Heavener v. Quicken Loans Inc. et al

Filing 42

ORDER GRANTING PLAINTIFF'S MOTION 37 FOR LEAVE TO FILE 39 AMENDED COMPLAINT. Signed by District Judge Gina M. Groh on 3/26/2013. (tlg)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG

DWAYNE A. HEAVENER, JR.,
Plaintiff,
v.

CIVIL ACTION NO. 3:12-CV-68
(JUDGE GROH)

QUICKEN LOANS, INC.;
ADVANCED MORTGAGE SERVICES, INC.;
and ORTH APPRAISALS, LLC,
Defendants.
ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT
Currently pending before this Court is the Plaintiff’s Motion for Leave to File
Amended Complaint [Doc. 37] filed on January 8, 2013. On January 11, 2013,
Defendant Quicken Loans Inc. filed its “Opposition to Plaintiff’s Motion for Leave to File
Amended Complaint.” Plaintiff did not file a reply. This Court has reviewed the record
and the motion and, for the reasons set out below, finds that Plaintiff’s Motion for Leave
to File Amended Complaint should be GRANTED.
BACKGROUND
I.

Factual Allegations
This case involves a loan that was made in excess of the market value of

Plaintiff’s property. In Plaintiff’s proposed Amended Complaint, he alleges that on or
about June 2004, the Plaintiff, Dwayne A. Heavener, Jr., purchased real property
located at HC 87 23-4, Yellow Spring, Hampshire County, West Virginia, 26865. In or
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around August 2005, Plaintiff obtained a mortgage loan from Bank of America in the
amount of $154,400. Then, in 2007, Plaintiff alleges he was solicited by Defendant
Quicken Loans regarding a possible refinance of his existing mortgage loan with Bank
of America. Plaintiff alleges that he had numerous telephone conversations with an
individual named Adam, who he believed was a representative of Quicken Loans. In
those conversations, Adam reviewed the terms of the proposed loan. Defendant
Quicken Loans offered for Plaintiff to participate in the Smart 30 program whereby he
would pay interest only for the first five years, and then the loan would automatically roll
over into a thirty year fixed rate not to exceed the rate of 5.75%. Plaintiff’s loan closing
was conducted at his home by an agent of Quicken Loans. Plaintiff states he was given
little time to review the loan documents prior to signing them.
Then, Defendant Advanced Mortgage, a mortgage broker, arranged for
Defendant Orth Appraisals, LLC (“Orth Appraisals”) to conduct an appraisal of the
Plaintiff’s property. Orth Appraisals conducted an appraisal of Plaintiff’s property.
Plaintiff alleges that the actual market value of Plaintiff’s property at the time of
appraisal was substantially less than the appraised value given by Orth Appraisals. The
alleged fraudulent appraisal ultimately resulted in Plaintiff receiving a loan in excess of
the value of his home and a transferal of additional unsecured debt into home secured
debt.
The Plaintiff’s original Complaint and proposed Amended Complaint has seven
counts. The first count alleges a breach of fiduciary duty against the Defendant broker,
Advanced Mortgage. The second count alleges unlawful predatory lending against
Defendant Quicken Loans. The third count alleges the unauthorized practice of law by
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Defendant Quicken Loans. The fourth count alleges fraud and conspiracy against all of
the Defendants. The fifth count alleges dishonesty, misrepresentation, and breach of
professional standards against Defendant Orth Appraisals. The sixth count alleges that
Defendant Orth Appraisals accepted a fee contingent on a predetermined conclusion.
Last, the seventh count alleges that the Defendants acted in a joint venture, conspiracy,
and agency relationship.
II.

Procedural History
On June 25, 2012, Plaintiff filed, by counsel, his Complaint in the Circuit Court of

Hampshire County, West Virginia, against Defendants Quicken Loans,
Indymac/OneWest, Advanced Mortgage, and Orth Appraisals [Doc. 1-2]. The
Defendants OneWest and Orth Appraisals were served with the Plaintiff’s State Court
Civil Action on or about June 29, 2012. The Plaintiff served the Summons and
Complaint on the West Virginia Secretary of State as Quicken Loans’ statutory attorneyin-fact on June 29, 2012. Quicken Loans’ agent, CT Corporation, then received the
Summons and Complaint on July 5, 2012, via certified mail. The Plaintiff served the
Summons and Complaint on the West Virginia Secretary of State as Advanced
Mortgage’s statutory attorney-in-fact on June 29, 2012. Advanced Mortgage then
received the Summons and Complaint on July 6, 2012, via certified mail.
On July 27, 2012, Defendant Quicken Loans, with the consent of Defendants
OneWest and Orth Appraisals, removed the civil action to the Northern District of West
Virginia pursuant to this Court’s diversity jurisdiction [Doc. 1]. On August 16, 2012,
OneWest filed its Motion to Dismiss Plaintiff’s Complaint, and the Court granted
OneWest’s motion on November 7, 2012.
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On January 8, 2013, Plaintiff filed his “Motion for Leave to File Amended
Complaint.” On January 11, 2013, Defendant Quicken Loans filed its “Opposition to
Plaintiff’s Motion for Leave to File Amended Complaint.” Plaintiff did not file a reply.
Because the deadline for filing a reply has passed and this Court has not received a
reply, the motion is ripe for this Court’s review. See N.D.W. Va. R. 7.02(b)(2) (“[e]xcept
for replies to responses to motions for summary judgment, replies shall be filed and
served within seven (7) days from the date of service of the response to the motion.”).
DISCUSSION
I.

Applicable Standard
Pursuant to Rule 15(a) of the Federal Rules of Civil Procedure, “[a] party may

amend its pleading once as a matter of course . . . if the pleading is one to which a
responsive pleading is required, [within] 21 days after service of a responsive pleading
or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.”
FED. R. CIV. P. 15(a)(1)(B). However, “[i]n 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).
Under Federal Rule of Civil Procedure 15(a), leave to amend a pleading “shall be
freely given when justice so requires.” FED. R. CIV. P. 15(a); see also Foman v. Davis,
371 U.S. 178, 182, 83 S.Ct. 227, 230 (1962) (Supreme Court declaring that “this
mandate is to be heeded”). The law is well settled “that leave to amend a pleading
should be denied only when 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 be

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futile.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir.1986). Delay alone
is an insufficient reason to deny leave to amend. See id. Rather, the delay must be
accompanied by prejudice, bad faith, or futility. See Edwards v. City of Goldsboro,
178 F.3d 231, 242 (4th Cir. 1999). The Fourth Circuit has stated that
[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.” (citing Johnson v.
Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986) (internal citations
omitted). 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.
Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980).
II.

Analysis
In this case, Plaintiff did not amend his Complaint within the twenty-one day

period provided under Rule 15(a)(1)(B). Thus, Plaintiff must have leave of court to
amend his Complaint. Plaintiff does not seek to amend his complaint to add additional
parties or new claims. Rather, Plaintiff argues that his “purpose for amending the
Complaint is to include additional factual background material he obtained as a result of
locating his Quicken loan file . . . not . . . to amend the Complaint to add any additional
parties, Counts or causes of action because the same were accurately and property set
forth in his original Complaint.”
Defendant Quicken Loans opposes Plaintiff’s motion to amend for three reasons:
(1) Plaintiff’s dilatory motive in ignoring the Complaint’s deficiency has caused undue
delay; (2) Plaintiff’s conduct is solely to blame for the undue delay; and (3) Defendant

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has experienced and will continue to experience unfair prejudice and requests costs in
filing and briefing the summary judgment motion. Defendant Quicken Loans also
argues that, if the Court would grant Plaintiff’s motion for leave to amend, he should not
be allowed to add new claims against it.
The Court finds no undue delay, bad faith, or dilatory motive on the part of the
Plaintiff in filing his motion for leave to amend. This is Plaintiff’s first request to amend
his Complaint, and there has not been a repeated failure to cure deficiencies in his
Complaint. The motion was filed on January 8, 2013, and it was timely, as the
scheduling order in this case allowed for amended pleadings to be filed until January 25,
2013.
Additionally, Defendants will not be prejudiced by the amendments as Plaintiff
has only added more facts to support his claim–he has not alleged new claims or added
new parties. Defendant Quicken Loans argues that Plaintiff’s Count I, Breach of
Fiduciary Duty, asserted against “Defendant broker” should not be misread to be
asserted against Quicken Loans instead of Defendant Advanced Mortgage. In this
Court’s previous order granting OneWest’s Motion to Dismiss, the Court noted that
“[t]he first count [of Plaintiff’s original Complaint] alleges a breach of fiduciary duty
against the Defendant broker, Advanced Mortgage.” [Doc. 29]. Indeed, the Original
Complaint and Amended Complaint identify Defendant Advanced Mortgage Service,
Inc. as a “mortgage broker.” None of the other Defendants are identified as a
“mortgage broker.” In both the Original complaint and Amended Complaint, Count I for
Breach of Fiduciary Duty is asserted against “[t]he Defendant broker.” Thus, the
Plaintiff has not alleged a new claim, and the Defendants are not prejudiced by the
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amendments.
Therefore, the Court GRANTS Plaintiff’s Motion for Leave to File Amended
Complaint.
CONCLUSION
For the foregoing reasons, the Plaintiff’s “Motion for Leave to File Amended
Complaint” [Doc. 37] is GRANTED.
It is so ORDERED.
The Clerk is directed to transmit copies of this Order to all counsel of record
and/or pro se parties.
DATED: March 26, 2013

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