Berona v. Franklin County Treasurer et al

Filing 34

OPINION AND ORDER granting 27 Motion to Withdraw 23 Motion for Joinder; denying 27 Motion for Leave to File Amended Complaint & denying 17 Motion for Attorney Fees. Signed by Magistrate Judge Terence P Kemp on 10/29/2013. (kk2)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Diane Berona,

:

Plaintiff,

:

v.

Case No. 2:13-cv-00012

:

Franklin County
Treasurer, at al.,

:

JUDGE EDMUND A. SARGUS, JR.
Magistrate Judge Kemp

:
Defendants.
OPINION AND ORDER
This case is before the Court to consider a motion for leave
to file an amended complaint and a motion to withdraw the motion
for joinder filed by Plaintiff Diane Berona.

(Doc. #27).

Also

before the Court is Ms. Berona’s motion for attorney fees.
#17).

(Doc.

For the reasons that follow, the motion to withdraw will

be granted, but the motion for leave to amend and the motion for
attorney fees will be denied.
I. Background
On January 7, 2013, Ms. Berona filed this lawsuit against
the Bank of America, N.A. (“BANA”) and the Franklin County
Treasurer, claiming that BANA cannot prove that it has a mortgage
interest in her property and that it, therefore, improperly
collected mortgage payments as well as the proceeds from a short
sale of that property.

Ms. Berona further alleges that the

Franklin County Treasurer “may have an interest” in the property
“by virtue of any unpaid real estate taxes and assessments.”
(Doc. #1 at 3, ¶8).1

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Based upon these allegations, Ms. Berona

As this Court noted previously, “[n]owhere does Plaintiff
indicate the relief she seeks from [the Franklin County
Treasurer], nor is it clear to the Court what that relief might
be.” (Doc. #15 at 5). Although the Franklin County Treasurer
has not made an appearance in this case, as discussed infra, this
Court withheld granting a default judgment against the Franklin

attempts to bring claims for unjust enrichment and a violation of
the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §1962
et seq.

Ms. Berona also alleges that BANA engaged in fraud which

led her to rely to her detriment on misrepresentations that it
was the true holder of the note on the first and second mortgages
on the property.

She seeks leave to amend the complaint to add a

claim for breach of contract and also to allege that BANA is
liable for actions taken by Countrywide Home Loans, Inc.
(“Countrywide”).

BANA opposes the motion for leave to amend,

arguing that the motion is untimely, that Ms. Berona has not
demonstrated good cause to extend the deadline in the Court’s
scheduling order, and that BANA would be unfairly prejudiced by
granting leave.
Prior to addressing the motion for leave to amend, the Court
will briefly address Ms. Berona’s motion for leave to withdraw
her motion for joinder filed on August 8, 2013.

Ms. Berona seeks

to withdraw the motion for joinder based upon “new information”
regarding the merger between Countrywide and BANA, which her
counsel claims led her to file the motion for leave to amend.
(Doc. #32 at 3).

More specifically, Ms. Berona no longer seeks

to add Countrywide as a defendant, but rather wishes to plead
that BANA is liable for any actions taken by Countrywide, based
upon the terms of the merger.

BANA acknowledges Ms. Berona’s

desire to withdraw the motion for joinder, but does not oppose
it.

(Doc. #28 at 1; Doc. #30 at 2, 5).

For good cause shown,

the Court will grant the motion for leave to withdraw.
now turns to the motion for leave to amend.

The Court

After addressing the

motion for leave to amend, the Court will examine the motion for
attorney fees.

County Treasurer until it has had an opportunity to hear the case
against BANA on the merits. Id.
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II. The Motion for Leave to Amend
Motions for leave to amend are evaluated under the standards
in Fed. R. Civ. P. 15(a), which provides that leave to amend
should be freely given if justice so requires.

Fed. R. Civ. P.

15(a) cannot be read in isolation, however, but must be read
together with Fed. R. Civ. P. 16(b).
F.3d 888, 906-07 (6th Cir. 2003).

See Leary v. Daeschner, 349

Fed. R. Civ. P. 16(b) requires

the Court, in each civil action which is not exempt from the
rule, to “enter a scheduling order that limits the time” to,
inter alia, file motions, identify expert witnesses, and complete
discovery.

The rule further provides that “[a] schedule shall

not be modified except upon a showing of good cause. . . .”
Consequently, the Court is permitted to examine the standard
factors governing amendment of complaints under Fed. R. Civ. P.
15(a) only if it is satisfied that any prior date for the filing
of a motion for leave to amend either has been met or is properly
extended under the good cause provisions of Fed. R. Civ. P.
16(b).
The Court has broad discretion to modify its own pretrial
orders, but it must consider that “[a]dherence to reasonable
deadlines is ... critical to maintaining integrity in court
proceedings,” and that pretrial scheduling orders are “the
essential mechanism for cases becoming trial-ready in an
efficient, just, and certain manner.”

Rouse v. Farmers State

Bank, 866 F. Supp. 1191, 1198-99 (N.D. Iowa 1994).

In evaluating

whether the party seeking modification of a pretrial scheduling
order has demonstrated good cause, the Court is mindful that
“[t]he party seeking an extension must show that despite due
diligence it could not have reasonably met the scheduled
deadlines.”

Deghand v. Wal-Mart Stores, Inc., 904 F. Supp. 1218,

1221 (D. Kan. 1995).

The focus is primarily upon the diligence

of the movant; the absence of prejudice to the opposing party is
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not equivalent to a showing of good cause.

See Tschantz v.

McCann, 160 F.R.D. 568, 571 (N.D. Ind. 1995).

Of course,

“[c]arelessness is not compatible with a finding of diligence and
offers no reason for a grant of relief.”

Dilmar Oil Co. v.

Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997).
Further, although the primary focus of the inquiry is upon the
moving party’s diligence, the presence or absence of prejudice to
the other party or parties is a factor to be considered.

See

Inge v. Rock Fin. Corp., 281 F.3d 613, 625 (6th Cir. 2002).

It

is with these standards in mind that Ms. Berona’s motion will be
decided.
Although Ms. Berona filed her motion for leave after the
established deadline, she did not address Fed. R. Civ. P. 16(b)’s
good cause standard in her supporting memorandum.

Rather, Ms.

Berona refers to Fed. R. Civ. P. 15(a) and argues that amendment
should be allowed because “the case is still in the beginning
stage,” and amendment would further settlement.
4).

(Doc. #27 at 3-

She also asserts that justice cannot be served without

allowing amendment, and it is “judicially efficient to do so at
this date.”

Id.

In its opposition to Ms. Berona’s motion, BANA argues that
Ms. Berona fails to satisfy the good cause requirement of Fed. R.
Civ. P. 16(b).

BANA asserts that Ms. Berona “does not even

acknowledge that there was a deadline for seeking leave to amend,
much less present facts sufficient to establish good cause that
the deadline should be extended to accommodate her motion.”
(Doc. #30 at 4).

BANA likewise argues that Ms. Berona was not

diligent in seeking leave and that she has not shown that the
need for additional time was unforeseeable.

Finally, BANA

contends that denying leave to amend will not create a
substantial risk of unfairness to Ms. Berona.

Accordingly, BANA

urges that the relevant factors “weigh heavily against granting
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leave.”

Id.

Ms. Berona addresses the issue of good cause for the first
time in her reply brief, stating that she “can easily satisfy the
test under the Rule 16(b) analysis.”

(Doc. #23 at 2).

Ms.

Berona argues that she was diligent in seeking leave to amend and
that the delay was caused by defense counsel’s misrepresentation
of facts concerning the merger between Countrywide and BANA.
at 3.

Id.

Ms. Berona further argues that there would be substantial

risk of unfairness to her if leave is not granted, and that
filing the motion “a mere six days after the deadline” was not
the result of bad faith.

Id.

In the Rule 26(f) report, counsel for both Ms. Berona and
BANA agreed that June 21, 2013 was a reasonable deadline for
filing a motion to amend the pleadings.

(Doc. #20).

Based on

discussions at the first pretrial conference which suggested that
Ms. Berona’s counsel may require additional time to identify the
proper parties, the Court issued an order permitting any motion
to amend to be filed by August 21, 2013.

(Doc. #21 at 2-3).

Despite granting the additional time, Ms. Berona’s counsel did
not file the motion for leave to amend until after the August 21
deadline.

The purported reason for delay, namely an alleged

misrepresentation of fact by defense counsel concerning the
relationship between Countrywide and BANA, is unsupported by the
record.

Simply put, there is no evidence to support Ms. Berona’s

argument that the delay was somehow caused by defense counsel, or
that defense counsel misrepresented any fact concerning the
merger between Countrywide and BANA.

The merger that prompted

the proposed amendments took place years ago, and the record does
not support counsel’s claim that the motion for leave to amend
could not have been filed before August 21.

Indeed, Ms. Berona’s

counsel readily admits that once she conducted “further
research,” she was able to learn that BANA merged with
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Countrywide in 2008, with BANA assuming liability for
Countrywide’s obligations.

(Doc. #32 at 2).

Accordingly, the

Court agrees with BANA’s position that the “proposed amendments
are not based on any newly discovered facts that were not
available or known by Plaintiff at the time she filed her
complaint.”

(Doc. #30 at 4).

Moreover, Ms. Berona’s counsel did

not move for an extension or otherwise indicate that she would be
unable to file the motion to amend until after the relevant
deadline.

Because Ms. Berona’s counsel fails to make any showing

of reasonable diligence to provide this Court with a basis for
finding good cause, the Court must deny the motion for leave to
amend.
Looking briefly at the other relevant factors, the Court
recognizes that the delay here is minimal and would not cause
substantial prejudice to BANA given the early stage of the
proposed amendment.

Nevertheless, the Court is required to deny

the motion for leave to amend in light of counsel’s failure to
demonstrate the type of reasonable diligence that justifies
extending a deadline found in an order issued under Rule 16(b).
Counsel’s blanket assertion that “there was no lack of due
diligence,” without any support for that statement in the record,
simply does not make it so.

(Doc. #32 at 3).

Because the Court

cannot excuse counsel’s obligation to satisfy the good cause
requirement of Fed. R. Civ. P. 16(b), there is no reasonable
basis for adjusting the Court deadline in these circumstances.
Consequently, Ms. Berona’s motion for leave to amend will be
denied.
III. The Motion for Attorney Fees
The Court next turns to Ms. Berona’s motion for attorney
fees.

(Doc. #17).

In the motion, Ms. Berona contends that

BANA’s failure to timely answer the complaint caused her to incur
“the fees associated with drafting and filing the Application to
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the Clerk for Entry of Default, and the Motion for Default
Judgment.”

(Doc. #17 at 2).

In opposition, BANA argues that the

costs incurred in moving for default were “unnecessary and
premature.”

(Doc. #19 at 1).

The record reflects that Ms. Berona moved for entry of
default on February 4, 2013 (Doc. #6), and the Clerk of this
Court entered default the following day (Doc. #7).

On February

21, 2013, BANA filed a motion to set aside the entry of default
and for additional time to respond to the complaint.

(Doc. #9).

Ms. Berona did not respond to the motion, but instead filed a
motion for default judgment.

(Doc. #10).

On April 10, 2013, the

Court granted the motion for extension of time to respond and
stayed briefing on the motion for default judgment until it
issued a decision on the motion to set aside the entry of
default.

(Doc. #14).

On May 9, 2013, the Court issued an order granting the
motion to set aside the entry of default and for additional time
to respond to the complaint.

(Doc. #15).

In granting the

motion, the Court found that Ms. Berona served BANA at a location
where it did not typically receive service of process, causing a
delay in forwarding the summons and complaint to the legal
department.

The Court also found that Ms. Berona would not be

prejudiced by the setting aside of the entry of default, that
BANA had a meritorious defense, and that its conduct was not
culpable.

Based upon these findings, the Court also held that

Ms. Berona’s motion for default judgment was moot as to BANA.
The motion was also denied as to the Franklin County Treasurer.
The Court made the latter determination despite the Franklin
County Treasurer’s failure to appear, opting for the preferred
practice which is to withhold granting a default judgment until a
trial of the action is heard against the appearing defendant.
As this Court has observed previously, “BANA moved promptly
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to set aside the default before a judgment was entered or even
moved for . . . ” and the Court set aside the entry of default.
(Doc. #15 at 4).

The Court will not award attorney fees for

filing the motion for default.

Further, Ms. Berona’s counsel

also opted to incur additional costs at her own peril by choosing
to file the motion for default judgment instead of responding to
the motion to set aside and for additional time and by not
recognizing the strong likelihood that the Court would set aside
the entry of default.

Because Ms. Berona has failed to set forth

any ground upon which this Court could award her attorney fees,
the motion for attorney fees will be denied.
IV. Conclusion
For the reasons set forth above, the motion to withdraw the
motion for joinder filed by Plaintiff Diane Berona is granted.
(Doc. #27).

The Clerk is directed to remove the motion for

joinder (Doc. #23) from this Court’s pending motions list.

The

motion for leave to file an amended complaint (Doc. #27) and the
motion for attorney fees (Doc. #17) are denied.
V. Procedure on Objections
Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
reconsideration by a District Judge.

28 U.S.C. §636(b)(1)(A),

Rule 72(a), F ed. R. Civ. P.; Eastern Division Order No. 91-3,
pt. I., F., 5.

The motion must specifically designate the order

or part in question and the basis for any objection.

Responses

to objections are due fourteen days after objections are filed
and replies by the objecting party are due seven days thereafter.
The District Judge, upon consideration of the motion, shall set
aside any part of this Order found to be clearly erroneous or
contrary to law.

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This order is in full force and effect, notwithstanding the
filing of any objections, unless stayed by the Magistrate Judge
or District Judge.

S.D. Ohio L.R. 72.3.
/s/ Terence P. Kemp
United States Magistrate Judge

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