Abrahamian v Loandepot.com LLC
Filing
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ORDER denying Defendant's 47 Motion for Leave to Amend its Answer and Affirmative Defenses. Signed by Judge Susan M. Brnovich on 1/28/2025. (ESG)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Lee Abrahamian,
Plaintiff,
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v.
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loanDepot.com LLC,
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No. CV-23-00728-PHX-SMB
ORDER
Defendant.
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Before the Court is Defendant loanDepot.com LLC’s (“loanDepot”) Motion for
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Leave to Amend its Answer and Affirmative Defenses (Doc. 47). The parties fully briefed
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the pending Motion (see Doc. 48 (Plaintiff Lee Abrahamian’s Response); Doc. 50
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(loanDepot’s Reply)). Having considered the parties’ briefings and the applicable law, the
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Court will deny the Motion.
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I.
BACKGROUND
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The issue before the Court is narrow—whether leave to amend is warranted to
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supplement a stricken affirmative defense that reserved the right to assert arbitration nearly
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two years after this lawsuit was filed.
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Plaintiff Lee Abrahamian filed this lawsuit in April 2023. (Doc. 1 (Complaint);
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Doc. 14 (First Amended Complaint) at 2–4.) Abrahamian claims entitlement to statutory
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damages after he received allegedly unsolicited phone calls and a text message from
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loanDepot in violation of the Telephone Consumer Protection Act. (Doc. 14 at 2–4, 6.) In
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March 2024, following various motions and extensions, loanDepot filed its Answer to the
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First Amended Complaint and asserted thirty-one affirmative defenses. (See Doc. 31.)
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This Court entered a Scheduling Order on April 11, 2024, setting a sixty-day deadline (June
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10, 2024) to file amended pleadings. (Doc. 33 at 1.) On May 6, 2024, Abrahamian moved
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to strike various defenses. (Doc. 34.) Relevant here, the Court granted Abrahamian’s
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Motion, striking loanDepot’s affirmative defense where it “reserve[d] the right to assert
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arbitration.” (Doc. 46 at 8; see also Doc. 31 at 14.) In doing so, the Court agreed with
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loanDepot that asserting affirmative defenses does not require meeting the Twombly/Iqbal
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pleading standard, but rather under a lower standard, a defendant must provide “fair notice”
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by stating in general terms the nature and grounds for the defense (Doc. 46 at 6–7, 8); see
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generally Ader v. SimonMed Imaging Inc., 324 F. Supp. 3d 1045, 1049 (D. Ariz. 2018)
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(“The Supreme Court has long held that fair notice requires only a plain statement of the
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nature and grounds of a claim or defense.”). However, the Court concluded that loanDepot
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failed even under that lesser standard.
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LoanDepot now moves for leave to amend its stricken arbitration defense to state:
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“loanDepot reserves the right to assert arbitration because pursuant to loanDepot’s records,
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on July 25, 2015, Plaintiff visited bills.com and entered his phone number and accepted
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the disclosure, which included an arbitration provision.” (Doc. 47-1 at 14.)
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II.
LEGAL STANDARD
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Federal Rule of Civil Procedure 15(a) requires that leave to amend be “freely give[n]
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when justice so requires.” Leave to amend should not be denied unless “the proposed
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amendment either lacks merit or would not serve any purpose because to grant it would be
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futile in saving the plaintiff’s suit.” Universal Mortg. Co. v. Prudential Ins. Co., 799 F.2d
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458, 459 (9th Cir. 1986). Therefore, “a district court should grant leave to amend even if
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no request to amend the pleading was made, unless it determines that the pleading could
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not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122,
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1127 (9th Cir. 2000) (cleaned up).
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III.
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DISCUSSION
As a preliminary matter, the Court first addresses procedural arguments and issues
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before reaching whether leave to amend is warranted.
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Abrahamian argues the Court should deny loanDepot’s Motion for its failure to
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comply with Local Rule of Civil Procedure 15.1 and failure to request an amendment to
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the Court’s Scheduling Order (Doc. 33) before seeking leave to amend. (Doc. 48 at 2–6.)
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Local Rule 15.1 requires a movant to “must attach a copy of the proposed amended
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pleading as an exhibit to the motion, which must indicate in what respect it differs from
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the pleading which it amends, by bracketing or striking through the text to be deleted and
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underlining the text to be added.” LRCiv. 15.1(a) (emphasis added). LoanDepot did attach
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a proposed Amended Answer, however, it failed to bracket or strike through the amended
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text. (See Doc. 47-1 at 14.) Abrahamian complains that the failure to adhere to the rule
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has “deprived [his] ability to review and address the actual proposed pleading.” (Doc. 48
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at 2.) LoanDepot attached a compliant proposed Amended Answer to its Reply. (Doc.
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50-1.) Given that the instant Motion deals with a single affirmative defense regarding the
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narrow arbitration issue, Abrahamian aptly briefed the Motion, and loanDepot
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acknowledge and corrected its deficient filing, the Court will exercise its discretion and
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decline to summarily dismiss the Motion on this ground.
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Next, Federal Rule of Civil Procedure 16(b)(4) requires a party to request the Court
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to modify a schedule “only for good cause.” “A court’s evaluation of good cause is not
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coextensive with an inquiry into the propriety of the amendment under . . . Rule 15.”
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Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). Courts may
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deny a motion for leave to amend where the movant fails to request a modification of the
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scheduling order prior, however, courts may also construe untimely motions for leave to
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amend as a request to modify a scheduling order. MiCamp Sols. LLC v. Nat’l Processing
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LLC, No. CV-19-05468-PHX-MTL, 2021 WL 289661, at *2 (D. Ariz. Jan. 28, 2021).
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Here, loanDepot, although not explicitly requesting a modification or separately moving
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for a modification, has argued there is good cause to modify the Scheduling Order under
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Rule 16(b)(4). (Doc. 47 at 6–7.) LoanDepot contends that it has shown good cause because
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it filed its Answer reserving its right to compel arbitration on March 27, 2024. The parties
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then met and conferred regarding the various affirmative defenses and loanDepot indicated
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that it planned to amend its arbitration defense at a later date. To explain the delay in
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seeking leave to amend, loanDepot explains that it waited because Abrahamian filed his
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Motion to Strike on May 6, 2024 and planned to wait on the Court’s ruling. (Id.)
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Additionally, loanDepot posits that its delay was in the interest of judicial efficiency, thus
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further supporting good cause. (Id. at 8–9.)
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The Court finds that loanDepot’s arguments are consistent with a request to modify
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the Scheduling Order to permit it to seek leave to amend its Answer. Therefore, the Court
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will treat the arguments as such and evaluate whether loanDepot has demonstrated good
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cause. The “good cause” standard primarily considers the diligence of the party seeking
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the amendment. Johnson, 975 F.2d at 609 (“[C]arelessness is not compatible with a finding
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of diligence and offers no reason for a grant of relief.”). “The district court may modify
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the pretrial schedule ‘if it cannot reasonably be met despite the diligence of the party
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seeking the extension.’” Id. (citation omitted). The focus of the Court’s inquiry is on the
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moving party’s reasons for seeking a modification, and if the party was not diligent, the
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inquiry should end. Id.
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First, looking at the temporal concerns of loanDepot’s request, as Abrahamian
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points out, loanDepot was aware of the need to and intended to amend its arbitration
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defense around April 23, 2024. (See Doc. 48 at 4–6; see also Doc. 49-1 at 1, 5–6.) Prior
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to this, the Court’s April 11, 2024 Scheduling Order set the deadline to amend pleadings
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for June 10, 2024. (Doc. 33 at 1.) LoanDepot filed its Response to Abrahamian’s Motion
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to Strike on May 20, 2024, in which it reiterated that it would amend its answer to include
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additional factual support for its arbitration defense. (See Doc. 36 at 13.) Rather than
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seeking leave to amend its Answer and moot the issue, loanDepot waited to see the
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disposition of that Motion. See, e.g., BMW of N. Am., LLC v. WIN.IT Am., Inc., No.
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CV178826PSGMRWX, 2019 WL 12536807, at *3 (C.D. Cal. Feb. 21, 2019) (finding a
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lack of diligence where a party decided to wait and see rather than make reasonable efforts
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to investigate and litigate their case). Further, loanDepot does not contend that the
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information added in its amendment was unavailable, which would have otherwise
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rendered it impossible for loanDepot to add unknown facts before the amendment deadline.
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It is not clear to the Court why the amendment is necessary, but evidently,
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loanDepot’s concern pertains to preservation of its defense. See (Doc. 47 at 7 (arguing that
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“loanDepot acted diligently in preserving its arbitration defense”).) However, failure to
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raise the right to assert arbitration as an affirmative defense is not inconsistent with the
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right to arbitrate a case. See Roman v. Jan-Pro Franchising Int'l, Inc., 342 F.R.D. 274, 292
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(N.D. Cal. 2022) (collecting Ninth Circuit cases). Whether a party states that it has a right
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to arbitration in pleadings is relevant to whether a party has engaged in acts that are
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inconsistent with the right to arbitrate, and thus waived its right, but the reservation itself
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is not dispositive to the issue. See Martin v. Yasuda, 829 F.3d 1118, 1125 (9th Cir. 2016).
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Therefore, as a matter of judicial efficiency, allowing the amendment seemingly makes no
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difference.
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Thus, the Court finds that loanDepot has not adequately explained its delay in
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seeking leave to amend its Answer and thereby has not demonstrated good cause to modify
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the scheduling order. As such, the request is denied. Absent a modification to this Court’s
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Scheduling Order, loanDepot’s pending Motion is untimely and thus denied.
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IV.
CONCLUSION
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Accordingly,
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IT IS HEREBY Ordered denying loanDepot’s Motion for Leave to Amend its
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Answer and Affirmative Defenses (Doc. 47).
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Dated this 28th day of January, 2025.
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