Contreras et al v. Nationstar, LLC et al

Filing 48

MEMORANDUM AND ORDER signed by District Judge Morrison C. England, Jr. on 09/17/18 GRANTING 31 Motion to Amend the Complaint; plaintiffs are directed to file their Second Amended Complaint within 5 days. Defendants' pending 28 Motion to Dismiss is DENIED without prejudice. (Benson, A.)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11
12
13
14
15

EUGENIO AND ROSA CONTRERAS,
WILLIAM AND MELVA PHILLIPS,
TERESA BARNEY, KEITH AND
TERESA MARCEL, SHERLIE
CHARLOT, COLLEEN ANN
O’HALLORAN, JENNIE MILLER, and
EDWARD YAGER, on behalf of
themselves and all others similarly
situated,

16

19
20
21

v.
NATIONSTAR MORTGAGE LLC, A
DELAWARE LIMITED LIABILITY
COMPANY; SOLUTIONSTAR, LLC, A
DELAWARE LIMITED LIABILITY
COMPANY; and DOES 1 through
1000,
Defendants.

22
23

MEMORANDUM AND ORDER

Plaintiffs,

17
18

No. 2:16-cv-00302-MCE-EFB

Through this class action, Plaintiffs Eugenio and Rosa Contreras (“Contreras”),

24

William and Melva Phillips (“Phillips”), Teresa Barney (“Barney”), Keith and Teresa

25

Marcel (“Marcel”), Sherlie Charlot (“Charlot”), Colleen Ann O’Halloran (“O’Halloran”),

26

Jennie Miller (“Miller”), and Edward Yager (“Yager”), individually and on behalf of others

27

similarly situated, seek relief from Defendants Nationstar Mortgage LLC (“Nationstar”)1,

28

1

Defendant notes that it was erroneously named Nationstar LLC in the Complaint.

1

1

Solutionstar LLC (“Solutionstar”), and Does 1-100 arising from fees assessed during the

2

court of the loan. According to the Complaint, both Nationstar and Solutionstar are

3

subsidiaries of Nationstar Mortgage Holdings, Inc. Plaintiffs claim that Defendants

4

unfairly and excessively charged them for distressed mortgage fees. Specifically,

5

Plaintiffs allege Defendants engaged in two schemes to generate unwarranted fees; an

6

Inspection Fee Scheme and a Pay-to-Pay Scheme. Plaintiffs further allege that

7

Nationstar orders these property inspections through its affiliate Solutionstar in order to

8

unfairly mark-up charges to borrowers.

9

Presently before the Court are two motions: Plaintiffs’ Motion for Leave to Amend

10

the Complaint (ECF No. 31), and Defendants’ Motion to Dismiss (ECF No. 28). Both

11

parties filed timely oppositions and replies to each motion. ECF Nos. 36, 37, 38, 39. For

12

the reasons set forth below, Plaintiffs’ Motion is GRANTED and Defendants’ Motion is

13

DENIED as moot.2

14
15

ANALYSIS

16
17

Under Rule 15(a)(2), courts should “freely give leave when justice so requires,”

18

Fed. R. Civ. P. 15(a)(2), and the Ninth Circuit has noted that the policy is one “to be

19

applied with extreme liberality,” Morongo Band of Mission Indians v. Rose, 893 F.2d

20

1074, 1079 (9th Cir. 1990). In exercising its discretion to permit or deny a party to

21

amend its pleading, this Court considers five factors: (1) whether the amendment was

22

filed with undue delay; (2) whether the movant has requested the amendment in bad

23

faith or as a dilatory tactic; (3) whether the movant was allowed to make previous

24

amendments which failed to correct deficiencies of the complaint; (4) whether the

25

amendment will unduly prejudice the opposing party; and (5) whether the amendment

26

would be futile. Foman v. Davis, 371 U.S. 178, 182 (1962). Whether amendment will

27
2

28

Because oral argument would not be of material assistance, the Court ordered this matter
submitted on the briefs. E.D. Cal. Local Rule 230(g).

2

1

unduly prejudice the opposing party is the most important consideration in a court’s

2

analysis under Rule 15(a). Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052

3

(9th Cir. 2003). Consideration of each of these factors favors permitting amendment

4

here.

5

Plaintiffs have not previously been granted leave to amend, and, while Plaintiffs

6

acknowledge that they delayed in seeking the proposed relief, “[u]ndue delay by

7

itself . . . is insufficient to justify denying a motion to amend.” Owens v. Kaiser Found.

8

Health Plan, Inc., 244 F. 3d 708, 712-13 (9th Cir. 2001) (alterations in original) (quoting

9

Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1998)). While Defendants point out that

10

Plaintiffs have not proffered any explanation for not including the RICO claim in the initial

11

complaint, Plaintiffs counter that it would not have made sense for them to seek leave to

12

add their RICO cause of action while the Court was already considering Defendants’

13

original Motion to Dismiss. Once Plaintiffs were permitted leave to amend, they believed

14

they could permissibly add the RICO claim at that time, and when Defendants disputed

15

their ability to do so, Plaintiffs filed the instant Motion.3 In the overall scheme of things,

16

the Court does not consider Plaintiffs to have unduly delayed. Additionally, Defendants

17

have not pointed to any prejudice it will suffer, nor can the Court conceive any, if leave to

18

amend were to be granted. To the contrary, discovery is still in its infancy, the parties

19

are still litigating over the pleadings, and no trial date has been set. Simply having to

20

defend against newly fashioned allegations is not enough to warrant denying Plaintiffs’

21

request.

22

Furthermore, Defendants do not allege, and nothing in the record indicates

23

Plaintiffs’ proposed amendments are the result of any bad faith. Finally, regardless of

24

whether Defendants believe they will inevitably succeed in defending against Plaintiffs’

25

new allegation, nothing before the Court indicates that the amended claims are futile.

26

Accordingly, leave to amend must be freely given here. Not later than five (5) days

27
28

3
For future reference, the Court advises parties that when it grants leave to amend an existing
complaint, its Order should be construed to permit amendment only of the causes of action already pled
within the prior pleading.

3

1

following the date this Memorandum and Order is electronically filed, Plaintiffs are

2

directed to file a Second Amended Complaint, and Defendants’ Motion to Dismiss

3

Plaintiffs’ First Amended Complaint is thus DENIED as moot.

4
5

CONCLUSION

6
7

For the reasons just stated, Plaintiffs’ Motion for Leave to Amend the Complaint

8

(ECF No. 31) is GRANTED. Not later than five (5) days following the date this

9

Memorandum and Order is electronically filed, Plaintiffs are directed to file their Second

10

Amended Complaint. Defendants’ pending Motion to Dismiss (ECF No. 28) is

11

accordingly DENIED without prejudice.

12

IT IS SO ORDERED.

13

Dated: September 17, 2018

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4