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Velazquez v. GMAC Mortgage Corp.

September 10, 2009

MARIA AND GUADALUPE VELAZQUEZ, INDIVIDUALLY AND ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
GMAC MORTGAGE CORPORATION, GMAC MORTGAGE, LLC, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT AND MOTION TO AMEND CORRECTED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

[Motions filed on July 15, 2009 and July 16, 2009]

This matter is before the Court on Plaintiffs' motion for leave to file a second amended complaint.*fn1 After reviewing the submissions of the parties, the Court denies the motion.

I. BACKGROUND

On August 19, 2008, Plaintiffs Maria and Guadalupe Velazquez filed this suit against GMAC Mortgage Corporation, GMAC Mortgage, LLC, and other unnamed defendants (collectively "Defendants") on behalf of themselves and all others similarly situated, alleging that Defendants' actions in connection with the sale and servicing of Plaintiffs' loans violated the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., and raising several state law claims for relief.

Defendants filed a Motion to Dismiss, relying in part on facts unique to the Velazquezes, namely that: (1) the re-finance of their mortgage loan in May 2007 precludes any claim for rescission under TILA, and (2) a one-year statute of limitations bars any claim for damages under TILA.

On December 22, 2008, the Court granted in part and denied in part Defendants' Motion to Dismiss. Velazquez v. GMAC Mortg.

Corp., 605 F. Supp. 2d 1049 (C.D. Cal. 2008). The Court granted the motion with respect to Plaintiffs' TILA rescission claim, but denied the motion as to Plaintiffs' claim for damages under TILA. The Court noted that because Plaintiffs may be entitled to equitable tolling, the statute of limitations issue is better suited to resolution on summary judgment. Id. at 1061.

Since the Court's ruling on Defendants' Motion to Dismiss, the parties have engaged in discovery particular to the Velazquezes, for example, with respect to whether equitable tolling applies to their TILA claim. (Opp. 2:10-13.) Defendants have sought information and documents through discovery concerning whom the Velazquezes spoke with regarding their loan, what documents they were provided, what they understood the loan terms to be, and what contact they had with Defendants. (Id. at 2:13-18.) In addition, Defendants have answered written discovery requests relating to the Velazquezes' loan and subpoenaed several third parties with information regarding the Velazquezes' loan. (Id. 2:20-3:6.)

On May 8, 2009, the parties filed a stipulation and proposed order for Plaintiffs to file a First Amended Complaint ("FAC") to substitute Residential Funding Company, LLC, as a defendant for GMAC Mortgage Corp. The Court signed the order on May 14, 2009. (Docket No. 55.) Plaintiffs filed the FAC on May 15, 2009. (Docket No. 56.)

On May 27, 2009, Defendants deposed Maria and Guadalupe Velazquez. (Defs.' Ex. A (G. Velazquez Dep.); Ex. B (M. Velazquez Dep.).) The depositions revealed that Mr. and Mrs. Velazquez: (1) do not speak or read English, and thus did not read the disclosure documents that form the basis of their claims, (Ex. A 10:23-11:3; Ex. B 12:19-23); (2) did not request or receive any Spanish-language translations of any loan disclosure documents, instead relying on a Spanish-speaking mortgage broker to explain the loan terms, (Ex. A 21:11-22:9, 74:25-76, 78:11-79:1; Ex. B 13:11-17, 19:23-20:2); (3) realized the loan terms were not what they expected almost immediately upon repayment and quickly sought to re-finance, (Ex. A 92:10-93:9, 95:7-15; Ex. B 25:25-26:13); and (4) did not meet with their attorneys until the day before the depositions and the day of the depositions, respectively, (Ex. A 108:9-108:13; Ex. B 23:21-24:1.)

On July 16, 2009, Plaintiffs filed this Motion for Leave to File a Second Amended Complaint ("SAC"). The Motion notes that "Maria and Guadalupe Velazquez have elected to withdraw as named Plaintiffs in the action" and requests leave to file the SAC, which: (1) dismisses the Velazquezes from the case; (2) substitutes four new plaintiffs, the Lowerys and the Largents, the latter of whom have no connection whatsoever with Defendants regarding their loan; (3) adds three new defendants-- Countrywide Home Loans and BAC Home Loans Servicing LLP, who allegedly owned and serviced, respectively, the Largents' loan, and Aurora Loan Services, LLC, who allegedly serviced the Lowerys' loan; and (4) revives the TILA rescission cause of action on behalf of the newly-named plaintiffs that the Court previously dismissed with respect to the Velazquezes.

II. DISCUSSION

A. Legal ...


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