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Khan v. Recontrust Co.

United States District Court, Northern District of California, San Francisco Division

November 3, 2014

RAHILA KHAN, Plaintiff,
v.
RECONTRUST COMPANY, et al., Defendants

Rahila Khan, Plaintiff, Pro se, Fremont, CA.

For ReconTrust Company, Bank of America, N.A., Defendants: Brian Stratton Whittemore, Severson & Werson, A Professional Corporation, San Francisco, CA.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT [Re: ECF No. 73]

LAUREL BEELER, United States Magistrate Judge.

INTRODUCTION

Plaintiff Rahila Khan, proceeding pro se, filed this action against defendants ReconTrust Company (" ReconTrust") and Bank of America, N.A. (" Bank of America") (collectively, " Defendants") for claims based on the circumstances surrounding her mortgage loans and her subsequent default on those loans. After the court granted in part and denied in part Defendants' motion to dismiss Plaintiff's First Amended Complaint (" FAC"), the court, in a Case Management and Pretrial Order, ECF No. 72, set September 26, 2014 as the deadline for Ms. Khan to seek leave to amend the complaint or add parties to this action.

In the pending motion, which was filed on the deadline, Ms. Khan seeks leave to file a second amended complaint that would name an additional defendant and add an additional claim. See Motion to Amend, ECF No. 73. Defendants filed an opposition to her motion on October 9, 2014. Opposition, ECF No. 78. Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument and vacates the November 6, 2014 hearing. Upon consideration of the papers submitted and the applicable legal authority, the court GRANTS IN PART and DENIES IN PART Ms. Khan's Motion to Amend.

STATEMENT

Ms. Khan alleges that in September 2006, she entered into two mortgage loans, which she used to purchase property at 39959 Michelle Street, Fremont, California (" the Michelle Street Property"). FAC, ECF No. 22, ¶ 2[1] Request for Judicial Notice (" RJN"), ECF No. 6-1, Exs. B, C. In January 2009, Ms. Khan began falling behind on her mortgage payments for the Michelle Street Property " because the interest rates were exorbitant and it was . . . impossible for [her to make them]." FAC, ECF No. 22, ¶ 13.

Thereafter, she alleges that she received trial or permanent loan modifications for the Michelle Street Property on three occasions. Id., ¶ 14(A)-(C). In September 2009, Ms. Khan submitted all documentation required to obtain a loan modification, but she says that Bank of America cancelled it shortly after claiming that it did not receive the required paperwork. Id., ¶ 14(A). Then, in January 2010, Bank of America allegedly agreed to provide Ms. Khan with a loan modification, but Bank of America later cancelled it without giving any reason for doing so. Id., ¶ 14(B). Finally, Ms. Khan obtained a loan modification in April 2010, but Bank of America apparently cancelled it, which she learned when she received a Notice of Default. Id., ¶ 14(C). The Notice of Default, which was recorded by ReconTrust on September 21, 2011, states that Ms. Khan was behind on her mortgage payments for the Michelle Street Property by $151, 302.53 as of September 20, 2011. RJN, ECF No. 6-1, Ex. D.[2]

It does not appear from the record that a Notice of Trustee's Sale has been recorded or that a foreclosure sale has occurred for the Michelle Street Property. See generally FAC, ECF No. 22; RJN, ECF No. 6-1.

Ms. Khan filed this action, which to this point has been about the Michelle Street Property only, against ReconTrust and Bank of America on March 6, 2012. The court dismissed her original complaint on July 2, 2012, but allowed her to file an amended one. 7/2/2012 Order, ECF No. 16. She did so on September 6, 2012. FAC, ECF No. 22. As she did in her original complaint, she alleged claims for (1) fraud, (2) violation of TILA, (3) violation of RESPA, and (4) wrongful foreclosure in violation of California Civil Code § § 2923.5 and 2924. See id .

On October 26, 2012, upon Defendants' motion, the court dismissed with prejudice Ms. Khan's claims under TILA and RESPA, and for wrongful foreclosure, but found that her fraud claim against Defendants for their handling of her mortgage loans for the Michelle Street Property survives. See 10/23/2012 Order, ECF No. 26. Defendants then answered what remained of Ms. Khan's First Amended Complaint. Answer, ECF No. 30. For roughly the next two years, Ms. Khan and Defendants engaged in mediation with the court's ADR program in an attempt to resolve the action. After that attempt failed, in a Case Management and Pretrial Order, ECF No. 72, the court set September 26, 2014 as the deadline for Ms. Khan to file leave to add new parties or amend the pleadings.

On September 26, 2014, Ms. Khan filed a motion for leave to file a second amended complaint. See Motion to Amend, ECF No. 73. She attached to it a copy of her proposed Second Amended Complaint (" Proposed SAC"). Proposed SAC, ECF No. 76. In it, she does two things: she 1) adds Portfolio Servicing, Inc. (" Select Portfolio") as a defendant to her surviving fraud claim (which she currently brings against Bank of America and ReconTrust only); and 2) adds a new fraud claim against Bank of America, ReconTrust, and Select Portfolio with respect to a completely separate property that she owns at 40224 Blanchard Street (" the Blanchard Street Property"). See Proposed SAC, ECF No. 76, ¶ ¶ 3-4(D)

On October 9, 2014, Defendants filed an opposition in which they object only to Ms. Khan's new, proposed fraud claim relating to the Blanchard Street Property. See Opposition, ECF No. 78 Defendants do not oppose the addition of Select Portfolio to Ms. Khan's surviving fraud claim relating to the Michelle Street ...


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