Kim et al

Filing 86

ORDER denying as moot 37 Motion to Strike; denying as moot 38 Motion to Strike; granting in part and denying in part 45 Motion for Summary Judgment; granting in part and denying in part 57 Motion to Dismiss; and denying 59 Motion to Strike . IT IS FURTHER ORDERED granting in part and denying in part 55 Motion to Amend Complaint. Plaintiffs have 30 days to file a second amended complaint. Signed by Judge Philip M. Pro on 8/29/2010. (Copies have been distributed pursuant to the NEF - MJZ)

1 2 3 UNITED STATES DISTRICT COURT 4 D IS T R IC T OF NEVADA 5 6 T A I-S I KIM and JIN-SUNG HONG, 7 P la in tif f s , 8 v. 9 A D A M B. KEARNEY, et al., 10 Defendants. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 *** ) ) ) ) ) ) ) ) ) ) )

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ORDER

P re se n tly before the Court is Defendant Alverson, Taylor, Mortensen & Sanders' M o tio n to Strike Plaintiffs' First Amended Complaint (Doc. #37), filed on March 15, 2010. Plaintiffs filed an Opposition (Doc. #50) on April 1, 2010. Defendant filed a Reply (Doc. # 5 6 ) on April 12, 2010. A ls o before the Court is Defendant First American Title Insurance Company's M o tio n to Strike First Amended Complaint (Doc. #38), filed on March 15, 2010. Plaintiffs f ile d an Opposition (Doc. #51) on April 1, 2010. Defendant filed a Reply (Doc. #54) on A p ril 9, 2010. A ls o before the Court is proposed defendant Valley Foreclosure Services' Motion f o r Summary Judgment (Doc. #45/#46), filed on March 29, 2010. Plaintiffs filed an O p p o s itio n (Doc. #72) on May 11, 2010. Proposed defendant Valley Foreclosure Services d id not file a reply. A ls o before the Court is Plaintiffs' Motion for Leave to File First Amended C o m p la in t and to Add Parties (Doc. #55), filed on April 9, 2010. Defendant Alverson, T a ylo r, Mortensen & Sanders filed an Opposition (Doc. #63) on April 26, 2010. Defendant

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F irs t American Title Insurance Company filed an Opposition (Doc. #64) on April 26, 2010. Plaintiffs filed Replies (Doc. #70, #71) on May 6, 2010. Also before the Court is proposed defendant Cumorah Credit Union's Motion to D is m iss (Doc. #57) and Motion to Strike Plaintiffs' Claims for Punitive Damages (Doc. # 5 9 ), filed on April 12, 2010. Plaintiffs Filed an Opposition (Doc. #73) on May 14, 2010. Proposed defendant Cumorah Credit Union filed a Reply (Doc. #74) on May 24, 2010. I . BACKGROUND T h e Court set forth the factual predicate for this action in another Order filed c o n te m p o ra n e o u s ly herewith, and the Court will not repeat the facts here except where n e c e s s a ry. Generally, Plaintiffs' claims arise out of a real estate transaction in which P la in tif f s contend they were duped into paying for an investment property ("the Property") w h ic h Defendant Adam Kearney ("Kearney") encumbered with a loan by proposed d e f e n d a n t Cumorah Credit Union ("Cumorah"). Kearney was to have turned over the P ro p e rty to Plaintiffs free and clear of any liens, including the Cumorah lien, upon Plaintiffs e x e rc isin g an option to buy the Property. Kearney initially did not transfer the Property to P la in tif f s despite taking Plaintiffs' payment in cash, and did not pay off the Cumorah loan e v e n after he transferred the Property to Plaintiffs. Cumorah eventually foreclosed on the P ro p e rty, leaving Plaintiffs without the Property and without the cash they invested therein. P la in tif f s filed suit in this Court on October 15, 2009, asserting claims against K e a rn e y and others involved in the transaction and its aftermath. Several Defendants m o v e d to dismiss the claims against them. Plaintiffs subsequently filed a First Amended C o m p la in t (Doc. #29) without leave of the Court, adding several new Defendants and c la rif yin g allegations against the original Defendants. Defendants Alverson, Taylor, M o rte n s e n & Sanders ("ATM&S") and First American Title Insurance Company ("First A m e ric a n " ) filed motions to strike the First Amended Complaint. In the meantime, one of th e new proposed defendants, Valley Foreclosure Services ("VFS"), moved for summary 2

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ju d g m e n t on the First Amended Complaint's claims against it. Plaintiffs thereafter filed a m o tio n for leave to amend the Complaint in response to the motions to strike. Following P la in tif f s ' motion to amend, proposed new defendant Cumorah filed a motion to dismiss a n d to strike aimed at the proposed First Amended Complaint. Given the procedural p o s tu re , the Court will deny the motions to strike filed by Defendants ATM&S and First A m e ric a n as moot, and will treat the motions by VFS and Cumorah as oppositions to P la in tif f s ' motion to amend on the grounds of futility. I . LEGAL STANDARD G e n e ra lly, a plaintiff may amend his or her complaint once "as a matter of c o u rs e " within twenty-one days after serving it, or twenty-one days after service of a re s p o n s iv e pleading or motion. Fed. R. Civ. P. 15(a)(1). In all other cases, a party may a m e n d its pleading only by leave of court or by written consent of the adverse party. Fed. R . Civ. P. 15(a)(2). "The court should freely give leave when justice so requires." Id.; see a ls o Foman v. Davis, 371 U.S. 178, 182 (1962) ("Rule 15(a) declares that leave to amend `s h a ll be freely given when justice so requires'; this mandate is to be heeded."). The Court c o n s id e rs five factors in deciding whether to grant leave to amend: "(1) bad faith, (2) undue d e la y, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether p la in tif f has previously amended his complaint." Allen v. City of Beverly Hills, 911 F.2d 3 6 7 , 373 (9th Cir. 1990) (citing Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9 th Cir. 1989)). The futility analysis determines whether the proposed amendment would s u rv iv e a challenge of legal insufficiency under Federal Rule of Civil Procedure 12(b)(6). Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). In considering a motion to dismiss, "all well-pleaded allegations of material fact a re taken as true and construed in a light most favorable to the non-moving party." Wyler S u m m it P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation o m itte d ). However, the Court does not necessarily assume the truth of legal conclusions 3

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m e re ly because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). There is a s tro n g presumption against dismissing an action for failure to state a claim. Ileto v. Glock In c ., 349 F.3d 1191, 1200 (9th Cir. 2003). A plaintiff must make sufficient factual a lle g a tio n s to establish a plausible entitlement to relief. Bell Atl. Corp. v Twombly, 550 U .S . 544, 556 (2007). Such allegations must amount to "more than labels and conclusions, [ o r] a formulaic recitation of the elements of a cause of action." Id. at 555. However, a c o m p la in t "need not identify the statutory or constitutional source of the claim raised in o rd e r to survive a motion to dismiss." Alvarez v. Hill, 518 F.3d 1152, 1157 (9th Cir. 2008). A . Alverson, Taylor, Mortensen & Sanders D e f e n d a n t ATM&S opposes Plaintiffs' motion to amend, arguing that Plaintiffs k n e w the facts supporting their amendment when they filed the original Complaint. Additionally, ATM&S contends that the new allegations demonstrate ATM&S did not p ro x im a te ly cause Plaintiffs' injuries because Plaintiffs hired counsel after ATM&S p ro v id e d services, and his alleged negligence is a superseding cause of Plaintiffs' injuries. P la in tif f s respond that they did not know some of the facts supporting a m e n d m e n t until First American Title Insurance Company filed its motion to dismiss, w h ic h caused Plaintiffs to investigate their claims further. Plaintiffs further contend that th e y also in good faith addressed some of the concerns Defendants raised in prior motions to dismiss. T h e Court will not deny leave to amend based on the argument that Plaintiffs s h o u ld have known about the facts supporting amendment previously. Plaintiffs have in d ic a te d that Defendants' motions to dismiss alerted Plaintiffs to facts which they s u b s e q u e n tly investigated to support the new claims against the new proposed Defendants. Plaintiffs also explain that they made clarifying allegations in response to Defendants' m o tio n s . 4

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A s to whether Plaintiffs' allegations regarding the negligence of Plaintiffs' s u b s e q u e n t attorney is a superseding cause relieving ATM&S of liability as a matter of law, th e Court will not deny amendment. Which Defendants proximately caused Plaintiffs' in ju rie s is a question of fact not suitable to resolution at this stage of the proceedings. Plaintiffs may plead their claims against ATM&S and the subsequently-retained counsel in th e alternative. Fed. R. Civ. P. 8(d). B. First American Title Insurance Company D e f e n d a n t First American Title Insurance Company ("First American") opposes P la in tif f s ' motion to amend, arguing that Plaintiffs have not cured the deficiencies First A m e ric a n identified in relation to Plaintiffs' claims other than to add a factual allegation in re la tio n to the alleged misrepresentation made by First American employee, Defendant Gina T h o m a s . First American argues that because some of the claims are futile and subject to a m o tio n to dismiss, the Court should not allow amendment until it first addresses First A m e ric a n 's motion to dismiss the original Complaint. P la in tif f s respond that they did not know some of the facts supporting a m e n d m e n t until First American filed its motion to dismiss, which caused Plaintiffs to in v e s tig a te their claims further. Plaintiffs further contend that they also in good faith a d d re s s e d some of the concerns Defendants raised in prior motions to dismiss. A s just discussed, Plaintiffs have indicated that Defendants' motions to dismiss a le rte d Plaintiffs to facts which they subsequently investigated to support the new claims a g a in s t the new proposed Defendants. Plaintiffs also explain that they made clarifying a lle g a tio n s in response to Defendants' motions. However, Defendant First American is c o rre c t that Plaintiffs have not cured the deficiencies associated with several causes of a c tio n against Defendant First American. The Court will not deny Plaintiffs leave to file the p ro p o s e d first amended complaint as it stands. However, if Plaintiffs file the proposed first a m e n d e d complaint as it stands, the Court will deny amendment as to those claims which 5

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th e Court identified as deficient in the Order filed contemporaneously herewith, and will g ra n t dismissal of those claims with prejudice. If Plaintiffs still seek to preserve those c la im s , Plaintiffs must file a second amended complaint within thirty (30) days of the date o f this Order which cures the deficiencies identified in the Court's other Order. C . VFS P ro p o s e d defendant VFS moves for summary judgment, and thus opposes a m e n d m e n t, on the four counts asserted against it: counts thirty-six (wrongful foreclosure), th irty-s e v e n (conversion), thirty-nine (slander of title), and forty (quiet title). VFS argues th a t Plaintiffs' wrongful foreclosure claim is untimely under the relevant statute, and in any e v e n t, Cumorah was entitled to foreclose because Kearney defaulted on the loan. VFS c o n te n d s a conversion claim only applies to personal property, not real property. As to s la n d e r of title, VFS argues Plaintiffs were aware of the Cumorah lien and Cumorah had a v a lid deed trust on the Property, and thus there was no false utterance regarding the P ro p e rty. As to the quiet title claim, VFS argues that although the claim's caption identifies V F S as a defendant on this claim, VFS does not claim title to the Property, as the trustee's d e e d grants title only to Cumorah. P la in tif f s respond that VFS was not entitled to exercise any powers under the a p p lic a b le statutory authority because Plaintiffs owned the Property free and clear of C u m o ra h 's lien when they took the Property without notice of Cumorah's lien in June 2006. Plaintiffs contend that when an alleged trustee lacks authorization to conduct a sale, the tru ste e is not entitled to a statute of limitations defense. As to conversion, Plaintiffs re s p o n d that if VFS disposed of personal property, such as fixtures, VFS is liable for c o n v e rs io n , and Plaintiffs need to depose VFS and Cumorah to make this determination. As to slander of title Plaintiffs contend a genuine issue of fact remains as to whether P la in tif f s were bone fide purchasers who took without notice of Cumorah's pending lien. As to the quiet title claim, Plaintiffs agree to dismiss this claim against VFS if VFS claims 6

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n o rights in the Property. Plaintiffs further argue that VFS's motion is premature because P la in tif f s need discovery to determine whether it was VFS or Cumorah which induced P la in tif f s ' prior counsel to drop them as defendants from a prior complaint. 1 . Wrongful Foreclosure U n d e r Nevada law, a plaintiff successfully pleads a wrongful foreclosure claim if h e alleges "that at the time the power of sale was exercised or the foreclosure occurred, no b re a c h of condition or failure of performance existed on the mortgagor's or trustor's part w h ic h would have authorized the foreclosure or exercise of the power of sale." Collins v. U n io n Fed. Sav. & Loan Ass'n, 662 P.2d 610, 623 (Nev. 1983). Under the relevant s ta tu to ry authority, a court may declare a foreclosure sale void under certain conditions, but a n y action to void the sale must be brought either within 90 days after the date of the sale f o r persons with notice of the foreclosure, or within 120 days after the date on which the p e rs o n received actual notice of the sale if proper notice was not provided pursuant to the s ta tu te . Nev. Rev. Stat. § 107.080(5), (6). P la in tif f s do not dispute that they had notice of the foreclosure sale and did not b rin g their lawsuit against VFS within ninety days of the sale. Plaintiffs provide no a u th o rity for the proposition that a trustee who lacks authorization to exercise a power of s a le is not entitled to a statute of limitations defense. The Court therefore will deny P la in tif f s leave to amend to add a wrongful foreclosure claim against VFS. 2 . Conversion In Nevada, conversion is "a distinct act of dominion wrongfully exerted over a n o th e r's personal property in denial of, or inconsistent with his title or rights therein or in d e ro g a tio n , exclusion, or defiance of such title or rights." Evans v. Dean Witter Reynolds, In c ., 5 P.3d 1043, 1048 (Nev. 2000) (quotation omitted). Whether the defendant converted th e plaintiff's property generally is a question of fact. Id. /// 7

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P la in tif f s do not dispute that conversion applies only to personal property, not re a l property. However, Plaintiffs contend VFS may have converted Plaintiffs' personal p ro p e rty located on the real property when it was sold. Plaintiffs have not made any factual a lle g a tio n s supporting this claim. Although Plaintiffs contend they need to depose VFS and C u m o ra h to determine whether either entity converted Plaintiffs' property, Plaintiffs should b e aware of facts regarding whether they had any personal property on their real property w h e n it was sold. The Court therefore will deny Plaintiffs leave to amend to add this claim a s it stands in the proposed first amended complaint, but will grant leave to amend to add f a c tu a l allegations in support of this claim. If Plaintiffs still seek to preserve this claim, P la in tif f s must file a second amended complaint within thirty (30) days of the date of this O rd e r which cures the deficiencies identified in this Order. 3 . Slander of Title In Nevada, to allege a slander of title claim, the plaintiff must allege that "the w o rd s spoken were false, that they were maliciously spoken, and that the plaintiff sustained s o m e special pecuniary damages as a direct and natural result of their having been spoken." Summa Corp. v. Greenspun, 607 P.2d 569, 573 (Nev. 1980). Recording a false document s a tis f ie s the first element, and "a deed of trust which should have been cancelled is such a f a ls e document." Id. Allegations that the defendant knew the statement was false or acted in reckless disregard of its truth or falsity will satisfy the malice requirement. Rowland v. L e p ire , 662 P.2d 1332, 1335 (Nev. 1983). "The special pecuniary damage is that which d ire c tly and immediately results from the impairment of the vendability of the land caused b y the publication of the disparaging matter." Summa Corp., 607 P.2d at 573. Plaintiffs allege the Cumorah's deed of trust identified the wrong property, both b y the metes and bounds description and by parcel number, and Plaintiffs affirmatively w e re told that the Cumorah lien had been satisfied. Plaintiffs thus assert they took the P ro p e rty as bona fide purchasers without notice. Plaintiffs also allege VFS and Cumorah 8

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w e re aware of the potential for a mistake regarding the lien's status with respect to the P ro p e rty, because Cumorah recorded a corrected version of its lien after Plaintiffs acquired th e Property, yet VFS and Cumorah forged ahead with the foreclosure, and Plaintiffs s u f f e re d damages as a result. Plaintiffs adequately have alleged a slander of title claim, and th e Court will grant leave to amend to add this claim. 4 . Quiet Title P la in tif f s have agreed not to assert this claim against VFS, as VFS has disclaimed it asserts an interest in the Property. The Court therefore will deny leave to amend to add th is claim against VFS. D . Cumorah P ro p o s e d defendant Cumorah moves to dismiss, and thus opposes amendment, as to counts thirty-six (wrongful foreclosure), thirty-seven (conversion), thirty-nine (slander of title ), and forty (quiet title). Cumorah argues Plaintiffs' wrongful foreclosure claim is u n tim e ly. Cumorah further argues that even if this claim were timely, Cumorah was e n title d to foreclose because Kearney did not perform his obligations on the loan. Cumorah a ls o argues Cumorah's conduct was not the proximate cause of Plaintiffs' injuries for its w ro n g f u l foreclosure, slander of title, and quiet title claims. Cumorah further argues the c o n v e rs io n claim fails because conversion applies only to personal property, not real p ro p e rty. Finally, Cumorah argues Plaintiffs' allegations do not support a request for p u n itiv e damages as against Cumorah. Plaintiffs respond that Plaintiffs are bona fide purchasers who have owned the P ro p e rty since they took it without notice of Cumorah's continuing lien on the Property in J u n e 2006. Plaintiffs further contend that because Cumorah ignored warning signs that it m a y have lost its foreclosure rights due to its failure to record its deed of trust with an a c c u ra te description of the Property, Plaintiffs have alleged facts supporting punitive d a m a g e s . As to their claims for slander of title and quiet title, Plaintiffs argue that Cumorah 9

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d id not make any arguments as to why these two claims should be dismissed other than to a rg u e that because the wrongful foreclosure claim must be dismissed, so must these two c la im s . Finally, as to conversion, Plaintiffs argue that if Cumorah disposed of any of P la in tif f s ' personal property, such as fixtures, then Plaintiffs have a viable conversion c la im . Plaintiffs contend they need to depose VFS and Cumorah to make this d e te rm in a tio n . 1 . Wrongful Foreclosure A s discussed above, this claim is untimely. The Court therefore will deny leave to amend to add this claim against Cumorah. 2 . Conversion A s discussed above, Plaintiffs do not dispute that conversion applies only to p e rs o n a l property, not real property. However, Plaintiffs contend Cumorah may have c o n v e rte d Plaintiffs' personal property located on the real property when it was sold. Plaintiffs have not made any factual allegations supporting this claim. Although Plaintiffs c o n te n d they need to depose VFS and Cumorah to determine whether either of these entities c o n v e rte d Plaintiffs' property, Plaintiffs should be aware of facts regarding whether they h a d any personal property on their real property when it was sold. The Court therefore will d e n y Plaintiffs leave to amend to add this claim as it stands in the proposed first amended c o m p la in t, but will grant leave to amend to add factual allegations in support of this claim. If Plaintiffs still seek to preserve this claim, Plaintiffs must file a second amended c o m p la in t within thirty (30) days of the date of this Order which cures the deficiencies id e n tif ie d in this Order. 3 . Slander of Title A s set forth above, Plaintiffs have alleged a slander of title claim. The Court th e re f o re will grant Plaintiffs leave to amend to add this claim. /// 10

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4 . Quiet Title A plaintiff asserting a quiet title claim must allege that the defendant is u n la w f u lly asserting an adverse claim to title to real property. Union Mill v. Mining Co. v. W a rre n , 82 F. 519, 520 (D. Nev. 1897); Clay v. Cheeline Banking & Trust Co., 159 P. 1081 (N e v . 1916). To prevail in a quiet title action, the plaintiff must establish "good title in h im s e lf ." Breliant v. Preferred Equities Corp., 918 P.2d 314, 318 (Nev. 1996). Under Nevada law, "[e]very conveyance of real property within this State . . . w h ic h shall not be recorded as provided in this chapter, shall be void as against any s u b s e q u e n t purchaser, in good faith and for a valuable consideration, of the same real p ro p e rty, or any portion thereof, where his or her own conveyance shall be first duly re c o rd e d ." Nev. Rev. Stat. § 111.325. A bona fide purchaser is under a duty of inquiry w h e n "the circumstances are such that a purchaser is in possession of facts which would le a d a reasonable man in his position to make an investigation that would advise him of the e x is te n c e of prior unrecorded rights." Berge v. Fredericks, 591 P.2d 246, 249 (Nev. 1979). Cumorah argues that because it was entitled to foreclose after Kearney failed to p a y off the loan, Plaintiffs have no wrongful foreclosure claim and thus no right to a quiet title claim. However, Plaintiffs allege they are bona fide purchasers who were unaware of th e Cumorah loan. Although Cumorah argues Plaintiffs' own allegations show they had a c tu a l notice of the Cumorah lien, Plaintiffs contend they did not have notice that the C u m o ra h loan had not been repaid, and in fact had been assured the loan was satisfied and th e lien no longer encumbered the Property. Cumorah contends Plaintiffs were aware or s h o u ld have been aware that the lien still encumbered the Property because they did not re c e iv e a payoff statement at escrow. Whether Plaintiffs actually were on notice or should h a v e investigated further are questions not suitable for resolution at this stage of the p ro c e e d in g s . Plaintiffs have alleged facts supporting a quiet title claim and the Court

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th e re f o re will grant Plaintiffs leave to amend to add this claim.1 5 . Motion to Strike Punitive Damages C u m o ra h moves to strike Plaintiffs' request for punitive damages. Evidence that a defendant ignored warning signs of a potential mistake regarding its ability to foreclose a n d proceeded with the foreclosure in the face of those warning signs may suffice to s u p p o rt punitive damages. Countrywide Home Loans, Inc. v. Thitchener, 192 P.3d 243, 2 5 5 (Nev. 2008). Here, Plaintiffs allege Cumorah had warning signs that it did not have a u th o rity to foreclose on the Property due to errors in the recorded deed of trust, yet it p ro c e e d e d with the foreclosure anyway. Given these allegations, the Court will not strike th e request for punitive damages at this stage of the proceedings. V . CONCLUSION IT IS THEREFORE ORDERED that Defendant Alverson, Taylor, Mortensen & S a n d e rs ' Motion to Strike Plaintiffs' First Amended Complaint (Doc. #37) is hereby D E N IE D as moot. IT IS FURTHER ORDERED that Defendant First American Title Insurance C o m p a n y's Motion to Strike First Amended Complaint (Doc. #38) is hereby DENIED as m o o t. IT IS FURTHER ORDERED that proposed defendant Valley Foreclosure S e rv ic e s ' Motion for Summary Judgment (Doc. #45/#46) is hereby GRANTED in part and D E N IE D in part. The motion is granted in that the Court will (1) deny Plaintiffs leave to a m e n d to add a wrongful foreclosure claim against Valley Foreclosure Services, (2) deny P la in tif f s leave to amend to add a quiet title claim against Valley Foreclosure Services, and (3 ) deny Plaintiffs leave to amend to add the conversion claim as it presently is stated. The Defendant Cumorah argues for the first time in reply that because the wrongful foreclosure claim is untimely, so are Plaintiffs' other claims related to the foreclosure. The Court declines to consider this argument raised for the first time in the reply brief, as Plaintiffs have not had an opportunity to respond. Carstarphen v. Milsner, 594 F. Supp. 2d 1201, 1204 n.1 (D. Nev. 2009). 12
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m o tio n is denied in that the Court will (1) grant Plaintiffs leave to amend to add the slander o f title claim as stated in the proposed first amended complaint, and (2) grant Plaintiffs le a v e to file a second amended complaint adding factual allegations to support a conversion c la im . IT IS FURTHER ORDERED that proposed defendant Cumorah Credit Union's M o tio n to Dismiss (Doc. #57) is hereby GRANTED in part and DENIED in part. The m o tio n is granted in that the Court will (1) deny Plaintiffs leave to amend to add a wrongful f o re c lo s u re claim against Cumorah Credit Union, and (2) deny Plaintiffs leave to amend to a d d the conversion claim as it presently is stated. The motion is denied in that the Court w ill (1) grant Plaintiffs leave to amend to add the slander of title and quiet title claims as s ta te d in the proposed first amended complaint, and (2) grant Plaintiffs leave to file a s e c o n d amended complaint adding factual allegations to support a conversion claim. IT IS FURTHER ORDERED that proposed defendant Cumorah Credit Union's M o tio n to Strike Plaintiffs' Claims for Punitive Damages (Doc. #59) is hereby DENIED. IT IS FURTHER ORDERED that Plaintiffs' Motion for Leave to File First A m e n d e d Complaint and to Add Parties (Doc. #55) is hereby GRANTED in part and D E N IE D part. Plaintiffs may elect to stand on the proposed first amended complaint. Alternatively, Plaintiffs may file a second amended complaint within thirty (30) days of the d a te of this Order correcting the deficiencies identified in this Order and the Order filed c o n te m p o ra n e o u s ly herewith.

D A T E D : August 29, 2010 _______________________________ PHILIP M. PRO United States District Judge

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