United States District Court, S.D. California
April 16, 2014
PETER R. SOLLENNE and PATRICIA D. SOLLENNE, as Trustees for the Sollenne Family Trust, dated December 12, 2007, Plaintiffs,
U.S. BANK NATIONAL ASSOCIATION, as Trustee for Lehman XS Trust Mortgage Pass-Through Certificates, Series 2007-18N; NATIONSTAR MORTGAGE, LLC; and DOES 1-10, inclusive, Defendants.
ORDER: (1) GRANTING MOTION TO SET ASIDE JUDGMENT (2) DENYING MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 41(B) [DKT. NOS. 27, 31]
ROGER T. BENITEZ, District Judge.
Before this Court are a Motion to Set Aside Judgment (Docket No. 27), filed by Plaintiffs Peter R. Sollenne and Patricia D. Sollenne and a Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 41(b) (Docket No. 31), filed by Defendants U.S. Bank National Association and Nationstar Mortgage, LLC.
Plaintiffs originally brought a foreclosure-related complaint on December 14, 2012. (Docket No. 1). On December 13, 2013, this Court granted Defendants' Motion to Dismiss Plaintiff's First Amended Complaint. (Docket No. 25). Plaintiffs were given 30 days to file a Second Amended Complaint. On January 16, 2014, after more than 30 days had elapsed, Plaintiffs attempted to file a Second Amended Complaint. The filing was rejected as untimely. (Docket No. 26). Plaintiffs did not request an extension of the deadline to file, or file a motion for reconsideration of the order rejecting the Second Amended Complaint.
On February 28, 2014, Plaintiffs filed a motion asking this Court to set aside the dismissal on the grounds of excusable neglect. Plaintiffs assert that they mistakenly believed that they had until January 30, 2014 to file a Second Amended Complaint, and ask that this Court excuse their failure to meet the deadline. (Mot. to Set Aside at 2). Defendants oppose the motion, and ask that this Court dismiss the case. For the reasons stated below, the Motion to Set Aside is GRANTED and the Motion to Dismiss is DENIED.
I. Motion to Set Aside
A district court is empowered to relieve a party from a final judgment, order, or proceeding resulting from "excusable neglect." FED. R. CIV. P. 60(b)(1). This Court notes that no final judgment document has been filed, but understands that Plaintiffs are asking for relief from the deadline set in this Court's December 13 Order, which effectively ends their case. A Rule 60(b) motion is an appropriate means to ask a Court to excuse a failure to file in a timely fashion. See Briones v. Riviera Hotel & Casino, 116 F.3d 379, 382 (9th Cir. 1997). The determination of whether neglect is excusable is "at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission." Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 395 (1993). In applying the Pioneer analysis, a court is to consider at least four factors, including (1) the danger of prejudice to the opposing party, (2) the length of the delay and its potential impact on proceedings, (3) the reasons for the delay, and (4) whether the movant acted in good faith. Lemoge v. United States, 587 F.3d 1188, 1192 (9th Cir. 2009) (citations omitted). Ignorance of court rules does not constitute excusable neglect, even if the litigant is pro se. Briones, 116 F.3d at 381.
Upon analysis of the four factors and taking into account all of the relevant circumstances, the Court concludes that setting aside the deadline is equitable. Plaintiffs argue that their amended complaint was only filed a few days late. They argue that the prejudice to Defendants is only the cost of litigation, but the prejudice to Plaintiffs is the loss of their home. (Mot. to Set Aside at 4). They also point out that they sought to set aside the dismissal 41 days after this Court rejected their amended complaint, and that it will cause little delay in the proceedings. They also emphasize that they were acting without an attorney at the time.
In their Opposition, Defendants argue that this Court has already found the case without merit. (Opp'n to Mot. to Set Aside at 1). They contend that they are prejudiced by having to pay attorney's fees and costs to defend the lawsuit. ( Id. at 4). They assert that the trustee's sale would not be stopped. ( Id. ) Defendants argue that the delay caused by the failure to meet deadlines would be substantial, as the hearing on this motion was not set until more than three months after they should have filed their complaint. ( Id. at 4-5). They argue that Plaintiffs are abusing the legal process in the hope of delaying foreclosure. ( Id. at 5). Defendants argue that the explanation for delay was "dubious." ( Id. )
This Court finds that an extension of time to file a response is appropriate. Plaintiffs, who were then proceeding without the assistance of counsel, were only a few days late in filing, and clearly were attempting to prosecute their case. This delay necessitated these motions, but has not seriously impeded the prosecution of the case. Although the reason for the failure to file in a timely fashion appears to be simple negligence in determining filing deadlines, there is no evidence that Plaintiffs are seeking to amend their complaint in bad faith. Defendants also fail to establish that they will suffer prejudice. Defendants point to the costs of litigating this matter, but merely being forced to litigate the merits is not prejudicial. See TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001). Defendants themselves state that continuing the litigation will not prevent them from continuing with the foreclosure. Although this Court warns Plaintiffs that future failures to comply with Court-ordered filing deadlines may result in the dismissal of their case, the equities of this situation favor allowing Plaintiffs to proceed. The Motion to Set Aside is GRANTED.
II. Motion to Dismiss
Defendants ask this Court to dismiss this case pursuant to Federal Rule of Civil Procedure 41(b). When a plaintiff fails to amend his complaint after a district judge dismisses the complaint with leave to amend, the dismissal is typically considered a dismissal for failure to comply with a court order. Yourish v. Cal. Amplifier, 191 F.3d 983, 986 (9th Cir. 1999) (citing Ferdick v. Bonzelet, 963 F.2d 1258, 1260 (9th Cir. 1992)). In determining if dismissal is appropriate, a court is to consider (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic alternatives. Id. at 990.
As discussed above, this Court has determined that the appropriate Rule 60(b) analysis requires that Plaintiffs' failure to comply with the filing deadline be excused. The Court determines that dismissal is not required by the Court's need to manage its docket, and that Plaintiffs should be given an opportunity to litigate the merits of their case. Accordingly, the Motion to Dismiss is DENIED.
For the reasons stated above, Plaintiffs' Motion to Set Aside is GRANTED and Defendants' Motion to Dismiss is DENIED. Plaintiffs have 21 days from the date this Order is signed to file their Second Amended Complaint. Plaintiffs are specifically warned that failure to comply with the new deadline will likely result in dismissal of their action for failure to comply with a court order.
IT IS SO ORDERED.