United States District Court, D. Massachusetts
JAMES E. SPAULDING and JOANN C. SPAULDING, Plaintiffs,
CITIFINANCIAL SERVICING, LLC, et al., Defendants.
MEMORANDUM AND ORDER REGARDING PLAINTIFFS' MOTION
TO FURTHER AMEND THE VERIFIED COMPLAINT (DKT. NO.
KATHERINE A. ROBERTSON U.S. MAGISTRATE JUDGE.
matter is before the court on the motion by plaintiffs James
E. Spaulding and Joann Spaulding (“Plaintiffs”)
for leave to further amend their verified complaint
(“Plaintiff's Motion”). Citifinancial
Servicing, LLC, the sole remaining defendant
(“Defendant”), opposes the motion. The court
heard argument from the parties on March 9, 2018, and, for
the reasons set forth below, DENIES on the ground of futility
Plaintiff's Motion for leave to further amend their
filed their initial complaint in the Berkshire County
Superior Court on September 19, 2016. They amended the
complaint to add additional claims on October 3, 2016 (Dkt.
No. 1-2). The defendants removed the case to this court (Dkt.
No. 1). The factual allegations on which Plaintiffs based
their claims did not change when they initially amended their
complaint, nor have those allegations changed with respect to
instant motion. In summary, Plaintiffs allege that they are
the owners of land in Egremont which was historically shown
on a plan as two lots, which Plaintiffs refer to as Lot 1 and
Lot 2. The parents of plaintiff Joann Spaulding acquired both
lots, Lot 1 in 1952 and Lot 2 in 1973, from different sellers
and conveyed a one-half undivided interest in each lot to
Plaintiffs in 1982. In April 2002, Josephine Curtiss,
plaintiff Joann Spaulding's mother, granted a mortgage to
Citifinancial Services, Inc. secured by Lots 1 and 2, less
and excepting the property interest conveyed to Plaintiffs.
This mortgage was subsequently discharged. On February 14,
2003, Ms. Curtiss granted a second mortgage to Citifinancial
Services, Inc (“Second Mortgage”). The metes and
bounds description of the property securing the Second
Mortgage corresponded to Lot 2 only. Lot 2 is landlocked and
unbuildable and is subject to Plaintiffs' one-half
undivided interest. Ms. Curtiss was discharged in bankruptcy
on April 11, 2005. On March 6, 2009, Ms. Curtiss conveyed her
remaining one-half interest in Lots 1 and 2 to Plaintiffs.
Ms. Curtiss died in 2010 (Dkt. 1-1 at 9-10, ¶¶
4-14). Plaintiffs' residence is on Lot 1, which,
according to the metes and bounds description, is not subject
to the Second Mortgage (id. at 11, ¶¶ 17,
specificity as to dates or amounts, Plaintiffs allege that
they “continued to make monthly payments on the
[Second] [M]ortgage” (id. at 10, ¶
They further allege that beginning in July 2015, Defendant
cashed the checks Plaintiffs were sending to pay off the
Second Mortgage but failed to credit the payments to the
mortgage account. On October 22, 2015, Defendant conducted an
appraisal of Plaintiff's residence. In November 2015,
Defendant ceased sending monthly mortgage statements and
Plaintiffs ceased making payments on the Second Mortgage. On
May 13, 2016, Defendant sent a notice of default addressed to
Ms. Curtiss and, on August 5, 2016, Defendant sent a
“threat of foreclosure” addressed to Ms. Curtiss.
Defendant, Plaintiffs allege, was unresponsive when, through
counsel and on multiple occasions, they sought to communicate
with the point of contact identified in the threat of
foreclosure document (id. at 11-12, ¶¶
16-22). On September 8, 2016, Plaintiffs returned home to
find that Mortgage Contracting Services (“MCS”)
had posted a notice on their home stating that MCS was taking
steps to secure the property (id. at 12, ¶ 23).
complaint, as amended, seeks a declaratory judgment (Count
I); injunctive relief (Count II); and a permanent injunction
(Count III); and asserts claims for trespass (Count IV);
infliction of emotional distress (Count V); slander of title
(Count VI) (id. at 12-16, ¶¶ 24-33);
unfair and deceptive trade practices (Count VIII); unfair
debt collection practices in violation of federal law (Count
IX); and unfair debt collection practices in violation of
state law (Count X) (Dkt. No. 1-2 at 2-3, at ¶¶
34-41). Plaintiffs' proposed second amendment
to their verified complaint would add claims that Defendant
violated the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. §§ 2610-2617
(proposed Count XI); the Truth in Lending Act
(“TILA”), 15 U.S.C. § 1601 (proposed Count
XII); and the Massachusetts Consumer Credit Cost Disclosure
Act (“MCCCDA”), Mass. Gen. Laws ch. 140D, et seq.
(proposed Count XIII) (Dkt. No. 60-1 at 2-5, ¶¶
42-63). Just as Plaintiffs did not seek to add to or amend
the factual allegations in their initial verified complaint
by their first amendment to the complaint, they do not seek
to do so in support of the claims they seek to add by their
proposed second amendment (id.).
A motion to amend a complaint will be treated differently
depending on its timing and the context in which it is filed.
. . . The default rule mandates that leave to amend is to be
“freely given when justice so requires” . . .
unless the amendment “would be futile, or reward,
inter alia, undue or intended delay.” As a
case progresses, and the issues are joined, the burden on a
plaintiff seeking to amend a complaint becomes more exacting.
. . . Once a scheduling order is in place [if leave to amend
is sought after the cut-off date established in the order],
the liberal default rule is replaced by the more demanding
“good cause” standard of Fed.R.Civ.P. 16(b).
Steir v. Girl Scouts of the USA, 383 F.3d 7, 11-12
(2004) (internal citations omitted).
‘spirit of the rule' dictates a preference for
decisions ‘on the merits, not because of missteps by
counsel in pleading.'” J.S. McCarthy Co. v.
Braus Diecutting & Converting, 226 F.R.D. 14, 17 (D.
Me. 2005) (quoting Allendale Mut. Ins. Co. v.
Rutherford, 178 F.R.D. 1, 3 (D. Me. 1998) (quoting
Sweeney v. Keystone Provident Life Ins. Co., 578
F.Supp. 31, 34 (D. Mass. 1983))); see also Torres-Alamo
v. Puerto Rico, 502 F.3d 20, 25-25 (1st Cir. 2007) (Rule
15(a) embodies a liberal standard for judging a motion for
leave to file an amended complaint). “In considering a
motion for leave to amend . . . the trial court must first
consider whether the proposed new claims are futile[.] . . .
If the claims are not futile, then the trial court must
consider whether, given the timing of the motion for leave to
amend, such prejudice to the defendant would arise from
granting the motion that the motion should be denied on that
ground.” Smith v. Mitre Corp., 949 F.Supp.
943, 945 (D. Mass. 1997). “In determining whether the
plaintiffs unduly delayed in filing their motion to amend,
the focus . . . is on whether allowing the amendment would
unfairly prejudice the defendants.” Bond
Opportunity Fund II, LLC v. Heffernan, 340 F.Supp.2d
146, 155-56 (D.R.I. 2004); Mitre Corp., 949 F.Supp.
at 945. “Amendment of pleadings is largely a matter
within the discretion of the district court.”
Guest-Tek Interactive Entm't Inc. v. Pullen, 731
F.Supp.2d 80, 92 (D. Mass. 2010).
leave to amend is sought before discovery is complete and
neither party has moved for summary judgment, the accuracy of
the ‘futility' label is gauged by reference to the
liberal criteria of Federal Rule of Civil Procedure
12(b)(6).” Hatch v. Dept. for Children, Youth &
Their Families, 274 F.3d 12, 19 (1st Cir. 2001); see
Adorno v. Crowley Towing & Transp. Co., 443 F.3d
122, 126 (1st Cir. 2006) (“In assessing futility, the
district court must apply the standard which applies to
motions to dismiss under Fed.R.Civ.P. 12(b)(6).”).
Thus, in this context, “[f]utility means that the
complaint, as amended, would fail to state a claim upon which
relief could be granted.” Glassman v.
Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996);
see also Rose v. Hartford Underwriters Ins. Co., 203
F.3d 417, 421 (6th Cir. 2000) (“a proposed amendment is
futile only if it could not withstand a 12(b)(6) motion to
dismiss”). Thus, where the question of futility is
raised in opposition to a motion for leave to amend a
complaint, the proposed amended complaint must satisfy the
Rule 12(b)(6) standard.
opposition to Plaintiffs' Motion is based on the single
contention that adding the proposed additional claims would
be futile because Plaintiffs have not alleged (and cannot
allege) that they were signatories to the promissory note
which required repayment of the loan secured by the Second
Mortgage. According to Defendant, Plaintiffs, therefore, are
not “borrowers” and lack standing to assert any
of the three causes of action identified in the newly
proposed amendments to the verified complaint (Dkt. No. 64).
Plaintiffs do not dispute that their status as borrowers is
the critical question. Rather, they contend that there is
persuasive authority for ...