Becker et al v. Wells Fargo Bank, NA, Inc. et al

Filing 194

ORDER signed by Magistrate Judge Kendall J. Newman on 6/6/14 DENYING 188 Motion to modify scheduling order. (Manzer, C)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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DENNLY R. BECKER, et al.,

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Plaintiffs,

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No. 2:10-cv-2799-TLN-KJN (PS)

v.

ORDER

WELLS FARGO BANK, N.A., INC., et
al.,
Defendants.

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Presently before the court is plaintiff’s motion styled as “Motion to Modify the

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Scheduling Order in Order to Amend the Complaint to Conform to Discovery Evidence.”1 (ECF

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No. 188.) Defendant filed an opposition and plaintiff filed a reply. (ECF Nos. 191, 192.) The

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undersigned has fully considered the parties’ briefs and appropriate portions of the record.2 For

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the reasons stated below, plaintiff’s motion is denied.
Plaintiff’s motion requests the court to modify the court’s discovery scheduling order

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pursuant to Federal Rule of Civil Procedure 16(b)(4) so that plaintiff may have an opportunity to

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file a motion for leave to amend his complaint for a fourth time to conform his allegations to

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This action proceeds before this court pursuant to Eastern District of California Local Rule
302(c)(21) and 28 U.S.C. § 636(b)(1).
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This motion was submitted on the record and briefs without oral argument pursuant to Local
Rule 230(g).
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evidence plaintiff has obtained through discovery. In particular, plaintiff requests that the

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scheduling order be modified to allow him an additional 30 days in which to amend his

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complaint. (ECF No. 188 at 40.) Plaintiff also seeks to extend any remaining scheduling

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deadlines and dates by “about 4 months after [plaintiff] files his amended complaint.” (Id. at 40-

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41.)

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Rule 16(b)(4) provides that “[a] schedule may be modified only for good cause and with

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the judge’s consent.” Fed. R. Civ. P. 16(b)(4) (emphasis added). To establish “good cause,”

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parties seeking modification of a scheduling order must generally show that, even with the

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exercise of due diligence, they could not reasonably meet the timetable set by the court. Johnson

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v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). “Although the existence or

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degree of prejudice to the party opposing the modification might supply additional reasons to

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deny a motion, the focus of the inquiry is upon the moving party’s reasons for seeking

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modification.” Id. If the party seeking the modification “was not diligent, the inquiry should

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end” and the motion to modify should not be granted. Id.

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Here, plaintiff has failed to demonstrate that good cause is present for his belated motion.

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As an initial matter, plaintiff’s motion was filed nearly two months after the close of discovery

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and nearly a month after the law and motion deadline. Plaintiff claims that he waited to file his

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motion because “it would have been premature and a burden on the Court for Plaintiff to seek

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leave to amend his complaint to incorporate the genuine issues of material facts determined by

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Plaintiff’s expert witness until . . . the Defendant had a chance to argue the relevance of Plaintiff’s

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handwriting expert . . . .” (ECF No. 188 at 9.) Plaintiff states that defendant had an opportunity

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to address this issue in its motion for summary judgment and reply in support of that motion, but

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failed to do so. Plaintiff appears to argue that he acted with due diligence because he could not

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have filed a motion to amend his complaint until after defendant had an opportunity to address the

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relevance of plaintiff’s handwriting expert. However, plaintiff’s assumption that he had to wait

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until defendant had an opportunity to address this issue is incorrect. There was nothing

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procedural or otherwise preventing plaintiff from filing the present motion or a motion for leave

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to amend prior to defendant addressing the relevance of plaintiff’s handwriting expert.
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Plaintiff also claims that he “exercised due diligence by completing discovery before the

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revised discovery date of February 24, 2014.” (ECF No. 188 at 10.) However, this in no way

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shows that plaintiff exercised due diligence in filing the present motion. Moreover, discovery was

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complete as of February 24, 2014, giving plaintiff over a month before the law and motion

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deadline to file either the present motion or a motion to amend his complaint based on the

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discovery he obtained.

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Nonetheless, plaintiff argues in his reply that he was unable to file his present motion or a

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motion for leave to amend until after the law and motion deadline because defendant filed its

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motion for summary judgment on February 27, 2014, three days after the revised discovery

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deadline, which required plaintiff to work “full time on his opposition through the morning of

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March 27, 2014,” the date of the revised law and motion deadline, so that he could meet the filing

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deadline for his opposition to defendant’s motion for summary judgment. (ECF No. 192 at 4.)

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While these circumstances and the fact that plaintiff is proceeding pro se in this matter do lend

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some credibility to plaintiff’s contention that he exercised due diligence in filing the present

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motion, plaintiff still fails to show why there is good cause to extend the law and motion

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schedule because plaintiff’s claimed purpose behind the requested modification, to obtain more

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time to file a motion for leave to amend the complaint for a fourth time, is without merit because

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a grant of leave to amend would be unwarranted under Federal Rule of Civil Procedure 15(a).

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As an initial matter, plaintiff has yet to file a motion for leave to amend. While plaintiff

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requests in his present motion that he be allowed to make amendments to some of his claims, it

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cannot be properly construed as a motion for leave to amend. Furthermore, even if it could be so

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construed, it would be procedurally improper under the local rules because plaintiff does not

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attach a proposed fourth amended complaint. E.D. Local Rule 134(c). Nevertheless, plaintiff’s

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representations in the present motion indicate that a motion for leave to amend the complaint for a

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fourth time would be denied if plaintiff were given the opportunity file it.

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Rule 15(a)(2) provides that leave to amend should be freely given “when justice so

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requires,” and the Ninth Circuit Court of Appeals has stated that “requests for leave should be

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granted with ‘extreme liberality.’” Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009)
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(citation omitted). However, the Court of Appeals has also cautioned that “liberality in granting

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leave to amend is subject to several limitations,” which include “undue prejudice to the opposing

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party, bad faith by the movant, futility, and undue delay.” Cafasso v. Gen. Dynamics C4 Sys.,

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Inc., 637 F.3d 1047, 1058 (9th Cir. 2011) (citations and quotation marks omitted); accord

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AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). It has also

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advised that a “district court’s discretion to deny leave to amend is particularly broad where

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plaintiff has previously amended the complaint.” Cafasso, 637 F.3d at 1058 (citations and

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quotation marks omitted). Ultimately, the issue of whether to grant or deny leave to amend rests

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in the district court’s sound discretion. Foman v. Davis, 371 U.S. 178, 182 (1962).

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Plaintiff argues that a grant of leave to amend would not unduly prejudice defendant

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because no further discovery would need to take place because plaintiff would not seek to add

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additional claims. Defendant asserts that it will suffer prejudice because it “still would have to

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conduct further discovery in order to prepare its defense based on the amendments.” (ECF No.

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191 at 5.) In particular, defendant stresses the fact that plaintiff includes new facts in his present

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motion regarding damages that indicate that plaintiff would attempt to include his litigation costs

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as part of his claim for damages in a proposed fourth amended complaint, which would require

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defendant to conduct additional discovery because such a claim was never made as part of the

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third amended complaint. (Id. at 5-6.)

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The court agrees with defendant that it would suffer undue prejudice if plaintiff’s planned

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motion to amend were heard and granted. Based on plaintiff’s representations in his present

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motion, it appears that he would seek to alter several of his claims in such a way as to prejudice

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defendant if such amendments were permitted and defendant did not have an opportunity to

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engage in further discovery. Accordingly, the court finds that there may be undue prejudice to

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defendant if plaintiff were allowed to proceed with a motion for leave to make the amendments

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he discusses in the present motion. Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d

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980, 986 (9th Cir. 1999) (citing Solomon v. North Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1139

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(9th Cir. 1998)) (“A need to reopen discovery and therefore delay the proceedings supports a

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district court’s finding of prejudice from a delayed motion to amend the complaint.”).
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Furthermore, a fully-briefed motion for summary judgment is currently pending and

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possible disposition of this case would be unduly delayed by granting the motion for leave to

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amend that plaintiff claims he will file if the present motion were granted. See Lockheed Martin

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Corp. v. Network Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999) (citations omitted) (stating

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that “[a]lthough delay is not a dispositive factor in the amendment analysis, it is relevant ”); M/V

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Am. Queen v. San Diego Marine Const. Corp., 708 F.2d 1483, 1492 (9th Cir. 1983). Moreover,

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plaintiff would be proceeding on a fourth amended complaint and this case will have been

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pending for approximately four years by the time plaintiff’s proposed motion for leave to amend

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would be filed, defendant was granted an opportunity to oppose that motion, and the court issued

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a ruling on that motion. See Cafasso, 637 F.3d at 1058 (stating that a “district court’s discretion

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to deny leave to amend is particularly broad where plaintiff has previously amended the

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complaint.”) (citations and quotation marks omitted).
Importantly, the current posture of the case and plaintiff’s representations in the present

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motion also indicate that plaintiff’s proposed motion for leave to amend appears to be made in

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bad faith as a means to either further address or unnecessarily delay defendant’s pending motion

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for summary judgment. Plaintiff devotes the majority of his present motion to argue why further

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amendment of the complaint would not be futile with respect to many of the claims asserted in the

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operative third amended complaint. (ECF No. 188 at 10-38.) However, plaintiff dedicates most

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of this discussion to addressing the arguments advanced by defendant in its reply in support of its

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pending motion for summary judgment. In essence, these assertions show that much of the

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discussion surrounding the proposed amendments in the present motion is little more than a

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procedurally impermissible “surreply” to defendant’s reply, acting as a means for plaintiff to

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further argue the merits of defendant’s otherwise fully-briefed motion for summary judgment.

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See E.D. Local Rule 230. Furthermore, several of the changes to the allegations plaintiff claims

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he would seek through a future motion for leave to amend appear to be little more than

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reactionary attempts to work around the issues highlighted by defendant in its motion for

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summary judgment.

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When plaintiff’s assertions in the present motion are taken in light of defendant’s pending

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motion for summary judgment, it appears that the present motion and plaintiff’s proposed motion

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for leave to amend are little more than an attempt to maneuver around or delay a ruling on

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defendant’s pending motion and indicates that plaintiff’s proposed motion for leave to amend

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would be arguably made in bad faith if plaintiff were granted the opportunity to file it. See

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Tungjunyatham, 2011 WL 1363924 at *7 (citing M/V American Queen v. San Diego Marine

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Construction Corp., 708 F.2d 1483, 1492 (9th Cir. 1983)) (“A motion for leave to amend is not a

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tool for avoiding summary judgment.”); Cowen, 70 F.3d at 944 (noting that “[a] plaintiff who

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proposes to amend his complaint after the defendant has moved for summary judgment may be

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maneuvering desperately to stave off the immediate dismissal of the case” and that a district court

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will not abuse its discretion in denying leave to amend under such circumstances where plaintiff

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fails to provide “solid enough evidence to warrant keeping the case going after the completion of

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discovery”).

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Finally, while the court concludes from the above discussion that it would be well within

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its discretion to deny plaintiff leave to further amend his complaint, the fourth factor—futility of

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the proposed amendment—also supports the decision to deny plaintiff’s proposed motion for

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leave to amend. An amended complaint is futile if it merely restates the same facts as the original

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complaint in different terms, reasserts a claim on which the court previously ruled, fails to state a

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legal theory or could not withstand a motion to dismiss. Rumber v. D.C., 598 F. Supp. 2d 97, 102

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(D.D.C. 2009) aff’d, 595 F.3d 1298 (D.C. Cir. 2010). Furthermore, “[w]hen the defendant’s

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motion for summary judgment is pending, if the plaintiff has had adequate opportunity for

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discovery, a court may deny a motion for leave to amend unless the plaintiff can produce

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‘substantial and convincing evidence’ supporting the proposed amendment.” Tungjunyatham v.

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Johanns, 2011 WL 1363924 at *7 (E.D. Cal. Apr. 11, 2011) aff’d, 500 F. App’x 686 (9th Cir.

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2012) (citing Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 944 (7th Cir. 1995)).

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As an initial matter, many of the amendments plaintiff suggests he would seek in a future

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motion for leave to amend are little more than restatements of the same allegations as those made

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in the third amended complaint stated in different terms. For instance, in his present motion,
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plaintiff merely restates the same alleged factual basis for his RICO claim against defendant

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concerning defendant’s alleged misrepresentations with respect to the loan forbearance

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agreements, albeit with a bit more factual detail. Plaintiff also makes similar restatements with

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respect to his claims for fraud. In essence, it appears from plaintiff’s present motion that these

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proposed amendments would merely restate the same claims based on the same events as those

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alleged in the third amended complaint, but with more factual detail. Therefore, these proposed

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amendments would be futile because they would result in little more than a restatement of the

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allegations already made in the third amended complaint with respect to these claims. See

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Rumber, 598 F. Supp. 2d at 102.

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Plaintiff also states that he would seek to amend his negligence claims to state claims for

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negligent misrepresentation in light of defendant’s reliance on the recent case Lueras v. BAC

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Home Loans Servicing, LP, 221 Cal.App.4th 49 (Ct. App. 2013), which was decided by

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California’s Fourth District Court of Appeal on October 31, 2013. In Lueras, the plaintiff brought

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a negligence claim arising out of the defendant’s handling of his application for a loan

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modification. Lueras, 221 Cal.App.4th at 63. The court held that the plaintiff could not state a

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negligence claim because the defendant had no “common law duty to offer or approve a loan

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modification.” However, it also concluded that “a lender does owe a duty to a borrower to not

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make material misrepresentations about the status of an application for a loan modification or

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about the date, time, or status of a foreclosure sale.” Id. at 67-68. Accordingly, the court granted

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the plaintiff leave to amend “to plead a cause of action for negligent misrepresentation.” Id. at

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69.

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Plaintiff argues in his reply that he should be given leave to amend his negligence claims

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to claims for negligent misrepresentation because “Lueras represents a significant change in

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California common law that occurred late in discovery” for the present case. (ECF No. 192 at 3.)

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Plaintiff further asserts that it would be unjust for the court to allow defendant to rely on the

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ruling in Lueras in its motion for summary judgment without first allowing plaintiff to make this

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amendment because plaintiff was preoccupied with various discovery tasks at the time this

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decision was issued and was preparing his opposition to defendant’s motion for summary
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judgment in the time between the close of discovery and the law and motion deadline. (Id.)

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Essentially, plaintiff appears to argue that he should be granted leave to make this amendment

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because he has acted as diligently as possible under the circumstances. However, plaintiff’s

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arguments are without merit because not only did he wait six and a half months after Lueras was

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decided to file his instant motion, but plaintiff’s sudden insistence that he be granted leave to

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make this amendment comes only after defendant has filed its motion for summary judgment,

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indicating that plaintiff is seeking this amendment in bad faith in an effort to further address the

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fully-briefed arguments already made by the parties in connection with defendant’s pending

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motion. Finally, while plaintiff claims he wants to amend in order conform his allegations to the

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evidence obtained through discovery, this proposed amendment only seeks to change the legal

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theory of plaintiff’s negligence claims. Because plaintiff fails to produce any additional evidence

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to support this proposed amendment, plaintiff cannot meet the ‘substantial and convincing

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evidence’ threshold that must be met when seeking to amend after the close of discovery and

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while a motion for summary judgment is pending. See Tungjunyatham, 2011 WL 1363924 at *7

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(quoting Cowen, 70 F.3d at 944). Accordingly, this proposed amendment would also be

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unwarranted.

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For the reasons stated above, plaintiff fails to show that good cause underlies his present

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motion because plaintiff’s purpose behind his request to modify the scheduling order, i.e. to file a

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future motion for leave to amend, would not be warranted. Accordingly, IT IS HEREBY

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ORDERED THAT plaintiff’s motion styled as “Motion to Modify the Scheduling Order in Order

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to Amend the Complaint to Conform to Discovery Evidence” (ECF No. 188) is DENIED.

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IT IS SO ORDERED.
Dated: June 6, 2014

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