DOMINIC W. LANZA, District Judge.
This is a pro se lawsuit brought by a married couple, Anna and Darius Chabrowski ("Plaintiffs"), against three defendants: the Bank of New York Mellon Trust Company, N.A. f/k/a The Bank of New York Trust Company, N.A. ("BONY"), Bayview Loan Servicing, LLC ("Bayview"), and Zieve, Brodnax & Steele, LLP ("ZBS") (collectively, "Defendants"). In a nutshell, Plaintiffs allege that, even though they paid off the promissory note on their home in 2006, Defendants began pursuing improper collection and foreclosure efforts against them in 2016. As remedies, they seek (1) a declaration that Defendants are barred, for statute-of-limitations reasons, from foreclosing on their home and (2) compensatory and punitive damages.
Pending before the Court are four motions: (1) BONY and Bayview's motion to dismiss Plaintiffs' first amended complaint (Doc. 33), (2) BONY's unopposed "Request for Judicial Notice in Support of Motion to Dismiss" (Doc. 35), (3) Plaintiffs' motion to disqualify ZBS from serving as BONY's counsel in this matter (Doc. 41), and (4) Plaintiffs' amended motion for leave to file a second amended complaint (Doc. 58). As explained below, the Court will dismiss ZBS as a party under Rule 21, because Plaintiffs have not alleged diversity of citizenship as to ZBS. In addition, the Court will grant the motion to dismiss, grant the request for judicial notice, deny Plaintiffs' motion to disqualify counsel, and deny Plaintiffs' amended motion for leave to file a second amended complaint.
Plaintiffs are a married couple who reside in Arizona. (Doc. 32 ¶ 6.) In September 2017, Plaintiffs filed a pro se lawsuit against BONY in Arizona state court.
On June 7, 2018, Plaintiffs filed a first amended complaint ("FAC"). (Doc. 32.) The FAC adds two new defendants, Bayview and ZBS. (Doc. 32 at 3-4.) The FAC does not, however, properly allege the existence of diversity jurisdiction as to these two defendants. Among other things, the FAC does not allege the citizenship of all of ZBS's partners, owners, and members,
The FAC asserts a variety of claims arising from Defendants' efforts, beginning in 2016, to pursue collection and foreclosure efforts against Plaintiffs. The relief sought is two-fold: (1) a declaration that Defendants are barred, for statute-of-limitations reasons, from foreclosing on Plaintiffs' home, which is located in Anthem, Arizona, and (2) compensatory and punitive damages.
On June 21, 2018, BONY filed a motion to dismiss the FAC under Rule 12(b)(6) (see Doc. 33) and a request for judicial notice pertaining to the motion to dismiss (see Doc. 35). Bayview subsequently filed a joinder. (Doc. 44.)
In July 2018, Plaintiffs filed an opposition to the motion to dismiss (see Doc. 37) and a non-opposition to the request for judicial notice (see Doc. 38). Afterward, BONY timely filed a reply in support of the motion to dismiss. (Doc. 39.)
In August 2018, Plaintiffs filed a motion to disqualify ZBS from representing BONY in this matter. (Doc. 41.) BONY filed a timely response (see Doc. 42) and Plaintiffs filed a timely reply (see Doc. 45).
On October 9, 2018, Plaintiffs filed a motion for permission to file a second amended complaint. (Doc. 47.) On October 17, 2018, BONY and Bayview filed an opposition, arguing the motion should be denied because (1) Plaintiffs failed to comply with Local Rule 15.1(a), (2) Plaintiffs' proposed amendment (i.e., correcting BONY's true corporate name) was unnecessary because BONY had already made an appearance under its correct name and subjected itself to the Court's jurisdiction, and (3) granting leave to amend at such a late juncture (more than a year after the lawsuit was initiated) would result in undue hardship and delay. (Doc. 49.)
On October 31, 2018, this case was reassigned to the undersigned judge. (Doc. 53.)
On December 7, 2018, the Court issued an order denying Plaintiffs' motion for leave to file a second amended complaint based on non-compliance with Local Rule 15.1(a). (Doc. 55.)
On December 21, 2018, Plaintiffs filed an amended motion for leave to file a second amended complaint. (Doc. 58.) This time, they complied with Local Rule 15.1(a) by providing a redlined copy of their proposed new complaint. (Doc. 59.) It appears the only proposed changes would be (1) to insert the phrase "f.k.a Bank of New York Trust Company" after "Bank of New York Mellon Trust Company," (2) to assert a new allegation concerning BONY's registration to do business in Arizona, (3) to assert that the address of BONY's parent company is in California, not Arizona, (4) to include new allegations about ZBS's activities in Arizona and California, and (5) to replace the acronym BONY with "BNY Trust." There are no changes to Plaintiffs' legal theories or claims for relief.
Below, the Court has attempted to summarize, in chronological order, the allegations in the FAC relevant to Plaintiffs' asserted claims:
In 2005, Plaintiffs hired a builder to construct a home for them in Anthem, Arizona. (Doc. 32 ¶¶ 18-20.) They paid $150,000 to the builder and borrowed the remaining balance, $185,000, from a company called Preferred Home Mortgage Company ("Preferred Home"), which was "a financing arm" of the builder. (Id.) The promissory note was executed in April 2006. (Id.)
On a date not specified in the FAC, but "before the house was even built, and before [Plaintiffs] closed on the loan," Preferred Home sold the $185,000 mortgage to Bank of America. (Id. ¶ 21.)
In mid-to-late 2006, "Plaintiffs paid of[f] the mortgage with Preferred Home" by using their own savings and money they had obtained from an equity line of credit from ETRADE Financial. (Id. ¶ 22.) Plaintiffs then carried that line of credit as their first mortgage. (Id.)
In 2007, Preferred Home went bankrupt. (Id. ¶ 50.) Plaintiffs allege that Preferred Home "failed to fully satisfy [the loan] . . . before Preferred Home Mortgage went bankrupt," thus making the mortgage "defunct." (Id.)
In 2009, despite the fact that Plaintiffs had already paid off the promissory note, Bank of America accelerated the loan and scheduled a foreclosure. (Id. ¶ 23.) Bank of America then cancelled the foreclosure effort, "after discovering it an error," and paid $2,000 to Plaintiffs in consequential damages. (Id.)
"[S]ometime in 2009," BONY acquired an interest in Plaintiffs' mortgage from Preferred Home pursuant to an Assignment of Deed of Trust. (Id. ¶¶ 30, 46.) The Assignment was signed by "Aida Duenas." (Id. ¶ 46.) Plaintiffs allege that "Aida Duenas" is a robo-signer who lacked authority to assign any interest to BONY because Preferred Home went bankrupt in 2007 and "Aida Duenas" is a false name that has reappeared in litigation concerning robo-signing efforts by other banks. (Id. ¶¶ 48-50.) Therefore, BONY knew or had reason to know the Assignment of Deed of Trust was invalid. (Id. ¶ 51.) Regardless, BONY recorded the Assignment of Deed of Trust. (Id.)
On February 16, 2016, Plaintiffs began receiving mail from Bayview, which was attempting to collect mortgage payments on behalf of Bank of America. (Id. ¶ 24.) Bayview then corrected itself and attempted to collect the payments on behalf of BONY. (Id.) Bayview had purchased servicing rights to Plaintiffs' mortgage loan knowing the loan was defunct. (Id. ¶ 25.) In the correspondence received by Plaintiffs, Defendants represented themselves as debt collectors, giving notices such as "WE ARE ATTEMPTING TO COLLECT DEBT, AND ANY INFORMATION WILL BE USED FOR THAT PURPOSE." (Id. ¶ 56.) Moreover, Defendants sent Plaintiffs a Statement of Breach and Non-Performance that stated: "the monthly installment of principal and interest became due on 4/1/2009, including late charges and all subsequent monthly installments of principal and interest." (Id. ¶ 38.) Plaintiffs refused to pay, so Bayview threatened Plaintiffs with a non-judicial foreclosure. (Id. ¶ 25.)
On July 13, 2017, BONY sent Plaintiffs a "notice of acceleration" of their loan. (Id. ¶ 40.) The notice from BONY was invalid because the loan had never been decelerated or reinstated after Bank of America accelerated it in 2009. (Id. ¶ 39.)
Plaintiffs then filed an action in the Maricopa County Superior Court. (Id. ¶ 31.) On October 17, 2017, the court entered a preliminary injunction "enjoining the trustee sale identified under TS No. 17-47529 with the Bank of New York Mellon." (Id.) Plaintiffs allege that Defendants have not complied with the preliminary injunction. (Id. ¶ 32.)
Before addressing the motion to dismiss, the Court must determine whether it has jurisdiction. Moore v. Maricopa Cty. Sheriff's Office, 657 F.3d 890, 895 (9th Cir. 2011) ("[T]he Supreme Court has specifically instructed that a district court must first determine whether it has jurisdiction before it can decide whether a complaint states a claim.").
As noted, this case was initially filed in state court against a single defendant, BONY. After BONY removed it to federal court, invoking the Court's diversity jurisdiction, Plaintiffs filed the FAC, which identifies ZBS as an additional defendant. The FAC does not, however, allege ZBS's citizenship. This is improper. Hobe' v. U.S. Dep't of Educ., 2009 WL 1699269, *4 (D. Ariz. 2009) (under 28 U.S.C. § 1332(a), a plaintiff seeking to "invoke diversity as the basis for this Court's jurisdiction over his claims . . . must include in his complaint a statement of: (a) his own state citizenship; (b) the citizenship of [each defendant]; and (c) an amount in controversy in excess of $75,000").
Moreover, to the extent the FAC contains anything in the ballpark of allegations concerning ZBS's citizenship, it suggests ZBS would be considered a citizen of Arizona. Among other things, it alleges that ZBS "claims to be the duly appointed trustee of the deed of trust in their capacity as [a] member of the [Arizona] State Bar under A.R.S. 33-803(A)(2)" (see Doc. 32 ¶ 10) and that ZBS "listed their address at an abandoned office at 112 N Central Ave, Suite 425" (id.), which is an Arizona address. The FAC's certificate of service also identifies a different Arizona address for ZBS. (Doc. 32 at 19.)
Although dismissal of the entire case is an option when this sort of jurisdictional defect arises,
"Whether a non-party is `indispensable' is determined by application of Federal Rule of Civil Procedure 19." Confederated Tribes of Chehalis Indian Reservation v. Lujan, 928 F.2d 1496, 1498 (9th Cir. 1991) "Rule 19(a) provides a two-pronged inquiry for determining whether a party is `necessary.'" White v. Univ. of Cal., 765 F.3d 1010, 1026 (9th Cir. 2014). "First, the court must determine whether complete relief can be afforded if the action is limited to the existing parties. Second, the court must determine whether the absent party has a `legally protected interest' in the subject of the action and, if so, whether the party's absence will `impair or impede' the party's ability to protect that interest or will leave an existing party subject to multiple, inconsistent legal obligations with respect to that interest." Id. (citation omitted).
ZBS does not qualify as a necessary party under this test. ZBS is the law firm representing BONY and Bayview in this matter. (As discussed below, ZBS is not a trustee to Plaintiffs' Deed of Trust, as evidenced by the "Substitution of Trustee" the Court has judicially noticed.) If Plaintiffs were to prevail on all of their claims against BONY and Bayview, they would obtain the "complete relief" they are seeking in this action (i.e., declaratory relief concerning the statute of limitations and monetary damages). Moreover, ZBS has no legally protected interest in the subject of the action and ZBS's absence won't leave BONY or Bayview subject to multiple, inconsistent legal obligations. Consequently, ZBS is a dispensable, non-diverse party that will be dismissed under Rule 21.
BONY and Bayview have asked the Court to take judicial notice of seven documents for purposes of ruling on the motion to dismiss. (Doc. 35.) Three of the documents (Exhibits A, B, and C) are title documents related to Plaintiffs' property in Anthem. The next three documents (Exhibits D, E, and F) are from Plaintiff Anna Chabrowski's Chapter 13 bankruptcy case. The final document (Exhibit G) is a minute entry that was issued by the state-court judge in this case before BONY removed the case to federal court. Notably, Plaintiffs do not oppose the judicial-notice request. (Doc. 38 at 1 ["Plaintiffs . . . DO NOT oppose [the] Request for Judicial Notice . . . as the Defendant(s)' Exhibits actually support Plaintiffs' [position]."].)
Courts regularly take judicial notice of the type of documents at issue here. See, e.g., Jacobsen v. HSBC Bank USA, N.A., 713 Fed. App'x 679, 680 (9th Cir. 2018) ("The district court did not abuse its discretion by taking judicial notice of the title documents."); U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) ("[W]e `may take notice of proceedings in other courts . . . within . . . the federal judicial system, if those proceedings have a direct relation to matters at issue.'") (citation omitted); Griffin v. Green Tree Servicing, LLC, 166 F.Supp.3d 1030, 1040 (C.D. Cal. 2015) (taking judicial notice of documents "that concern the chain of title on [plaintiff's] mortgage" and summarizing cases that similarly took judicial notice of title documents). Accordingly, and given Plaintiffs' non-opposition to the request, the Court will take judicial notice of all seven documents, with the proviso that it cannot—at the motion-to-dismiss stage—take judicial notice of any disputed facts contained within these records. See, e.g., Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018); Lee v. City of Los Angeles, 250 F.3d 668, 688-90 (9th Cir. 2001). Specifically:
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The only "fact" within these documents the Court will decline to judicially notice is the validity of Exhibit C (the 2012 assignment to BONY). This is because Plaintiffs dispute whether Aida Duenas had authority to execute the assignment. (Doc. 32 ¶¶ 46-51.)
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Although the Court is taking judicial notice of Exhibits D-F, the Court does not agree with BONY and Bayview's contention (Doc. 33 at 7-8) that these documents are helpful for res judicata purposes. The bankruptcy court did not rule, on the merits, that Anna Chabrowski owed a debt to BONY. During the January 2017 hearing, the bankruptcy court merely noted that this issue was disputed and that further evidentiary development might be needed. Although the court subsequently dismissed Anna Chabrowski's bankruptcy case, it appears this dismissal was based on her failure to comply with court orders, not based on a merits resolution of the disputed issue.
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Although the Court is taking judicial notice of Exhibit G,
"[T]o survive a motion to dismiss, a party must allege `sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Iqbal, 556 U.S. at 678). "[A]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party." Id. at 1144-45 (citation omitted). However, the court need not accept legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 679-80. The court also may dismiss due to "a lack of a cognizable legal theory." Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015) (citation omitted). It is important to note that "[p]ro se complaints are to be construed liberally and may be dismissed for failure to state a claim only where it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Barrett v. Belleque, 544 F.3d 1060, 1061-62 (9th Cir. 2008) (citation omitted).
In Count 1 of the FAC, Plaintiffs seek a declaration that "Defendants are barred from conduc[t]ing [a] trustee sale due to Arizona's Statute of Limitations." (Doc. 32 ¶¶ 33-42; see also id. ¶ 3 ["Plaintiffs seek judgment of the Court declaring the substitute of trustee, the assignment of deed of trust, and notice of trustee sale as unenforceable in light of [Arizona's statute-of-limitations provisions,] A.R.S. § 12-548 and 33-816."].) This claim is premised upon the allegation that Bank of America accelerated Plaintiffs' loan in 2009 and, because the loan was never decelerated, the six-year statute of limitations established by A.R.S. § 12-548 has already expired. (Doc. 32 ¶¶ 23, 33.)
In their motion, BONY and Bayview argue that Bank of America could not have accelerated the loan in 2009 because Bank of America did not even acquire any interest in Plaintiffs' loan until 2011, as evidenced by Exhibit A to the request for judicial notice. (Doc. 33 at 5.) They also claim the "continuous breach theory" is applicable, under which each missed payment by Plaintiffs created its own cause of action, and therefore the statute of limitations has not expired. (Id. at 3-5.) In their response, Plaintiffs do not make a meaningful effort to address these arguments, other than to reassert in conclusory fashion that the acceleration occurred in 2009. (Doc. 37 at 6 ["Plaintiffs cannot remove their claims [that] the Bank of America already accelerated the alleged debt in 2009, as it is part of public record."].)
The Court will dismiss Count 1 because Plaintiffs have not alleged sufficient facts to state a plausible claim that Bank of America accelerated their loan in 2009, causing the statute of limitations to begin to run. The FAC does not allege any facts regarding how Bank of America accelerated the loan or why Plaintiffs believed the loan was accelerated, and Plaintiffs have stipulated to the judicial notice of documents showing that Bank of America didn't even obtain an interest in their loan until 2011. Under these circumstances, Plaintiffs have not pleaded "factual content that allows the court to draw the reasonable inference" that the statute of limitations began running in 2009. In re Fitness Holdings, 714 F.3d at 1144 (citation omitted).
In Claim 2 of the FAC, entitled "False Documents," Plaintiffs assert a claim under A.R.S. § 33-420(A) premised on the notion that "Aida Duenas," the person who signed the document assigning Bank of America's interest in Plaintiffs' loan to BONY, was actually a robo-signer. (Doc. 32 ¶¶ 43-51.)
In their motion, BONY and Bayview argue this claim fails as a matter of law because (1) Plaintiffs never made a written demand to release or correct the challenged document, which is a mandatory prerequisite to relief under Arizona law, see A.R.S. § 33-420(C); (2) the Arizona false-recording statute only applies to certain types of documents and doesn't apply to the documents at issue here, see Schayes v. Orion Fin. Grp., Inc., 2011 WL 3156303, *6 (D. Ariz. 2011); and (3) the alleged misrepresentations were immaterial, see Sitton v. Deutsche Bank Nat'l Tr. Co., 311 P.3d 237 (Ariz. Ct. App. 2013). (Doc. 33 at 6-7.) In their response, Plaintiffs make no effort whatsoever to address these arguments.
The Court will dismiss Count 2. As an initial matter, Plaintiffs' failure to address the arguments presented in the motion to dismiss "is an independent basis to dismiss." Wilkinson v. Wells Fargo Bank, N.A., 2012 WL 869285, *3 (D. Ariz. 2012) (citing LRCiv 7.2(i)).
In Count 3 of the FAC, entitled "Misrepresentation," Plaintiffs assert a state-law tort claim premised on the notion that "Defendants acted deceptively and under false pretenses [by] misrepresenting themselves as Debt Collector[s]" as that term is defined by the Fair Debt Collection Practices Act ("FDCPA"). (Doc. 32 ¶¶ 52-60.) They seek both declaratory relief (see Doc. 32 at 17 [seeking a "Declaration that Defendants misrepresented themselves as Debt Collector [sic] under 15 U.S.C. 1692a(6)"]) and (2) compensatory damages arising from "having to defend from false foreclosure, in addition to harassment at hands of Defendants[`] agents continuously threatening foreclosure. . . ." (see Doc. 32 ¶¶ 59-60).
In their motion, BONY and Bayview acknowledge they aren't debt collectors under the FDCPA. (Doc. 33 at 8-9.) Nevertheless, they seek dismissal under Rule 9 because Count 3 doesn't allege, with any specificity, "when, where, or how" they purportedly held themselves out as debt collectors. (Id.) In their response, Plaintiffs don't address this argument in any meaningful way—they argue, in conclusory fashion, that their initial allegations were sufficient and request, in the alternative, leave to file a second amended complaint with more details. (Doc. 37 at 2.)
The Court will dismiss Count 3 based on non-compliance with Rule 9(b). This rule requires a party alleging fraud to "state with particularity the circumstances constituting fraud." The allegations "must be accompanied by `the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). "The plaintiff must set forth what is false or misleading about a statement, and why it is false." Id. (citation omitted).
Here, Plaintiffs fail to allege who made the representations, when the representations were made, and why the representations were false. Plaintiffs claim that "Defendants represented themselves as Debt Collector[s]" (see Doc. 32 ¶ 56), but Defendants are three separate entities. Plaintiffs do not specify which Defendant made the misrepresentation, whether all three Defendants each made the same misrepresentation, or whether Plaintiffs merely attribute the misrepresentation to all three Defendants. Plaintiffs also fail to allege when the misrepresentations were made, simply stating they occurred "[o]n multiple occasions." (Id.)
Additionally, Plaintiffs do not allege any injury that is traceable to Defendants' alleged misrepresentation of themselves as debt collectors. Although Plaintiffs allege they "suffered damages in having to defend from false foreclosure" (Doc. 32 ¶ 59), this injury has no causal connection to the alleged misrepresentation that Defendants were debt collectors. Failure to allege an injury that is "fairly traceable to the defendant's allegedly unlawful conduct" is a proper basis to dismiss under Rule 12(b)(6). See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 (2006) (citation omitted) ("A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief."); MAI Sys. Corp. v. UIPS, 856 F.Supp. 538, 540 (C.D. Cal. 1994) (citation omitted) ("Failure to properly allege standing is a ground for dismissal under Rule 12(b)(6).").
The Court also will deny Plaintiffs' request to attempt to cure the issues in Count 3 by filing a second amended complaint. Although Plaintiffs requested a chance to cure in their response to the motion to dismiss, their request was notably vague. Moreover, while the motion to dismiss was pending, Plaintiffs attempted to file a second amended complaint, which doesn't contain any new details concerning the supposed misrepresentations or an injury that is fairly traceable to the supposed misrepresentations. These circumstances suggest that any further opportunity to cure the issues would be futile. Resident Minors of City and Cty. of San Francisco v. Harris, 482 Fed. App'x 293, 294 (9th Cir. 2012) ("The district court did not abuse its discretion in denying . . . leave to amend. . . because the[ ] alleged wrongs do not have a `fairly traceable causal connection' to defendants' alleged [wrongdoing]."); Chodos v. W. Publishing Co., 292 F.3d 992, 1002 (9th Cir. 2002) (citation omitted) ("[W]hen a district court has already granted a plaintiff leave to amend, its discretion in deciding subsequent motions to amend is `particularly broad.'").
In Count 4 of the FAC, entitled "Breach of Fiduciary Duty," Plaintiffs assert that Defendants violated their fiduciary duties to Plaintiffs by (1) not complying with Arizona's foreclosure statutes, (2) "self dealing," (3) having a conflict of interest, and (4) violating the Maricopa County Superior Court's preliminary injunction. (Doc. 32 ¶¶ 61-73.)
In their motion, BONY and Bayview argue this claim fails because (1) "[i]t is well settled in Arizona that a mortgage lender does not owe a fiduciary duty to a borrower," see Valley Nat'l Bank of Phoenix v. Elect. Dist. No. 4, 367 P.2d 655, 662 (Ariz. 1961); (2) Arizona law does not require a company to register as an Arizona corporation, or maintain a registered agent in Arizona, before seeking to foreclose; (3) Plaintiffs' conflict-of-interest theory "is not a recognized tort or claim in Arizona, nor is it supported by any plausible facts"; and (4) the violation-of-court-order claim fails because no trustee sale took place after the state court issued its order. (Doc. 33 at 9-10.) In their response, Plaintiffs concede that BONY doesn't owe any fiduciary duties to them and seem to argue that Claim 4 is only being asserted against ZBS. (Doc. 37 at 5-6.)
The Court will dismiss the breach of fiduciary duty claim as it pertains to BONY and Bayview, both on the merits
Plaintiffs move to disqualify ZBS from representing BONY in this matter. (Doc. 41.) They allege that ZBS has a conflict of interest because it is the trustee established by the Deed of Trust. (Id. at 3.)
BONY argues that ZBS is a law firm, not the trustee under the Deed of Trust. (Doc. 42 at 2.)
The Court "appl[ies] state law in determining matters of disqualification." In re Cty. of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000). In Arizona, motions to disqualify are "view[ed] with suspicion." Gomez v. Superior Court, 717 P.2d 902, 905 (Ariz. 1986). "[T]he moving party [must] show sufficient reason why an attorney should be disqualified from representing his client." Alexander v. Superior Court, 685 P.2d 1309, 1313 (Ariz. 1984).
Plaintiffs have failed to carry this burden. Plaintiffs are incorrect that ZBS is the trustee established by the Deed of Trust, as evidenced by the "Substitution of Trustee" the Court has judicially noticed. Additionally, Plaintiffs don't identify how ZBS is materially limited from representing BONY under Arizona Ethical Rule 1.7. The speculative assertion that ZBS is likely to put its recovery ahead of its client is insufficient. Finally, the Court is not persuaded there is even an appearance of impropriety here.
Plaintiffs have moved for leave to file a seconded amended complaint ("SAC"). Plaintiffs claim they "have made very little change to the first amended complaint because the second amended complaint is in respect to resolving issues of misnamed or improperly identified parties
The Court will deny Plaintiffs' request to file the SAC. The proposed changes in the SAC do nothing to cure the deficiencies identified in this order.
Nor will the Court allow Plaintiffs to make additional efforts to amend the complaint. "When considering a motion for leave to amend, a district court must consider whether the proposed amendment results from undue delay, is made in bad faith, will cause prejudice to the opposing party, or is a dilatory tactic." Chodos, 292 F.3d at 1002. Here, Plaintiffs' attempts to amend their complaint in piecemeal fashion, even before the Court could rule on Defendants' motion to dismiss, appear to be dilatory tactics to avoid foreclosure on their Anthem property. Plaintiffs also had the benefit of participating in meet-and-confer sessions during which opposing counsel "conferred with Plaintiffs as to each cause of action and the corresponding deficiencies." (Doc. 33 at 2 n.1). Yet Plaintiffs refused to amend the FAC to address those deficiencies, causing Defendants to file the motion to dismiss that is now before the Court. (Doc. 33.) The motion documented why the FAC was deficient. (Id.) Plaintiffs filed a response brief (Doc. 37), but before the Court could rule, Plaintiffs moved the Court to amend the FAC (Doc. 47, refiled as Doc. 58). None of the deficiencies identified in Defendants' motion to dismiss were remedied. (Doc. 58.) Under these circumstances, further amendment would be futile. Chodos, 292 F.3d at 1002 (citation omitted) ("[W]hen a district court has already granted a plaintiff leave to amend, its discretion in deciding subsequent motions to amend is `particularly broad.'").
Accordingly,
