IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

BANK OF AMERICA, N.A.,

Plaintiff,

vs. Civil Action 2:11-CV-881

Judge Sargus

Magistrate Judge King 

SARAH L. ALLEY, et al., 

Defendants.

OPINION AND ORDER

This is a foreclosure action removed to this Court by

defendant Sarah L. Alley [“defendant”], who asserted counterclaims

alleging that plaintiff is not the holder of the note and mortgage

upon which plaintiff is proceeding. This matter is now before the

Court on defendant’s Motion to Strike Plaintiff’s Notice of

Substitution of Exhibit “A” to the Complaint, Doc. No. 19, [“Motion to

Strike”], and on Plaintiff Bank of America N.A.’s (1)Opposition to

Motion to Strike (Doc. 19) or, in the Alternative, (2) Motion for

Leave to Amend Complaint, Doc. No. 21 [“Motion to Amend”]. 

Background

Plaintiff alleges in the Complaint that it “is the holder of

a note, a copy of which is attached hereto as Exhibit ‘A’.” 

Complaint, Doc. No. 3, ¶ 1. Exhibit A appears to be a photocopy of a

promissory note [“Note”] signed by defendant and which identifies the

lender as “America’s Wholesale Lender.” In her Answer, Doc. No. 5,

defendant denied the allegation that “Plaintiff Bank of America is the

holder of the Promissory Note and Mortgage and further denies that

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Defendant Alley owes any money to the Plaintiff.” Id. at ¶ 1. In her

counterclaims, defendant also specifically denied that the Note was

“ever indorsed over to, and/or physically delivered” to an assignee by

America’s Wholesale Lender. Id., Counterclaim, ¶ 15. Defendant

asserted counterclaims of abuse of process, unjust enrichment, fraud

and violation of the Fair Debt Collection Practices Act, 15 U.S.C. §

1692. Id.

Plaintiff filed a motion to dismiss the counterclaims,

Plaintiff’s Motion to Dismiss, Doc. No. 10. Although plaintiff

asserted in that motion that “[t]he Note and Mortgage were

subsequently transferred to Bank of America Home Loans Servicing, LP .

. . [and that] Bank of America Home Loans Servicing LP merged into

Bank of America N.A. (the plaintiff in this case) . . . .” 

Plaintiff’s Memorandum in Support of Motion to Dismiss, Doc. No. 11,

pp. 1-2, plaintiff did not provide any evidence that the Note was ever

transferred or assigned by America’s Wholesale Lender, the original

creditor. Defendant filed a 10 page memorandum in opposition to the

motion to dismiss the counterclaims and attached a number of exhibits

thereto. Defendant Sarah Alley’s Memo contra to Plaintiff’s Motion to

Dismiss, Doc. No. 13. 

Motion to Strike; Motion to Amend

Two weeks after plaintiff filed its reply in support of the

motion to dismiss the counterclaims, plaintiff filed its Notice of

Substitution of Exhibit “A” to the Complaint, Doc. No. 18 [“Notice”],

attached to which is a photocopy of the Note with an endorsement in

blank signed by a representative of America’s Wholesale Lender. 

Plaintiff filed the Motion to Strike, arguing that the Notice is,

in reality, an improper attempt to amend the Complaint and that to

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permit plaintiff to effect such an amendment would prejudice

defendant, whose answer and counterclaims were based “solely on the

statements and Exhibits contained within the Complaint, including the

unendorsed Promissory Note.” Id. at 2 (emphasis in original). 

Defendant asks that the Notice and substituted Exhibit A be stricken

and that she be awarded “reasonable attorney fees for all work done

thus far on the case, on reliance upon the invalid filings of the

Plaintiff, and an award or attorneys fees to rewrite all of the

Defendant’s pleadings.” Id. at 3. In response, plaintiff filed a

memorandum in opposition to the Motion to Strike; in the alternative,

plaintiff asked for leave to amend the Complaint. Motion to Amend. 

Plaintiff represents that its current counsel (who did not file the

Complaint), had only recently come into possession of the original

Note, which reflected the endorsement. Arguing that a foreclosing

plaintiff need not establish evidence of assignment of a note at the

outset of a foreclosure action, plaintiff characterizes defendant’s

demand for attorneys fees as “absurd.” Motion to Amend, at 2.

Discussion

Defendant contends, plaintiff apparently concedes and this Court

agrees that plaintiff’s Notice – by which plaintiff substituted a

critical exhibit attached to the Complaint – is, in effect, an

amendment of the Complaint. The Court will therefore consider

plaintiff’s belated request for leave to amend by reference to the

standards of Rule 15 of the Federal Rules of Civil Procedure, which

governs amendments to the pleadings.1

Rule 15(a) specifies that leave to amend a pleading “shall be

1Plaintiff’s Notice and Motion to Amend were not untimely. See

Preliminary Pretrial Order, Doc. No. 16.

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freely given when justice so requires.” Whether to grant or deny a

plaintiff leave to amend a complaint “is committed to the district

court's sound discretion.” Moore v. City of Paducah, 790 F.2d 557, 559

(6th Cir.1986). Among the reasons justifying denial of leave to amend

are bad faith, dilatory motive or undue prejudice to the opposing

party. Foman v. Davis, 371 U.S. 178, 182 (1962); Gen. Elec. Co. v.

Sargent & Lundy, 916 F.2d 1119, 1129 (6th Cir.1990).

 In exercising its discretion, a district court may address the

issue of prejudice to the party opposing leave to amend by imposing

conditions on the grant of leave to amend. See Local 783 Allied Indus.

Workers of Am. v. Gen. Elec. Co., 471 F.2d 751, 756 (6th Cir. 1973).

“Requiring the applicant to pay attorneys' fees, discovery costs, and

costs of preparing responsive pleadings rendered moot by the amendment

are conditions district courts may impose to mitigate the prejudice

caused to the opposing party by the amendment.” Ruschel v. Nestle

Holding, Inc., 89 Fed. Appx. 518, 2004 WL 346034, **3 (6th Cir.

February 23, 2004).

This Court is persuaded by defendant’s protestation of prejudice: 

she clearly based her defense to the litigation and her counterclaims

on her understanding that plaintiff was not the holder of the Note. 

This understanding was well-grounded in light of the fact that the

Complaint was supported by an exhibit that affirmatively called into

question plaintiff’s status as a holder of the Note. By contrast, the

Court is not persuaded by plaintiff’s dismissive rejection of

defendant’s claim of prejudice: the authority upon which plaintiff

relies in discounting defendant’s request for attorneys fees, Deutsche

Bank Natl. Trust Co. V. Traxler, 2010 WL 3294292 (Ohio App. 9 Dist.,

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August 23, 2010), did not, apparently, involve a complaint supported

by an erroneous and misleading exhibit.

Under the circumstances presented in this case, the Court

concludes that the grant of plaintiff’s Motion to Amend would result

in serious prejudice to defendant. The Court will therefore condition

the grant of plaintiff’s Motion to Amend on its payment to defendant

of the latter’s attorneys fees unnecessarily incurred by reason of

plaintiff’s use of the misleading exhibit in support of the Complaint. 

See Ruschel, 2004 WL 346034, **3.

Defendant asks that she be reimbursed for not only the fees

associated with her filings based on plaintiff’s use of the original

exhibit, but also for the fees associated with future filings based on

the substituted exhibit. The Court rejects that request. Defendant

can reasonably be expected to incur attorneys fees in connection with

her defense of the action; it is only the fees incurred in connection

with her response to plaintiff’s original, and misleading, exhibit

that should rightfully be borne by plaintiff. Defendant will therefore

be awarded her attorneys fees associated with the Answer and

Counterclaims, her response to the Motion to Dismiss and her Motion to

Strike. Defendant’s counsel shall promptly provide to plaintiff an

itemization of attorneys fees associated with those filings. 

WHEREUPON defendant Sarah L. Alley’s Motion to Strike, Doc. No.

19, is DENIED and plaintiff’s alternative Motion to Amend, Doc. No.

21, is GRANTED, conditional on plaintiff’s payment to defendant Sarah

L. Alley her attorneys fees associated with the Answer and

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Counterclaims, Doc. No. 5, her response to the Motion to Dismiss, Doc.

No. 13, and her Motion to Strike, Doc. No. 19. Moreover, defendant

Sarah L. Alley is GRANTED fourteen (14) days in which to amend, if she

chooses to do so, her answer and counterclaims.

 s/Norah McCann King Norah McCann King

 United States Magistrate Judge

July 23, 2012

Date

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