Northstar Marine, Inc. v. Huffman et al

Filing 76

ORDER denying 72 Motion for Reconsideration and Request for Hearing. Signed by Chief Judge William H. Steele on 8/8/2014. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
NORTHSTAR MARINE, INC.,
Plaintiff,
v.
MICHAEL HUFFMAN, et al.,
Defendants.

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CIVIL ACTION 13-0037-WS-C

ORDER
This matter comes before the Court on defendants’ Motion for Reconsideration and
Request for Hearing (doc. 72).1
I.

The Challenged Order.
On July 28, 2014, the undersigned entered an Order (doc. 71) denying the Motion to

Amend Answer (doc. 49), in which defendants had requested leave to interpose new affirmative
defenses of statute of frauds and failure of consideration. The July 28 Order noted that the
applicable Rule 16(b) Scheduling Order fixed a deadline of June 28, 2013 for motions to amend
pleadings; that this deadline had been jointly proposed and agreed to by the parties; and that
defendants had waited until June 25, 2014 (some 362 days after the deadline) to move to amend
their answer. In light of those circumstances, the Motion to Amend Answer was governed not by
the liberal standard of Rule 15(a), but by the stringent “good cause” standard prescribed by Rule
16(b)(4). See, e.g., Sosa v. Airprint Systems, Inc., 133 F.3d 1417, 1419 (11th Cir. 1998)
(“[B]ecause Sosa’s motion to amend was filed after the scheduling order’s deadline, she must
first demonstrate good cause under Rule 16(b) before we will consider whether amendment is

1

The Local Rules provide that “the court may in its discretion rule on any motion
without oral argument.” LR 7.3. After review of the Motion, the undersigned is of the opinion
that oral argument would not be helpful to resolution of the straightforward matters presented;
therefore, defendants’ Request for Hearing is denied.

proper under Rule 15(a).”). “To establish good cause, the party seeking the extension must have
been diligent.” Romero v. Drummond Co., 552 F.3d 1303, 1319 (11th Cir. 2008).
The July 28 Order explained that defendants had not established the quantum of diligence
necessary to support a Rule 16(b)(4) modification of the scheduling order. In particular, the July
28 Order reasoned that the mere “short timeline to file an Answer” and communication issues
between defendants and their lawyers do not constitute good cause because they shed no light on
why it took a year to identify these defenses. Likewise, the July 28 Order rejected defendants’
statement that their legal research did not illuminate the perceived viability of the statute of
frauds defense until well after the deadline, simply because defendants had failed to demonstrate
that, despite their diligence, such research could not have been performed sooner. And the July
28 Order found unpersuasive defendants’ explanation that “[i]t was only after depositions were
taken in Philadelphia, on January 28 and 29, 2014, and in Long Island, New York, on June 2,
2014, that the facts supporting these defenses were discovered” (doc. 67, at 3-4), for the
following reasons: (i) defendants did not identify what new information surfaced at these
depositions; (ii) defendants did not explain why they could not have obtained such information
earlier with diligence; (iii) defendants did not explain why they waited so long before taking the
depositions, despite knowledge of the June 2013 deadline for amending pleadings; and (iv)
defendants made no showing why they could not have moved to amend their answer after the
January 2014 depositions, based on information available at that time.
Based on these and other considerations, the July 28 Order denied the motion to amend
pleadings, reasoning that “Defendants have not met their burden of showing ‘good cause’ to
warrant such relief, instead traveling in conclusory generalities that raise more questions than
they answer.” (Doc. 71, at 6.)
II.

Legal Standard for Motion to Reconsider.
Defendants now request reconsideration of the July 28 Order via a 12-page motion/brief

and 34 pages of exhibits. The threshold defect in their Motion (which is really a motion to alter
or amend pursuant to Rule 59(e), Fed.R.Civ.P.) is that defendants gloss over the strict legal
standard governing their motion. A dissatisfied federal litigant is not entitled to reconsideration
of anything and everything, merely because he or she disagrees with a court’s ruling or thought
of something else to say. To the contrary, “[t]he only grounds for granting a Rule 59 motion are
newly-discovered evidence or manifest errors of law or fact.” United States v. Marion, 562 F.3d

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1330, 1335 (11th Cir. 2009) (citation and internal marks omitted); see also Arthur v. King, 500
F.3d 1335, 1343 (11th Cir. 2007) (similar). Authority is legion for the proposition that motions to
reconsider “may not be used to relitigate old matters, or to raise arguments or present evidence
that could have been raised prior to the entry of judgment.” Exxon Shipping Co. v. Baker, 554
U.S. 471, 485 n.5, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) (citation omitted).2 Rule 59(e)
motions do not afford an unsuccessful litigant “two bites at the apple.” American Home Assur.
Co. v. Glenn Estess & Associates, Inc., 763 F.2d 1237, 1239 (11th Cir. 1985). Nor are such
motions properly filed “as a kneejerk reaction by a dissatisfied federal court loser.” Lee v.
Thomas, 2012 WL 3137901, *2 (S.D. Ala. Aug. 1, 2012).3 “They are neither appeal substitutes
nor a ‘dry run’ to test arguments in anticipation of a forthcoming appeal.” Id.
Defendants have identified neither newly-discovered evidence nor manifest errors of law
or fact that afflict the July 28 Order. Instead, they devote the bulk of their Motion for
Reconsideration to a detailed outline of the discovery process in this case, including extensive
discussion of the various delays, impediments, detours, false starts, surprises, disappointments,
2

See also Smith v. Ocwen Financial, 2012 WL 3758378, *2 (11th Cir. Aug. 30,
2012) (“A motion for reconsideration cannot be used to relitigate old matters, raise arguments, or
present evidence that could have been raised prior to the entry of judgment.”) (citation omitted);
Richardson v. Johnson, 598 F.3d 734, 740 (11th Cir. 2010) (similar); Kight v. IPD Printing &
Distributing, Inc., 2011 WL 2015055, *1 (11th Cir. May 24, 2011) (motion for reconsideration
properly denied where movant “merely attempted to relitigate old matters and presented
evidence that could have been raised prior to the entry of judgment”); Morton v. Astrue, 2010
WL 2130613, *3 (11th Cir. May 27, 2010) (“In his motion to alter or amend judgment, …
Morton merely attempted to reargue factual issues previously decided by the district court. The
district court therefore did not abuse its discretion in denying the motion.”); Dyas v. City of
Fairhope, 2009 WL 5062367, *3 (S.D. Ala. Dec. 23, 2009) (“Motions to reconsider … do not
exist to permit losing parties to prop up arguments previously made or to inject new ones, nor to
provide evidence or authority previously omitted. They do not, in short, serve to relieve a party
of the consequences of its original, limited presentation.”).
3

See also Hughes v. Stryker Sales Corp., 2010 WL 2608957, *2 (S.D. Ala. June
28, 2010) (rejecting notion that motions to reconsider “are appropriate whenever the losing party
thinks the District Court got it wrong,” but finding that they are “an extraordinary remedy” that
must be “employed sparingly”) (citations omitted); Garrett v. Stanton, 2010 WL 320492, *3
(S.D. Ala. Jan. 18, 2010) (“Far too often, litigants operate under the flawed assumption that any
adverse ruling on a dispositive motion confers upon them license … to relitigate issues that have
already been decided, to champion new arguments that could have been made before, and
otherwise to attempt a ‘do-over’ to erase a disappointing outcome. This is improper.”).

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obstacles, hardships and inconveniences that transpired along the way. All of these facts were
available to and known by defendants at the time they filed their Motion to Amend Answer;
however, they neglected to present them at that time to meet their burden of showing “good
cause” under Rule 16(b)(4). Defendants having chosen not to rely on these facts (or, indeed, to
focus on proving up “good cause,” and instead banking on the lenient Rule 15(a) standard) in
originally briefing their Motion to Amend, they may not change tactics in their Rule 59(e)
Motion by presenting those facts now. It’s too late. The time for defendants to make a Rule
16(b)(4) showing of diligence was before their Motion to Amend was adjudicated, not after.
Because the Motion is predicated on facts, arguments and evidence that could and should
have been presented earlier, defendants’ Motion for Reconsideration is denied as an improper
attempt to relitigate an adversely decided issue using previously available (but omitted) facts and
arguments.
III.

Defendants’ Supplemental Showing.
Even if this Court were to consider defendants’ Motion for Reconsideration on the merits

under Rule 16(b)(4) (rather than as procedurally improper under Rule 59(e)), the result would be
unchanged. Again, the critical issue presented in the underlying Motion to Amend Answer is
why defendants failed to do so prior to the June 2013 deadline fixed in the Scheduling Order. In
their Rule 59(e) Motion, defendants go on at great length about personal, professional and
logistical difficulties that marred the discovery process in late 2013 and early 2014. But those
facts are not helpful, simply because they do not tend to establish diligence or good cause by
defendants prior to the June 28, 2013 deadline for moving to amend pleadings. To say that
defendants faced obstacles six or more months after the deadline had already expired does not
tell us anything about (much less establish the necessary good cause for) why they did not meet
that deadline in the first place. Simply put, defendants do not show what efforts they employed
to identify and investigate all potentially viable affirmative defenses before the June 2013
deadline to which they had agreed.
To demonstrate the point, one of the new defenses that defendants now seek to add is that
of statute of frauds. In their Motion for Reconsideration, defendants state that “[i]t appeared
through initial conversations with Huffman that the work performed by Huffman Construction
on the NRC contract and payment thereon occurred within a one year time frame,” so they
omitted a statute of frauds defense in their initial answer. (Doc. 72, at 2-3.) According to their

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Rule 59(e) Motion, however, in reviewing documents and speaking with NRC officials prior to
June 2014 depositions, “Defendants discovered that Huffman Construction’s contract might have
been for a five year time period,” and obtained a document from NRC confirming the protracted
timeframe during which NRC made payments to Huffman Construction. (Id. at 7.) Based on
this information that payments occurred over a period longer than one year, defendants reason,
they knew for the first time that they had a viable statute of frauds defense.
This evidence is insufficient to satisfy defendants’ burden of proving that the scheduling
order deadline for amending pleadings “cannot be met despite the diligence of the party seeking
the extension.” Sosa, 133 F.3d at 1418 (citation and internal quotation marks). Even if Huffman
could not recall whether the NRC contract lasted five months or five years (itself a dubious
proposition), surely he possessed (or had ready access to) banking records showing what funds
Huffman Construction received from NRC and when. Of course, no Rule 16(b)(4) good cause is
present where the facts in question were or should have been known by the movant from the
outset. See, e.g., Kendall v. Thaxton Road LLC, 2011 WL 3903400, *5 (11th Cir. Sept. 7, 2011)
(no good cause for untimely amendment where “the facts with which Kendall wished to amend
his complaint were known to Kendall at the time he filed his initial complaint”).4 It is difficult to
imagine how defendants could reasonably have mistaken a five-year contract as being one for
less than a year, or how defendants could not have learned the truth had they investigated with
diligence at the outset of this lawsuit. On that point, even if Huffman lacked the necessary
banking records or those banking records were inadequate or unavailable (neither of which
defendants have shown), defendants do not explain why they could not have simply contacted
non-party NRC at the beginning of the case to obtain the relevant information about the duration
4

See also Wolk v. Kodak Imaging Network, Inc., 840 F. Supp.2d 724, 735
(S.D.N.Y. 2012) (“[T]he good cause standard is not satisfied when the proposed amendment
rests on information that the party knew, or should have known, in advance of the deadline.”)
(citation omitted); Ross v. American Red Cross, 2014 WL 289430, *8 (6th Cir. Jan. 27, 2014) (“A
plaintiff does not establish ‘good cause’ to modify a case schedule to extend the deadline to
amend the pleadings where she was aware of the facts underlying the proposed amendment to
her pleading but failed, without explanation, to move to amend the complaint before the
deadline.”); see generally Korrow v. Aaron’s, Inc., --- F.R.D. ----, 2014 WL 3040802, *11
(D.N.J. June 30, 2014) (“Defendant bears the burden of showing good cause under Rule 16 to
persuade the Court that, despite its diligent efforts, it was unable to know until long after … its
deadline for seeking leave to amend its pleading, that it had a counterclaim against Korrow”).

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of the contract and contract payments. In their Rule 59(e) Motion, defendants refer to
information gleaned from telephone calls with NRC representatives prior to June 2014
depositions. Why did they not make those telephone calls in June 2013 (or earlier) to hunt down
these facts? Defendants do not say.
In short, the Court has no information before it that (i) despite diligence, Huffman lacked
access to information about when Huffman Construction received payments from NRC; (ii)
Huffman was unable to inquire of NRC about the duration of the contract and contract payments
prior to June 2014; or (iii) neither NRC nor Huffman Construction’s banking institution were
willing to provide the necessary information prior to June 2014. For all of these reasons, then,
the Court concludes that even if defendants’ Motion for Reconsideration were proper under Rule
59(e) (and it is not), relief would be unwarranted for want of good cause. Defendants have not
shown that the basic facts underlying their statute of frauds defense were unknown and
unknowable to them – despite their diligent efforts to uncover same – prior to the June 28, 2013
deadline fixed by the applicable Scheduling Order for motions to amend the pleadings.
With respect to the failure of consideration defense, defendants’ Motion for
Reconsideration provides no explanation at all. Under Alabama law, “[f]ailure of consideration
is the neglect, refusal and failure of one of the contracting parties to do, perform, or furnish, after
making and entering into the contract, the consideration in substance and in fact agreed on.” BSI
Rentals, Inc. v. Wendt, 893 So.2d 1184, 1189 (Ala.Civ.App. 2004) (citations omitted). How did
Northstar Marine neglect, refuse, or fail to perform under its contract with Huffman
Construction? More to the point, how is it that defendants neither knew nor could have known
about such neglect, refusal or failure to perform until their June 2014 request to amend the
pleadings? Defendants’ Rule 59(e) Motion neither answers nor even addresses these questions;
therefore, it does not come close to establishing the requisite good cause for modification of the
Scheduling Order deadline for amending pleadings to add such a defense.
IV.

Conclusion.
For all of the foregoing reasons, defendants’ Motion for Reconsideration and Request for

Hearing (doc. 72) is denied.
DONE and ORDERED this 8th day of August, 2014.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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