Summit Auto Sales Inc v. Draco Inc
MEMORANDUM OPINION Signed by Chief Judge Karon O Bowdre on 9/19/16. (SAC )
2016 Sep-19 AM 09:39
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SUMMIT AUTO SALES, INC.,
DRACO, INC., D/B/A YANKEE FORD
This case is before the court on Plaintiff’s “Motion for Leave to Amend Complaint.”
(Doc. 29). For the reasons stated below, the court finds that Plaintiff’s Motion is due to be
Plaintiff requests leave to amend its Complaint because it asserts that Defendant Draco,
Inc. sold its Yankee Ford dealership in an attempt to avoid liability in this action. Plaintiff
accordingly seeks leave to add ESPO, LLC and additional sellers and buyers of Yankee Ford as
necessary parties and to join claims against them relating to the asset purchase.
Before trial and after the time period for amendment as a matter of course has elapsed, the
court should “freely give leave [to amend] as justice so requires.” F. R. C. P. 15(a)(2). This
directive contemplates “the absence of any apparent or declared reason—such as 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, futility of amendment, etc.”—indicating that amendment would not further the
interests of justice. Foman v. Davis, 371 U.S. 178, 182 (1962); see Maynard v. Bd. of Regents of
Div. of Univs. of Fla. Dep’t of Educ. ex rel. Univ. of S. Fla. 342 F.3d 1281, 1287 (11th Cir. 2003)
(“Although leave to amend shall be freely given when justice so requires, a motion to amend may
be denied on numerous grounds such as undue delay, undue prejudice to the defendants, and
futility of the amendment.” (citations and quotations omitted)).
The court finds that justice requires denial of leave to amend under the circumstances of
this case. First, amendment here would be futile. Plaintiff’s allegation that Draco sold its assets to
ESPO to avoid potential liability is premature. Plaintiff’s efforts are more akin to an action for
fraudulent transfer that would be more appropriately brought after judgment if Plaintiff wins this
lawsuit. Further, Plaintiff has failed to demonstrate how this court in Alabama would have
personal jurisdiction over the defendants it seeks to add.
Second, Plaintiff fails to show what causes of action it would assert against the suggested
defendants that would arise from the transaction at the heart of this case. Plaintiff seeks to “add
claims related to [ESPO]’s purchase of Yankee Ford Sales during the pendency of this matter”
(Doc. 29, at 1) without stating what those claims are and how they arise out of the same
transaction or occurrence as the original complaint. See F.R.C.P. 20(a)(2). In its reply to
Defendant’s opposition, Plaintiff does not elaborate as to what claims it would add against the
purchasers of Yankee Ford, except to say that they “would be related to the sale of the dealership
if it is found that the transfer of ownership was made fraudulently in order to avoid liability
related to this litigation.” (Doc. 31, at 4 (emphasis added)). But, as noted above, such claims are
premature. This case relates to the sale of seven vehicles, not of the dealership. The court
questions what claims Plaintiff could properly join against ESPO and the individual buyers,
given that Plaintiff’s claims in this action all stem from a transaction between Summit and
Yankee Ford in October 2013, when ESPO, LLC did not yet exist and the asset purchase
agreement had not been executed.
Finally, such an amendment as Plaintiff seeks now, approximately two weeks before the
end of discovery, would cause undue delay and would unduly prejudice Defendant. The court
anticipates that the defendants Plaintiff seeks to add would challenge personal jurisdiction,
among other defenses, causing additional delay. Amendment would prolong unnecessarily the
discovery period that ends soon, on September 23. It would burden Defendant with the cost of
defending ESPO in this suit and with the delay required for conducting additional discovery.
Further, amending the Complaint now, when Defendant has proceeded under one theory of
Plaintiff’s case for nearly a year and a half, would force Defendant to grapple with additional
discovery, new parties, and as-yet-undetermined claims without a clear articulation of how the
additions will ultimately relate to the underlying case. Cf. Tampa Bay Water v. HDR
Engineering, Inc., 731 F.3d 1171, 1186 (11th Cir. 2003) (stating that “[w]hile the lengthy nature
of litigation . . . does not justify denying the plaintiffs the opportunity to amend their complaint,
prejudice is especially likely to exist if the amendment involves new theories of recovery or
would require additional discovery.” (citations and quotations omitted)).
Accordingly, the court DENIES WITHOUT PREJUDICE Plaintiff’s Motion for Leave
to Amend Complaint.
DONE and ORDERED this 19th day of September, 2016.
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE
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