United States District Court, C.D. California
Present: The Honorable CHRISTINA A. SNYDER, JUDGE
CIVIL MINUTES - GENERAL
(IN CHAMBERS) - PLAINTIFF'S MOTION FOR RECONSIDERATION
(Dkt. 132, Filed December 27, 2016)
Court finds this motion appropriate for decision without oral
argument. Fed.R.Civ.P. 78; Local Rule 7-15. Accordingly, the
hearing date of February 13, 2017, is vacated, and the matter
is hereby taken under submission.
INTRODUCTION AND BACKGROUND
February 8, 2013, Kathleen Eisenberg filed the instant action
in Los Angeles County Superior Court against Citibank, N.A.,
as trustee for American Home Mortgage Assets Trust 2006-4
Mortgage-Backed Pass-Through Certificates Series 2006-4
(“Citibank”); Homeward Residential, Inc.
(“Homeward”); Power Default Services, Inc.
(“Power”); and Does one through 40, inclusive.
Dkt. 1. The original complaint alleged four claims, namely,
(1) rescission, (2) breach of contract, (3) unfair business
practices pursuant to California's Unfair Competition Law
(“UCL”), California Business and Professions Code
§§ 17200 et seq., and (4) declaratory relief. The
gravamen of plaintiff's claims is that she was
fraudulently induced into an adjustable rate mortgage
whereby, unbeknownst to her, her loan payments were all but
guaranteed to dramatically increase a few years after the
mortgage was executed. Plaintiff's complaint seeks to
recover damages, rescind the adjustable rate mortgage
instrument, and prevent the foreclosure of her home at 25431
Prado De Las Fresas, Calabasas CA 91302.
February 8, 2013, the Los Angeles Superior Court issued a
Temporary Restraining Order enjoining foreclosure on the
Property. Dkt. 1 at 74. On February 25, 2013, the Superior
Court held a hearing regarding the issuance of a preliminary
injunction. Dkt. 1 at 62. Defendants failed to oppose the
preliminary injunction or appear for the hearing.
Id. The Superior Court issued a preliminary
injunction against defendants enjoining them from foreclosing
upon the Property during the pendency of this action.
March 13, 2013, defendants removed the case to this Court.
Dkt. 1. On March 15 2013, defendants filed a motion to
dismiss the complaint, dkt. 3, which the Court granted, dkt.
17. On May 28, 2013, plaintiff filed a First Amended
Complaint (“FAC”). Dkt. 24. On May 29, 2013,
defendants filed a motion to dismiss the FAC. Dkt. 25. The
Court took the motion to dismiss the FAC under submission
while the parties engaged in negotiation to see if a
modification of plaintiff's home loan was possible. On
June 15, 2016, after more than two years of failed
negotiations, the Court granted, in part, and denied, in
part, defendants' motion to dismiss the FAC. The Court
dismissed plaintiff's claims for rescission and violation
of the UCL. Dkt. 89. On August 24, 2016, plaintiff filed a
Second Amended Complaint (“SAC”). Dkt. 108. On
August 29, 2016, defendants filed a motion to dismiss the
claims in the SAC for rescission and violation of the UCL.
October 21, 2016, defendants filed a motion seeking
dissolution or modification of the preliminary injunction
issued in this action by the Superior Court in 2013. Dkt.
October 31, 2016, the Court dismissed plaintiff's claims
for rescission and violation of the UCL for failure to state
a claim with sufficient particularity, Fed.R.Civ.P. 9(b), and
because they are barred by the applicable statute of
limitations. Dkt. 121. During the hearing on the motion to
dismiss the SAC, plaintiff's counsel requested an
opportunity to confer with his client and determine whether
or not he would seek leave to further amend the pleadings.
Accordingly, the Court ordered that:
Plaintiff's counsel shall confer with plaintiff and file
a declaration no later than ten (10) days from the issuance
of this order explaining whether or not the foregoing defects
can be cured. Thereafter, if plaintiff contends that the
foregoing defects can be cured, the SAC shall be dismissed
without prejudice and plaintiff is granted an additional ten
(10) days leave in which to file a Third Amended Complaint.
If plaintiff determines that the foregoing defects cannot be
cured, then plaintiff's SAC shall be dismissed with
Dkt. 121 at 11 (emphasis in original).
November 10, 2016, plaintiff's counsel, Mark Goodfriend,
filed a declaration indicating that he believed the defects
in the SAC could be cured in the filing of a Third Amended
Complaint (“TAC”). Dkt. 123 (“Prior
Goodfriend Decl.”). Goodfriend further indicated that
he would file a TAC no later than November 21, 2016. In his
declaration, Goodfriend, stated:
Notwithstanding the foregoing, if in the final analysis, on
or before November 21, 2016, Plaintiff ultimately concludes
that she is unable to cure the defects in the Second Amended
Complaint identified by the Court, she will not file a Third
Amended Complaint, and in that event, it is understood that
the first and third causes of action for rescission and
unfair business practices, respectively, of the Second
Amended Complaint shall be deemed dismissed with prejudice.
Goodfriend Decl. ¶ 5. Thereafter, plaintiff did not file
November 29, 2016, the Court granted defendants' motion
to dissolve the preliminary injunction, dkt. 129, and, in
light of plaintiff's failure to timely file a TAC,
dismissed plaintiff's claims for rescission and violation
of the UCL with prejudice, dkt. 130.
December 27, 2016, plaintiff filed a motion seeking leave to
file an untimely TAC adding four paragraphs of allegations
purportedly curing the deficiencies in plaintiff's claims
for rescission and violation of the UCL. Dkt. 132
(“Motion”). Plaintiff's motion seeks
reconsideration of the Court's order dismissing the
claims for rescission and violation of the UCL. The Motion
also seeks reconsideration of the Court's order
dissolving the preliminary injunction. Id. In
support of the Motion, Goodfriend has submitted a declaration
in which he states:
Distracted by other legal matters, including in particular a
pending sale of a property for over $35 million which was due
to close November 30, 2016, over which there was heated
litigation and settlement discussions, I inadvertently missed
the November 21, 2016 deadline for filing a Third Amended
Complaint. I realized that I missed it on November 23, 2016,
but due to the holidays and other ...