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Gbb1, Inc. and Victor Franco v. Jp Morgan Chase Bank National Association

August 17, 2012

GBB1, INC. AND VICTOR FRANCO,
PLAINTIFFS,
v.
JP MORGAN CHASE BANK NATIONAL ASSOCIATION, AND DOES 1 TO 250, INCLUSIVE, DEFENDANTS.



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

ORDER (1) GRANTING PLAINTIFFS' MOTION SEEKING AMENDED COMPLAINT AND

(2) DENYING AS MOOT DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S COMPLAINT AND MOTION TO EXPUNGE RECORDED LIS PENDENS LEAVE TO FILE FIRST (ECF Nos. 6, 9)

Presently before the Court are Defendant JP Morgan Chase Bank, N.A.'s ("JP Morgan" or "Defendant") Motion to Dismiss Plaintiff's Complaint and Motion to Expunge Recorded Lis Pendens, (Mot. to Dismiss, ECF No. 6), and Plaintiffs GBB1, Inc. ("GBB1") and Victor Franco's ("Franco," and collectively "Plaintiffs") Motion Seeking Leave to File First Amended Complaint, (Mot. File FAC, ECF No. 9). Also before the Court is JP Morgan's response in opposition to Plaintiffs' motion for leave to amend. (Resp. in Opp'n, ECF No. 16) The hearings set for the motions on June 21, 2012, and July 5, 2012, respectively, were vacated, and the matters taken under submission on the papers. Having considered the parties' arguments and the law, the Court GRANTS Plaintiffs' motion for leave to file an amended complaint and DENIES AS MOOT JP Morgan's motion to dismiss.

BACKGROUND

Plaintiffs first filed this action in the Superior Court of California for the County of San Diego on February 24, 2012. (Notice of Removal Ex. A,*fn1 at 11, ECF No. 1) The original complaint asserts one cause of action for rescission of notice of default. (Id. at 13--14)

On April 6, 2012, JP Morgan removed to this Court on grounds of diversity jurisdiction, (Notice of Removal, ECF No. 1), and thereafter filed a motion to dismiss on April 12, 2012, (Mot. to Dismiss, ECF No. 6). The Court set a briefing schedule on JP Morgan's motion to dismiss, directing Plaintiffs to respond on or before May 10, 2012. (Order, Apr. 18, 2012, ECF No. 8)

Before the deadline to respond to the motion to dismiss and just one day after the period for amendment as a matter of course, see Fed. R. Civ. P. 15(a)(1)(B),*fn2 Plaintiffs filed their motion for leave to file an amended complaint, (Mot. File FAC, ECF No. 9). But as of the date of this Order, Plaintiffs have failed to respond to JP Morgan's motion to dismiss.*fn3 Nor did they file their (optional) reply in support of their motion for leave to amend.

Plaintiffs' amended complaint seeks to drop GBB1 as a plaintiff, add Enriqueta Franco as a plaintiff, and to "provid[e] the court with a full and complete statement of facts and the basis for the relief sought by the Plaintiffs." (Mot. File FAC 3, ECF No. 9) The proposed amended complaint contains fifty-eight paragraphs to the original complaint's fifteen, but still asserts just one cause of action: "Set aside of trustee sale." (Proposed FAC, ECF No. 9-1) In addition, it appears to add several allegations with the purpose of curing some of the deficiencies noted in JP Morgan's motion to dismiss. (See, e.g., id. ¶¶ 56--58 (alleging that tender is not required in this case))

LEGAL STANDARD

Leave to amend should be freely given "when justice so requires." Fed. R. Civ. P. 15(a)(2). But while the rule should be interpreted extremely liberally, leave should not be granted automatically. Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990). "The party opposing amendment bears the burden of showing prejudice." DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). A trial court may deny a motion for leave to amend based on various factors, including bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the party has previously amended. Foman v. Davis, 371 U.S. 178, 182 (1962).

ANALYSIS

JP Morgan opposes Plaintiffs' motion for leave to amend primarily on the basis that amendment would be futile, but also because of undue delay, bad faith, and prejudice. (See generally Resp. in Opp'n, ECF No. 16) The Court considers each in turn.

1. Futility

"A proposed amendment is futile only if no set of facts can be proven under the amendment to the pleadings that would constitute a valid and sufficient claim." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). In its pending motion to dismiss and in opposition to Plaintiffs' motion for leave to amend, JP Morgan lists several reasons why Plaintiffs' claims fail as a matter of law. At this early stage, however, the Court, in its ...


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