1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 SUZANNE RYAN-BEEDY, No. 2:17-cv-01999 WBS EFB 13 Plaintiff, 14 v. ORDER RE: MOTION TO LIFT STAY

AND MOTION FOR LEAVE TO FILE

15 THE BANK OF NEW YORK MELLON fka AMENDED COMPLAINT

THE BANK OF NEW YORK AS TRUSTEE

16 FOR THE BENEFIT OF THE

CERTIFICATE HOLDERS OF THE

17 CWALT, INC., ALTERNATIVE LOAN

TRUST 2004-25CB, MORTGAGE PASS-

18 THROUGH CERTIFICATES, SERIES 2004-25CB; DITECH FINANCIAL, 19 LLC; and DOES 1 through 50, inclusive, 20 Defendants. 21

22 ----oo0oo---- 23 Plaintiff Suzanne Ryan-Beedy filed this action against 24 defendants Ditech Financial, LLC (“Ditech”) and the Bank of New 25 York Mellon fka The Bank of New York as Trustee for the Benefit 26 of the Certificate Holders of the CWALT, Inc. (“BONY” or “Bank of 27 New York Mellon”) arising out of defendants’ alleged acts or 28 1 omissions concerning residential mortgage loan modification 2 transactions and the foreclosure of plaintiff’s property. After 3 plaintiff filed suit, Ditech filed for bankruptcy and this action 4 was automatically stayed with respect to Ditech. (See Order 5 Granting Stay (Docket No. 47).) The court then stayed the 6 proceedings because, for most of plaintiff’s claims, “BONY’s 7 liability . . . [was] predicated on Ditech’s,” and “BONY would be 8 entitled to an indemnity or reimbursement from Ditech for any 9 judgment.” (Id. at 6.) Plaintiff now moves to lift the stay and 10 to file a Second Amended Complaint. (Mot. (Docket No. 62).) 11 I. Motion to Lift Stay 12 Plaintiff argues that the proposed Second Amended 13 Complaint (“SAC” (Docket No. 62-2)) avoids the circumstances that 14 previously led the court to stay the proceedings because the SAC 15 “no longer intertwines causes of action involving Ditech.” (Mot. 16 at 5.) 17 “In the absence of special circumstances, stays 18 pursuant to section 362(a) are limited to debtors and do not 19 include [claims against] non-bankrupt co-defendants.” Ingersoll- 20 Rand Fin. Corp. v. Miller Mining Co., 817 F.2d 1424, 1427 (9th 21 Cir. 1987) (citing Teachers Ins. & Annuity Ass’n of Am. v. 22 Butler, 803 F.2d 61, 65 (2d Cir. 1986)). In granting the stay, 23 this court found that such special circumstances existed and a 24 “broader stay of claims” was required because a judgment against 25 BONY would in effect be a judgment against Ditech. (Order 26 Granting Stay at 5-6.) 27 The proposed SAC does not resolve the interdependence 28 of BONY and Ditech’s liabilities. The wrongful foreclosure 1 claim, for example, is based, in part, on the allegation that 2 there was a failure “to properly review [plaintiff’s] complete 3 modification application and [Ditech] simply mov[ed] forward with 4 the foreclosure despite assurances that the foreclosure would 5 necessarily be postponed.” (Compare SAC ¶ 78, with First Amended 6 Complaint (“FAC”) ¶ 88(a)(i) (Docket No. 16) (“[S]everal DITECH 7 representatives told Plaintiff that if she submitted a complete 8 loan modification application before the July 7, 2017 foreclosure 9 sale date, DITECH would postpone the foreclosure sale”).) 10 Likewise, the intentional infliction of emotional distress claim 11 is based, in part, on allegations that Ditech “misled Plaintiff 12 with the false hope that simply submitting a complete loan 13 modification application would necessarily lead to a postponement 14 of the foreclosure sale” and “induc[ed] her to follow the path of 15 a loan modification to stop a foreclosure Defendant never 16 intended to stop, all the while telling her they would not sell 17 the Subject Property.” (SAC ¶¶ 85, 90.) Finally, the Unfair 18 Business Practices claim likewise rests, in part, on allegations 19 that plaintiff was told “she would not lose her property if she 20 followed BONYM/DITECH’s instruction to submit a complete 21 modification application, without explaining to Plaintiff that it 22 was going to foreclose regardless of her application.” (SAC ¶ 23 99.) 24 These claims all depend on Ditech’s purported 25 wrongdoing, and the court therefore cannot “determine whether 26 BONY is liable to plaintiff on these claims without ‘thinking 27 about the issues’ undergirding plaintiff’s claim against bankrupt 28 defendant Ditech.” (See Order Granting Stay at 6 (citing Dean v. □□□ 2.48 VV VASO DYE BP MMUEUITIOCII VY POR Ue PAY OF ST

1 Trans World Airlines, Inc., 72 F.3d 754, 756 (9th Cir. 1995).) 2 Accordingly, the court will deny plaintiff’s motion to lift the 3 stay. 4 II. Leave to File Second Amended Complaint 5 Independently of the SAC’s failure to cure the 6 circumstances that prompted this court to stay the proceedings, 7 the SAC includes an additional claim for negligence. (SAC □ 72- 8 76.) Although the claim excludes references to Ditech, the 9 | negligence claim in the SAC is indistinguishable from the one 10 pled in the First Amended Complaint (FAC @@ 113-117), which the 11 court dismissed without leave to amend. (Docket No. 31.) 12 Indeed, plaintiff states that the proposed claim “further 13 detail[s] the actions of BONYM.” (Reply at 2 (Docket No. 64).) 14 Plaintiff has not requested leave to replead this claim and 15 cannot do so at this point in the proceedings. 16 IT IS THEREFORE ORDERED that plaintiff’s motion to lift 17 stay and motion to file a Second Amended Complaint (Docket No. 18 62) be, and the same hereby is, DENIED without prejudice to 19 | plaintiff’s filing an amended complaint that complies with this 20 Order. 21 | Dated: June 11, 2020 bette 2d. □□ 22 WILLIAM B. SHUBB

UNITED STATES DISTRICT JUDGE

23 24 25 26 27 28