) A.R.S. § 44-1521 et seq. Doc. 23 at 6. Specifically, Plaintiff alleged that
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Defendant, a servicer of mortgage loans to whom the Plaintiff’s Deed of Trust was
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assigned, failed to make timely payments on an insurance policy, resulting in
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cancellation of coverage and subsequent denial of a claim for water damage by Plaintiff.
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Id.
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In her proposed amended complaint, Plaintiff seeks to add a claim of negligence
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against Defendant. Doc. 23 at 12. The additional claim asserts that Defendant’s failure
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to pay the insurance premium on time was a breach of Defendant’s duty to Plaintiff, and
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that Defendant acted negligently and unreasonably in servicing Plaintiff’s loan. Id.
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I.
Rule 15 Standard Regarding Amendments to Pleadings.
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Under Rule 15, the Court “should freely give leave [to amend pleadings] when
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justice so requires.” Fed. R. Civ. P. 15(a)(2). The policy in favor of leave to amend must
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not only be heeded, see Foman v. Davis, 371 U.S. 178, 182 (1962), it must be applied
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with extreme liberality, see Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712
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(9th Cir. 2001). This liberality “is not dependent on whether the amendment will add
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causes of action or parties.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th
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Cir. 1987).
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Motions to amend should be granted unless the district court determines that there
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has been a showing of: (1) undue delay, (2) bad faith or dilatory motives on the part of
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the movant, (3) repeated failure to cure deficiencies by previous amendments, (4) undue
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prejudice to the opposing party, or (5) futility of the proposed amendment. Foman v.
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Davis, 371 U.S. 178, 182 (1962). “Generally, this determination should be performed
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with all inferences in favor of granting the motion.” Griggs v. Pace Am. Grp., Inc., 170
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F.3d 877, 880 (9th Cir. 1999) (citing DCD Programs, 833 F.2d at 186). The party
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opposing amendment bears the burden of showing a reason for denying a motion to
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amend. DCD Programs, 833 F.2d at 187.
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II.
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Defendant argues that Plaintiff’s proposed amendment is futile. Doc. 24 at 4. A
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motion for leave to amend is futile only “if no set of facts can be proved under the
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amendment to the pleadings that would constitute a valid and sufficient claim or
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defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988); see also
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Gabrielson v. Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir. 1986).
Futility.
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Defendant argues that Plaintiff’s new negligence claim is futile because Plaintiff
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has failed to identify any duty owed Plaintiff by Defendant. Doc. 24 at 5. Defendant
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argues that no “special relationship” exists between Plaintiff and Defendant that could
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form the basis of a duty. Id. As a result, Defendant argues that Plaintiff’s amended
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claim cannot meet the requirements of Rule 8 and the pleading standards articulated in
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) and Bell Atlantic Corp. v. Twombly, 550
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U.S. 544, 555 (2007). The absence of a duty would make any claim for negligence
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futile and subject to dismissal. Gipson v. Kasey, 150 P.3d 228, 230 (2007).
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Contractual relationships can give rise to duties of care. Gilbert Tuscany Lender,
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LLC v. Wells Fargo Bank, 307 P.3d 1025, 1028 (App. 2013), citing Gipson, 150 P.3d at
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232. Here, Plaintiff asserts that its Deed of Trust provides that Plaintiff would pay to
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Defendant “Funds” for taxes and insurance.
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sufficient statement of a contractual relationship to allege a duty by Defendant to pass
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the funds on to the insurer.
Doc. 23, ¶ 14.
This allegation is a
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Additionally, no “special relationship” is required between Plaintiff and
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Defendant to create a duty of care. Gipson, 150 P.3d at 232. Rather, “when public
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policy has supported the existence of a legal obligation, courts have imposed duties for
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the protection of persons with whom no preexisting ‘relationship’ existed.” Id. at 232.
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Statutes may be an appropriate expression of public policy upon which a duty of care
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can be based, id. at 233, and Plaintiff’s claim of negligence in her amended complaint
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rests on the timeliness of Defendant’s insurance premium payments, an obligation
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required under RESPA, 12 U.S.C. § 2605(g) (“the servicer shall make payments from
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the escrow account for such taxes, insurance premiums, and other charges in a timely
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manner as such payments become due”). Plaintiff asserts that Defendant was assigned
the Deed of Trust to Plaintiff’s residential real estate, that Defendant is a servicer under
RESPA, and that Defendant failed to make payments on time. Doc. 23 at 7.
These factual allegations are sufficient to state a claim that Defendant owed a
duty of care to Plaintiff, and that the duty was breached. Iqbal, 556 U.S. at 678 (noting
that a complaint must “contain sufficient factual matter, accepted as true,” to allow the
court to draw reasonable inference that defendant is liable”).
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IT IS ORDERED that Plaintiff’s motion to amend (Doc. 23) is granted.
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Dated this 21st day of November, 2013.
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