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Dennly R. Becker, et al v. Wells Fargo Bank

August 21, 2012

DENNLY R. BECKER, ET AL., PLAINTIFFS,
v.
WELLS FARGO BANK, NA, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS

Presently before the court is plaintiff's*fn1 motion for leave to file his most recently lodged proposed Third Amended Complaint (Dkt. No. 97-98).*fn2 The court heard this matter on its August 9, 2012 civil law and motion calendar. Plaintiff, who is proceeding without counsel, appeared and represented himself. Attorney David M. Newman appeared via telephone on behalf of defendants.

The undersigned has fully considered the parties' briefs, oral arguments, and appropriate portions of the record and, for the reasons that follow, recommends that plaintiff's motion for leave to amend be granted in part, and that plaintiff's proposed Third Amended Complaint be deemed filed as narrowed herein.

I. BACKGROUND

This tortured, foreclosure-related case has been pending in this court since October 2010, and the pleadings are still not yet closed. Although plaintiff and defendants share the blame for the delays in this case moving forward, all parties represented at the hearing that they would like to see this case move forward.

Defendants removed this case to federal court on October 15, 2010, and filed a motion to dismiss the complaint shortly thereafter. In response, plaintiff filed a motion for leave to amend his complaint. The court denied plaintiff's motion because plaintiff was already entitled to amend his complaint as a matter of course pursuant to Federal Rule of Civil Procedure 15(a)(1)(B); the court permitted plaintiff to file his First Amended Complaint. (See Order, Nov. 12, 2010, at 2, Dkt. No. 15.)

Plaintiff filed a timely First Amended Complaint, and defendants filed a motion to dismiss in January 2011. Although there was substantial delay in resolving the motion caused by the filing of ancillary motions, proceedings related to the issuance of a preliminary injunction, and the ordering of supplemental briefing in regards to defendants' motion to dismiss, on August 1, 2012, the district judge presiding over this case, United States Senior District Judge Lawrence K. Karlton, adopted the undersigned's findings and recommendations and partially granted defendants' motion to dismiss the First Amended Complaint. (Order & Findings & Recommendations, Mar. 22, 2011, Dkt. No. 49, adopted by Order, Aug. 1, 2011, Dkt. No. 58.) Judge Karlton also construed plaintiff's objections to the findings and recommendations as a motion for reconsideration, and granted that motion in a very limited respect. (Order, Aug. 1, 2011, at 2.)

At bottom, following resolution of the findings and recommendations and plaintiff's motion for reconsideration, plaintiff was granted leave to file a Second Amended Complaint that included claims of:

(1) fraud;

(2) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq.;

(3) unfair debt collection under federal law and California law;

(4) civil violation of the Racketeer Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C. § 1962;

(5) negligence and negligent misrepresentation insofar as those claims arose "from defendants' alleged representations during the loan modification application process";

(6) "breach of contract insofar as such claim may arise from defendants' alleged foreclosure activities during the forbearance period stated within the Forbearance Agreement, and/or insofar as such claim may arise from an oral contract for a loan modification resulting from representations made to plaintiff during the loan modification process"; and

(7) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2605 et seq. (Order & Findings & Recommendations, Mar. 22, 2011, at 26, 44, adopted by Order, Aug. 1, 2011, at 7.) Plaintiff was granted leave to "remedy [these] deficient claims in accordance with the terms of [the] order." (Order & Findings & Recommendations, Mar. 22, 2011, at 2.) In regards to plaintiff's motion for reconsideration, plaintiff was "granted leave to add new facts in support of his [Real Estate Settlement Procedures Act] claim." (Order, Aug. 1, 2012, at 7.) The court dismissed with prejudice plaintiff's claims for: violation of the Consumers Legal Remedies Act ("CLRA"), false advertising, violation of California Civil Code § 2943, wrongful foreclosure, quiet title, negligence and negligent misrepresentation insofar as plaintiff's negligence and negligent misrepresentation claims arose "implicitly or explicitly from the Forbearance Agreement." (Order & Findings & Recommendations, Mar. 22, 2011, at 44, adopted by Order, Aug. 1, 2011, at 7.)*fn3

Plaintiff filed a Second Amended Complaint (Dkt. No. 60), which materially failed to comply with the court's orders regarding the scope of leave to amend. Plaintiff alleged 22 claims for relief and re-pled claims that had already been dismissed with prejudice. However, the court subsequently struck the 138-page Second Amended Complaint pursuant to the parties' stipulation. (Order, Sept. 8, 2011, Dkt. No. 67.) In approving the parties' stipulation and permitting the filing of a revised Second Amended Complaint, the court cautioned plaintiff as follows:

The Second Amended Complaint must comply with Judge Karlton's Order of August 1, 2011 (Dkt. No. 58) and the Findings and Recommendations (Dkt. No. 49) adopted in full therein. Any nonconforming portion(s) of the Second Amended Complaint may be subject to a Motion to Strike and/or may be stricken sua sponte. If plaintiff files a Second Amended Complaint that does not substantially comply with the applicable Order (Dkt. No. 58) and Findings and Recommendations (Dkt. No. 49) adopted in full therein, plaintiff may be subject to sanctions, including the potential dismissal of his case, for failure to comply with order(s) of the court. (Id. at 1-2 (emphasis in original).) The court also cited numerous legal authorities relevant to the question of sanctions, including dismissal, for failing to follow the court's order. (Id. at 2 n.1.)

Plaintiff filed his revised Second Amended Complaint on September 12, 2011, which alleged eight claims for relief and appears to have largely conformed to the scope of the leave granted by the court (Dkt. No. 68). However, on September 30, 2011, before defendants could respond to the Second Amended Complaint, plaintiff filed a motion for leave to amend and a proposed Third Amended Complaint (Dkt. No. 70).

On October 3, 2011, defendants filed a motion to dismiss plaintiff's Second Amended Complaint (Dkt. No. 71). As a result of the competing motions for leave to file a Third Amended Complaint and to dismiss the Second Amended Complaint, and the possibility that plaintiff's motion for leave to amend might ultimately moot the motion to dismiss in whole or part, the court ordered that plaintiff's motion for leave to amend would be heard first and that the motion to dismiss the Second ...


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