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Taylor v. Deutsche Bank National Trust Co.

United States District Court, D. Arizona

January 17, 2017

Allen C. Taylor and Lynell M. Taylor, Plaintiffs,
Deutsche Bank National Trust Company, as Trustee for Morgan Stanley Capital 1 Inc. Trust 2006-NC2 Mortgage Pass-Through Certificates, Series 2006-NC2, Defendant.



         On May 10, 2016, Plaintiffs Allen and Lynell Taylor filed suit against Defendant Deutsche Bank National Trust Company in Maricopa County Superior Court. (Doc. 1-1.) Defendant removed the case to this Court one month later. (Doc. 1.) Plaintiffs thereafter filed a first amended complaint alleging three claims arising out of a residential mortgage and foreclosure process: quiet title, false recordings perpetuated on rescinded loan, and violation of the Truth in Lending Act. (Doc. 10.)

         On October 20, 2016, the Court granted Defendant's motion to dismiss because Plaintiffs' rescission theory failed and their claims otherwise were barred by the statute of limitations and a loan modification agreement. (Doc. 20.) Plaintiffs have filed motions for leave to amend and to vacate the dismissal order. (Docs. 21, 22.) The motions are fully briefed, and no party requested oral argument. For reasons stated below, the motions are denied.

         I. Motion for Leave to Amend

         Plaintiffs seek leave to amend the first amended complaint under Federal Rule of Civil Procedure 15(a). Rule 15(a)(2) requires the Court to “freely give leave when justice so requires.” Plaintiffs correctly note that this directive should be applied liberally in favor of amendments. (Doc. 21 at 2-3.) This Circuit has made clear, however, that “leave need not be granted where the amendment of the complaint would cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or creates undue delay.” Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

         Having carefully reviewed the proposed second amended complaint, (Doc. 21-1), and the record as a whole, the Court finds that granting leave to amend would be futile and cause undue delay and not all amendments are sought in good faith. The motion for leave to amend therefore is denied.

         A. The Proposed Pleading Violates Rule 8

         The Court notes at the outset that the second amended complaint fails to comply with the pleading requirements of Federal Rule of Civil Procedure 8. Rule 8 requires a “short and plain statement” of the claim showing an entitlement to relief. Fed. R. Civ. 8(a)(2). The rule further provides that each allegation must be “simple, concise, and direct.” Fed. R. Civ. 8(d)(1).

         The second amended complaint falls far short of these pleading requirements. The complaint is a lengthy narrative of events that spans nearly 40 pages and includes more than 200 verbose paragraphs and over 100 pages in exhibits. (Doc. 21-1, 10-1.) The complaint impermissibly contains legal arguments and related citations to various legal authorities. The document reads more like a Rule 56 summary judgment motion and statement of facts than a simple and concise Rule 8 pleading.

         Although the factual allegations must be sufficient to raise a right to relief above the speculative level, see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), it is unnecessary and in violation of Rule 8 for Plaintiffs “to provide a lengthy narrative setting forth every detail regardless of how trivial or irrelevant.” Peyton v. Vasquez, No. 1:06-cv-01758-OWW-GSA, 2008 WL 4168837, at *1 (E.D. Cal. Sept. 5, 2008). Stated differently, a heightened pleading standard is no “invitation to disregard's Rule 8's requirement of simplicity, directness, and clarity.” McHenry v. Renne, 84 F.3d 1172, 1176 (9th Cir. 1996). This requirement “applies to good claims as well as bad, and is a basis for dismissal independent of Rule 12(b)(6).” Id. at 1179. The Court finds that the proposed second amended complaint is so far removed from a simple, direct, and clear pleading that it would be subject to dismissal under Rule 8. See Id. (affirming dismissal of complaint that engaged in “storytelling” and contained “narrative rumblings”); Hatch v. Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985) (no abuse of discretion in dismissing complaint pursuant to Rule 8 where the complaint and exhibits exceeded 70 pages in length and were confusing and conclusory).

         B. Granting Leave to Amend Would Be Futile

         Even if the second amended complaint satisfied Rule 8's pleading requirements, allowing the proffered amendments “would be nothing more than an exercise in futility.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). The proposed complaint asserts five claims: quiet title, false recordings perpetuated on rescinded loan, breach of contract, unconscionability, and a second breach of contract claim. (Doc. 21-1, ¶¶ 110-208.) None of the claims, as amended, states a plausible claim for relief.

         1. Counts One and Two: Quiet Title and False Recording

         Plaintiffs have added Wells Fargo and Michael Bosco, the loan servicer and trustee respectively, as defendants to the quiet title and false recording claims, but these claims are nearly the same as previously pled and continue to rely on the failed rescission theory. (Doc. 21-1, ¶¶ 110-76.) Plaintiffs re-allege that they rescinded the note and deed of trust in September 2008 and the rescission automatically voided the documents. (Id., ΒΆΒΆ 113, 132, 146.) In the dismissal order, however, the Court squarely rejected the rescission theory given that Plaintiffs admittedly signed the notice of right to cancel in November 2005 and the notice conspicuously disclosed the applicable three-day rescission period. (Doc. 20 at 4-5.) The Court also found the quiet title and false recording claims to be barred by the statute of limitations and satisfied by the loan ...

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