Macklin v. Hollingsworth et al

Filing 42

ORDER signed by Magistrate Judge Kendall J. Newman on 7/1/2014 GRANTING 40 Motion for Leave to Amend the Complaint; DEEMING that the plaintiff's Proposed Second Amended Complaint found at 40 , pages 13-38, be the operative complaint and that it be served as the plaintiff's "Second Amended Complaint"; DIRECTING the Clerk of Court to issue and serve on the plaintiff, summons as to Defendants Wells Fargo & Co. and Quality Loan Service Corporation; ORDERING Defendants Wells Fa rgo & Co. and Quality Loan Service Corporation to file an answer or other pleading responsive to the Second Amended Complaint within 21 days of service of the summons and Second Amended Complaint; ORDERING any parties who have already appeared in this case and who are still named in the plaintiff's Second Amended Complaint to file an answer or other pleading responsive to the Second Amended Complaint by 7/21/2014. (Michel, G)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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JAMES L. MACKLIN,

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Plaintiff,

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No. 2:10-cv-1097 MCE KJN PS

ORDER

v.
MATTHEW HOLLINGSWORTH, et al.,

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Defendants.

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Presently before the court is plaintiff James Macklin’s (“plaintiff”) motion for leave to

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amend his complaint for a second time. (ECF No. 40.) On March 17, 2014, the court ordered

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plaintiff to file a motion for leave to file a Second Amended Complaint along with a proposed

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Second Amended Complaint. (ECF No. 39.) In compliance with this order, plaintiff filed a

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motion for leave to amend on April 15, 2014. (ECF No. 40.) Plaintiff has attached a proposed

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Second Amended Complaint to his motion.1 (Id. at 13-38.)
Plaintiff states in his motion for leave to amend that he seeks to add Wells Fargo & Co.

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(“Wells Fargo”) and Quality Loan Service Corporation (“Quality Loan”) as new defendants and

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Pursuant to the court’s March 17, 2014 order, defendants have not filed an opposition to
plaintiff’s motion for leave to amend. The court stated in this previous order that it would assess
plaintiff’s motion and proposed Second Amended Complaint and would direct defendants to file a
statement of opposition, if any, only if the court determined that such a response would be
necessary. (ECF No. 39 at 2.)

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both proposed parties are named as defendants in the proposed Second Amended Complaint.2

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(ECF No. 40 at 12.) Furthermore, plaintiff seeks to add causes of action for illegal contract,

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breach of contract, violations of the Equal Credit Opportunity Act, violations of the Fair Credit

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Reporting Act, violations of the Truth in Lending Act, and violations of California’s Unfair

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Competition Law.3 Plaintiff states in his motion that he only recently became aware of the

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alleged involvement of Wells Fargo and Quality Loan in the acts underlying plaintiff’s claims and

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of the facts underlying plaintiff’s proposed new claims while this case was stayed during the

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pendency of plaintiff’s bankruptcy proceedings.
Federal Rule of Civil Procedure 15(a)(2) governs plaintiff’s request for leave to amend.

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Rule 15(a)(2) provides that “a party may amend its pleading only with the opposing party’s

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written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). Rule 15(a)(2) further provides that

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“[t]he court should freely give leave when justice so requires,” id., and the Ninth Circuit Court of

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Appeals has stated that “requests for leave should be granted with ‘extreme liberality.’” Moss v.

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U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009) (citation omitted). However, the Court of

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Appeals has also cautioned that “liberality in granting leave to amend is subject to several

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limitations,” which include “undue prejudice to the opposing party, bad faith by the movant,

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futility, and undue delay.” Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th

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The court notes that plaintiff does not name Mortgage Electronic Registration Systems, Inc. as a
defendant in the proposed Second Amended Complaint even though it was named as a defendant
in the First Amended Complaint. Plaintiff is cautioned that the court cannot refer to a prior
complaint, brief, exhibits, or other filings to make plaintiffs’ Second Amended Complaint
complete. Local Rule 220 requires that an amended complaint be complete in itself without
reference to any prior pleading. Thus, once the Second Amended Complaint is filed, it supersedes
the First Amended Complaint, which no longer serves any function in the case. Accordingly,
because plaintiff no longer names Mortgage Electronic Registration Systems, Inc. in his proposed
Second Amended Complaint, a grant of plaintiff’s motion will effectively result in a dismissal of
Mortgage Electronic Registration Systems, Inc. from this case.

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Plaintiff does not include in his proposed Second Amended Complaint claims for violations of
the Fair Debt Collection Practices Act, fraud by concealment, Fourteenth Amendment Due
Process violations, Real Estate Settlement Procedures Act violations, and intentional infliction of
emotional distress, which are all stated in the First Amended Complaint. Accordingly, a grant of
plaintiff’s motion will effectively result in a dismissal of these claims because the court can no
longer refer to plaintiff’s First Amended Complaint if it is to grant plaintiff’s motion for leave to
amend.
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Cir. 2011) (citations and quotation marks omitted); accord AmerisourceBergen Corp. v. Dialysist

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West, Inc., 465 F.3d 946, 951 (9th Cir. 2006).

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Additionally, in regards to the permissive joinder of parties, Federal Rule of Civil
Procedure 20(a)(2) provides:

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(a) Persons Who May Join or Be Joined. . . .

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(2) Defendants. Persons . . . may be joined in one action as defendants if:

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(A) any right to relief is asserted against them jointly, severally, or
in the alternative with respect to or arising out of the same transaction, occurrence,
or series of transactions or occurrences; and

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(B) any question of law or fact common to all defendants will arise

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in the action.

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This rule is conjunctive in nature, requiring an adequate showing under Rule 20(a)(2)(A)

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and Rule 20(a)(2)(B). In essence, a plaintiff may bring a claim against multiple defendants so

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long as (1) the claim arises out of the same transaction or occurrence, or series of transactions and

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occurrences, and (2) there are commons questions of law or fact. Fed. R. Civ. P. 20(a)(2);

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Coughlin v. Rogers, 130 F.3d 1348, 1351 (9th Cir. 1997); Desert Empire Bank v. Insurance Co.

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of North America, 623 F.3d 1371, 1375 (9th Cir. 1980). Only if the defendants are properly

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joined under Rule 20(a) will the Court review the other claims to determine if they may be joined

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under Federal Rule of Civil Procedure 18(a), which permits the joinder of multiple claims against

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the same party.4
Plaintiff’s proposed amendment to add Wells Fargo and Quality Loan as defendants

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plainly satisfies the requirements of Federal Rule of Civil Procedure 20(a)(2). As to Rule

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20(a)(2)(A)’s “same transaction, occurrence, or series of transactions or occurrences”

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requirement, plaintiff has satisfactorily alleged that Wells Fargo and Quality Loan were involved

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in the origination, underwriting, servicing, and foreclosure of the residential home loan that forms

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Federal Rule of Civil Procedure 18(a) states that “[a] party asserting a claim, counterclaim,
crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as
it has against an opposing party.”

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the basis of plaintiff’s causes of action stated in the Second Amended Complaint. These

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allegations also satisfy Rule 20(a)(2)(B)’s requirement of the presence of a common question of

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law or fact common in the action.

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While the undersigned is cognizant of the fact that the currently-named defendants have

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not been granted an opportunity to oppose plaintiff’s motion for leave to amend5 and of the fact

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that they earlier expressed a desire to oppose such a motion if one were made (see ECF No. 37 at

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9), it does not appear that they will suffer undue prejudice as a result of a grant of plaintiff’s

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motion. While this case has had quite a prolonged history, primarily due to the automatic stay

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imposed during plaintiff’s bankruptcy proceedings, no discovery has taken place, no pre-trial

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deadlines have been set, and no defendants have yet answered the First Amended Complaint.

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Additionally, there is no indication from the record that the proposed amendment is futile, is

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motivated by bad faith, or that plaintiff acted with undue delay in bringing the present motion.

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Accordingly, the undersigned grants plaintiff leave to amend in light of the policies favoring

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liberal amendment.

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Based on the foregoing, IT IS HEREBY ORDERED that:

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1. Plaintiff’s motion for leave to amend his complaint (ECF No. 40) is granted.

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2. Plaintiff’s proposed Second Amended Complaint found at docket entry 40 at pages 13

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through 38 is deemed the operative complaint and shall be served as plaintiff’s “Second Amended

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Complaint.”

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3. The Clerk of Court is directed to issue, and serve on plaintiff, a summons as to
defendant Wells Fargo & Co.

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4. The Clerk of Court is directed to issue, and serve on plaintiff, a summons as to
defendant Quality Loan Service Corporation.

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The court stated in its March 17, 2014 order that defendants need not file an opposition to
plaintiff’s motion to amend and that the court would “direct defendants to file an opposition to the
motion if the court determine[d] that such a response w[ould] be necessary.” (ECF No. 39 at 2.)
After assessing plaintiff’s motion and proposed Second Amended Complaint, the court has
determined that an opposition will not be necessary because, for the reasons noted above,
plaintiff’s proposed amendments will not cause defendants any undue prejudice under the
circumstances and do not appear to be futile, made in bad faith, or made with a motive to delay.
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5. Defendants Wells Fargo & Co. and Quality Loan Service Corporation shall file an

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answer or other response to plaintiff’s Second Amended Complaint within 21 days of being

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served with the summons and Second Amended Complaint.

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6. On or before July 21, 2014, defendants who have already appeared in this case and are

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still named in plaintiff’s Second Amended Complaint shall file an answer or other response to

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plaintiff’s Second Amended Complaint.

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IT IS SO ORDERED.
Dated: July 1, 2014

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