Pearl v. Ontario Systems, L.L.C.

Filing 40

ORDER granting 28 Motion to Amend Scheduling Order. Ontario to amend its answer to add its counterclaim by 7/13/12. Pearl shall file response by 7/20/12. Pretrial Conference reset for 9/20/2012 11:30 AM in US Courthouse, Judge's Chambers, 113 St. Joseph Street, Mobile, AL 36602 before Judge Kristi K. DuBose. Motions due by 7/20/2012. Pretrial disclosures to be made by 9/11/12. Position Regarding Settlement due by 7/20/2012.. Signed by Judge Kristi K. DuBose on 7/6/2012. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
CAMERON PEARL,
Plaintiff,
v.
ONTARIO SYSTEMS, LLC.,
Defendant.

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CIVIL ACTION NO. 11-00428-KD-M

ORDER
This action is before the Court on defendant Ontario Systems, LLC’s “Motion to Amend
Scheduling Order for Leave to Amend Pleadings and Assert Counterclaim” (doc. 28) and the
response filed by plaintiff Cameron Pearl (doc. 36). Upon consideration, and for the reasons set
forth herein, the motion is GRANTED and paragraph 5 of the Rule 16(b) Scheduling Order is
amended for the limited purpose of allowing Ontario to amend its answer to add its counterclaim
on or before July 13, 2012. Pearl shall file his response to the counterclaim on or before July
20, 2012.
Accordingly, the deadlines set forth in the Rule 16(b) Scheduling Order, as amended, are
further amended as follows:
2. FINAL PRETRIAL CONFERENCE. This action is set for a final pretrial conference
before the District Judge on Thursday, September 20, 2012, at 11:30 a.m. This is a firm setting
and the parties are expected to be ready for trial on that date.
8. PRETRIAL DISCLOSURES. The disclosure of information regarding the evidence
that each party may present at trial required by Fed.R.Civ.P. 26(a)(3) is to be made on or before
September 11, 2012.

11. DISPOSITIVE MOTIONS. Motions for summary judgment and any other dispositive
motions, especially those which require little or no discovery, are to be filed as soon as possible
but in no event later than July 20, 2012.
12. SETTLEMENT. On or before July 20, 2012, the parties shall confer for the purpose
of discussing settlement and shall file with the Clerk of Court a joint statement setting out the
present status of settlement negotiations (without disclosing figures) and whether mediation or a
settlement conference would be helpful.
All other provisions of the Scheduling Order remain in effect.
Analysis
Ontario moves the Court for leave to amend its answer to assert a counterclaim against
Pearl for breach of the non-compete agreement based upon information obtained during Pearl’s
deposition in May 2012. Ontario argues that it has met the good cause requirement of Rule
16(b)(4) of the Federal Rules of Civil Procedure because the parties engaged in settlement
negotiations and Pearl’s deposition was delayed because of his work schedule. Ontario also
argues that even if it had deposed Pearl before the January 20, 2012 deadline for amendment to
pleadings, it would not have learned the facts which support the counterclaim because Pearl
began to work for the competitor after the deadline in either February or March of 2012. Hence,
the deadline to amend pleadings to add the counterclaim could not have been met despite the
diligence of the parties.
Pearl responds that Ontario’s allegations that he violated two provisions of the noncompete agreement are not supported by the cited deposition testimony. Pearl argues that his
testimony could not reasonably be interpreted as evidence that he is working in competition with
Ontario or that he made statements disparaging Ontario to customers or potential customers.

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In other words, Pearl argues that allowing the counterclaim would be futile in that there is no
evidence to support the counterclaim.
Leave to amend at this procedural posture will only be given upon a showing of “good
cause” under Rule 16(b)(4) (“Modifying a Schedule. A schedule may be modified only for good
cause and with the judge's consent.”). Smith v. School Bd. of Orange Cty., 487 F.3d 1361, 1366
(11th Cir. 2007); Sosa v. Airprint Systems, Inc., 133 F.3d 1417, 1418 (11th Cir. 1998). Ontario
must show “good cause” for the delay and obtain the Court’s consent. To do so, Ontario has the
burden of showing that “extraordinary circumstances require” allowing the amendment and that
“the parties have diligently pursued discovery.” Williams v. Baldwin County Comm’n, 203
F.R.D. 512, 516 (S.D. Ala. 2001).
Ontario has met its burden. Ontario has now presented evidence that even had it deposed
Pearl before the deadline for amendment of pleadings, it could not have discovered that Pearl
worked for a competitor. Pearl began employment with a competitor in February or March of
2012, after the January 20, 2012, deadline for amendment of pleadings. Therefore, regardless of
whether Pearl’s deposition was delayed because Ontario cancelled the December 28, 2011
deposition or because of Pearl’s work schedule, extraordinary circumstances exist such that
Ontario should be allowed to amend its answer to assert a counterclaim against Pearl for breach
of the non-compete agreement.
Additionally, when a motion for leave to amend a complaint should be denied on basis of
futility, the Eleventh Circuit has explained that
A district court may deny leave to amend a complaint if it concludes that the
proposed amendment would be futile, meaning that the amended complaint would
not survive a motion to dismiss. . . . A complaint must be dismissed if it fails to
state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). In
determining whether a complaint states a claim for relief, the reviewing court
must “accept[ ] the factual allegations in the complaint as true and construe[ ]
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them in the light most favorable to the plaintiff.” Speaker v. U.S. Dep't of Health
and Human Services Centers for Disease Control and Prevention, 623 F.3d 1371,
1379 (11th Cir. 2010). The complaint must “state a claim for relief that is
plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127
S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. ----, ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). The
complaint need not include detailed factual allegations, but it must set forth “more
than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. at 1964-1965.
Christman v. Walsh, 416 Fed. Appx. 841, 844 (11th Cir. 2011).
Applying this standard, the Court finds that Ontario has plead sufficient factual content,
accepted as true and construed in the light most favorable to Ontario, from which the Court could
draw a reasonable inference that Pearl is liable for breach of the non-compete agreement. (See
Doc. 28-1, ¶ 13).
DONE and ORDERED this the 6th day of July, 2012.

/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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