Dale Sundby et al v. Fidelity National Title Insurance Company et al

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