United States District Court, W.D. Washington
ORDER ON PLAINTIFF'S MOTION FOR RELIEF FROM CASE
SCHEDULE DEADLINE, FOR JOINDER OF DEFENDANT FEDERAL HOME LOAN
MORTGAGE CORP. AND FOR LEAVE TO AMEND COMPLAINT
S. Lasnik, United States District Judge
matter comes before the Court on plaintiff Michael
Thomas's “Motion for Relief from Case Schedule
Deadline, for Joinder of Defendant Federal Home Loan Mortgage
Corp. and for Leave to Amend Complaint.” Dkt. #77.
action pertains to a residence located at 27546
254th Way SE, Maple Valley, WA 98038 (“the
Property”). Dkt. #68 (Compl.) at ¶ 1. Plaintiff
obtained a loan in the amount of $398, 000 secured against
the Property on June 11, 2008 (“the Loan”).
Id. at ¶ 4. The Federal Home Loan Mortgage
Corporation (“Freddie Mac”) is the owner of the
beneficial interest in the Loan. Dkt. #77 at 3. While
Flagstar Bank (“Flagstar”) was servicing the
Loan, plaintiff fell behind on his mortgage payments and
sought a loan modification. Id. at ¶ 5.
Flagstar offered him a Trial Period Plan (TPP) under the
federal Home Affordable Modification Program
(“HAMP”). Id at ¶ 6. Plaintiff
claims that he completed all three trial payments on time,
but Flagstar revoked the offer in February 2013. Id.
at ¶ 7. The trustee ordered a title report for the
Property in March 2013, which contained details regarding
three payroll federal tax liens recorded against it in
connection with a house painting business that plaintiff
owned and operated until 2010. Plaintiff was unaware of the
existence of these liens. Id. at ¶¶ 8-9.
Flagstar initiated foreclosure proceedings in April 2013.
Id. at ¶ 10. Servicing of the Loan was
transferred to Green Tree Loan Servicing LLC (“Green
Tree”) on January 16, 2014. Id. at ¶ 12.
of the Foreclosure Fairness Act (“FFA”) mediation
process, see RCW 61.24.163, Green Tree offered
plaintiff another TPP. Id. at ¶¶ 11-14.
Plaintiff claims that he accepted the offer and made all
three payments as agreed. Id. at ¶¶ 15-16.
Green Tree obtained a title report for the Property in
October 2014, which again showed the three federal tax liens.
It did not inform plaintiff of their existence. Id.
at ¶¶ 17-18. Green Tree then sent plaintiff a
Notice of Default on November 7, 2014, stating that it
intended to foreclose on the Property if he did not cure the
default. Plaintiff claims that he continued to make payments
in December 2014 and January 2015 according to the terms of
the loan modification, and Green Tree accepted both payments.
Id. at ¶ 19. He was informed of the liens for
the first time on January 21, 2015 at his final FFA mediation
session. Id. at ¶ 20. Plaintiff filed a
complaint against Flagstar1 and Green Tree on July 23, 2015.
Dkt. #1-1 at 2-8. He asserted three claims for violations of
the Washington Consumer Protection Act (“CPA”),
see RCW 19.86.010 et seq, breach of
contract, and negligent misrepresentation. Id. at 8.
On August 17, 2015, Green Tree filed a Notice of Removal with
this Court. Dkt. #1 at 1-5; see 28 U.S.C.
§§ 1332, 1441(c).
was deposed on June 29, 2016. Dkt. #80 (Fig Decl.) at ¶
4. Green Tree's first corporate representative under
Federal Rule of Civil Procedure 30(b)(6) was deposed on
September 20, 2016. Id. A second corporate
representative was deposed on October 11, 2016, with specific
regard to Green Tree's application of Freddie Mac's
guidelines to plaintiffs loan modification application.
Id On November 2, 2016, plaintiff and Green Tree
entered into another mediation. Id at ¶ 31. In
an “Amended Order Setting Trial Date and Related
Dates” dated November 7, 2016, the Court set deadlines
of December 2, 2016 for joining additional parties and
March 15, 2017 for amending pleadings. Dkt. #36 at 1.
Plaintiff received another HAMP loan modification offer on
February 28, 2017 and made timely payments under it.
Id at ¶¶ 31-33. Green Tree approved the
loan modification on June 30, 2017. Id at ¶ 34.
on January 29, 2018, Green Tree sent plaintiff a letter
stating that there were discrepancies in the 2017 agreement.
Id at ¶ 39. It requested plaintiff to execute
and return a revised agreement by February 7, 2018.
Otherwise, it stated, Green Tree might revoke the
modification entirely. Id at ¶ 39. Plaintiffs
wife was visiting family in Alaska at the time. Id
at ¶ 40. Plaintiff received a statement from Green Tree
on February 16, 2018, stating the amount owed according to
post-modification terms. Id at ¶ 42. On March
16, 2018, plaintiff sent Green Tree a Notice of Error
(“NOE”), see 12 C.F.R § 1024.35,
and a Request for Information (“RFI”),
see 12 C.F.R § 1024.36. Id at
¶¶ 45-46. He received another statement from Green
Tree on March 27, 2018, stating the amount owed according to
pre-modification terms. Id at ¶ 47. On
April 19, 2018, in response to his NOE and RFI, Green Tree
stated that “a recalculation of the proposed totals
found an error in the amortization of the account, which
would have left a portion of the principal balance unpaid and
owed at the maturity date.” Id at ¶ 48.
It stated that “because the corrected agreement was not
executed and returned to [Green Tree] within the required
time-frame, the process of removing the terms of the Home
Affordable Modification Agreement began on March 20, 2018 and
was completed on March 27, 2018.” Id at ¶
filed his Amended Complaint on June 29, 2018, bringing claims
of breach of contract, id at ¶¶ 61-65,
breach of good faith and fair dealing, id at
¶¶ 66-75, unfair and deceptive acts and practices
in violation of the CPA, id at ¶¶ 76-83,
negligent misrepresentation, id at ¶¶
84-90, tort of outrage, id at ¶¶ 91-102,
and violations of the Equal Credit Opportunity Act
(“ECOA”), id at ¶¶ 103-118,
see 15 U.S.C. §§ 1691-1691f (2006). The
Amended Complaint also added allegations that Green Tree
improperly withdrew the Freddie Mae HAMP loan modification
agreement dated February 28, 2017. Id at
¶¶ 31-50; see Fig. Decl. at ¶ 6. On
August 30, 2018, plaintiff deposed a Green Tree
representative regarding the 2017 loan modification.
Plaintiff was deposed on October 19, 2018. Fig. Decl. at
December 17, 2018, the parties filed a “Stipulated
Motion to Extend Remaining Case Management Deadlines.”
Dkt. #75. This states that the parties had agreed to mediate
the matter on December 12, 2018. Id at 1. However,
on December 5, 2018, Green Tree's counsel was informed
that Green Tree could not meaningfully participate in the
mediation due to serious financial constraints. Id
at 2. Green Tree is a solely owned subsidiary of Ditech
Holding Corporation (“Ditech”) which,
“accordingly to its most recent investor's report,
[was] in the process of being delisted from the NYSE and
[was] considering reentering Chapter 11.” Id
The parties stated that if Ditech reentered bankruptcy,
“it would most likely involve Green Tree and,
therefore, continuing to litigate this matter would be a
waste of the parties['] and court's time and
resources.” Id They requested that all
deadlines be reset to dates 90 days out. Id These
were reset in the Court's order dated December 18, 2018.
now requests relief from the deadlines for amending pleadings
and joining additional parties, and an “order granting
leave to amend the complaint to clarify that [Green Tree]
(now [Ditech]) is now and at all times was in fact acting as
agent for [Freddie Mac].” Dkt. #77 at 1. Green Tree
does not object to being identified as Ditech,  but
otherwise objects to plaintiff's motions. Dkt. #79 at 1.
the filing of this motion, Ditech filed a Chapter 11 petition
on February 11, 2019 in the District Court for the Southern
District of New York. Dkt. #82; see Dkt #82-1. The
Court has since stayed this action as to Green Tree. Dkt.
#83; see 11 U.S.C. § 362(a).
district court is given broad discretion in supervising the
pretrial phase of litigation.” Zivkovic v. S.
California Edison Co., 302 F.3d 1080, 1087 (9th Cir.
2002) (quoting Johnson v. Mammoth Recreations, Inc.,
975 F.2d 604, 607 (9th Cir. 1992)). Other than an amendment
as a matter of course, “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)(2). However, a
case scheduling order may be modified “only for good
cause and with the judge's consent.” Fed.R.Civ.P.
16(b)(4). “Although Rule 15 generally provides for
liberal amendment to pleadings, once a pretrial scheduling
order has been entered pursuant to Rule 16(b)(1), an
additional showing of ‘good cause' for amendment
must be made if the scheduling order's deadline for
amending pleadings has passed.” Paz v. City of
Aberdeen, No. C13-5104 RJB, 2013 WL 6163016, at *2 (W.D.
Wash. Nov. 25, 2013) (citing Johnson, 975 F.2d at
608). A party seeking to amend a pleading after the date
specified in the scheduling order ...