Lesho v. Specialized Loan Servicing, LLC et al

Filing 39

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS MOTION TO AMEND COMPLAINT [DKT. NO. 34 . The Court DIRECTS the Clerk to file her amended complaint (Dkt. No. 34 -1). Signed by Senior Judge Irene M. Keeley on 11/8/17. (njz)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
NANCY C. LESHO
Plaintiff,
v.

//

CIVIL ACTION NO. 1:16CV19
(Judge Keeley)

SPECIALIZED LOAN SERVICES, LLC; and
THE BANK OF NEW YORK MELLON, FKA THE
BANK OF NEW YORK, as Trustee for the
Certificate Holders of CWABS, Inc.,
Asset-Backed Certificates, Series 2006-20,
Defendants.

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
Pending before the Court is the Motion to Amend Complaint
filed by the plaintiff, Nancy C. Lesho (“Lesho”), in which she
seeks “to add as a party the servicing agent to which [her] account
was transferred during the pendency of this action.” For the
following reasons, the Court GRANTS the motion (Dkt. No. 34).
I. BACKGROUND
Lesho filed her original complaint in the Circuit Court of
Harrison County, West Virginia, against the defendants, Specialized
Loan Services, LLC (“SLS”), and The Bank of New York Mellon, FKA
The Bank of New York, as Trustee for the Certificate Holders of
CWABS,

Inc.,

Asset-Backed

Certificates,

Series

2006-20

(“BNY

Mellon”) (collectively, “the Defendants”) (Dkt. No. 1-2). BNY
Mellon is the holder of Lesho’s mortgage loan, and SLS was the loan
servicer when Lesho filed her original complaint. Id. at 8.

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
Lesho alleges that her home was completely destroyed by a fire
in June 2014, and that she was hospitalized due to complications
from a stroke for much of December 2015. Id. at 8-9. Although Lesho
claims that she never received notice of foreclosure, SLS scheduled
her home for a foreclosure sale on January 7, 2016. When she
contacted SLS, a representative advised Lesho that her account was
in arrears in the amount of $3,673, and that she would only be able
to

reinstate

the

loan

by

paying

attorney’s

fees

and

costs

associated with avoiding the foreclosure. Id. at 9-10. Lesho’s
original complaint alleged four causes of action: 1) illegal
default fees, in violation of W. Va. Code §§ 46A-2-127(g), 46A-2115,

and

46A-2-128,

2)

misrepresentation

of

amount

due,

in

violation of W. Va. Code § 46A-2-127(d), 3) tortious interference
with contract, and 4) breach of contract. Id. 10-14.
On February 10, 2016, the Defendants removed the case to this
Court pursuant to 28 U.S.C. § 1332 (Dkt. No. 1). The Court held a
scheduling conference on April 14, 2016, but continued the case for
45 days because the parties were engaged in preliminary settlement
discussions (Dkt. No. 10). When the parties failed to settle their
dispute, the Court entered a limited schedule on discovery and
dispositive motions on June 1, 2016 (Dkt. No. 15). Thereafter, on
October 3, 2016, during a status conference, the parties placed on
2

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
the record the terms of an agreement to resolve the case, and the
Court directed them to notify it when each had fulfilled its
respective obligations under the settlement agreement (Dkt. No.
22).
It was only through a status report filed on June 16, 2017,
that

the

servicing

parties
of

advised

Lesho’s

the

Court

for

the

loan

had

been

mortgage

first

time

that

transferred

to

Shellpoint Mortgage Servicing, a division of New Penn Financial,
LLC (“Shellpoint”), and that the parties were having difficulty
finalizing their settlement agreement (Dkt. No. 24). When the
parties were unable to submit a dismissal order by August 23, 2017,
the Court conducted a status conference on October 4, 2017, at
which it learned that the parties had not yet complied with the
terms

of

their

settlement

agreement

(Dkt.

No.

27).

As

a

consequence, the Court scheduled the case for trial beginning on
January 4, 2018 (Dkt. No. 35).
On October 11, 2017, Lesho moved for leave to amend her
complaint to add Shellpoint as a defendant (Dkt. No. 34). According
to Lesho, after her loan was transferred to Shellpoint in December
2016, it returned all five payments she had made to SLS under the
settlement agreement. Id. at 2. As a result, Lesho seeks to assert

3

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
a

fifth

cause

of

action

for

illegal

return

of

payments,

in

violation of W. Va. Code § 46A-2-115(c) (Dkt. No. 34-1 at 9-10).
II. DISCUSSION
Under the rules, a plaintiff may amend her complaint “once as
a matter of course” within either 21 days after serving the
complaint, or 21 days after service of a responsive pleading or a
motion under Rule 12(b), (e), or (f), whichever is earlier. Fed. R.
Civ. P. 15(a)(1). “In all other cases, a party may amend its
pleading only with the opposing party’s written consent or the
court’s leave. The Court should freely give leave when justice so
requires.” Fed. R. Civ. P. 15(a)(2). Because SLS opposes Lesho’s
proposed amendment (Dkt. No. 37), she may only amend her complaint
with the Court’s leave.
The grant or denial of a motion to amend is within the
discretion of the Court. Scott v. Family Dollar Stores, Inc., 733
F.3d 105, 121 (4th Cir. 2013). “[D]elay . . . is not sufficient
reason to deny leave to amend.” Rather, the Court should freely
grant leave unless the amendment “would be prejudicial to the
opposing party, there has been bad faith on the part of the moving
party, or the amendment would have been futile.” Johnson v. Oroweat
Foods Co., 785 F.2d 503, 509 (4th Cir. 1986) (citing Foman v.

4

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
Davis, 371 U.S. 178, 182 (1962)); see also Edwards v. City of
Goldsboro, 178 F.3d 231 (4th Cir. 1999).
In the Fourth Circuit,
[w]hether an amendment is prejudicial will often be
determined by the nature of the amendment and its timing.
A common example of a prejudicial amendment is one that
“raises a new legal theory that would require the
gathering and analysis of facts not already considered by
the [defendant, and] is offered shortly before or during
trial.” An amendment is not prejudicial, by contrast, if
it merely adds an additional theory of recovery to the
facts already pled and is offered before any discovery
has occurred.
Laber v. Harvey, 438 F.3d 404, 427 (4th Cir. 2006) (alteration in
original). In other words, the further a case progresses, the more
likely it is that the defendant will be prejudiced by an amendment.
See Mayfield v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 674
F.3d 369, 379 (4th Cir. 2012) (citing Matrix Cap. Mgmt. Fund, LP v.
BearingPoint, Inc., 576 F.3d 172, 193 (4th Cir. 2009)).
After considering the specific circumstances in this case, the
Court concludes that granting leave to amend is appropriate,
despite SLS’s argument that “the proposed amendment is prejudicial
and the product of undue delay” (Dkt. No. 37 at 2). Indeed, it has
been nearly ten months since Shellpoint engaged in the allegedly
unlawful conduct that forms the basis of Lesho’s amendment, but
Lesho’s delay is mitigated by the circumstances of this case. Until

5

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
recently, the parties were attempting to resolve the matter without
further litigation or court involvement. Lesho promptly moved for
leave to amend only one week after the parties advised the Court of
their failed settlement, and almost three months before trial.
McNeeley v. Wells Fargo Bank, N.A., No. 2:13-cv-25114, 2015 WL
1543124, at *2 (S.D.W.Va. Apr. 2, 2015) (reasoning that a Rule
15(a) motion made three months before trial was not “shortly before
or during trial” as usually required for a finding of prejudice).
SLS’s

concern

regarding

further

prejudicial

delay

is

unwarranted (Dkt. No. 37 at 3-4). With several months remaining
before trial, “the parties can conduct further discovery, if
needed, with permission from the court,” McNeeley, No. 2:13-cv25114, 2015 WL 1543124, at *2, and Lesho has indicated that she
will

readily

consent

to

such

discovery

(Dkt.

No.

34

at

3).

Moreover, the complete dearth of discovery in this case during the
two years that it has been pending suggests that the necessary
scope of any inquiry will be quite limited. See Mayfield, 674 F.3d
at 379 (“The amount of discovery is also a relevant consideration
in determining whether prejudice would result . . . .”).
The additional allegations in the amended complaint arise out
of servicing the same mortgage loan at issue in the original
complaint, and relate to the parties’ efforts to settle the instant
6

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
lawsuit. Thus, they simply are not “an entirely new event and
nucleus

of

facts,”

nor

will

they

“change

the

nature

of

the

litigation.” Id. at 380; cf. Hill v. Equifax Info. Servs., LLC, No.
1:11CV107, 2013 WL 474789, at *4 (M.D.N.C. Feb. 7, 2013) (denying
motion to amend because additional claims were “so clearly distinct
from the original claims that they [would] vastly expand the
complexities of proof and risk confusion of the jury”).
The “advanced” stage of this litigation does not pose a risk
of prejudice to the new defendant, Shellpoint, which has been
servicing Lesho’s mortgage loan for nearly one year. At an earlier
hearing, counsel for SLS advised that it has been working with
Shellpoint throughout 2017 to effectuate the proposed settlement
agreement SLS reached with Lesho in October 2016. Therefore,
Shellpoint has been aware of this lawsuit and will not require much
time to familiarize itself with Lesho’s allegations. Cf. Knisely v.
Nat’l Better Living Ass’n, Inc., No. 3:14-CV-15, 2015 WL 1868819,
at *8 (N.D.W.Va. Apr. 23, 2015) (“Given the purported close
relationship between NBLA and the proposed new defendants, NBLA
likely has been aware of those allegations for quite some time . .
. .”).

7

LESHO V. SLS, LLC, ET AL.

1:16CV19

MEMORANDUM OPINION AND ORDER GRANTING
PLAINTIFF’S MOTION TO AMEND COMPLAINT [DKT. NO. 34]
III. CONCLUSION
In conclusion, for the reasons discussed, the Court GRANTS
Lesho’s Motion to Amend Complaint (Dkt. No. 34), and DIRECTS the
Clerk to file her amended complaint (Dkt. No. 34-1).
It is so ORDERED.
The Court DIRECTS the Clerk to transmit copies of this Order
to counsel of record.
DATED: November 8, 2017.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

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