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Bouchard v. Winstar Mortgage Partners

August 10, 2010

KEVIN BOUCHARD, MERCEDES BOUCHARD, PLAINTIFF,
v.
WINSTAR MORTGAGE PARTNERS, INC.; AWARD MORTGAGE, INC.; QUALITY LOAN SERVICES CORPORATION; ET. AL., DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER GRANTING MOTION TO INTERVENE (Doc. No. 9)

Presently before the Court is Aurora Loan Services LLC's Motion to Intervene pursuant to Federal Rule of Civil Procedure 24(a)(2) or in the alternative, under Federal Rule of Civil Procedure 24(b)(2). (Memo. ISO Motion at 3.) Plaintiffs Kevin Bouchard and Mercedes Bouchard oppose Aurora's motion. (Opp. at 1.) For the reasons stated below, the Court GRANTS Aurora's Motion to Intervene.

BACKGROUND

In July of 2007, Plaintiffs obtained a mortgage for $540,000.00 for the purchase of a home. (Compl. ¶ 7.) Plaintiffs' allege that misrepresentations made by Defendant Award Mortgage and Defendant Winstar during the loan origination process resulted in Plaintiffs obtaining an unaffordable mortgage. On December 4, 2009, Plaintiffs, "after they had difficulty making their mortgage payments," received a Notice of Default recorded by Defendant Quality Loan Services Corporation (QLS), the trustee on the deed of trust and trustee for the unknown noteholder. (Compl. ¶¶ 15, 42.) On March 8, 2010, Plaintiffs filed a complaint against Defendants Winstar Mortgage Partners, Inc., Award Mortgage, Inc., Quality Loan Services Corporation, and Does 1 though 10. (Compl.) Plaintiffs' complaint presents six claims for relief: (1) intentional misrepresentation, (2) fraudulent concealment, (3) breach of fiduciary duty, (4) constructive fraud, (5) quiet title, and (6) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607. Aurora is an assignee claiming a beneficial interest in the deed of trust underlying the loan. (Memo. ISO Motion at 4.)

ANALYSIS

On July 8, 2010, Aurora moved to intervene claiming a significantly protectable interest as assignee of the beneficial interest and as the loan servicer. Id. Plaintiffs oppose the motion to intervene arguing that Aurora has no significantly protectable interest and cannot be adversely affected by the pending litigation because Aurora has no ownership interest in the mortgage and all claims are related to the origination of the loan and the liability of the current owner of the loan. (Opp. at 3.)

I. INTERVENTION AS OF RIGHT

A. Legal Standard

Federal Rule of Civil Procedure 24(a) provides in relevant part: On timely motion, the court must permit anyone to intervene who:... (2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

In order to qualify for intervention as of right, a moving party must meet the requirements of a four part test: "(1) the motion must be timely; (2) the applicant must assert a 'significantly protectable' interest relating to property or a transaction that is the subject matter of litigation; (3) the applicant must be situated so that disposition of action may as a practical matter impair or impede the interest; and (4) the applicant's interest must be inadequately represented by the parties." Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094, 1107--08 (9th Cir. 2002) (citing Wetlands Action Network v. U.S. Army Corps of Eng'rs, 222 F.3d 1105, 1113--14 (9th Cir. 2000) and Sierra Club v. E.P.A., 995 F.2d 1478, 1481 (9th Cir. 1993)). The requirements for intervention as of right are interpreted liberally in favor of intervention. Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006). In determining whether intervention is appropriate, well-pleaded nonconclusory allegations in the motion to intervene and the declarations in support of the motion must be taken as true, and a court may take notice of uncontroverted facts in pleadings and affidavits opposing intervention. Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 819--20 (9th Cir. 2001). This determination should be primarily guided by practical and equitable considerations. Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998).

B. Discussion

1. Aurora's Motion to Intervene is Timely

A court considers three factors in determining whether a motion to intervene is timely: "'(1) the stage of the proceeding at which an applicant seeks to intervene; (2) the prejudice to other parties; and (3) the reason for and length of the delay.'" Cal. Dept. of Toxic Substances Control v. Commercial Realty Projects, Inc., 309 F.3d 1113, 1119 (9th Cir. 2002) (quoting United States v. Washington, 86 F.3d 1499, 1503 (9th Cir. 1996)). Courts should be lenient in determining whether a motion to intervene as a matter of right is timely. See United States v. Oregon, 745 F.2d 550, 552--53 (9th Cir. 1984).

First, the Court finds that Aurora filed its motion at an early stage of the proceeding. Aurora filed within two months of Plaintiffs' complaint, the only response that has been filed is a declaration of non-monetary status by Defendant QLS, and the Court has yet to make any substantive rulings. (Doc. Nos. 8 ...


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