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Navin v. Wells Fargo Bank, N.A.

United States District Court, D. Connecticut

September 29, 2017

JEFFREY NAVIN and JOHN O'REILLY on behalf of themselves and of all others similarly situated, Plaintiffs,


          Michael P. Shea, U.S.D.J.

         Plaintiff Jeffrey Navin-who died in 2015-and pro se plaintiff John O'Reilly (collectively, “Plaintiffs”) brought this lawsuit against the following Defendants: HSBC Bank USA, N.A. (“HSBC”); Wells Fargo Bank, N.A., America's Servicing Company, and Wells Fargo Insurance, Inc. (collectively, the “Wells Fargo Defendants”); and Assurant Inc. (“Assurant”) and its subsidiary American Security Insurance Company (“ASIC”) (collectively, the “Assurant Defendants”). (First Amended Complaint (“FAC”), ECF No. 8 at 1.)

         On August 8, 2016, the Court dismissed Plaintiffs' claims challenging Defendants' practice of forcing residential borrowers, such as Navin, to pay for homeowners' insurance that lenders obtained to protect their interest when the homeowners failed to maintain their own insurance. (ECF No. 113.) Plaintiff O'Reilly now moves to amend the First Amended Complaint (ECF No. 114) by filing the proposed Second Amended Complaint (ECF No. 117), and to substitute Christopher Carveth, Esq., administrator of the estate of Jeffrey Navin, as the proper plaintiff in this action. (ECF No. 116.)

         For the reasons discussed below, the motions are DENIED.

         I. Factual Background

         I assume familiarity with the underlying facts and the decision rendered on August 8, 2016. (ECF No. 113.) I recount certain relevant procedural facts below.

         Plaintiffs filed their Complaint on May 5, 2015. (ECF No. 1.) On June 19, 2015, Plaintiffs amended their pleading and filed the FAC. (ECF No. 8.) On or about October 30, 2015, Navin was declared to have died. (ECF No. 116 at 1.) Defendants filed a Suggestion of Death on November 20, 2015. (ECF No. 97.) On December 1, 2015, Christopher Carveth, Esq. was appointed by the Trumbull Probate Court to be the administrator of Navin's estate. (ECF No. 115-1 at 9.)

         On August 8, 2016, the Court dismissed the FAC and denied O'Reilly's motion to substitute himself for Navin. (ECF No. 113.) The Court ruled that O'Reilly's motion to substitute himself for Navin failed under Connecticut's Survival Statute, Conn. Gen. Stat. § 52-599(a), which made the proper party for substitution the executor or the administrator of Navin's estate. (ECF No. 113 at 11.) The Court also ruled that, for his own part, O'Reilly failed to state a claim on which relief could be granted. The Court provided O'Reilly thirty days within which to file a motion to amend or supplement the FAC, a statement explaining why the Court should grant him leave to amend or supplement the FAC given the potential obstacles of futility, bad faith, and prejudice, and a copy of his proposed supplemental or amended pleading. (ECF No. 113 at 24.)

         On September 6, 2016, O'Reilly filed a motion to amend the FAC and a motion to substitute Christopher Carveth for Navin as the proper plaintiff. (ECF Nos. 114, 116.) O'Reilly filed a proposed Second Amended Complaint on September 7, 2016. (ECF No. 117.) Defendants filed a joint opposition to both of O'Reilly's motions on October 6, 2016 (ECF No. 118.) Carveth also filed a memorandum in opposition to O'Reilly's motion to substitute, representing that he had decided not to pursue the claims belonging to Navin's estate. (ECF No. 121.)

         II. Legal Standards

         A. Substitution

         Rule 25 provides that “[i]f a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent's successor or representative. If the motion is not made within 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.” Fed.R.Civ.P. 25(a)(1). Whether a person is “the proper party” is “a question of state law.” Coleman v. Sys. Dialing LLC, No. 15 CV 3868 (DLC), 2016 WL 1169518, at *2 (S.D.N.Y. Mar. 22, 2016); Falls v. Novartis Pharm. Corp., No. 3:13-CV-270 (JBA), 2014 WL 3810246, at *2 n.3 (D. Conn. Aug. 1, 2014) (noting that “state substantive law determines whether a claim survives death”). Connecticut's Survival Statute provides that “[a] cause or right of action shall not be lost or destroyed by the death of any person, but shall survive in favor of or against the executor or administrator of the deceased person.” Conn. Gen. Stat. § 52-599(a).

         B. Amendment

         Before trial, “a party may amend its pleading only with the opposing party's written consent or the court's leave, ” which the Court should “freely give . . . when justice so requires.” Fed.R.Civ.P. 15(a)(2). In addition, “the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented.” Fed.R.Civ.P. 15(d). Despite the liberal standard for amending or supplementing pleadings, “[a] district court has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). See also Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir. 1995) (holding that a motion to supplement will be granted “[a]bsent undue delay, bad faith, dilatory tactics, undue prejudice to the party to be served with the proposed pleading, or futility”). “In this Circuit, it is well settled that an amendment is considered futile if the amended pleading fails to state a claim or would be subject to a motion to dismiss on some other basis.” Gilbert, Segall & Young v. Bank of Montreal, 785 F.Supp. 453, 457 (S.D.N.Y. 1992); see also Kalimantano GmbH v. Motion in Time, Inc., 939 F.Supp.2d 392, 403 (S.D.N.Y. 2013) (“‘Futility' under Rule 15 turns on whether the proposed pleading would state a claim upon which relief could be granted.”) (quoting Dougherty v. N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 87-88 (2d Cir. 2002)).

         III. Discussion

         A. Motion ...

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