JOEL H. SLOMSKY, J.
Appellants, Necholas and Cartion Noel, are a husband and wife who defaulted on a construction loan obtained from non-party IndyMac Bank, F.S.B. (“IndyMac”). (Doc. No. 5-1 at 5.) Appellee OneWest Bank, formerly doing business as (f/d/b/a) IndyMac Bank, (“OneWest”) is a California bank which serviced Appellants’ loan. (Doc. No. 5 at 8.)
Appellants defaulted on their loan and filed for Chapter 13 bankruptcy. (Doc. No. 5-1 at 11.) Thereafter, Appellants filed an adversary action against Appellee OneWest in the United States Bankruptcy Court for the Eastern District of Pennsylvania, alleging breach of contract and violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). (Doc. No. 5-1 at 9-14.) The Bankruptcy Court dismissed Appellants’ case for failure to timely file an amended complaint, pursuant to Federal Rule of Civil Procedure 41(b). (Doc. No. 5-1 at 5-6.) Appellants filed this timely appeal from the decision of the Bankruptcy Court, claiming the order granting dismissal was in error. The Court will remand this case to the Bankruptcy Court for reasons that follow.
II. FACTUAL BACKGROUND
On March 5, 2002, the Noels obtained a construction loan from IndyMac for $360, 110.50. (Doc. No. 5-1 at 10.) The loan principal was soon increased to $557, 000. (Id.) On July 11, 2008, IndyMac failed and was seized by the Office of Thrift Supervision (“OTS”). On the same day, the OTS appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver for IndyMac. (Id.) Through a series of transactions involving the FDIC, certain assets of IndyMac (including the Noels’ loan) were transferred to IndyMac Venture, LLC (“IndyMac Venture”). (Id.) On March 19, 2009, pursuant to a servicing agreement between IndyMac Venture and Appellee OneWest, Appellee began servicing the Noels’ loan for IndyMac Venture. (Id. at 8-9.) On June 17, 2011, the Noels defaulted on their loan and filed for Chapter 13 bankruptcy. (Doc. No. 5-1 at 11.)
On April 13, 2012, the Noels filed an adversary action against OneWest in the United States Bankruptcy Court for the Eastern District of Pennsylvania, alleging breach of contract and violations of Pennsylvania’s UTPCPL. (Id. at 9-14.) On May 15, 2012, OneWest moved to dismiss the complaint, arguing that the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) barred the claims of the Noels. (Id. at 15-37.) The Bankruptcy Court granted the motion to dismiss on June 26, 2012, and granted the Noels leave to file an amended complaint. (Doc. No. 5-5 at 17-18.)
On July 16, 2012, an amended complaint was filed. (Doc. No. 15 at 1-12.) On August 16, 2012, OneWest filed a motion to dismiss the amended complaint. (Doc. No. 17 at 1.) On September 18, 2012, the motion to dismiss the amended complaint was granted, and the Bankruptcy Court ordered that a second amended complaint be filed by October 1, 2012. (Doc. No. 28 at 1.) The second amended complaint was filed on October 3, 2012, two days after the filing deadline. (Doc. No. 30 at 1-11.)
On November 29, 2012, the Bankruptcy Court sua sponte dismissed the second amended complaint with prejudice, pursuant to Federal Rule of Civil Procedure 41(b), in the following Order:
AND NOW, Necholas Noel and Cartion Noel (“the plaintiffs”) commenced an adversary proceeding on April 13th, 2012.
AND, the plaintiffs filed an Amended Complaint dated July 16, 2012 [Docket No. 15] (the “Amended Complaint”).
AND, this Court entered an Order dated September 18, 2012 [Docket No. 28] (the “Order”) dismissing the Amended Complaint.
AND, the Order provided that the Plaintiffs may file an amended complaint with regard to those claims that were dismissed without prejudice by the Order.
AND, the Order further provided that if the Plaintiff did not file an amended complaint within ten days of the entry of the Order, this ...