Young v. SunTrust, Inc.

Filing 16

ORDER signed by Judge John A. Mendez on 8/1/2013 GRANTING 11 Motion for Leave to Amend; DEEMING Plaintiff's First Amended Complaint filed as of the date of this order; ORDERING the defendant to file a responsive pleading within 20 days. (Michel, G)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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EDWARD MILTON YOUNG,

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2:13-cv-00720-JAM-AC

Plaintiff,

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No.

v.

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DEUTSCHE BANK NATIONAL TRUST
COMPANY AS TRUSTEE FOR STARM
MORTGAGE LOAN TRUST 2007-4,
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-4, BY ITS ATTORNEY IN
FACT SUNTRUST MORTGAGE, INC. and
DOES 1-20, Inclusive,

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ORDER GRANTING PLAINTIFF’S
MOTION FOR LEAVE TO FILE A
FIRST AMENDED COMPLAINT

Defendants.

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This matter first came before the Court on Defendant

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SunTrust Mortgage, Inc.’s (“Defendant”) unopposed Motion to

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Dismiss (Doc. #6).1

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filed no opposition or statement of non-opposition to this

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motion, but did file an improperly calendared Motion for Leave to

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Amend (Doc. #11).

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unopposed, it was granted (Doc. #13) leaving only Plaintiff’s

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Motion for Leave to Amend for resolution.

Plaintiff Edward Milton Young (“Plaintiff”)

Because Defendant’s Motion to Dismiss was

The Court determined

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for July 10, 2013.
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that Plaintiff’s Motion for Leave to Amend was a related counter

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motion to Defendant’s Motion to Dismiss pursuant to Local Rule

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230(e).

Defendant opposes Plaintiff’s counter motion (Doc. #14).

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I.

FACTUAL ALLEGATIONS & PROCEDURAL BACKGROUND

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This action arises out of Plaintiff’s allegations that

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Defendant’s actions violated the Homeowner’s Bill of Rights

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(“HOBR”), California Civil Code §§ 2923 and 2924.

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Plaintiff originally filed this action in the Superior Court of

Compl. ¶7.

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California for the County of Placer, but it was successfully

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removed by Defendant to this Court under 28 U.S.C. § 1446(b)

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based on complete diversity of the parties and an amount in

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controversy over $75,000 pursuant to 28 U.S.C. § 1332 (Doc. #1).

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Defendant’s Motion to Dismiss was granted, but Plaintiff now

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seeks leave to amend.

In the proposed first amended complaint

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(“PFAC”), Plaintiff alleges that Defendant’s actions violated

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California Civil Code § 2923.6(b) because Defendant continued to

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foreclose on Plaintiff’s home even after he submitted a completed

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loan modification application.

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alleges that he submitted a completed loan modification

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application on January 4, 2013.

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alleges Defendant filed a Notice of Trustee sale on January 22,

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which Defendant concedes.

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February 25, 2013, Defendant sent Plaintiff a letter postponing

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the sale date to March 18, 2013.

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that his attorney contacted Defendant’s law firm on March 14,

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2013 to find out the status of the trustee sale and a

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representative of the law firm said “as of today, the trustee

PFAC ¶ 4 (Doc #11-1).

PFAC ¶ 6.

Plaintiff

Then Plaintiff

Plaintiff further alleges that on

PFAC ¶ 7.

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Plaintiff alleges

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sale was still scheduled for March 18.”

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the sale taking place, Plaintiff filed his original complaint in

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state court on March 15, 2013 seeking injunctive relief and

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attorneys’ fees.

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II.

PFAC ¶ 9.

Anticipating

OPINION

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A.

Legal Standard for Leave to Amend

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Upon granting a motion to dismiss for failure to state a

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claim, a court has discretion to allow leave to amend the

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complaint pursuant to Federal Rule of Civil Procedure 15(a).

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“Dismissal with prejudice and without leave to amend is not

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appropriate unless it is clear . . . that the complaint could not

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be saved by amendment.”

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Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

Eminence Capital, L.L.C. v. Aspeon,

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“Whether leave to amend should be granted is generally

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determined by considering the following factors: (1) undue delay;

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(2) bad faith; (3) futility of amendment; and (4) prejudice to

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the opposing party.”

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Rogstad), 126 F.3d 1224, 1228 (9th Cir. 1997).

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any of the preceding factors, leave to amend should be freely

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granted.

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765 (9th Cir. 1986).

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B.

N. Slope Borough v. Rogstad (In re
In the absence of

See Gabrielson v. Montgomery Ward & Co., 785 F.2d 762,

Discussion
1.

Plaintiff’s Motion for Leave to File a First
Amended Complaint

Defendant opposes leave to amend by arguing that both the

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allegations and requests for relief in the PFAC are essentially

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identical to those in the original complaint.

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arguments stem from a factual dispute as to when Plaintiff’s loan
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Defendant’s

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modification application was complete.

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it was completed on March 1, 2013, not January 4, 2013.

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Defendant therefore argues that as a matter of law, there are no

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HOBR violations stemming from the January 22, 2013 Notice of

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Trustee’s sale because it was recorded before Defendant received

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a complete loan modification application on March 1, 2013.

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Furthermore, Defendant contends that since it received

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Plaintiff’s borrower response package in March 2013, no trustee’s

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sale has taken place.

Defendant contends that

Defendant states that Plaintiff admits

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that the sale was voluntarily postponed and Defendant is working

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with Plaintiff regarding a possible loan modification, thus

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satisfying the express purpose of HOBR.

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it would be futile to permit Plaintiff to file an amended

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complaint because it would be vulnerable to a FRCP Rule 12(b)(6)

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motion to dismiss made on identical grounds set forth in

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Defendant’s motion to dismiss the original complaint.

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Defendant concludes that

Defendant’s arguments in opposition primarily concern the

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futility of Plaintiff’s proposed amendments.

Futility can be

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found where it is clear that the proposed amendments would not

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save a complaint from a dispositive motion.

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Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir. 1986).

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this case, the Court finds that Plaintiff’s PFAC alleges

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sufficient facts to support his claims such that it may survive a

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further dispositive motion.

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loan modification application was submitted January 4, 2013.

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Thus, taking Plaintiff’s allegation as true, the January 22, 2013

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notice of trustee’s sale violated the HOBR’s prohibition on such

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filings once a loan modification application is received.

See Gabrielson v.
In

Plaintiff alleges that a completed

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Furthermore, the Court finds that Plaintiff’s allegation that

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Defendant violated §§ 2923.6(b)-(c) of the HOBR by dual tracking

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the trustee sale date at the same time Plaintiff was actively

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applying for a loan modification is a sufficient basis to grant

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leave to amend.

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Defendant allegedly recorded the notice of trustee’s sale and set

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the March 18, 2013 date after Plaintiff submitted his completed

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loan modification application.

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Plaintiff’s amendments are not futile.

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Although the sale date was ultimately postponed,

Accordingly, the Court finds that

Defendant contends tender is required to postpone a trustee

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sale, but cites no authority for a tender requirement under

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§2923.6(b).

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non-judicial foreclosure were satisfied is irrelevant because

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once a completed loan modification is submitted, § 2923.6(b)

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requires Defendant to postpone foreclosure proceedings, which

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Defendant allegedly did not do.

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Notice of Default recorded in 2012 did not violate the HOBR, but

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that argument is irrelevant because Plaintiff does not make a

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claim related to the Notice of Default in the PFAC.

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Plaintiff has shown that amendment would not be futile,

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Plaintiff’s motion is GRANTED.

Defendant’s argument that statutory requirements for

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Defendant also argues that a

Because

III. ORDER
For the reasons given, Plaintiff’s Motion for Leave to Amend

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is GRANTED and the PFAC is deemed filed as of the date of this

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order.

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20 days.

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Defendant is ordered to file a responsive pleading within

IT IS SO ORDERED.
Dated: August 1, 2013

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JOHN A. MENDEZ,
5 UNITED STATES DISTRICT JUDGE