Coleman et al v. Caliber Home Loans, Inc. et al

Filing 47

OPINION AND ORDER granting 24 Motion to Amend the Amended Complaint. Signed by Magistrate Judge Norah McCann King on 12/3/2014. (pes1)

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

JAMES COLEMAN, et al.,
Plaintiffs,
vs.

Civil Action 2:14-cv-243
Judge Marbley
Magistrate Judge King

CALIBER HOME LOANS, INC., et al.,
Defendants.
OPINION AND ORDER

This matter is before the Court on the motion of plaintiffs
James and January Coleman (“plaintiffs”) for leave to file a
second amended complaint. Motion for Leave to File Second
Amended Complaint (“Motion to Amend the Amended Complaint”),
Doc. No. 24.

For the reasons that follow, the Motion to Amend

the Amended Complaint is GRANTED.
I.

BACKGROUND
Defendants Caliber Home Loans, Inc., CIT Mortgage Loan Trust

2007-1, and The Bank of New York Mellon Trust Company, N.A.,
(collectively, “Loan Defendants”) “are the purported servicer, former
holder, and holder of [the plaintiffs’] home loan, respectively.”
Amended Complaint for Money Damages and Other Relief (“Amended
Complaint”), Doc. No. 9, ¶ 2.

On November 26, 2013, the United States

Bankruptcy Court for the Southern District of Ohio ordered that the
Colemans’ mortgage on real property for a home loan be “declared

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current and any arrearages discharged, and the Colemans have been
paying their mortgage on time.”

Id. at ¶ 1, Exhibit H. Plaintiffs

filed this action on March 11, 2014, alleging that the Loan Defendants
violated the order of the Bankruptcy Court by attempting to collect
amounts not owed on plaintiffs’ home loan and by reporting the
plaintiffs’ loan account as delinquent.

The original complaint

asserted claims under the Real Estate Settlement Procedures Act
(“RESPA”), as well as claims of breach of contract, negligence,
intentional infliction of emotional distress, defamation, and invasion
of privacy.

Complaint for Money Damages and Other Relief

(“Complaint”), Doc. No. 1. On April 4, 2014, plaintiffs amended the
original complaint to include claims under the Fair Credit Reporting
Act (“FCRA”). Amended Complaint.1

The Loan Defendants moved to dismiss

the Amended Complaint for failure to state a claim upon which relief
can be granted.

Motion of Defendants Caliber Home Loans, Inc., The

Bank of New York Mellon Trust Company, N.A., and CIT Mortgage Loan
Trust 207-1 to Dismiss Plaintiffs’ Complaint (“Defendants’ Motion to
Dismiss”), Doc. No. 17.
On June 19, 2014, plaintiffs filed the Motion to Amend the
Amended Complaint.

By the proposed amendment, plaintiffs seek to

address the Loan Defendants’ arguments regarding the breach of
contract claims and to plead additional violations of the FCRA and to
plead additional relevant facts that have allegedly occurred since the
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 The Amended Complaint also joined  Experian Information Solutions, Inc., and
Equifax Information Services, LLC, as defendants. The claims against these
defendants have been dismissed. Order, Doc. No. 45; Order, Doc. No. 46. 

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Amended Complaint was filed.

The Loan Defendants oppose the Motion to

Amend the Amended Complaint.

Defendants Caliber Home Loans, Inc., The

Bank of New York Mellon Trust Company, N.A., and CIT Mortgage Loan
Trust 207-1’s Response in Opposition to Plaintiffs’ Motion for Leave
to File Second Amended Complaint (“Memo. in Opp.”), Doc. No. 29.

With

the filing of Plaintiffs’ Reply Memorandum in Support of Their Motion
for Leave to File Second Amended Complaint (“Reply”), Doc. No. 32,
this matter is now ripe for resolution.
II.

STANDARD
Rule 15(a) of the Federal Rules of Civil Procedure provides that

“[t]he court should freely give leave [to amend] when justice so
requires.”

Fed. R. Civ. P. 15(a)(2).

Rule 15 reinforces “the

principle that cases ‘should be tried on their merits rather than the
technicalities of the pleadings.’”

Moore v. City of Paducah, 790 F.2d

557, 559 (6th Cir. 1986) (quoting Tefft v. Seward, 689 F.2d 637, 639
(6th Cir. 1982)).

The grant or denial of a request to amend a

complaint is left to the broad discretion of the trial court.

General

Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990).

“In

deciding whether to grant a motion to amend, courts should consider
undue delay in filing, lack of notice to the opposing party, bad faith
by the moving party, repeated failure to cure deficiencies by previous
amendments, undue prejudice to the opposing party, and futility of
amendment.”

Brumbalough v. Camelot Care Ctrs., Inc., 427 F.3d 996,

1001 (6th Cir. 2005) (citing Brooks v. Celeste, 39 F.3d 125, 130 (6th
Cir. 1994).

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“A proposed amendment is futile if the amendment could not
withstand a Rule 12(b)(6) motion to dismiss.”

Rose v. Hartford

Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000) (citing
Thiokol Corp. v. Dep’t of Treasury, Revenue Div., 987 F.2d 376, 382-83
(6th Cir. 1993)).

“To survive a motion to dismiss, a [claim] must

contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’”

Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007)).

“A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 663 (2007)).
III. DISCUSSION
In opposing the Motion to Amend the Amended Complaint, the Loan
Defendants argue that plaintiffs’ proposed amendment fails to comply
with S.D. Ohio Civ. R. 7.3, would result in prejudice to the Loan
Defendants if permitted, and is futile.

The Court will address each

argument in turn.
The Loan Defendants argue, first, that the Motion to Amend the
Amended Complaint was filed in violation of the local rules of this
Court because plaintiffs did not consult with the Loan Defendants
prior

to

filing

the

motion.

Rule

7.3

of

the

Court’s

local

rules

requires, under certain circumstances, that counsel confer with each
other before filing a motion. Rule 7.3(a) requires consultation with

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opposing counsel prior to filing a motion for an extension of time.
S.D. Ohio Civ. R. 7.3(a). Moreover,
[a] party filing any other type of motion to which other
parties might reasonably be expected to give their consent
(such as a motion to amend pleadings, for leave to file a
document instanter, for voluntary dismissal of a complaint
or counterclaim, or to correct an electronic filing
involving a technical error in using the ECF system) shall
comply with the procedure set forth in S.D. Ohio Civ. R.
7.3(a) before filing such motion.
S.D. Ohio Civ. R. 7.3(b).

Plaintiffs contend that they did not

violate Rule 7.3, even though they did not consult with the Loan
Defendants prior to filing the Motion to Amend the Amended Complaint,
because they had no reason to believe that the motion would be
unopposed by the Loan Defendants. Reply, p. 3. Considering the
procedural history and posture of this case, the Court agrees that
plaintiffs did not file the Motion to Amend the Amended Complaint in
violation of S.D. Ohio Civ. R. 7.3.
Next, the Loan Defendants contend that they will be prejudiced by
the filing of the proposed amended pleading.

The Loan Defendants

specifically argue that, because the filing of the proposed Second
Amended Complaint will render moot Defendants’ Motion to Dismiss, the
Loan Defendants will have to incur additional time and expense in
addressing yet another amended pleading and because the litigation
will be further delayed during the pendency of the anticipated renewed
motion to dismiss.

Memo in Opp., pp. 8-9.

Loan Defendants’ arguments

are not well taken.
The prejudice sufficient to deny a motion for leave to amend a
pleading must be significant. Leary v. Daeschner, 349 F.3d 888, 908

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(6th Cir. 2003) (citing Moore, 790 F.2d at 562).

This Court has

previously held that “neither delay nor rebriefing is sufficient to
demonstrate prejudice.”

Smith v. Robbins & Myers, Inc., 3:12-cv-281,

2012 WL 5845072, *4 (S.D. Ohio Nov. 19, 2012). Moreover, the Motion to
Amend the Amended Complaint, which was filed on June 19, 2014, is not
untimely.

See Preliminary Pretrial Order, Doc. No. 14, p. 2

(establishing August 1, 2014 as the date by which motions to amend
must be filed). The Court also concludes that the litigation should
not be significantly delayed by reason of the proposed amendment.

The

April 20, 2015 discovery completion date is more than 120 days away
and the Court has previously expressed its expectation that discovery
should proceed even during the pendency of a motion to dismiss.
Preliminary Pretrial Order, p. 2.
Finally, the Loan Defendants argue that to grant the Motion to
Amend the Amended Complaint would be futile. Memo. in Opp. p. 2.

In

this regard, the Loan Defendants refer to the arguments presented in
Defendants’ Motion to Dismiss and argue, further, that the proposed
breach of contract claim could not survive a motion to dismiss. This
Court concludes that, for purposes of resolving the Motion to Amend
the Amended Complaint, the proposed Second Amended Complaint
adequately states claims for relief, including a claim for breach of
contract. See Pavlovich v. Nat'l City Bank, 435 F.3d 560, 565 (6th
Cir. 2006)(an Ohio breach of contract claim has four elements: (1) the
existence of a contract; (2) the plaintiff's performance; (3) the
defendant's breach; and (4) damage). Resolution of the specific

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challenges to plaintiffs’ claims are, in this Court’s estimation,
better left for consideration by the District Judge in the context of
a renewed motion to dismiss.
WHEREUPON plaintiffs’ Motion to Amend the Amended Complaint, Doc.
No. 24, is GRANTED.

The Clerk is DIRECTED to file the Second Amended

Complaint, which is attached to the motion.

December 3, 2014

s/ Norah McCann King
Norah McCann King
United States Magistrate Judge

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