Opinion
Civil Action 1:20-cv-452-WJM-SKC
09-14-2021
TIFFANY GRAYS Plaintiff, v. NAVIENT SOLUTIONS, LLC, Defendant.
RECOMMENDATION RE: PLAINTIFF'S MOTION TO AMEND [DKT. 103]
S. Kato Crews U.S. Magistrate Judge
To finance her continued education, Plaintiff Tiffany Grays took out a number of student loans, which were serviced by Defendant Navient Solutions, LLC. According to her allegations, in 2014 Navient began incorrectly reporting Plaintiff's payment status to the major credit reporting services and when notified of its errors, failed (or delayed) to correct the information. She initiated this action for monetary damages as well as injunctive and declaratory relief in February 2020, arguing Navient's actions damaged her credit and prevented her from obtaining auto loans, credit cards, apartments, and jobs.
On September 28, 2020, this Court convened a Scheduling Conference to set the discovery limitations and deadlines in this case, including a deadline of November 30, 2020, to amend the pleadings. On October 13, 2020, this Court permitted Plaintiff to file her Second Amended Complaint, which removed a claim regarding unfair debt collection practices and added additional claims against Navient. Three months after 1 the deadline for amendment, on March 3, 2020, Plaintiff filed a motion seeking to file a Third Amended Complaint. Navient opposes this motion based on undue delay and futility and argues Plaintiff has failed to establish good cause to amend the Scheduling Order.
The Court has reviewed the Motion and proposed pleading, Navient's Response and attachments, and Plaintiff's Reply. No hearing is necessary. For the following reasons the Court RECOMMENDS the Motion be DENIED.
DISCUSSION
In her proposed pleading, Plaintiff seeks to add allegations regarding Navient's alleged failure to honor the terms of the “Master Promissory Note” or provide the appropriate in-school deferments and grace periods. In addition, she newly alleges Navient misled her into loan consolidation and forbearance, and the consequences of doing so. Plaintiff also seeks to add exemplary damages.
A. Legal Framework
When a party seeks to amend their pleadings after the deadline established in the scheduling order, “a party must meet the two-part test of first showing good cause to amend the scheduling order under Rule 16(b), and then showing that amendment would be allowed under Rule 15(a).” Ayon v. Kent Denver Sch., No. 12-cv-2546-WJM-CBS, 2014 WL 85287, at *2 (D. Colo. Jan. 9, 2014). Cf. Gorsuch, Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1241 (10th Cir. 2014) (trial court did not abuse its discretion by using “Rule 16's good cause requirement as the threshold inquiry to consider whether amendments should be allowed after a scheduling order deadline has passed;” “[t]he district court did not err in dismissing the motion to amend if [the plaintiffs] were unable to show good cause for their delay”).
The Rule 16 “good cause” standard requires the moving party to show that despite its diligent efforts, it could not have reasonably met the scheduled deadline. See Pumpco, Inc. v. Schenker Int'l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001). This standard is “much different than the more lenient standard contained in Rule 15(a).” Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000) (quoting Dilmar Oil Co. v. Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997), aff'd, 129 F.3d 116 (4th Cir. 1997)). The Rule does not focus on the bad faith of the movant, or the prejudice to the opposing party. Instead, it focuses on the diligence of the party seeking leave to modify the scheduling order to permit the proposed amendment. Id.
Rule 15(a) provides that leave to amend “shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). The purpose of Rule 15(a) unquestionably is to facilitate a decision on the merits. Bob Marshall All. v. Lujan, 804 F.Supp. 1292, 1298 (D. Mont. 1992) (noting that the court's exercise of discretion must “be guided by the underlying purpose of Rule 15 - to facilitate decision on the merits, rather than on the pleadings or technicalities). To that end, motions to amend should be freely granted when justice requires. See, e.g., Bellairs v. Coors Brewing Co., 907 F.Supp. 1448, 1459 (D. Colo. 1995). But in considering the “needs of justice, ” the Court must take into consideration the interests of all parties.
Several factors are typically considered by the courts in determining whether to allow amendment of a complaint. These include whether the
amendment will result in undue prejudice, whether the request was unduly and inexplicably delayed, was offered in good faith, or that the party had sufficient opportunity to state a claim and failed. Where the party seeking amendment knows or should have known of the facts upon which the proposed amendment is based but fails to include them in the original complaint, the motion to amend is subject to denial.Las Vegas Ice & Cold Storage Co. v. Far W. Bank, 893 F.2d 1182, 1185 (10th Cir. 1990) (internal citation omitted); see also Arkansas-Platte & Gulf P'ship v. Dow Chem. Co., 886 F.Supp. 762, 765 (D. Colo. 1995) (“Leave to amend should be freely given based on the balancing of several factors, including futility, delay, bad faith, dilatory motive, repeated failure to cure deficiencies, and prejudice to the opposing party.”).
B. New Claims
In her Motion, Plaintiff contends she could not timely move to amend her pleadings because of Navient's “discovery dance.” She cites to Navient's requested extensions of time as well as the various discovery disputes that have arisen. [Dkt. 103 at p.7.] And she argues, because of these delays, she did not have documents which substantiated her new claims. [Id.] Plaintiff, however, does not specify what documents she did not have and, furthermore, lacking documents to support a claim is distinguishable from the ability to allege facts that form the basis of a claim. Plaintiff has not identified any new facts she discovered after the deadline for amended pleadings to support a basis for amending her claims now. In fact, it appears those facts were within her knowledge all along, or at least from a much earlier time.
Plaintiff signed the Master Promissory Note in 2001 [Dkt. 103-3] and consolidated her loans in 2007 and 2016. [Dkt. 59-1 at ¶29; Dkt. 103-6.] And since the inception of this case, Plaintiff has believed her accounts were in forbearance, deferment, or were current on payments. [Dkt. 6-1 at ¶10.] In addition, Defendants correctly observe that, at minimum, Plaintiff was aware of the bases for her amendments in September and October 2020 when she received direct communications from Navient regarding her complaint filed with the Colorado Attorney General. [Dkt. 110-1 at Exh. I.] In these communications, Plaintiff specifically voices her concerns regarding grace periods, the effects of consolidation, and the terms of the Master Promissory Note. [Id.] Despite having this information more than one month prior to the amendment deadline, Plaintiff did not seek to amend or request an extension of that deadline. “A litigant's failure to assert a claim as soon as [s]he could have is properly a factor to be considered in deciding whether to grant leave to amend.” In re Enron Corp. Sec., Derivative & ERISA Litig., 610 F.Supp.2d 600, 653 (S.D. Tex. 2009) (“where plaintiffs deliberately chose to delay amending their complaint, . . . a busy court need not allow itself to be imposed upon by the presentation of theories seriatim”).
Rather than seek to amend her pleading as soon as she became aware of the underlying facts described in her Motion, Plaintiff waited several months to make her request. Her reliance on the recent discovery disputes is unavailing as they did not address any discovery related to these new allegations. [See Dkt. 121; Dkt. 123.] The Court does not find good cause to support granting this Motion. The Court acknowledges Plaintiff is not represented by counsel in this case, but even then, she is held to the same standard as counsel would be held, particularly on issues of timing. Pro se plaintiffs must “follow the same rules of procedure that govern other litigants.” Nielsen v. Price, 17 F.3d 1276, 1277 (10th Cir. 1994). The timing, facts, and course of this litigation suggest Plaintiff knew the circumstances giving rise to her purported amendments far earlier than when she chose to file the Motion. That she has only recently realized how these facts support additional claims is not good cause to belatedly amend. See Transamerica Life Ins. Co. v. Lincoln Nat'l Life Ins. Co., 590 F.Supp.2d 1093, 1100-1105 (N.D. Iowa 2008) (plaintiff's belated motion for leave to amend was not prompted by a change in the law, but rather reflected “second-guessing” of earlier tactical decisions to forego those claims; holding that plaintiff knew all the circumstances giving rise to the belatedly proposed claim well before the deadline for leave to amend). Cf. Martinez v. Target Corp., 384 Fed.Appx. 840, 846-47 (10th Cir. 2010) (no abuse of discretion in the trial court's denial of plaintiff's untimely motion for leave to amend; finding as inadequate plaintiff's explanation that she did not move to amend because she thought her FMLA claim was premature). On the existing record, the Court concludes Plaintiff has not sustained her burden under Rule 16(b)(4).
In addition to Plaintiff's unexplained delay in attempting to amend her Complaint, it is also important to note both the Court and Navient are entitled to expect that by a certain date, Plaintiff's claims will be fixed, and the case will proceed on that basis. Cf. Carbajal v. St. Anthony Cent. Hosp., No. 12-cv-02257-REB-KLM, 2015 WL 1499864, at *2 (D. Colo. Mar. 27, 2015) (in denying plaintiff's motion for leave to amend filed after the close of discovery and after motions for summary judgment had been filed, the court observed that the liberalized pleading rules do not permit a plaintiff to wait until the last minute to refine the theories upon which they will pursue their case). Plaintiff has already amended her complaint twice; this Court must avoid allowing the complaint to become a moving target. Minter v. Prime Equipment Co., 451 F.3d 1196, 1206 (10th Cir. 2006) (“Courts will properly deny a motion to amend when it appears that the plaintiff is using Rule 15 to make the complaint a moving target.”). Consequently, the Court recommends Plaintiff's request to file a Third Amended Complaint be denied.
C. Exemplary Damages
Apart from her request to add new claims, Plaintiff also seeks to add exemplary damages to her prayer for relief. [Dkt. 103 at p.9.] With respect to exemplary damages, Colorado law provides, in pertinent part:
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 plaintiff establishes prima facie proof of a triable issue.Colo. Rev. Stat. § 13-21-102(1.5)(a). To obtain exemplary damages, a plaintiff must demonstrate that “the injury complained of is attended by circumstances of fraud, malice, or willful and wanton conduct.” Colo. Rev. Stat. § 13-21-102(1)(a). Colorado law defines “willful and wanton conduct” as “conduct purposefully committed which the actor must have realized as dangerous, done heedlessly and recklessly, without regard to consequences, or of the rights and safety of others.” Colo. Rev. Stat. § 13-21-102(1)(b). The Colorado Supreme Court has observed that “[w]here the defendant is conscious of his conduct and the existing conditions and knew or should have known that injury would result, the statutory requirements” are met. Coors v. Sec. Life of Denver Ins. Co., 112 P.3d 59, 66 (Colo. 2005).
In support of her damages request, Plaintiff argues Navient's “normal course of business has been to deprive Plaintiff of her right to have NSL furnish accurate information upon Plaintiff's consumer credit report.” [Dkt. 103 at p.9.] As evidence she attaches a copy of her correspondence history with Navient, which purports to show ten separate disputes Navient failed to correct until after this litigation began. [Dkt. 104.] Although the prima facie standard is a lenient one, the Court concludes this evidence alone is insufficient to establish willful or wanton conduct.
While the correspondence history appears to show various disputes over Navient's reporting and the removal of delinquency notations, it does not contain any evidence Navient acted recklessly and without regard to the consequences of its actions; it is simply a list of actions taken with respect to Plaintiff's loans. Many of the notations are nearly indecipherable as they are written in abbreviations and contain what appear to be undefined company codes. And without any further explanation, it is not clear why any delinquency notations were removed, or whether Navient knew its conduct would result in injury to Plaintiff. To be sure, the Court observes several entries in the log appear to conclude Plaintiff's disputes were frivolous. [See id. at p.3.] Apart from this document, the Court is left only with Plaintiff's conclusory assertions of Navient's alleged fraud, malice, or willful and wanton conduct, which is insufficient.
For these reasons, Plaintiff's request to add exemplary damages should also be denied.
The Court RECOMMENDS the Motion to Amend be denied, for the reasons stated above.
Be advised that all parties shall have fourteen (14) days after service hereof to serve and file any written objections in order to obtain reconsideration by the District Judge to whom this case is assigned. Fed.R.Civ.P. 72(b). The party filing objections must specifically identify those findings or recommendations to which the objections are being made. The District Court need not consider frivolous, conclusive or general objections. A party's failure to file such written objections to proposed findings and recommendations contained in this report may bar the party from a de novo determination by the District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676-83 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the proposed findings and recommendations within fourteen (14) days after being served with a copy may bar the aggrieved party from appealing the factual findings and legal conclusions of the Magistrate Judge that are accepted or adopted by the District Court. Thomas v. Arn, 474 U.S. 140, 155 (1985); Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991).