United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
KRISTEN L. MIX, UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on Plaintiffs' Motion
to Amend Complaint [#23](the “Motion”).
Defendant filed a Response [#30] in opposition to the Motion
[#23], and Plaintiffs filed a Reply [#31]. The Court has
reviewed the Motion, Response, Reply, the entire case file,
and the applicable law, and is sufficiently advised in the
premises. For the reasons set forth below, it is respectfully
recommended that the Motion [#23] be GRANTED in
part, and DENIED without prejudice in
short, this case involves alleged misconduct by Defendant
“related to Plaintiff[s'] mortgage, its servicing,
loan modification, and the attempted foreclosure of their
home.” Compl. [#4] at 1. In the proposed
Amended Complaint [#23-1], Plaintiffs seek to add a claim for
forced-place insurance, and a claim for exemplary damages.
Defendant opposes amendment with respect to both claims.
Response [#30]. As an initial matter, the Scheduling
Order [#20] governing this case provides that the deadline
for joinder of parties and amendment of pleadings was April
8, 2017. Scheduling Order [#20] at 9 § 9(a).
Accordingly, Plaintiffs' Motion [#23] is timely.
Court has discretion to grant a party leave to amend its
pleadings. Foman v. Davis, 371 U.S. 178, 182 (1962);
see Fed. R. Civ. P. 15(a)(2) (“The court
should freely give leave when justice so requires.”).
“In the absence of any apparent or declared reason -
such as undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment,
futility of the amendment, etc. - the leave sought should, as
the rules require, be ‘freely given.'”
Id. (quoting Fed.R.Civ.P. 15(a)(2)).
amendment is futile only if it would not survive a motion to
dismiss. See Bradley v. Val-Mejias, 379 F.3d 892,
901 (10th Cir. 2004) (citing Jefferson Cnty. Sch. Dist.
v. Moody's Investor's Servs., 175 F.3d 848, 859
(10th Cir. 1999)). “In ascertaining whether
plaintiff[s'] proposed amended complaint is likely to
survive a motion to dismiss, the court must construe the
complaint in the light most favorable to plaintiff[s], and
the allegations in the complaint must be accepted as
true.” See Murray v. Sevier, 156 F.R.D. 235,
238 (D. Kan. 1994). Moreover, “[a]ny ambiguities must
be resolved in favor of plaintiff[s], giving [them]
‘the benefit of every reasonable inference' drawn
from the ‘well-pleaded' facts and allegations in
[the] complaint.” Id.
Forced Place Insurance
seek to add this claim on the grounds that Defendant
“placed high-priced insurance on the [Plaintiffs]
without a reasonable basis to believe that the Property was
uninsured by either asking or noticing the Plaintiffs,
” and that Plaintiffs have paid a higher price for
insurance as a result. Proposed Am. Compl. [#23-1]
at 12. Defendant contends that Plaintiffs' forced place
insurance claim is futile because Plaintiffs have not pled
the date when Defendant placed them in “high-priced
insurance, ” or what amount Plaintiffs were assessed
for it. Motion [#30] at 3. Defendant further
contends that Plaintiffs were required to plead these facts
pursuant to Fed.R.Civ.P. 8(a) to support a cause of action,
and that Wells Fargo's accounting records reveal that
Plaintiffs' claim will likely be time-barred.
Id. Defendant also argues that “Plaintiffs
were members of a settlement class resolving forced place[ ]
insurance claims like this one.” Id.
Court finds that it is not clear at this juncture that
Plaintiffs' new forced place insurance claim would be
futile either for failure to comply with Rule 8, or because
it is barred by the statute of limitations. Nothing in Rule 8
requires that Plaintiffs allege precisely when they were
placed in “high-priced insurance, ” or what they
were required to pay. See Fed. R. Civ. P. 8(a)
(requiring “a short and plain statement of the claim
showing that the pleader is entitled to relief”).
Additionally, further factual development is required to
determine whether the statute of limitations applies in this
case. Lastly, with respect to Defendant's argument that
Plaintiffs were part of a settlement class and that their
claim is therefore barred by the doctrine of res
judicata, Plaintiffs deny that they have been involved
in any such settlement. Response [#31] at 3-4. At
this stage, it is simply not appropriate for the Court to
weigh the facts and evidence to resolve any disputes between
the parties. See Sutton v. Utah State Sch. for the Deaf
& Blind, 173 F.3d 1226, 1236 (10th Cir. 1999);
Foman, 371 U.S. at 182 (“If the underlying
facts or circumstances relied upon by plaintiff may be a
proper subject of relief, he ought to be afforded an
opportunity to test his claim on the merits.”). The
Court's sole function now is to determine whether
Plaintiffs have provided a plausible basis for liability if
their version of the facts is assumed to be true. After
reviewing the proposed Amended Complaint [#23-1], the Court
finds that Plaintiffs have provided the necessary plausible
basis with respect to their forced place insurance claim.
seek to add a claim for exemplary damages on the grounds that
Defendant failed to “substantively reply to
Plaintiffs' written enquiries within strict timeframes,
” which amounted to willful and wanton conduct due to
the “volume of non-compliance.” Proposed Am.
Compl. [323-1] at 12. Defendant argues that Plaintiffs
lack any basis for exemplary damages because Plaintiffs have
failed to “identify even a single inquiry to which
[Defendant] failed to respond, or even a single response of
[Defendant's] that was late or otherwise failed to comply
with the law that could possibly support the requisite
elements of exemplary damages.” Response [#30]
Rev. Stat. § 13-21-102(1.5)(a) provides, in relevant
A claim for exemplary damages in an action governed by this
section may not be included in any initial claim for relief.
A claim for exemplary damages in an action governed by this
section may be allowed by amendment to the pleadings only
after the exchange of initial disclosures pursuant to rule 26
of the Colorado rules of ...