Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DALE SUNDBY and EDITH Case No.: 23-CV-01239-GPC-AHG LITTLEFIELD SUNDBY; DALE 12 SUNDBY and EDITH LITTLEFIELD ORDER GRANTING PLAINTIFFS’ 13 SUNDBY, Trustees, MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT; 14 Plaintiffs, DENYING DEFENDANT 15 v. FIDELITY’S MOTION TO DISMISS AS MOOT 16 FIDELITY NATIONAL TITLE INSURANCE COMPANY; and DOES 1- 17 [ECF Nos. 114, 118] X, inclusive, 18 Defendants. 19 20 Before the Court is Plaintiffs Dale and Edith Sundbys’ motion to file a first amended 21 complaint, ECF No. 114, as well as Defendant Fidelity’s motion to dismiss, ECF No. 118. 22 The motions are fully briefed. The Court finds the matter suitable for decision on the papers 23 under Civil Local Rule 7.1(d)(1) and vacates the hearing set for February 13, 2026. For the 24 reasons set forth below, the Court GRANTS Plaintiffs Dale and Edith Sundbys’ motion for 25 leave to file a first amended complaint, ECF No. 114. The Court DENIES as moot 26 Defendant Fidelity’s motion to dismiss, ECF No. 118. 27 // 1 BACKGROUND 2 I. Factual Background 3 On November 1, 2022, Plaintiffs Dale Sundby and Edith Littlefield Sundby, 4 appearing pro se as individuals and in their capacity as trustees of Declaration of Trust, 5 Trust No. 1989-1 Dated: January 26, 1989 (“Trust”), filed their initial complaint against 6 Defendant Fidelity National Title Company (“Fidelity”) and Doe Defendants I-X in the 7 Central District of California. ECF No. 1. The facts giving rise to the complaint concern 8 allegedly altered mortgage loan documents as to the Sundbys’ residence in La Jolla, 9 California. Id. ¶¶ 12–49. Defendant Fidelity is alleged to have issued title insurance for 10 the loan policy. Id. ¶ 41. 11 In 2019, Dale Sundby, appearing pro se on behalf of the Trust, initiated litigation 12 against the lenders concerning the altered loan documents. Id. ¶¶ 50–55; see Case No. 19- 13 cv-390 (“Case 390”), ECF No. 1. In this case, the Sundbys allege that Fidelity, as the policy 14 insurer, had effective control over the litigation in Case 390, including selecting and 15 directing counsel and the defendants to defend against the claims. Id. ¶¶ 58–69. Forming 16 the basis of the Sunbdys’ claims in this case, the Sundbys further allege that Fidelity 17 improperly caused a revoked deed of trust to be recorded, caused the initiation of default 18 proceedings, and caused the foreclosure of Sundbys’ property. Id. ¶¶ 82–116. The 19 Sundbys allege four causes of action concerning the purported wrongful foreclosure of 20 their property. Id. ¶¶ 117–96. 21 II. Procedural Background 22 On July 5, 2023, this case was transferred to the Southern District of California, ECF 23 No. 66, and, on July 27, 2023, to the undersigned’s chambers due to related cases pending 24 before the Court, ECF No. 77. 25 When the case was transferred to this district, Fidelity had a pending motion to 26 dismiss the Sundbys’ complaint, which the Sundbys had opposed. ECF Nos. 29, 37. While 27 that motion remained pending, and shortly after the case was transferred to this district, the 1 Sundbys filed a motion for leave to file a first amended complaint. ECF No. 70. Fidelity 2 opposed the motion for leave to amend. ECF No. 75. 3 On August 4, 2023, this Court issued a sua sponte stay of the proceedings pending 4 the outcome of Mr. Sundby’s appeal to the Ninth Circuit Court of Appeals in Case 390. 5 ECF No. 85. The Court did so in consideration of interconnected questions of law and fact 6 between the two cases. ECF No. 85, at 6–7. Specifically, the Court noted the relevance of 7 questions relating to the Sundbys’ capacity to represent the Trust pro se and Dale and Edith 8 Sundby’s standing to bring the alleged causes of action as individuals. Id. 9 In response, the Sundbys filed a petition for a writ of mandamus with the Ninth 10 Circuit. ECF No. 94, 108. The Ninth Circuit denied the Sundbys’ petition. ECF No. 110. 11 This Court also denied the Sundbys’ motion to lift the stay. ECF Nos. 102, 107. 12 On June 30, 2025, the Ninth Circuit affirmed this Court’s dismissal with prejudice 13 of Mr. Sundby’s claims in Case 390. See Case No. 19-cv-390, ECF No. 395-1. The 14 judgment took effect on October 14, 2025. Id., ECF No. 399. 15 Given the Ninth Circuit’s decision in Case 390, on November 12, 2025, the Sundbys 16 re-filed a motion for leave to file a first amended complaint in this case. ECF No. 114. On 17 November 18, 2025, Fidelity re-filed a motion to dismiss. ECF No. 118. Both motions have 18 been fully briefed. See ECF Nos. 120, 121, 122, 123. 19 LEGAL STANDARD 20 Because the Court grants the Sundbys’ motion for leave to amend, it does not 21 consider Defendant’s motion to dismiss. Thus, the Court provides only the legal standard 22 for a motion for leave to amend: 23 I. Federal Rule of Civil Procedure 15 24 When not within the window to amend as a matter of course, party may move to 25 amend its complaint after obtaining leave of the Court or by consent of the adverse party. 26 27 1 Fed R. Civ. P. 15(a)(2). Federal Rule of Civil Procedure (“Rule”)1 15 provides that leave 2 to amend “shall be freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). This 3 policy is “to be applied with extreme liberality.” Eminence Cap., LLC v. Aspeon, Inc., 316 4 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 5 F.3d 708, 712 (9th Cir. 2001)). 6 When considering whether to grant leave to amend, courts consider factors 7 including “undue delay, bad faith or dilatory motive on the part of the movant, repeated 8 failure to cure deficiencies by amendments previously allowed, undue prejudice to the 9 opposing party by virtue of allowance of the amendment, [and] futility of 10 amendment.” Foman v. Davis, 371 U.S. 178 (1962). In the Ninth Circuit, “it is the 11 consideration of prejudice to the opposing party that carries the greatest weight.” 12 Eminence Cap., LLC, 316 F.3d at 1052. Indeed, “[a]bsent prejudice, or a strong showing 13 of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in 14 favor of granting leave to amend.” Id (emphasis in original). 15 DISCUSSION 16 I. The Sundbys’ Motion for Leave to File a First Amended Complaint 17 The Sundbys’ amended complaint seeks only to (1) “clarify[] that Plaintiffs proceed 18 solely in their individual capacities,” and (2) “add Defendants already identified in the 19 pleadings and exhibits.” ECF No. 114, at 2. 20 A. Plaintiffs’ Change in Capacity 21 While the original complaint named Dale and Edith Sundby in their individual 22 capacities as well as Dale and Edith Sundby in their capacity as trustees, see ECF No. 1, at 23 1, the Sundbys’ proposed amended complaint names only Dale and Edith Sundby in their 24 individual capacities. ECF No. 114, at 13. 25 26 27 1 “Rule” or “Rules” refers to the Federal Rules of Civil Procedure unless otherwise noted. 1 The Sundbys’ proposed amendment reflects that on November 12, 2025, the 2 Sundbys, as trustees, “executed Assignment of Claims and Ratification,” wherein the Trust 3 “assign[s] to the Assignees all Trust claims relating to the Events” regarding the property 4 at issue in this case.2 ECF No. 114, at 2, 8, 11. The Sundbys allege that the assignment of 5 claims “foreclose[s] any capacity objections.” ECF No. 114, at 4. 6 In its opposition to the Sundbys’ motion, Fidelity does not challenge the validity of 7 the Assignment of Claims, nor does it address how such an Assignment might impact the 8 Sundbys’ standing to bring the claims alleged in their complaint or capacity to proceed 9 without counsel. In fact, Fidelity does not mention the Assignment—or the fact that the 10 Sundbys seek to proceed only in their individual capacity—at all. See generally ECF No. 11 120. 12 Thus, Fidelity has provided no response to the Sundbys’ proposed change in 13 plaintiffs sufficient to overcome the presumption in favor of granting leave to amend. See 14 Eminence Cap., LLC, 316 F.3d at 1052. 15 B. Additional Defendants 16 The Sundbys also seek to amend the complaint to include additional defendants. See 17 ECF No. 122, at 2 (“The proposed FAC does not expand the merits theories against 18 Fidelity; it simply adds the related participants already identified in the record so the 19 foreclosure-era dispute can be resolved in one proceeding.”) 20 A motion to add defendants is properly raised under Rule 15. However, as Fidelity 21 notes in its briefing, courts “differentiate between pleadings attempting to amend claims 22 from those seeking to amend parties.” Union Pac. R. Co. v. Nevada Power Co., 950 F.2d 23 24 25 26 2 The Assignment of Claims and Ratification is attached to the Sundbys’ motion as Exhibit 27 2. ECF No. 114, at 8. 1 1429, 1432 (9th Cir. 1991). Indeed, amendments adding parties are granted less freely than 2 those adding claims. Id. 3 However, Fidelity has not identified the more stringent standard for amendments 4 seeking to add parties nor how the Sundbys have failed to meet it. To the extent that added 5 defendants might seek to challenge whether the amended complaint sufficiently relates 6 back to the original pleading under Rule 15(c), they may do so. At this point, Fidelity has 7 raised no such concerns. 8 C. Foman Factors: Prejudice and Futility 9 Fidelity properly notes that leave to amend may be denied where the opposing party 10 makes a showing of undue prejudice, bad faith, or dilatory motive on the part of the moving 11 party. ECF No. 120, at 3 (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). However, 12 Fidelity fails to make any such showing beyond stating that “allowing leave to amend 13 would be futile and result in undue prejudice to Fidelity.” Id. 14 To the extent that Fidelity argues futility, it asks the Court to make such a finding 15 only on the basis of Fidelity’s pending motion to dismiss, which (1) the Court has not yet 16 evaluated and need not evaluate prior to ruling on the Sundbys’ motion, and (2) relates to 17 the original complaint, which does not address the Sundbys’ adjusted capacity theory 18 discussed above. See ECF No. 120, at 3. Thus, Fidelity has not made a showing of futility 19 sufficient to overcome the presumption in favor of granting leave to amend. See Eminence 20 Cap., LLC, 316 F.3d at 1052. 21 Further, Fidelity’s request that the Court consider the merits of its motion to dismiss 22 the original complaint to better assess the alleged futility of the Sundbys’ motion for leave 23 to file an amended complaint runs counter to interests of judicial economy. Because “‘when 24 a motion to dismiss is granted, the usual practice is to grant leave to amend the complaint’ 25 . . . it is often ‘in the interest of judicial economy for Plaintiffs to amend now rather than 26 after a ruling [on] Defendants’ motion to dismiss.’” San Diego Coastkeeper v. Pick-Your- 27 Part Auto Wrecking, No. 22-CV-1693 TWR (DDL), 2023 WL 2801199, at *2 (S.D. Cal. 1 Apr. 5, 2023) (first quoting Hayden v. County of Nassau, 180 F.3d 42, 53 (2d Cir. 2 1999), overruled in part on other grounds by Gonzaga Univ. v. Doe, 536 U.S. 273 (2002); 3 then In re Madison Asset LLC, No. 1:20-cv-10299-MKV, 2021 WL 1894032, at *2 4 (S.D.N.Y. May 11, 2021)). 5 Lastly, Fidelity argues that the Sundbys’ motion for leave to amend should be denied 6 because the Sundbys have failed to show any basis for amending. ECF No. 120, at 3 (citing 7 Long v. Satz, 181 F.3d 1275, 1279 (1999) (“Parties should not be allowed to amend their 8 complaint without showing how the complaint could be amended to save the meritless 9 claim”) (internal quotation marks and citation omitted)). Fidelity continues that the 10 Sundbys “completely failed to show any grounds for filing an amended complaint.” ECF 11 No. 120, at 4. 12 However, Fidelity’s motion to dismiss is partially based on the arguments that (1) 13 Mr. Sundby cannot represent the Trust pro se and (2) the Sundbys, as individuals, lack 14 standing to bring the claims in their complaint. ECF No. 118, at 19-21. The Sundbys’ 15 amended complaint seeks to address those alleged deficiencies by incorporating an 16 assignment of claims from the Trust to the Sunbdys as individuals. Whether these changes 17 will ultimately be successful is a separate question. At this juncture, the Court finds that 18 the Sundbys have explained how the amended complaint will purportedly cure certain 19 alleged deficiencies. Thus, the Court will not deny leave to amend on the grounds that the 20 Sundbys have not “shown any basis” for amending their complaint. See ECF No. 120, at 3. 21 Absent prejudice or a “strong showing” of bad faith, undue delay, dilatory motive, 22 futility, or repeated failure to cure deficiencies, there is a presumption in favor of granting 23 leave to amend. Eminence, 316 F. 3d at 1052. Fidelity has failed to make any such showing. 24 Accordingly, the Court GRANTS the Sundbys’ motion for leave to file a first amended 25 complaint, ECF No. 114. 26 II. Fidelity’s Motion to Dismiss 27 1 Having granted the Sundbys’ motion for leave to amend, the Court need not resolve 2 || Fidelity’s motion to dismiss. Accordingly, the Court DENIES as moot Fidelity’s motion to 3 dismiss. ECF No. 118. See, e.g. Marshall v. Gen. Motors/Corp. Serv. Co., No. 18-CV- 4 ||2551-GPC-JLB, 2018 WL 11412775, at *2 (S.D. Cal. Dec. 6, 2018) (“As a general rule, 5 ||an amended complaint supersedes a prior complaint . . . Therefore, the pending motions to 6 || dismiss will be rendered moot.” (internal quotation marks and citation omitted)); see also 7 || San Diego Coastkeeper, 2023 WL 2801199, at *1 (S.D. Cal. Apr. 5, 2023) (“Where the 8 || proposed amendment requires leave of court, the preferred course is to grant leave to amend 9 if doing so renders moot the motion to dismiss, rather than granting the motion to 10 dismiss and rendering moot the motion for leave.” (internal quotation marks and citation 11 || omitted)). 12 CONCLUSION 13 Based on the foregoing, The Court GRANTS the Sundbys’ motion for leave to file 14 |/a first amended complaint, ECF No. 114. The Court DENIES as moot Fidelity’s motion to 15 dismiss, ECF No. 118. 16 IT IS SO ORDERED. 17 Dated: February 10, 2026 18 Hon. athe Cae 19 United States District Judge 20 21 22 23 24 25 26 27 28 □ 92 717 01920 □□□ AUIS