Pennsylvania Lumbermens Mutual Insurance Company v. D.R. Horton, Inc.-Birmingham et al
ORDER denying 83 Motion to Strike. Signed by Chief Judge William H. Steele on 10/14/2015. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
MUTUAL INSURANCE COMPANY,
D. R. HORTON, INC.-BIRMINGHAM,
CIVIL ACTION 15-0071-WS-B
This matter comes before the Court on plaintiff’s Motion to Strike D.R. Horton, Inc. –
Birmingham’s Amended Answer and Counter-Claim to the Second Amended Complaint (doc.
Plaintiff, Pennsylvania Lumbermens Mutual Insurance Company (“Pennsylvania
Lumbermens”), brought this insurance declaratory judgment action against D. R. Horton, Inc. –
Birmingham (“D.R. Horton”) and an ever-evolving constellation of other defendants. Plaintiff
seeks a declaration that it does not owe insurance coverage or a duty to defend to D.R. Horton in
connection with an underlying wrongful death lawsuit filed in Baldwin County Circuit Court
regarding a construction site accident that resulted in the death of a subcontractor employee
named Roberto Campos Leco. Pennsylvania Lumbermens has amended its complaint on two
occasions, first on August 31, 2015 (see doc. 45) and again on September 21, 2015 (see doc. 59),
for entirely proper and permissible purposes such as naming additional defendants and correcting
the names of other defendants.
For its part, D.R. Horton filed an Answer and Counterclaim (doc. 16) to the original
Complaint back on March 18, 2015. The Counterclaim asserted causes of action against
Pennyslvania Lumbermens for breach of contract and bad faith based on the latter’s failure,
despite timely notice and demand, to provide indemnity or a defense to D.R. Horton in the
Baldwin County action. Pennsylvania Lumbermens filed a 49-page Answer (doc. 22) purporting
to recite 86 affirmative defenses to the Counterclaim on April 17, 2015; moreover, both sides
extensively addressed the Counterclaim in the Report of Parties’ Planning Meeting (doc. 23)
filed on the same date. Thus, the court file demonstrates that Pennsylvania Lumbermens has
been acutely aware of D.R. Horton’s Counterclaim and its presence in this litigation for nearly
seven months. Plaintiff does not (and cannot reasonably, on this record) suggest otherwise.
The Federal Rules of Civil Procedure generally contemplate that, when a plaintiff files an
amended complaint, the defendant shall file an amended answer. See Rule 15(a)(3),
Fed.R.Civ.P. D.R. Horton dutifully complied with this requirement by filing Answers (docs. 54
& 75) to plaintiff’s first and second amended complaints on September 14, 2015 and October 5,
2015, respectively. However, both of those Answers failed to replead – and omitted any
reference to – D.R. Horton’s Counterclaim against Pennsylvania Lumbermens, as interposed in
the original pleading. By all appearances, this was merely an inadvertent omission. There is no
indication anywhere that D.R. Horton’s failure to replead its Counterclaim was intended to
telegraph (or was construed by Pennsylvania Lumbermens as) a change in strategic priorities by
D.R. Horton or an intention to abandon such Counterclaim. Certainly, Pennsylvania
Lumbermens does not claim to have been misled by those omissions into believing the
Counterclaim to be off the table and out of the lawsuit.
Nonetheless, on October 9, 2015, just four days after D.R. Horton filed its latest iteration
of the Amended Answer, Pennsylvania Lumbermens filed a brief suggesting that an ongoing
discovery dispute between the parties had been rendered moot “because D.R. Horton has
abandoned its bad faith counterclaim.” (Doc. 81, at 3.) In support of that proposition, plaintiff
pointed to a small handful of district court authorities opining that a counterclaim is deemed
abandoned if it is not repleaded in an answer to an amended complaint. Less than one hour later,
D.R. Horton filed its Amended Answer and Counter-Claim to Second Amended Complaint (doc.
82), repleading its counterclaims for breach of contract and bad faith in their entirety. (Id. at 511.)
Undeterred by D.R. Horton’s immediate correction of what it must have known to be
simply a harmless oversight, Pennsylvania Lumbermens now requests that this Court strike D.R.
Horton’s Amended Answer and Counterclaim filed on October 9, 2015. In its Motion to Strike,
plaintiff does not claim to have sustained prejudice or hardship by virtue of the omission of the
Counterclaim from two previous iterations of D.R. Horton’s Answer. It does not purport to have
been confused or lulled into a false sense of security. Instead, with no citations to the Federal
Rules of Civil Procedure or applicable case authorities, Pennsylvania Lumbermens simply
declares that the Amended Answer reasserting the Counterclaim is “too little, too late.” (Doc.
83, at 3.)
This Court cannot agree. As plaintiff well knows (because it invoked the same procedure
less than a month ago (see doc. 59)), the Federal Rules of Civil Procedure allow a party to amend
its pleading once as a matter of course within 21 days after serving it. See Rule 15(a)(1)(A),
Fed.R.Civ.P. What’s good for the goose is good for the gander. If Pennsylvania Lumbermens
could amend its Complaint on September 21 as a matter of course to correct the name of a
defendant that everybody knew was part of the case, then D.R. Horton can amend its Answer on
October 9 as a matter of course to replead a Counterclaim that everybody knew was part of the
case. Even if amendment as a matter of course were not available here, the undersigned would
readily allow D.R. Horton leave to amend its Answer to replead the Counterclaim to promote the
interests of justice, fairness and efficiency, pursuant to Rule 15(a)(2), Fed.R.Civ.P. Federal
courts have recognized a “strong policy of determining cases on their merits.” In re Worldwide
Web Systems, Inc., 328 F.3d 1291 (11th Cir. 2003). What we have here is, at most, a hypertechnical pleading error that neither confused nor prejudiced anyone. As soon as the mistake
was brought to its attention, D.R. Horton took swift remedial action to correct its pleading to
reassert the Counterclaim that everyone has known to be part of this case for the last seven
months. Movant cannot justly or fairly parlay this sequence of events into the windfall of nonmerits dismissal of the Counterclaim.
For all of the foregoing reasons, D.R. Horton’s Amended Answer and Counter-Claim
(doc. 82) filed on October 9, 2015 is proper and permissible under Rule 15. The Motion to
Strike (doc. 83) is denied.
DONE and ORDERED this 14th day of October, 2015.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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