Bergenfield v. BAC Home Loans Servicing (Nev. Supreme Ct. – Sep. 10, 2015)

The issue is whether a plaintiff can appeal from a district court order that dismisses a complaint but allows the plaintiff leave to amend.

The Bergenfields filed a complaint against BAC Home Loans Servicing, LP, asserting fraud and consumer fraud. BAC moved to dismiss the complaint. The district court granted BAC’s motion to dismiss but allowed the Bergenfields leave to file an amended complaint. The Bergenfields then filed a first amended complaint, once again asserting fraud and consumer fraud. Again, the district court dismissed it, allowing the Bergenfields leave to amend. However, instead of filing a second amended complaint, the Bergenfields appealed. The Nevada Supreme Court issued an order to show cause why the appeal should not be dismissed for lack of jurisdiction.

The Court noted that in the United States Court of Appeals for the Ninth Circuit, an order dismissing a complaint with leave to amend is not final and, thus, not appealable. A plaintiff, who has been given leave to amend, may not file a notice of appeal simply because he does not choose to file an amended complaint. A plaintiff must obtain a further district court determination. A plaintiff obtains such a determination by filing in writing a notice of intent not to file an amended complaint. Filing of such notice gives the district court an opportunity to reconsider, if appropriate, but more importantly, to enter an order dismissing the action, one that is clearly appealable.

The Court concluded that this rule, requiring the plaintiff to obtain a further district court determination, is based on sound policy considerations because it allows plaintiffs to exercise their right to stand on a complaint and appeal the issue of whether the complaint is adequate as a matter of law. At the same time, it requires only a modicum of diligence by the parties and the district court, avoids uncertainty, and provides for a final look before the arduous appellate process commences.

Thus, the Court was persuaded by the Ninth Circuit’s approach and concluded that a district court order dismissing a complaint with leave to amend is not final and appealable. The Court explained that generally, after issuing an order dismissing a complaint with leave to amend, in the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, the district court should grant a party’s motion for leave to amend. If the plaintiff, however, chooses to stand on its complaint as drafted, then it must file a written notice with the district court revealing its choice within 30 days from the date of written notice of entry of the court’s order of dismissal. The district court can then enter a final and appealable order of dismissal, i.e., one without leave to amend.

Here, the district court order granting BAC’s second motion to dismiss was not final and appealable because it allowed the Bergenfields leave to amend. The Bergenfields did not notify the district court that they intended to stand on their first amended complaint. As a result, the district court never entered a final, appealable order. Accordingly, the Court dismissed the appeal for lack of jurisdiction.

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