Burton v. Nationstar Mortgage LLC

Filing 43

ORDER GRANTING Plaintiff's Motion to Amend the Complaint re 35 , signed by Magistrate Judge Jennifer L. Thurston on 12/23/2013. (Hall, S)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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DENNIS BURTON, on behalf of himself and )
all other similarly situated,
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Plaintiff,
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v.
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NATIONSTAR MORTGAGE, LLC, a
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Delaware limited liability company,
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Defendant.
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Case No.: 1:13-cv-00307 - LJO - JLT
ORDER GRANTING PLAINTIFF’S MOTION TO
AMEND THE COMPLAINT
(Doc. 35)

Plaintiff Dennis Burton seeks leave to file a Second Amended Complaint to alter the class

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definition. (Doc. 35.) Defendant Nationstar Mortgage, LLC (“Defendant” or “Nationstar”) filed a

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statement of non-opposition to the motion on December 9, 2013. (Doc. 39.) The Court found the

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matter suitable for decision without oral argument pursuant to Local Rule 230(g), and took the motion

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under submission on December 19, 2013. For the reasons set forth below, Plaintiff’s motion for leave

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to file a Second Amended Complaint is GRANTED.

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I.

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Relevant Procedural History
Plaintiff initiated this action by filing a complaint on March 4, 2013, alleging Defendant had an

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“intentional and systematic failure to provide permanent loan modifications to borrowers to signed

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Permanent Modification Agreements… under the Home Affordable Modification Program.” (Doc. 1

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at 2). Plaintiff sought to bring the action on behalf of himself and “a class of similarly situated
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homeowners across the nation,” with a class including:
All homeowners nationwide who had executed permanent modification agreements
(“PMAs”) with Nationstar from January 2008 through the present whose PMA Nationstar
refused to honor by permanently modifying the borrowers’ loans.

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(Id. at 2, 9.) On April 24, 2013, Defendant filed a motion to dismiss pursuant to Rule 12 of the Federal

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Rules of Civil Procedure (Doc. 8), which was granted in part by the Court on May 29, 2013 (Doc. 14.)

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The Court dismissed Plaintiff’s claims for breach of contract, implied covenant, promissory estoppel,

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and fraud with leave to amend; his other claims were dismissed with prejudice. (Doc. 14 at 27.) In

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compliance with the Court’s order, Plaintiff filed a First Amended Complaint on June 17, 2013, and

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Defendant filed its Answer on July 8, 2013. (Docs 15-16.) After Plaintiff filed a motion to strike

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Nationstar’s affirmative defenses, Defendant filed a First Amended Answer on September 20, 2013.

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(Doc. 30.)

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On November 25, 2013, Plaintiff filed the motion now pending before the Court, seeking to file

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a Second Amended Complaint. (Doc. 35.) He contends amendment of the class definition is warranted

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following discovery related to the size and scope of the putative class. (Id. at 3-4.) Plaintiff asserts the

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class claims “will continue to center on Nationstar’s failure to provide a permanent modification after

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countersigning Plaintiff’s PMA.” (Id. at 6.) As such, Plaintiff argues that “the amended class

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definition will not ‘significantly hinder’ Nationstar’s ability to defend against Burton’s claims or

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otherwise cause undue prejudice.” (Id. at 7.)

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II.

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Legal Standards for Leave to Amend
Under Fed. R. Civ. P. 15(a), a party may amend a pleading once as a matter of course within 21

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days of service, or if the pleading is one to which a response is required, 21 days after service of a

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motion under Rule 12(b), (e), or (f). “In all other cases, a party may amend its pleading only with the

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opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). Here, Defendants filed

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an answer on September 20, 2013 to Plaintiff’s First Amended Complaint. Therefore, Plaintiff requires

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either consent of the defendants or leave of the Court to file an amended complaint.1

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Although Defendant has filed a notice of non-opposition to the motion, the parties did not file a stipulation for
Plaintiff to file a Second Amended Complaint. According to Defendant’s counsel, the proposed pleading was not provided
with sufficient time for review prior to the deadline for a stipulation to be filed or for Plaintiff to file a motion to amend.
(Doc. 39 at 2.)

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Granting or denying leave to amend a complaint is in the discretion of the Court, Swanson v.

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United States Forest Service, 87 F.3d 339, 343 (9th Cir. 1996), though leave should be “freely give[n]

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when justice so requires.” Fed. R. Civ. P. 15(a)(2). “In exercising this discretion, a court must be

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guided by the underlying purpose of Rule 15 to facilitate decision on the merits, rather than on the

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pleadings or technicalities.” United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). Consequently,

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the policy to grant leave to amend is applied with extreme liberality. Id.
There is no abuse of discretion “in denying a motion to amend where the movant presents no

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new facts but only new theories and provides no satisfactory explanation for his failure to fully develop

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his contentions originally.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995); see also Allen v. City

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of Beverly Hills, 911 F.2d 367, 374 (9th Cir. 1990). After a defendant files an answer, leave to amend

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should not be granted where “amendment would cause prejudice to the opposing party, is sought in bad

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faith, is futile, or creates undue delay.” Madeja v. Olympic Packers, 310 F.3d 628, 636 (9th Cir. 2002)

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(citing Yakima Indian Nation v. Wash. Dep’t of Revenue, 176 F.3d 1241, 1246 (9th Cir. 1999)).

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III.

Discussion and Analysis

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In evaluating a motion to amend under Rule 15, the Court may consider (1) whether the plaintiff

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has previously amended his complaint, (2) undue delay, (3) bad faith, (4) futility of amendment, and (5)

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prejudice to the opposing party. Foman v. Davis, 371 U.S. 178, 182 (1962); Loehr v. Ventura County

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Community College Dist., 743 F.2d 1310, 1319 (9th Cir. 1984). These factors are not of equal weight

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as prejudice to the opposing party has long been held to be the most critical factor to determine whether

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to grant leave to amend. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003)

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(“As this circuit and others have held, it is the consideration of prejudice to the opposing party that

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carries the greatest weight”); Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990).

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A.

Prior amendments

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The Court’s discretion to deny an amendment is “particularly broad” where a plaintiff has

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previously amended his complaint previously. Allen, 911 F.2d at 373. Here, the amendment sought is

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the would be the second amendment by Plaintiff. Previously, the Court warned that it “will grant Mr.

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Burton no further attempt to plead claims.” (Doc. 14 at 28.) However, the proposed amendment

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relates to the scope of the class definition. Therefore, this factor does not weigh against amendment.
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B.

Undue delay

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By itself, undue delay is insufficient to prevent the Court from granting leave to amend

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pleadings. Howey v. United States, 481 F.2d 1187, 1191(9th Cir. 1973); DCD Programs, Ltd. v.

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Leighton, 833 F.2d 183, 186 (9th Cir. 1986). However, in combination with other factors, delay may

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be sufficient to deny amendment. See Hurn v. Ret. Fund Trust of Plumbing, 648 F.2d 1252, 1254 (9th

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Cir. 1981). Evaluating undue delay, the Court considers “whether the moving party knew or should

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have known the facts and theories raised by the amendment in the original pleading.” Jackson, 902

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F.2d at 1387; see also Eminence Capital, 316 F.3d at 1052. In addition, the Court should examine

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whether “permitting an amendment would . . . produce an undue delay in the litigation.” Id. at 1387.

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Here, Plaintiff argues he “is not acting with undue delay,” because he first informed Defendant

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in August 2013 that he “believed the class should include all persons who did not receive a timely

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modification,” and “[s]ince that time, Plaintiff … continued to seek information from Nationstar

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regarding the size of the current putative Class.” (Doc. 35 at 7.) According to Plaintiff, “it wasn’t

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until October 10, 2013 that Nationstar confirmed that there are no other members, besides Plaintiff

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Burton, in the current putative Class.” (Id.) During a status conference with the Court on October 25,

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2013, Plaintiff informed the Court that he intended to seek leave to file a Second Amended Compliant,

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and the Court set a deadline of November 25, 2013, with which Plaintiff complied. (Id.; see also Doc.

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34.) Further, it does not appear the amendment would cause a delay in the litigation. Consequently,

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this factor does not weigh against amendment.

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C.

Bad faith

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Plaintiff asserts he requested the defendant stipulate to the filing of an amended complaint, but

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did not receive a response. (Doc. 35 at 5.) According to Defendant, the reason a stipulation was not

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filed was the delay in receiving the proposed Second Amended Complaint from Plaintiff. (Doc. 39 at

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2.) Regardless, Plaintiff notified Defendant and the Court that he would seek to amend the pleading.

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Thus, Plaintiff did not act in bad faith, and this factor does not weigh against amendment.

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D.

Futility of Amendment

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“Futility of amendment can, by itself, justify the denial of a motion for leave to amend.”

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Bonin, 59 F.3d at 845; see also Miller v. Rykoff-Sexton, 845 F.2d 209, 214 (9th Cir. 1988) (“A motion
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for leave to amend may be denied if it appears to be futile or legally insufficient”). Futility may be

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found where added claims are duplicative of existing claims or patently frivolous, or both. See Bonin,

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59 F.3d at 846.
Plaintiffs assert amendment is not futile because “Plaintiff reasonably believes that he and the

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other putative proposed Class members suffered damages as a result of Nationstar’s failure to timely

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record or implement modifications.” (Doc. 35 at 7). Because Plaintiff does not seek to amend his

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claims and only the class definition, this factor does not weigh against amendment.

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E.

Prejudice to the opposing party

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The most critical factor in determining whether to grant leave to amend is prejudice to the

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opposing party. Eminence Capital, 316 F.3d at 1052. The burden of showing prejudice is on the party

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opposing an amendment to the complaint. DCD Programs, 833 F.2d at 187. There is a presumption

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under Rule 15(a) in favor of granting leave to amend where prejudice is not shown. Eminence

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Capital, 316 F.3d at 1052. As noted above, Defendant does not oppose the motion to amend.

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Moreover, because Plaintiff has complied with deadline set forth by the Court, ample time remains for

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discovery on the class allegations. Therefore, this factor does not weigh against amendment.

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IV.

Conclusion and Order

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Based upon the foregoing, the factors set forth by the Ninth Circuit weigh in favor of allowing

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Plaintiff to file a Second Amended Complaint. See Madeja, 310 F.3d at 636. Therefore, the Court is

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acting within its discretion in granting the motion to amend. See Swanson, 87 F.3d at 343.

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According, IT IS HEREBY ORDERED:

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1.

Plaintiff’s motion to amend (Doc. 35) is GRANTED; and

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2.

Plaintiff SHALL file his Second Amended Complaint within seven days of the date of
service of this Order.

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IT IS SO ORDERED.
Dated:

December 23, 2013

/s/ Jennifer L. Thurston
UNITED STATES MAGISTRATE JUDGE

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