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Gorham-Dimaggio v. Countrywide Home Loans

June 19, 2009

KIM GORHAM-DIMAGGIO, PLAINTIFF,
v.
COUNTRYWIDE HOME LOANS, INC., COUNTRYWIDE HOME LOANS, INC., LP, COUNTRYWIDE HOME LOANS SERVICING, LP, COUNTRYWIDE FINANCIAL CORP., AND INVESTOR NUMBER 1688597323 DEFENDANTS.



The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge

MEMORANDUM-DECISION AND ORDER

Presently before this Court is Plaintiff's unconventional filing of a Motion to Amend her First Amended Complaint, which has exponentially developed with the passing of time. After considerable debate, on March 26, 2009, Plaintiff filed a Motion to Amend the First Amended Complaint, albeit in a wanting manner. Dkt. No. 53, Richard L. DiMaggio, Jr., Esq., Affirm., undated, & proposed Second. Am. Compl. The Defendants filed their opposition to Plaintiff's Motion. Dkt. Nos. 55, Defs.' Mem. of Law, dated Apr. 3, 2009, & 56, Kenneth C. Rudd, Esq., Decl., dated Apr. 3, 2009. Then, on April 16, 2009, without permission and in contravention of a Court order, Plaintiff filed another purported Attorney's Affirmation, which technically could be construed as a Reply Affirmation.*fn1 Dkt. No. 57, Richard. L. DiMaggio, Jr., Esq., Affirm., undated.*fn2 Due to this Reply Affirmation, other pleading anomalies, and an evolution of other issues, yet another series of memoranda related to Plaintiff's efforts to amend her First Amended Complaint were spawned. These memoranda will also be considered by this Court and discussed more fully below. See Dkt. Nos. 59, 60, 63, 71, 77, 78, and 80.

I. HISTORY

A. First Amended Complaint and Motion to Dismiss

In order to place this Motion to Amend in perspective, the Court must harken back to the First Amended Complaint, Dkt. No. 15, and the ensuing Motion to Dismiss, Dkt. No. 17. The First Amended Complaint spanned fifty-three (53) pages, 304 paragraphs, and pled fourteen causes of action. Dkt. No. 15, First Am. Compl., dated Mar. 7, 2008. Among others, Plaintiff alleged both statutory and common law causes of action including allegations of violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605 et seq., the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 691, the Fair Housing Act (FHA), 42 U.S.C. § 3601 et seq., the deprivation of civil rights, discrimination, breach of fiduciary duty, negligence, and a breach of contract. First Am. Compl. On April 7, 2008, Defendants moved to dismiss the Amended Complaint. Dkt. No. 17. The Honorable Lawrence E. Kahn, Senior United States District Judge granted in part and denied in part Defendants' Motion to Dismiss. Counts I, II, IV-XIV were dismissed. Dkt. No. 21, Mem.-Dec. & Order, dated Dec. 17, 2008. As will be explained further, which is also pertinent to this Motion to Amend, Judge Kahn allowed the position stated in Count III that pertains solely to a June 15, 2007 letter, which he accepted as a "qualified written request," to survive the Motion to Dismiss.*fn3 Id. at pp. 12-13 (RESPA acknowledgment claim).

Plaintiff pled that on June 15, 2007, she sent a written request, entitled here as "the second qualified written request," to Defendants "disputing the escrow...[and seeking] an accounting of [her] escrow." First Am. Compl. at ¶¶ 86-94 & Ex. K.*fn4 By this litigation, Plaintiff is disputing an escrow deficiency of $1,411. Id. at ¶¶ 91-93.

Judge Kahn was confronted with the issue as to whether Plaintiff had triggered Defendants' duties under RESPA by forwarding to them a qualified written request, pursuant to 12 U.S.C. § 2605(e)(1)(A) & (B). Dkt. No. 21 at pp. 10-13. In addressing this issue, as it relates to the June 15, 2007 Letter, Judge Kahn wrote, Plaintiff, however, contends that a second qualified written request was sent to the Defendants "on or about June 15, 2007," and that this request was never acknowledged. Am. Compl. ¶¶ 86-87. Plaintiff claims that this handwritten letter contained all of the information required to constitute a qualified written request. Pl.'s Resp. at 35 (Dkt. No. 18). Accepting Plaintiff's allegations as true, Plaintiff has established a RESPA violation, because the Defendants received a written letter purportedly containing the information necessary to constitute a qualified request, the letter was actually received by the Defendants (as they have admitted), and Defendants did not respond within 20 days. Defendants' contention that the second request claim should not be permitted because it was raised only in the response papers and not in the Complaint is without merit, as the allegations regarding the second qualified written request were included in Plaintiff's Amended Complaint at ¶86-87, and were merely augmented by Plaintiff's response. Pl.'s Resp. at 35. Therefore, the claim for a RESPA violation based on the June 15, 2007 letter is not dismissed.

Id. at pp. 12-13.

Critical for our discussion herein, Judge Kahn continued his analysis of Plaintiff's other RESPA claim under 12 U.S.C. § 2605(e)(3), the alleged placement of derogatory information on Plaintiff's credit report within 60 days after receiving the purported qualified written request. Judge Kahn found that "the only instance when Plaintiff alleges that Defendants reported derogatory information on her credit report occurred on May 24, 2007.... Because the first email did not constitute a qualified written request, any subsequent report can not constitute a RESPA violation. Further, as Plaintiff has not alleged any instances of credit reporting occurring after the June written request, Plaintiff's claim under 12 U.S.C. § 2605(e)(3) must be dismissed." Id. at pp. 13-14.

If there was any confusion as to what cause of action survived the Motion to Dismiss, Judge Kahn reiterated "that the only claim remaining in the case is that portion of Claim V ([RESPA] failure to timely respond) which is based on the letter sent 'on or about June 15, 2007,' as contained in Count III of the Amended Complaint." Dkt. No. 25, Order, dated Jan. 14, 2009, at p. 3.

Equally pivotal to our Motion to Amend is Judge Kahn's discussion regarding Plaintiff's Count XI, negligence. First Am. Compl. at ¶¶ 274-280. Judge Kahn rightfully observed that this claim alleges that "Defendants were negligent in servicing [Plaintiff's] escrow account, and that [Defendants'] failure to employ reasonable care resulted in her default." Dkt. No. 21 at p. 21. In dismissing this Count, Judge Kahn ruled that Plaintiff could not establish a prima facie claim because she had not demonstrated that the breach of duty was the proximate cause of any harm she may have sustained. Namely, Defendants' action did not relieve Plaintiff of her obligation to pay the amount set forth in the April 2007 billing statement. Id. at pp. 21-22.

II. LAW

A. Motion to Amend Standard

FED. R. CIV. P. 15(a) states, in pertinent part, that leave to amend a pleading should be "freely given when justice so requires." Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003). Indeed, leave to amend should be denied only in the face of undue delay, bad faith, undue prejudice to the non-movant, futility of amendment, or where the movant has repeatedly failed to cure deficiencies in previous amendments. Foman v. Davis, 371 U.S. 178, 182 (1962); Kropelnicki v. Siegel, 290 F.3d 118, 130 (2d Cir. 2002) (citing Chill v. Gen. Elec. Co., 101 F.3d 263, 271-72 (2d Cir. 1996)). District courts are vested with broad discretion to grant a party leave to amend the pleadings.

See Local 802, Assoc. Musicians of Greater New York v. Parker Meridien Hotel, 145 F.3d 85, 89 (2d Cir. 1998). "The party opposing a motion for leave to amend has the burden of establishing that granting such leave would be unduly prejudicial." New York v. Panex Indus., Inc., 1997 WL 128369, at *2 (W.D.N.Y. Mar. 14, 1997) (citing Saxholm AS v. Dynal, Inc., 938 F. Supp. 120, 123 (E.D.N.Y. 1996)); see also Lamont v. Frank Soup Bowl, 2000 WL 1877043, at *2 (S.D.N.Y. Dec. 27, 2000) (citations omitted). This requires the non-movant to "do more than simply claim to be prejudiced." Bryn Mawr Hosp. v. Coatesville Elec. Supply Co., 776 F. Supp. 181, 185 (E.D. Pa. 1991). However, the court has the discretion to deny a motion to amend especially on the grounds of futility. Nettis v. Levitt, 241 F.3d 186, 193 (2d Cir. 2001); see also Marchi v. BOCES of Albany, 173 F.3d 469, 478 (2d Cir. 1999) (citing Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993)); Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir. 1990).*fn5 The Second Circuit has stated where futility is raised as an objection to the motion to amend, and [w]here it appears that granting leave to amend is unlikely to be productive, it is not an abuse of discretion to deny leave to amend. See, e.g., Foman v. Davis, 371 U.S. at 182, 83 S.Ct. at 230 (denial not abuse of discretion where amendment would be futile); Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir.1990) ("where... there is no merit in the proposed amendments, leave to amend should be denied"); Billard v. Rockwell International Corp., 683 F.2d 51, 57 (2d Cir.1982) (denial not abuse of discretion where plaintiff had had "access to full discovery" in a related case).

Ruffolo v. Oppenheimer & Co., 987 F.2d at 131.

As futility is an appropriate basis for denying leave to amend, such denial should be contemplated within the standards necessary to withstand a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6). Dougherty v. Town of North Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002) (citing Ricciuti v. N.Y.C.

Transit Auth., 941 F.2d 119, 123 (2d ...


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