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Congdon v. Wells Fargo Bank N.A.

United States District Court, W.D. Washington

June 5, 2017



          Robert S. Lasnik United States District Judge


         This matter comes before the Court on plaintiff's motion for leave of the Court to file a Second Amended Complaint pursuant to Federal Rule of Civil Procedure 15. Dkt. #25-2. For the reasons set forth below, the plaintiff's motion is DENIED.


         Plaintiff's first amended complaint raised four causes of action. First, plaintiff sought declaratory relief under the federal Truth in Lending Act (TILA) that, as a result of her notice of rescission and defendant's failure to properly respond to it, defendant Wells Fargo Bank, N.A. (Wells Fargo), “does not have any rights or interest in Plaintiff's Note and Deed of Trust, or the Property which authorized them, in fact or as a matter of law to enforce the terms of the Note and Deed of Trust in any matter whatsoever.” Dkt. #10 at 15-19, ¶¶ 1-21. Plaintiff also alleged that under the federal Real Estate Settlement Procedures Act (RESPA), Wells Fargo's purportedly inadequate response to her request for information entitles her to “statutory damages, civil liability, penalties, attorney's fees and actual damages.” Dkt. #10 at 20, ¶ 27. Plaintiff also asked for cancellation of all instruments and for an accounting of the money allegedly wrongfully paid to Wells Fargo. Dkt. #10 at 20-22, ¶¶ 29-50 (¶¶ 36-47 are missing, but page numbers are sequential)

         Upon Wells Fargo's motion to dismiss, the Court dismissed the TILA rescission claim with prejudice and dismissed plaintiff's three other claims without prejudice subject to a motion to amend. The Court found that the RESPA claim failed to allege legally and factually sufficient damages, and that the cancellation of instruments and accounting claims failed for being based on the TILA rescission theory. The Court instructed Plaintiff to file a second motion to amend her complaint in order to remedy its deficiencies. Dkt. # 24 at 10. Plaintiff's proposed second amended complaint attempts to cure the deficiencies in her RESPA, cancellation of instruments, and accounting claims, while including new claims for violations of the Fair Debt Collection Practices Act (FDCPA) and negligence. Dkt. #25-2.

         Taking the factual assertions, but not legal conclusions, presented in plaintiff's second amended complaint as true, plaintiff refinanced her single-family residence in August 2007 with World Savings Bank (WSB). Dkt. #25-2 at 7. After the origination of plaintiff's loan, WSB sold her loan to another entity [or entities]. Plaintiff alleges that these unknown entities were involved in the securitization of her loan into a Real Estate Mortgage Investment Conduit (REMIC 31 Trust) prior to November 2007. Dk.t #25-2 at 7. However, plaintiff alleges that because her Note and Deed of Trust were assigned to the REMIC 31 Trust, defendant Wells Fargo did not acquire plaintiff's loan when Wells Fargo acquired Wachovia (formerly known as WSB) in October 2008. As a result, Plaintiff claims that the trustee of the REMIC 31 Trust is the Bank of New York Mellon and not Wells Fargo. Plaintiff therefore alleges that Wells Fargo is not the true beneficiary of her underlying debt obligations. Dkt. #25-2 at 8.

         II. ANALYSIS

         A. Leave to Amend Standard

         Courts “should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). There is a “strong policy in favor of allowing amendment” after “considering four factors: bad faith, undue delay, prejudice to the opposing party, and the futility of amendment.” Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994).[1] The underlying purpose of Rule 15 is “to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). However, if the proposed amendment would be futile (i.e., it would be immediately subject to dismissal if challenged under Rule 12(b)(6)), there is no reason to put defendants through the unnecessary expense and delay of responding to the amendment. Nordyke v. King, 644 F.3d 776, 787 n.12 (9th Cir. 2011).

         B. Plaintiff's Proposed Amendments are Futile

         1. Claim for Declaratory Relief

         Plaintiff's first “claim” for declaratory relief[2] in relation to violations of TILA appears to be an attempt to recast the unsuccessful TILA claim from her first amended complaint. As the Court already noted, plaintiff's claim is time-barred by the statute's limitations on when an individual can invoke her right of rescission under TILA. Dkt. #24 at 5. Therefore, Plaintiff's proposed amendment is futile for failure to state a cognizable claim upon which relief can be granted.

         2. Real Estate Settlement Procedures Act ...

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