Judge: Yolanda Orozco, Case: 21STCV20169, Date: 2022-09-27 Tentative Ruling

Case Number: 21STCV20169    Hearing Date: September 27, 2022    Dept: 31

MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT IS GRANTED 

Background 

On May 28, 2021, Plaintiff David Babaie filed this action. The operative First Amended Complaint adds Plaintiffs Bruce Hitchman and Brett Alan Hitchman, as David Babie’s Successors-in-interest; and Keto Development Group, LLC. The named Defendants are JPMorgan Chase Bank, N.A.; JPMorgan Chase and Co.; and Does 1 to 25. The alleged causes of action are:   

1)     Negligence;

2)     Breach of Contract; and

3)     Breach of Fiduciary Duty. 

On August 23, 2022, Plaintiff filed this Motion seeking leave to file a Second Amended Complaint (SAC). 

A notice of non-opposition was filed on September 14, 2022. 

Legal Standard 

Leave to amend is permitted under Code of Civil Procedure section 473, subdivision (a) and section 576. California courts are required to permit liberal amendment of pleadings in the interest of justice between the parties to an action. (Dieckmann v. Superior Court (1985) 175 Cal.App.3d 345, 352.)¿ Generally, amendment must be permitted unless there is unwarranted delay in requesting leave to amend or undue prejudice to the opposing party. (Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, 1377.) Even if a good amendment is proposed in proper form, unwarranted delay in presenting it may – of itself—be a valid reason for denial. (Emerald Bay Community Association v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1097.)¿¿¿ 

¿¿ 

Under California Rules of Court, rule 3.1324, a motion to amend a pleading before trial must (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph and line number, the deleted allegations are located; and (3) state what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located. (Cal. Rules of Court, rule 3.1324(a).) A separate supporting declaration specifying (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reason why the request for amendment was not made earlier must accompany the motion. (Id., rule 3.1324(b).)¿ 

Discussion 

Plaintiff seeks leave to file a Second Amended Complaint (SAC). The proposed SAC is attached to the Declaration of Plaintiff’s counsel, Teresa A. Libertino, as Exhibit 3. 

The SAC proposes to add Select Portfolio Servicing, Inc. and Wilmington Trust as Defendants since they are the successors in interest to the deed of trust on the subject property.  Plaintiff also seeks to add a cause of action for Breach of the Implied Covenant of Good Faith and Fair Dealing against Defendant Chase and a cause of action for violation of Business and Professions Code section 17200 against Defendants Chase, SPS, and Wilmington. 

Plaintiff asserts that the proposed amendments to the SAC arise out of the same subject matter as the operative First Amended Complaint, are brought in good faith, and that Plaintiff sought leave to amend when it learned of the facts that gave rise to the proposed amendments. 

The Proposed Additions are as follows: 

(a) At the caption page, Page 1, Select Portfolio Servicing, Inc.(“SPS”) has been added as

a Defendant.

(b) At the caption page, Page 1, Defendant Wilmington Trust, NA as Trustee for the

benefit of registered holders of Structured Asset Mortgage Investments II Trust 2007-

AR5, Mortgage Pass-Through Certificates, Series 2007-AR5 (“Wilmington”) has

been added as a Defendant.

(c) At the caption page, Page 1, the cause of action for “Breach of Implied Covenant of

Good Faith and Fair Dealing” has been added;

(d) At the caption page, Page 1, the cause of action for Violation of Business &

Professions Code §17200 has been added

(e) Pages 1, line 28 to Page 2, lines 1-3, have been added to include Defendants SPS and

Wilmington.

(f) Page 2, lines 8-9, have been revised for clarity.

(g) Page 3, lines 21-22, have been added as follows: “…which are presently believed to

be held in trust by Select Portfolio Servicing, Inc.”

(h) Page 4, lines 2-5 have been revised to include funds in trust at Chase, or its successors,

SPS and Wilmington.

(i) Page 4, Paragraph 4, “and is the successor in interest to the Property to David Babaie”

has been added.

(j) Page 4, Paragraph 7, has been revised to include Chase’s acquisition of the Loan from

GreenPoint Mortgage Funding, Inc. in 2012.

(k) Paragraphs 8 and 9, have been added to include the identity of the newly added

Defendants SPS and Wilmington.

(l) Paragraph 21 has been revised to include the accurate check dates and amounts.

(m) Paragraph 44 has been revised

(n) Paragraph 49 has been revised to include: “Plaintiffs are informed and believe that

Select Portfolio Servicing acquired the Loan from Chase in 2022 and became liable

for any and all breaches of Chase pursuant to Civil Code §1589.”

(o) Paragraph 21 has been revised to include the accurate check dates and amounts.

(p) Paragraph 55 has been revised.

(q) Paragraphs 56-58 have been added.

(r) The Third Cause of Action for Breach of the Implied Covenant of Good Faith and Fair

Dealing has been added (Paragraphs 59- 64).

(s) The Fourth Cause of Action for Violation of Business and Professions Code §17200

has been added (Paragraphs 65-69)

(t) The Prayer for Relief on the First Cause of Action has been revised (Paragraph 2)

(u) The Prayer for Relief on the Second Cause of Action has been revised (Paragraph 3)

(v) The Prayer for Relief on the Third Cause of Action has been revised (Paragraphs 3-4)

(w) The Prayer for Relief on the Fourth Cause of Action has been added (Paragraphs 1-5) 

The proposed Deletions are as follows: 

(a) At the caption page, Page 1, and throughout, “JPMorgan Chase & Co.” has been

deleted as a defendant.

(b) At the caption page, Page 1, the third cause of action for “Breach Fiduciary Duty”

has been deleted.

(c) Paragraph 55 has been deleted and revised.

(d) The Third Cause of Action for “Breach of Fiduciary Duty” has been deleted. 

Defendants have not filed papers opposing the motion to show that they will be prejudiced by the proposed SAC. 

Based on the foregoing, Plaintiff’s Motion for Leave to file a SAC is GRANTED. 

Conclusion 

Plaintiff’s Motion for leave to file a Second Amended Complaint is GRANTED. 

Moving party to give notice. 

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All masking distancing protocols will be observed at the Courthouse and in the courtrooms.