United States of America, ex rel Michael J. Fisher v. JPMorgan Chase Bank, N.A.

MOTION for Leave to File Sixth Amended Complaint

E.D. Tex.January 30, 2019

1 1689219.3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION UNITED STATES OF AMERICA Ex rels. Michael J. Fisher, Keith Franklin, Chezza Hartfield and Reginald McPhaul, Plaintiffs, v. JPMORGAN CHASE BANK, N.A., Defendant. Civil Action No. 4:16-CV-395 JUDGE AMOS L. MAZZANT RELATORS’ MOTION FOR LEAVE TO AMEND Relators respectfully request leave to file a Sixth Amended Complaint. This case involves allegations of misconduct relating to mortgage loans modified under the Home Affordable Modification Program (“HAMP”). In certain communications involving discovery in this case, Defendant has taken the position that the Fifth Amended Complaint does not encompass loans that were insured by the Federal Housing Administration (“FHA loans”) and modified under the FHA’s version of the Home Affordable Modification Program (“FHA- HAMP”). Relators’ view is that the Fifth Amended Complaint does in fact include such loans. See, e.g., Fifth Am. Compl. ¶ 27 (describing FHA-HAMP). In their Second and Third Amended Complaints, Relators alleged that Chase failed to meet certain FHA requirements related to Chase’s servicing of delinquent FHA loans, despite representing to the Government in its initial HAMP Servicer Participation Agreement and annual certifications that it was in compliance with federal and state lending laws. Although Relators did not include those loan servicing allegations specific to FHA requirements in their Fourth and Fifth Amended Complaints—allegations regarding, for instance, defective appraisals, or failure Case 4:16-cv-00395-ALM Document 114 Filed 01/30/19 Page 1 of 4 PageID #: 2039 2 1689219.3 to engage in proper loss mitigation—Relators in no way withdrew FHA loans from the case entirely. To the contrary, Relators’ remaining allegations in the current live complaint regarding Chase’s fraudulent misconduct as a HAMP servicer extend by their own terms to Chase’s servicing of FHA loans, with which Relators had direct experience while at Chase. Given Chase’s apparent unfounded position regarding these allegations, out of an abundance of caution Relators seek leave to amend to add a single footnote leaving no doubt that the complaint’s remaining allegations concerning Chase’s misconduct with respect to HAMP loans extends both to conventional and to FHA-HAMP loans. The proposed Sixth Amended Complaint is attached as Exhibit A.1 Rule 15(a) instructs the Court to “freely give leave when justice so requires.” The rule “evinces a bias in favor of granting leave to amend.” Jones v. Robinson Prop. Grp., L.P., 427 F.3d 987, 994 (5th Cir. 2005) (citation omitted). The Court “may consider whether there has been undue delay, bad faith or dilatory motive, undue prejudice to the opposing party, and futility of amendment.” Transplace Tex. LP v. Alioto, No. 16-647, 2017 WL 823597, at *1 (E.D. Tex. Mar. 2, 2017). None of those factors are present here. This motion is filed within time permitted by the scheduling order. There is no bad faith or dilatory motive, merely a small amendment to clarify the universe of loans covered. There is no prejudice to Defendant as discovery has just begun. And a minor amendment such as this to an otherwise-valid complaint could not be futile. Leave should be granted. 1 Relators did not attach a redline against the Fifth Amended Complaint because reformatting issues were causing problems with creating a proper redline. The only non-formatting change between this proposed complaint and the Fifth Amended Complaint is the addition of this single footnote, which appears in the proposed Sixth Amended Complaint as footnote 1. Case 4:16-cv-00395-ALM Document 114 Filed 01/30/19 Page 2 of 4 PageID #: 2040 3 1689219.3 Dated: January 30, 2019 Respectfully submitted, By: _/s/ Roger D. Sanders Stephen Shackelford, Jr. sshackelford@susmangodfrey.com Texas Bar No. 24062998 SUSMAN GODFREY L.L.P. 1301 Avenue of the Americas 32nd Floor New York, New York 10019 212-336-8330 Telephone 212-336-8340 Facsimile Geoffrey Harrison Texas State Bar No. 00785947 gharrison@susmangodfrey.com Shawn L. Raymond Texas Bar No. 24009236 sraymond@susmangodfrey.com Laranda Moffett Walker Texas State Bar No. 24089943 lwalker@susmangodfrey.com SUSMAN GODFREY L.L.P. 1000 Louisiana Street, Suite 5100 Houston, Texas 77002 Telephone: (713) 651-9366 Facsimile: (713) 654-6666 Jason L. Lichtman jlichtman@lchb.com LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013-1413 212-355-9500 Telephone 212-355-9592 Facsimile Roger D. Sanders Texas Bar No. 17604700 roger.sanders@somlaw.net J. Michael Young Texas Bar No. 00786465 michael.young@somlaw.net SANDERS, MOTLEY, YOUNG & GALLARDO, PLLC Case 4:16-cv-00395-ALM Document 114 Filed 01/30/19 Page 3 of 4 PageID #: 2041 4 1689219.3 111 S. Travis Street Sherman, Texas 75090 903-892-9133 Telephone 903-892-4300 Facsimile Counsel for Relators CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the above and foregoing document has been served on January 30, 2019 to all counsel of record who are deemed to have consented to electronic service via the Court’s CM/ECF system per Local Rule CV-5(a)(3). /s/ Roger D. Sanders Roger D. Sanders CERTIFICATE OF CONFERENCE The undersigned hereby certifies that (1) counsel has complied with the meet and confer requirement in Local Rule CV-7(h) and (2) the motion is opposed. The parties discussed the matter by email and conducted the personal conference required by the Rule on January 30, 2019, by telephone. Participants included Michael Young for Relators and Mark Strachan for Chase. No agreement could be reached because Chase believes (wrongly) that all allegations relating to any FHA-HAMP loans were amended out of the complaint. Discussions have conclusively ended in an impasse, leaving an open issue for the Court to resolve. /s/ Roger D. Sanders Roger D. Sanders Case 4:16-cv-00395-ALM Document 114 Filed 01/30/19 Page 4 of 4 PageID #: 2042