Newcomb v. Cambridge Home Loans, Inc. et al
Filing
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ORDER GRANTING PLAINTIFF'S MOTION TO SET ASIDE CLERK'S JUDGMENT IN A CIVIL CASE 25 . ~ "[T]he Court grants Plaintiff 60 days from the date of this Order to file an amended complaint consistent with the April 16, 2010 Order." ~ Si gned by JUDGE DAVID ALAN EZRA on 6/23/2011. [April 16, 2010 Order - docket entry no. 21 . Judgment - docket entry no. 23 ]. (afc) CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry. NOTE: Order was NOT served upon James Ireijo. Modified on 6/23/2011 (afc).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
WILLIAM E. NEWCOMB, also
known as BILL NEWCOMB,
)
)
)
Plaintiff,
)
)
vs.
)
)
CAMBRIDGE HOME LOANS,
)
INC.; OPTION ONE MORTGAGE )
CORPORATION, a California
)
Corporation; AMERICAN HOME
)
MORTGAGE SERVICING, INC.; )
DEUTSCHE BANK NATIONAL
)
TRUST COMPANY,
)
)
Defendants.
)
_____________________________ )
CV. NO. 09-00567 DAE-KSC
ORDER GRANTING PLAINTIFF’S MOTION TO SET ASIDE CLERK’S
JUDGMENT IN A CIVIL CASE
Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for
disposition without a hearing. After careful review, the Court concludes that
Plaintiff William E. Newcomb’s (“Plaintiff”) failure to timely file his amended
complaint was the result of excusable neglect. Accordingly, the Court GRANTS
Plaintiff’s Motion to Set Aside Clerk’s Judgment in a Civil Case. (Doc. # 25.)
BACKGROUND
In or around October 2005, Plaintiff William E. Newcomb, also
known as Bill Newcomb, (“Plaintiff”) procured a mortgage loan (“Loan”) in the
approximate amount of $800,000.00 from Defendant Cambridge Home Loans, Inc.
(“Cambridge”), and/or its affiliates, for real property located at 77-107 Queen
Kalama Avenue, Kailua-Kona, Hawaii. (Doc. #1, Ex. A ¶ 2.) Plaintiff asserts that
Cambridge thereafter sold or assigned the Loan to Defendant Option One
Mortgage Corporation (“Option One”) and/or the other Defendants. (Id. ¶ 3.)
On October 6, 2009, Plaintiff filed a Complaint in the Circuit Court of
the Third Circuit, State of Hawaii, against Defendants Cambridge, Option One,
American Home Mortgage Servicing, Inc. (“AHMS”), and Deutsche Bank
National Trust Company (“Deutsche Bank”) (collectively, “Defendants”).
Plaintiff’s Complaint asserted various state and federal causes of action in
conjunction with the Loan. (Id. ¶¶ 8–18.) On November 30, 2009, Option One
and AHMS removed the case to this Court. (Doc. # 1.)
On December 16, 2009, Option One, AHMS, and Deutsche Bank filed
a Motion to Dismiss (Doc. # 6), which the Court granted on April 16, 2010 (Doc.
# 21). Specifically, the Court dismissed with prejudice Plaintiff’s TILA rescission
claim, dismissed without prejudice Plaintiff’s remaining claims, and directed
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Plaintiff to file an amended complaint on or before May 14, 2010. (Id.) Because
Plaintiff failed to timely file an amended complaint, the Clerk of Court entered
judgment in favor of Defendants on May 20, 2010. (Doc. # 23.)
On May 10, 2011, Plaintiff filed a Motion to Set Aside Clerk’s
Judgment in a Civil Case. (“Mot.,” Doc. # 25.) Plaintiff argues that his attorney’s
death precluded him from timely filing an amended complaint and that he has
therefore established excusable neglect pursuant to Federal Rules of Civil
Procedure 60(b)(1) such that this Court should set aside the judgment. (Id.) On
May 16, 2011, Option One, AHMS, and Deutsche Bank filed a Statement of No
Position. (Doc. # 27.)
DISCUSSION
Following the liberal standard set by the Ninth Circuit, the Court
concludes that Plaintiff has demonstrated excusable neglect. The Court therefore
grants Plaintiff’s motion and gives Plaintiff a reasonable extension of time to file
an amended complaint.
Federal Rules of Civil Procedure 60(b)(1) provides that “[o]n motion
and just terms, the court may relieve a party or its legal representative from a final
judgment, order, or proceeding for the following reasons: [ ] mistake, inadvertence,
surprise, or excusable neglect.” Fed. R. Civ. P. 60(b)(1).
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In Pioneer Investment Services Co. v. Brunswick Associates Limited
Partnership, the United States Supreme Court articulated a four-part test to
determine whether a party has established excusable neglect. 507 U.S. 380, 395
(1993). Specifically, courts must examine: (1) the danger of prejudice to the
opposing party; (2) the length of the delay and its potential impact on the
proceedings; (3) the reason for the delay; and (4) whether the movant acted in good
faith. Id. The determination of “what sorts of neglect will be considered
‘excusable’ . . . is at bottom an equitable one, taking account of all relevant
circumstances surrounding the party’s omission.” Pioneer, 507 U.S. at 395; see
also Lemoge v. United States, 587 F.3d 1188, 1195 (9th Cir. 2009) (stating that the
four enumerated Pioneer factors are “‘not an exclusive list’”) (quoting Briones v.
Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir. 1997) (per curiam)).
The Ninth Circuit has expounded upon the Pioneer test and adopted it
in other contexts, including Federal Rules of Civil Procedure (“Rule”) 6(b) and
60(b) as well as Federal Rules of Appellate Procedure (“Appellate Rule”) 4(a)(5).1
See, e.g., Briones, 116 F.3d at 381 (adopting the Pioneer test for consideration of
Rule 60(b) motions); Comm. for Idaho’s High Desert, Inc. v. Yost, 92 F.3d 814,
1
The Supreme Court established the Pioneer test for purposes of Federal
Rules of Bankruptcy Procedure (“Bankruptcy Rule”) 9006(b)(1). See Pioneer, 507
U.S. at 382–83.
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825 n.4 (9th Cir. 1996) (concluding that the Pioneer test is applicable to Rule 6(b)
and noting the Ninth Circuit’s prior holding that the Pioneer analysis applies to
Appellate Rule 4(a)(5)) (citing Reynolds v. Wagner, 55 F.3d 1426, 1429 (9th Cir.
1995)). Although the Ninth Circuit initially took a narrow approach to the Pioneer
excusable neglect analysis, see Kyle v. Campbell Soup Co., 28 F.3d 928, 931–32
(9th Cir. 1994) (concluding that an attorney’s mistake in interpreting and applying
unambiguous rules did not constitute excusable neglect under Pioneer), the clear
trend since Pincay v. Andrews, 389 F.3d 853 (9th Cir. 2004) (en banc) is to afford
the movant more lenience when applying the Pioneer factors, see, e.g., Lemoge,
587 F.3d at 1195–98 (determining that the district court abused its discretion in not
finding excusable neglect within Rule 60(b) when the plaintiffs’ attorney, due to
serious medical issues, failed to timely serve the summons and complaint, but
seven months later, moved to set aside the district court’s dismissal of the case); In
re Zilog, Inc., 450 F.3d 996, 1006–07 (9th Cir. 2006) (concluding that the
bankruptcy court abused its discretion in failing to find excusable neglect pursuant
to Bankruptcy Rule 9006(b)(1) when pro se employees failed to timely file proofs
of claim); Pincay, 389 F.3d at 858–60 (affirming the district court’s finding of
excusable neglect within the meaning of Appellate Rule 4(a)(5) when the
defendants filed their notice of appeal twenty-four days late due to a calendaring
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mistake caused by attorneys and paralegals misapplying a clear legal rule). Indeed,
the Ninth Circuit has recently reiterated that “[e]xcusable neglect ‘encompass[es]
situations in which the failure to comply with a filing deadline is attributable to
negligence,’ and includes ‘omissions caused by carelessness.’” Lemoge, 587 F.3d
at 1192 (quoting Pioneer, 507 U.S. at 394).
I.
Prejudice
The first Pioneer factor, prejudice to the opposing party, “requires
greater harm than simply that relief would delay resolution of the case.” Lemoge,
587 F.3d at 1196 (citing TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 701
(9th Cir. 2001)); see also Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1224–25
(9th Cir. 2000) (concluding that the loss of a “quick victory” is insufficient
prejudice to deny relief under Rule 60(b)). Prejudice to the movant, although not
an explicit Pioneer factor, can also be considered in appropriate circumstances.
Lemoge, 587 F.3d at 1195; see also S.E.C. v. Platforms Wireless Int’l Corp., 617
F.3d 1072, 1100 (9th Cir. 2010) (citing Lemoge, 587 F.3d at 1195).
Here, Defendants have not identified any prejudice they would suffer
from setting aside the judgment, and upon review of the information presented, the
Court concludes that the prejudice to Defendants is nominal. Reopening Plaintiff’s
lawsuit would merely mean that Defendants “would have lost a quick victory,”
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which is not sufficiently prejudicial to deny relief. See Bateman, 231 F.3d at 1225;
see also Lemoge, 587 F.3d at 1196 (rejecting the defendant’s assertion that it
would be prejudiced if the plaintiffs’ Rule 60(b) motion were granted because it
relied on the dismissal of the lawsuit in settling a separate action). Accordingly,
this factor weighs in favor of Plaintiff.2
II.
Length of the Delay
As to the second factor, the length of the delay, Rule 60(c) requires
that a Rule 60(b) motion be made “within a reasonable time” and “no more than a
year after the entry of the judgment or order or the date of the proceeding.” Fed. R.
Civ. P. 60(c). “‘What constitutes “reasonable time” depends upon the facts of each
case, taking into consideration the interest in finality, the reason for delay, the
practical ability of the litigant to learn earlier of the grounds relied upon, and
prejudice to the other parties.” Lemoge, 587 F.3d at 1196–97 (quoting Ashford v.
Steuart, 657 F.2d 1053, 1055 (9th Cir. 1981) (per curiam)).
2
As in Lemoge, it may be appropriate in this case to consider the prejudice
to Plaintiff if he is denied relief. See Lemoge, 587 F.3d at 1194–95 (concluding
that although prejudice to the movant is not an enumerated Pioneer factor, it is a
“relevant circumstance” to be considered in certain cases) (citing Pioneer, 507 U.S.
at 395). Because the Court already concludes that Defendants will not suffer
sufficient prejudice to deny relief, it does not consider the prejudice to Plaintiff as
an additional, relevant circumstance.
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Here, James Ireijo, Esq., was counsel of record when the Court issued
the April 16, 2010 Order, which granted the Motion to Dismiss and directed
Plaintiff to file an amended complaint on or before May 14, 2010. Plaintiff attests
that he last spoke with Mr. Ireijo in March 2010, and that, during this conversation,
Mr. Ireijo informed him that there was an upcoming court date. (Mot., Declaration
of William E. Newcomb (“Newcomb Decl.”) ¶¶ 2, 5.) Plaintiff states that he never
received notice that this action had been dismissed, and when he had not heard
from Mr. Ireijo by July 2010, he sent Mr. Ireijo an e-mail, which was returned as
undeliverable. (Id. ¶¶ 5–6.) Plaintiff represents that he subsequently found Mr.
Ireijo’s obituary online, which indicated that Mr. Ireijo passed away on April 21,
2010, five days after the Court issued the April 16, 2010 Order. (Id. ¶ 8.)
According to Plaintiff, he then contacted Mr. Ireijo’s family members to find out
what had happened to Mr. Ireijo’s legal files. (Id. ¶¶ 9–12.) On September 1,
2010, Plaintiff retained Terry G. Oppermann, Esq., to represent him in this matter.
(Id. ¶¶ 14–16; Mot., Declaration of Terry G. Oppermann (“Oppermann Decl.”)
¶ 6.)
Mr. Oppermann filed the instant Rule 60(b) motion on May 10, 2011,
and he attributes the eight-month delay to “gathering and reviewing court records,
reviewing records supplied by [Plaintiff], communicating with [Plaintiff] and
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researching the applicable law and waiting for [Plaintiff] to receive the
informational copy of the Death Certificate.” (Oppermann Decl. ¶¶ 7, 10, 15–16.)
Mr. Oppermann also attests that he was out of the country for significant periods of
time during these eight months “gathering and presenting documentation to
process visa papers for [his] daughter and her mother to come to Hawaii . . . as well
as addressing pending legal and business matters concerning the Philippine law
firm Evasco Chan & Abinales[] to whom [Mr. Oppermann] is ‘Of Counsel.’” (Id.
¶¶ 8–9, 11, 14.) According to Mr. Oppermann, he was also unable to work from
late January 2011 to the end of February 2011 due to a “number of medical
ailments.” (Id. ¶ 12.)
The combined delay, which encompasses the time it took Plaintiff to
learn of Mr. Ireijo’s death and find a new lawyer, as well as the time it took Mr.
Oppermann to file the Rule 60(b) motion, is just under one year. Admittedly, it
was not unreasonable for Plaintiff to wait until July 2010 to e-mail Mr. Ireijo. Mr.
Ireijo assured Plaintiff that the April 2010 hearing on the Motion to Dismiss was
nothing to worry about,3 and Plaintiff represents that he never received notice from
either the Court or Mr. Ireijo that the Complaint had been dismissed. (Newcomb
3
The Court ultimately vacated the hearing on the Motion to Dismiss and
decided the motion on the papers without a hearing. (Doc. # 20.)
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Decl. ¶ 5.) Moreover, when Plaintiff’s e-mail to Mr. Ireijo was returned as
undeliverable, Plaintiff was diligent in his attempts to contact Mr. Ireijo’s family
and his efforts to retain a new lawyer. The length of the delay attributable to
Plaintiff was therefore reasonable.
Mr. Oppermann’s eight-month delay in filing the instant motion is not
as easy to justify. Although Mr. Oppermann required a period of time to review
Plaintiff’s case file and obtain the necessary records, the eight months that it took
Mr. Oppermann to prepare the instant motion appears to be excessive. The Court
is mindful, however, that Mr. Oppermann’s delay can be attributed, at least in part,
to his other personal and professional commitments, as well as his lengthy illness
in the beginning of 2011. Due to the extreme circumstances surrounding
Plaintiff’s retention of Mr. Oppermann, the Court cannot conclude that the
combined delay of just under one year is unreasonable, particularly in light of other
delays that the Ninth Circuit has deemed reasonable. See, e.g., Lemoge, 587 F.3d
at 1197 (concluding that the plaintiffs’ Rule 60(b) motion, filed seven months after
the case had been dismissed, was brought within a reasonable amount of time);
Bateman, 231 F.3d at 1225 (characterizing the plaintiff’s month-long delay in
filing its Rule 60(b) motion as “minimal”). Accordingly, this factor does not
weigh in favor of either party.
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III.
Reason for the Delay
The Supreme Court has made clear that “excusable neglect . . . is not
limited to situations where the failure to timely file is due to circumstances beyond
the control of the filer.” Pioneer, 507 U.S. at 391. On several occasions, the Ninth
Circuit has found excusable neglect for delays caused by the negligence and
carelessness of experienced law firms and attorneys. See, e.g., Ahanchian v.
Xenon Pictures, Inc., 624 F.3d 1253, 1262 (9th Cir. 2010) (characterizing an
attorney’s “calendaring mistake caused by the failure to apply a clear local rule” as
a weak justification for the delay, but nonetheless finding excusable neglect);
Lemoge, 587 F.3d at 1197 (finding that although the plaintiffs’ attorney was
“seriously” negligent in failing to identify the correct agency to serve, his medical
problems, which began shortly thereafter and precluded him from correcting the
situation, “provided adequate reasons for the delay”); Pincay, 389 F.3d at 859
(recognizing that “a lawyer’s failure to read an applicable rule is one of the least
compelling excuses that can be offered,” but nevertheless holding that the district
court did not abuse its discretion by finding excusable neglect when a sophisticated
law firm missed a filing deadline because of a paralegal’s error); Bateman, 231
F.3d at 1222–25 (finding excusable neglect when an attorney missed an opposition
deadline while he was out of the country for a family emergency, but the attorney
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did not contact the district court until sixteen days after he returned, attributing his
lapse to “jet lag and the time it took to sort through the mail”). Indeed, in Pioneer
itself, the U.S. Supreme Court found excusable neglect when “an experienced
bankruptcy attorney” missed the deadline for filing pre-petition claims because he
overlooked the filing date in the bankruptcy court’s notice. Pioneer, 507 U.S. at
383–84, 398. Although the Supreme Court “consider[ed] significant” that the
bankruptcy court’s notice of the bar date was outside the ordinary course in
bankruptcy cases, it nonetheless clarified that even an attorney’s neglect can be
considered excusable. Id. at 398.
Here, to the extent that the delay is premised upon Mr. Ireijo’s death
and the time it took Plaintiff to retain a new lawyer, these circumstances were
largely beyond Plaintiff’s control, and the delay is thus justifiable. Although the
reasons for Mr. Oppermann’s delay are less compelling, Mr. Oppermann did not
miss the deadline for filing the Rule 60(b) motion, and he was no more careless in
this case than were the attorneys in Pioneer, Ahanchian, Lemoge, Pincay, and
Bateman. Accordingly, under the circumstances presented, this will not preclude
the Court from finding excusable neglect.
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IV.
Good Faith
As to the final factor, the Court cannot conclude that Plaintiff acted in
bad faith. Although Mr. Oppermann arguably should not have taken eight months
to file the instant motion, this does not constitute bad faith. See Bateman, 231 F.3d
at 1225 (concluding that the movant acted in good faith because “[h]is errors
resulted from negligence and carelessness, not from deviousness or willfulness”).
Moreover, Plaintiff acted in good faith by attempting to retain a new attorney
shortly after he learned of Mr. Ireijo’s death. Accordingly, this factor weighs in
favor of Plaintiff.
In sum, two of the Pioneer factors—prejudice and good faith—weigh
in favor of Plaintiff, and although Mr. Oppermann’s eight-month delay in filing the
instant motion was likely excessive, under the circumstances presented here, this
lapse will not preclude the Court from finding excusable neglect. See Pioneer, 507
U.S. at 388 (“Congress plainly contemplated that the courts would be permitted,
where appropriate, to accept late filings caused by inadvertence, mistake, or
carelessness, as well as by intervening circumstances beyond the party’s control.”).
Thus, “considering all relevant circumstances,” id. at 395, the Court concludes that
Plaintiff has demonstrated excusable neglect within the meaning of Rule 60(b)(1).
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Moreover, in accordance with Plaintiff’s request (Oppermann Decl.
¶¶ 19–20), the Court grants Plaintiff 60 days from the date of this Order to file an
amended complaint consistent with the April 16, 2010 Order. The amended
complaint must clearly state how each of the named defendants have injured
Plaintiff, and it must also clearly identify the statutory provisions, if any, under
which Plaintiff’s claims are brought. The Court expects full and complete
compliance with its orders going forward and cautions Plaintiff that no further
extensions of time will be granted.
CONCLUSION
For the reasons above, the Court GRANTS Plaintiff’s Motion to Set
Aside Clerk’s Judgment in a Civil Case. (Doc. # 25.)
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, June 23, 2011.
_____________________________
David Alan Ezra
United States District Judge
Newcomb v. Cambridge Home Loans, Inc. et al., Cv. No. 09-00567 DAE-KSC;
ORDER GRANTING PLAINTIFF’S MOTION TO SET ASIDE CLERK’S
JUDGMENT IN A CIVIL CASE
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