Kouretas v. Nationstar Mortgage Holdings, Inc. et al

Filing 62

MEMORANDUM and ORDER granting 56 Motion for Reconsideration signed by Chief Judge Morrison C. England, Jr on 1/28/15: Court's September 29, 2014, Judgment 55 is VACATED. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JAMES KOURETAS,

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No. 2:13-cv-02632-MCE-KJN

Plaintiff,
v.

MEMORANDUM AND ORDER

NATIONSTAR MORTGAGE
HOLDINGS, INC. and BANK OF
AMERICA, N.A.,

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Defendants.

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Presently before the Court is Plaintiff James Kouretas’ (“Plaintiff”) Motion for

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Reconsideration (“Motion”). ECF No. 56. For the following reasons, the Motion is

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GRANTED.1

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BACKGROUND

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On December 20, 2013, Plaintiff filed a complaint against Defendants Nationstar

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Mortgage Holdings, Inc. (“Nationstar”) and Bank of America, N.A. (“BofA”) (collectively

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“Defendants”). ECF No. 1. The initial complaint asserted causes of action for violations

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Because oral argument would not be of material assistance, the Court ordered this matter
submitted on the briefs. See E.D. Cal. Local R. 230(g); ECF No. 61.

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of California’s Homeowner Bill of Rights, Cal. Civ. Code §§ 2923.6(c), 2923.7(a); the

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Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-

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1968; and California Welfare & Institutions Code sections 15600 et seq., which prohibit

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elder abuse. Id. BofA and Nationstar filed separate motions to dismiss for failure to

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state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).2 ECF Nos. 13 (BofA),

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16 (Nationstar). On March 14, 2014, the Court granted both motions to dismiss and

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permitted Plaintiff to file an amended complaint. ECF No. 27.

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On April 7, 2014, Plaintiff filed a first amended complaint.3 ECF No. 32. In that
complaint, Plaintiff asserted causes of action for breach of the implied covenant of good

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faith and fair dealing, wrongful foreclosure, and financial elder abuse in violation of

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California Welfare & Institutions Code sections 15600 et seq. Id. Again, each defendant

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filed a Rule 12(b)(6) motion to dismiss. ECF Nos. 33 (Nationstar), 35 (BofA). On

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August 19, 2014, the Court granted both motions to dismiss. ECF No. 49.

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Addressing Plaintiff’s causes of action in turn, the Court dismissed with leave to

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amend the claim that Defendants breached the implied covenant of good faith and fair

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dealing. The Court initially determined that the first amended complaint failed to allege

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the existence of a contractual provision prohibiting Defendants from asserting the right to

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adhere to the original contract while Plaintiff’s request for a loan modification was

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pending. Id. at 5-7, 10. Next, the Court found that to the extent Plaintiff alleged that

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Defendants committed a tortious breach of the implied covenant of good faith and fair

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dealing, the claim failed for lack of a special fiduciary relationship between Plaintiff, as

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borrower, and Defendants, as lenders. Id. at 6-7. As to Plaintiff’s claim for wrongful

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foreclosure, the Court concluded that Plaintiff failed to adequately plead any of the

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requisite elements, including that a foreclosure had actually occurred, and dismissed the

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claim without leave to amend. Id. at 7-9. Finally, the Court dismissed without leave to

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All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless
otherwise noted.
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Plaintiff first filed an unsigned, and therefore deficient, first amended complaint on April 6, 2014.
ECF No. 31.

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amend Plaintiff’s claim of financial elder abuse on the grounds there was no allegation

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that Plaintiff had been deprived of any real or personal property. Id. at 9-10.

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In dismissing the first amended complaint, the Court’s order included the following

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provision: “Not later than twenty (20) days following the date this Memorandum and

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Order is electronically filed, Plaintiff may (but is not required to) file an amended

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complaint. If no amended complaint is filed within said twenty (20) day period, without

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further notice to the parties, Plaintiff’s claim for breach of the implied covenant of good

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faith and fair dealing will also be dismissed with prejudice and this action will be closed.”

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Id. at 11 (emphasis added). Thus, pursuant to the Court’s memorandum and order,

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Plaintiff was permitted, but not required, to file a second amended complaint no later

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than September 8, 2014.

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Without leave of the Court, Plaintiff filed an untimely second amended complaint

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on September 10, 2014.4 ECF No. 51. On September 29, 2014, consistent with its prior

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memorandum and order, the Court dismissed Plaintiff’s only potentially surviving claim—

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for beach of the implied covenant of good faith and fair dealing—with prejudice and

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directed the Clerk of the Court to close the case.5 ECF No. 54. Consequently, judgment

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in favor of Defendants was entered. ECF No. 55.

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Plaintiff then timely filed the instant Motion on the grounds the second amended

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complaint was filed late due solely to inadvertent attorney error. ECF No. 56.

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Specifically, Plaintiff states that the deadline for submission was mistakenly calendared

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as twenty court days rather than twenty calendar days. Id. at 1. Declarations from

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Plaintiff’s attorney of record and his associate accompanied the Motion. ECF Nos. 56-1,

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56-2.

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The second amended complaint asserts causes of action for promissory estoppel, violation of
California’s unfair competition law, and RICO violations. ECF No. 51.
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The order also denied as moot Nationstar’s motion to dismiss the second amended complaint.

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STANDARD

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Rule 60(b) provides that a court “may relieve a party or its legal representative

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from a final judgment, order, or proceeding” on the basis of “mistake, inadvertence,

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surprise, or excusable neglect.” Fed. R. Civ. P. 60(b). “To determine whether a party’s

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failure to meet a deadline constitutes excusable neglect, courts must apply a four-factor

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equitable test, examining: (1) the danger of prejudice to the opposing party; (2) the

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length of the delay and its potential impact on the proceedings; (3) the reason for this

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delay; and (4) whether the movant acted in good faith.” Ahanchian v. Xenon Pictures,

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Inc., 624 F.3d 1253, 1261 (9th Cir. 2010) (citations and internal quotation marks

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omitted). A district court abuses its discretion if it fails to apply this test. See id.

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Moreover, the Ninth Circuit has found that although calendaring mistakes are not

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necessarily “compelling excuse[s],” they can constitute excusable neglect under Rule 60.

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Pincay v. Andrews, 389 F.3d 853, 860 (9th Cir. 2004) (en banc); Ahanchian, 624 F.3d at

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1262 (finding “while a calendaring mistake caused by the failure to apply a clear local

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rule may be a weak justification for an attorney’s delay, we have previously found [in

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Pincay] the identical mistake to be excusable neglect”).

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ANALYSIS

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The Court finds there is a sufficient basis on which to grant the Motion. As to the

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first Pincay factor, there is little overall danger of prejudice to Defendants resulting from a

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two-day delay in filing an amended complaint. See Ahanchian, 624 F.3d at 1262

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(“[D]efendants would not have been prejudiced by a week’s delay. . . . At most, they

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would have won a quick but unmerited victory, the loss of which we do not consider

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prejudicial.”). As to the second Pincay factor, the Court considers the two-day length of

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delay to be slight. See id. (noting a “mere” delay of three days). As to the third Pincay

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factor, the Court finds that Plaintiff’s failure to properly calendar the date the second
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amended complaint was due for filing constitutes excusable neglect. See Pincay,

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389 F.3d at 860; Ahanchian, 624 F.3d at 1262. Finally, as to the remaining factor, the

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Court does not find that Plaintiff acted in bad faith by filing the second amended

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complaint two days late.6

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CONCLUSION

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For the foregoing reasons, Plaintiff’s Motion for Reconsideration, ECF No. 56, is

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GRANTED and the Court’s September 29, 2014, Judgment, ECF No. 55, is VACATED.

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The Clerk of Court is directed to return this case to the civil active list.
IT IS SO ORDERED.
Dated: January 28, 2015

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Nevertheless, Plaintiff is cautioned to follow all applicable rules and abide by this Court’s orders
in the future.

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