United States District Court, D. Maryland
MARY E. EDMONDSON, Plaintiff,
EAGLE NATIONAL BANK, et al., Defendants.
Stephanie A. Gallagher United States District Judge
December 8, 2016, Plaintiff Mary E. Edmondson
(“Edmondson”) filed a one-count class action
Complaint against Defendants Eagle National Bank, Eagle
Nationwide Mortgage Company, Eagle National Bancorp, Inc.,
ESSA Bancorp, Inc., and ESSA Bank & Trust (collectively
“Defendants”), alleging violations of the Real
Estate Settlement Procedures Act (“RESPA”). ECF
1. Edmondson now seeks leave to amend her complaint to modify
the putative class definition and to add additional
plaintiffs and class representatives (“the
Motion”). ECF 48. I have reviewed the Motion, along
with Defendants' Opposition and Edmondson's Reply.
ECF 49, 51. No. hearing is necessary. See Loc. R.
105.6 (D. Md. 2018). For the reasons that follow,
Edmondson's Motion will be granted.
noted above, this case commenced in late 2016. ECF 1.
Defendants filed a motion to dismiss the Complaint on March
27, 2017. ECF 11. Once the motion was fully briefed, United
States District Judge Richard D. Bennett held a motions
hearing on January 16, 2018 (over one year after the
Complaint had been filed), and issued an order granting the
Motion to Dismiss on January 29, 2018. ECF 24-27. An appeal
ensued. ECF 28. On April 26, 2019, the United States Court of
Appeals for the Fourth Circuit entered judgment reversing the
district court's decision and remanding the case for
further proceedings. ECF 33 at 6. Judge Bennett issued a
Scheduling Order on June 27, 2019. ECF 35. The parties
jointly requested modifications to the Scheduling Order on
July 10, 2019, and Judge Bennett approved the parties'
requested schedule on July 12, 2019. ECF 38, 39. According to
the schedule the parties jointly requested, the deadline for
“Moving for Joinder of Additional Parties and Amendment
of Pleadings” was November 1, 2019. ECF 39 at 1.
Rule of Civil Procedure 15 provides that a party seeking to
amend its pleading after twenty-one days following service
may do so “only with the opposing party's written
consent or the court's leave.” Fed.R.Civ.P.
15(a)(2). However, the Rule requires courts to “freely
give leave when justice so requires.” Id. The
Fourth Circuit's policy is “to liberally allow
amendment.” Galustian v. Peter, 591 F.3d 724,
729 (4th Cir. 2010). Accordingly, leave to amend should be
denied only if “prejudice, bad faith, or
futility” is present. See Johnson v. Oroweat Foods
Co., 785 F.2d 503, 509-10 (4th Cir. 1986) (interpreting
Foman v. Davis, 371 U.S. 178 (1962)); Hart v.
Hanover Cnty. Sch. Bd., 495 Fed.Appx. 314, 315 (4th Cir.
2012). Ultimately, the decision to grant leave to amend rests
in this Court's discretion. Foman, 371 U.S. at
182; Laber v. Harvey, 438 F.3d 404, 428 (4th Cir.
2006) (en banc).
asserts that two of the three grounds for denying a motion
for leave to amend are present in this case. First,
Defendants assert that they will be prejudiced if the Court
grants Edmondson leave to amend. ECF 49 at 7-10. Second,
Defendants claim that Edmondson brings her proposed
amendments in bad faith. Id. at 10-11. Each argument
is addressed in turn.
is “[p]erhaps the most important factor” to
consider in ruling on a motion for leave to amend a
complaint. Class Produce Group, LLC v. Harleysville
Worcester Ins. Co., No. SAG-16-3431, 2018 WL 5785664, at
*3 (D. Md. Nov. 5, 2018) (quoting 6 Charles Alan Wright,
Arthur R. Miller, & Mary Kay Kane, Federal Practice and
Procedure: Civil § 1487 (3d. ed. 2010)). Prejudice is
“often determined by the nature of the amendment and
its timing.” Laber, 438 F.3d at 427. An
amendment can cause undue prejudice when it “raises a
new legal theory that would require the gathering and
analysis of facts not already considered by the opposing
party [and] . . . the amendment is offered shortly before or
during trial.” Johnson, 785 F.2d at 510
(citations omitted). Conversely, a proposed amendment carries
little prejudice “if it merely adds an additional
theory of recovery to the facts already pled and is offered
before any discovery has occurred.” Laber, 438
F.3d at 427 (citing Davis, 615 F.2d at 613).
argue that they would suffer prejudice because the class
certifications and discovery deadlines will need to be
modified if the Complaint is amended. ECF 49 at 9-10. That
argument is unpersuasive. First, given the nature of this
litigation, and the fact that Edmondson seeks to add only one
couple as Plaintiffs and class representatives, it is unclear
that any material alterations to the Scheduling Order will be
required by the change. Defendants have not identified any
particular additional discovery that will be required to
accommodate the proposed amendments. Even if some change is
required, as the Fourth Circuit explained in Scott v.
Family Dollar Stores, Inc., “[A]lthough prejudice
can result where a new legal theory is alleged if it would
entail additional discovery and evidentiary burdens on the
part of the opposing party, this ‘basis for a finding
of prejudice essentially applies where the amendment is
offered shortly before or during trial.'” 733 F.3d
105, 118-19 (4th Cir. 2013) (quoting Johnson, 785
F.2d at 510). No. trial date has even been set in this case.
Second, Defendants' repeated contention that Edmondson
seeks this amendment “almost three years after this
action was filed, ” ECF 49 at 9, inaccurately portrays
the suit's procedural posture. As described above, the
active litigation occurring to date has been minimal, and
most of the three-year period was spent waiting for rulings
from either the trial court or the appellate court. Discovery
did not commence until this past summer, and Plaintiff's
motion seeking leave to amend was filed before the
parties' agreed deadline for such amendments.
See ECF 39 at 1. In light of those facts,
Defendants' unsupported assertion of
“prejudice” is unpersuasive.
also argue that leave to amend should be denied because
Edmondson is acting in bad faith “by seeking to roll
out new putative class representatives and amend the class
period at this late stage when such could have been pleaded
years ago.” ECF 49 at 10.
argument is unpersuasive. Courts typically find that a party
acts in bad faith in bringing a motion for leave to amend,
for example, when their amendment fails to “advance a
colorable legal argument.” McCall-Scovens v.
Blanchard, No. ELH-15-3433, 2016 WL 6277668, at *8 (D.
Md. Oct. 27, 2016); see Peamon v. Verizon Corp., 581
Fed.Appx. 291, 292 (4th Cir. 2014) (finding that a party
acted in bad faith by seeking leave to amend “to
artificially inflate his damages in order to obtain subject
matter jurisdiction”). Furthermore, the earlier in the
case the motion for leave to amend is brought, the less
likely it is that the motion is brought in bad faith. See