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Koenig v. Bank of America, N.A.

United States District Court, E.D. California

December 10, 2014

BANK OF AMERICA, N.A., Defendant.


BARBARA A. McAULIFFE, Magistrate Judge.

This is a mortgage-related case brought by Plaintiff Philip A. Koenig ("Plaintiff") against Defendant Bank of America, N.A. ("Defendant"). On October 6, 2014, Plaintiff filed a motion for leave to amend the complaint to add eight new defendants, eight new causes of action, and additional factual allegations, together with a proposed first amended complaint ("Proposed FAC"). (Docs. 45, 46). On October 31, 2014, Defendant filed a brief in opposition (Doc. 50); on November 17, 2014 and November 14, 2014, Plaintiff filed a reply and a supplemental reply brief (Docs. 51, 53). For the reasons set forth below, Plaintiff's motion to amend is DENIED and Plaintiff will have thirty (30) days from the date of the service of this Order to file an amended complaint in accordance with the Court's previous order dismissing the Complaint with leave to amend. (Doc. 24).


The theory underlying Plaintiff's initial complaint concerns a $349, 000 loan and related Deed of Trust ("DOT") recorded against the home owned by Plaintiff and his wife at 8772 North Chickadee Lane, Clovis, California 93619 (the "Property"). Proposed FAC ¶ 62, Doc 46. On April 5, 2013, Plaintiff filed suit against Defendant Bank of America challenging foreclosure proceedings on the Property and alleging claims for (1) violation of the Fair Debt Collection Practices Act ("FDCPA"); (2) request for declaratory relief; and (3) violation of the Racketeering Influenced and Corrupt Organization Act ("RICO") in the Fresno County Superior Court. (Doc. 1). Plaintiff's complaint was subsequently removed to this Court pursuant to 28 U.S.C. § 1441(b) for diversity jurisdiction. (Doc. 1.)

On May 17, 2013, Defendant brought a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) and a Request for Judicial Notice. (Doc. 5.) On December 23, 2013, the Court dismissed with prejudice Plaintiff's first cause of action alleging FDCPA violations, but found that Plaintiff was entitled to amend his second and third causes of action for declaratory relief and purported RICO violations. (Doc. 24).

Plaintiff did not immediately file his amended complaint, but instead filed a motion to alter or amend the Court's order on January 21, 2014 (Doc. 26), which the Court denied on May 28, 2014. (Doc. 34). In denying Plaintiff's Motion to Alter or Amend, the Court granted Plaintiff thirty (30) days from the date of the order to file an amended complaint, making Plaintiff's deadline for his First Amended Complaint ("FAC") June 30, 2014. (Doc. 26). Plaintiff failed to file his FAC within the allotted time and instead he requested three separate thirty-day motions for an extension of time to file his FAC. (Docs. 36, 39, 41). The Court granted Plaintiff's requests for additional time and his FAC was finally due on October 6, 2014. (Doc. 44.)

On October 6, 2014, Plaintiff filed the instant Motion along with his proposed FAC. In his FAC, Plaintiff seeks to add eight additional Defendants including: (1) Bank of America, N.A. as successor by merger to BAC Home Loans Servicing LP FKA Countrywide Loan Servicing LP; (2) Mortgage Electronic Registration Systems, Inc (MERS); (3) Merscorp Holdings, Inc.; (4) Federal Home Loan Mortgage Corporation ("Freddie Mac"); (5) FHLMC S/A-3Day Arc-125949; (6) Federal Housing Finance Agency; (7) Quality Loan Service Corp.; and (8) Corelogic, Inc. Plaintiff also seeks to add eight additional causes of action including claims for: (1) quiet title; (2) violation of the FDCPA; (3) request for declaratory relief; (4) request for injunctive relief; (5) cancellation of instrument; (6) violation of Cal. Civ. Code § 2923.5; (7) violation of Cal. Civ. Code § 2924; and (8) Negligence. Generally, Plaintiff's allegations challenge each proposed Defendants' interest in Plaintiff's loan and related foreclosure irregularities. Plaintiff also attempts to allege new factual allegations including that certain proposed Defendants should have offered him a loan modification and that he did not have enough time to read his original loan paperwork. See, e.g. Proposed FAC ¶¶ 11, 17-18, 70-71.


Generally, a court grants a motion for leave to amend pleadings pursuant to the permissive standard of Rule 15(a). Martinez v. Newport Beach City, 125 F.3d 777, 785 (9th Cir. 1997). Rule 15 provides that after a responsive pleading has been filed, "a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a).

Where leave to amend is required, the decision whether to grant leave to amend "is entrusted to the sound discretion of the trial court." Jordan v. County of Los Angeles, 669 F.2d 1311, 1324 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810 (1982). "Five factors are taken into account to assess the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint." Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004) ( citing Nunes v. Ashcroft, 348 F.3d 815, 818 (9th Cir. 2003)). "Some courts have stressed prejudice to the opposing party as the key factor." Texaco v. Ponsoldt, 939 F.2d 794, 798 (9th Cir. 1991). However, "[u]ndue delay is a valid reason for denying leave to amend." Id. (internal quotation marks and citation omitted); but see Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999) ("Undue delay by itself, however, is insufficient to justify denying a motion to amend."). Further, "the liberality of Rule 15(a) does not mean that amendment will be allowed regardless of the diligence of the moving party. Where the party seeking amendment knows or should know of the facts upon which the proposed amendment is based but fails to include them in the original complaint, the motion to amend may be denied." Jordan, 669 F.2d at 1324. "Late amendments to assert new theories are not reviewed favorably when the facts and the theory have been known to the party seeking amendment since the inception of the cause of action." Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994). Delay can contribute to a finding of prejudice, for "expense, delay, and wear and tear on individuals and companies count toward prejudice." Id. (internal quotation marks and citation omitted).


Defendant offers three primary reasons why leave to add additional defendants and claims should be denied. First, Defendant argues that Plaintiff unreasonably delayed bringing this claim because he has not pointed to any facts he learned since his original complaint supporting his proposed amendments. Second, Defendant argues that allowing Plaintiff to add eight new defendants and quadruple his causes of action would cause substantial prejudice. Finally, Defendant argues that Plaintiff's additional claims are futile.

1. Undue Delay in Seeking Amendment

Defendant argues that the Court should deny leave to amend because Plaintiff is not seeking to allege facts or theories that were previously unknown and there is no basis for excusing his undue delay in moving to amend his Complaint. The Court agrees that Plaintiff has unduly delayed seeking ...

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