Patel et al v. Trivedi et al
OPINION AND ORDER denying 87 Motion for Leave to File; denying 93 Motion for Protective Order; granting 97 Motion To Shorten Defendant's Time To Respond To Rule 34 Request. Defendant is ordered to produce by October 6, 2014. See Order for specifics. Signed by Honorable P. K. Holmes, III on September 19, 2014. (mll) Modified to correct title on 9/19/2014. (mll)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
NATVERLAL and JASWANTI PATEL
Case No. 4:10-CV-04195
NEW YORK LIFE INSURANCE COMPANY
OPINION AND ORDER
Currently before the Court is the motion of Plaintiffs Natverlal and Jaswanti Patel for
leave to file a second amended complaint (Doc. 87) and Defendant New York Life Insurance
Company’s (“New York Life”) response (Doc. 91). The Patels have also served New York Life
with a Rule 30(b)(6) notice duces tecum, and New York Life filed a motion for a protective order
(Doc. 93) asking the Court to quash the notice, or at a minimum to stay further discovery until
resolution of the other pending issues. The Patels have filed a response (Doc. 95) and brief in
support (Doc. 96) opposing the motion for a protective order. The Patels have also filed a
motion to shorten New York Life’s time to respond to a Rule 34 request (Doc. 97) and brief in
support (Doc. 98), to which New York Life has responded (Doc. 99). For the reasons set forth
below, the Patels’ motion to shorten New York Life’s time to respond to the Rule 34 request
(Doc. 97) will be GRANTED, and the Patels’ motion for leave to file a second amended
complaint (Doc. 87) and New York Life’s motion for a protective order (Doc. 93) will be
DENIED, as stated herein. 1
The Patels filed their original complaint in this matter against New York Life and a
separate defendant, Vikram Trivedi (who has since been dismissed), in an effort to recoup
Also pending before the Court is New York Life’s motion for summary judgment (Doc.
75) and the parties’ filings related to that matter. The instant Order does not address that motion.
premiums paid for certain life insurance policies the Patels had with New York Life. The Patels
alleged causes of action against New York Life for fraud in the inducement, civil conspiracy,
negligent supervision, and breach of contract, and also sought an accounting of the money they
paid New York Life and the status of all their policies. On December 8, 2011, the Court issued
an Order (Doc. 13) as to New York Life’s original motion to dismiss (Doc. 6), granting the
motion in large part but denying the motion as to the Patels’ breach of contract claim. The Patels
were ordered to amend their complaint and to provide a more definite statement setting forth a
specific date or definite timeframe for when any alleged breach occurred and identifying any
specific policy provisions they allege were breached. The Patels filed their amended complaint
(Doc. 16) on December 30, 2011.
In an attempt to comply with the Court’s order the amended complaint dropped most of
the claims originally brought against New York Life, leaving only a breach of contract claim.
New York Life then filed a motion to dismiss the amended complaint. In over four months, the
Patels failed to respond to the motion. The Court subsequently entered an order granting New
York Life’s motion to dismiss. In that order, the Court found as follows:
The Patels allege that “despite repeated demands . . . New York Life refused to
honor the waiver of premium benefit and therefore, breached the contract.” (Doc.
16, para. 21). However, it appears from the face of the pleadings, through the
exhibits attached to the Patels’ Amended Complaint, that New York Life did, in
fact, respond to the Patels’ demands - approving benefits under one policy, and
rescinding – in the remaining two policies – the provision that the Patels contend
were breached. In a letter dated August 8, 2008, the Patels were informed by a
New York Life representative that waiver of premium benefits could be approved
for one of the three policies. (Doc. 16-13).
(Doc. 25, p. 4). Even though the Court had ordered the Patels to make a more definite statement
in their amended complaint regarding their breach of contract allegations, “[t]he Patels d[id] not
allege that New York Life breached any of the policies by rescinding the Disability Waiver of
Premium Provision (or by approving benefits for one policy).” Id. The Court went on to find as
The Patels allege no facts in their Amended Complaint as to how New York
Life’s response to their demands was a breach of contract. The Patels have also
failed to respond to the motions to dismiss filed by the Defendants to provide any
further explanation to the Court as to how their claim for breach of contract may
be able to survive despite their failure to allege such facts. It is not sufficient for
the Patels to simply allege that Jaswanti Patel became disabled and that a breach
of contract occurred due to New York Life’s failure to waive the premium. The
exhibits referred to, and attached to, the Amended Complaint reveal, on their face,
that New York Life responded to the Patels’ complaints according to the
provisions of their policies.
Id. at pp. 4-5.
The Court dismissed all of the Patels’ claims with prejudice. (Doc. 25). On appeal, the
Eighth Circuit affirmed much of the Court’s order of dismissal, but found that the Patels had
plausibly alleged a claim for breach of contract against New York Life. (Doc. 54-2, p. 2). In
particular the court of appeals explained that the Patels plausibly alleged that New York Life
wrongfully rescinded waiver-of-premium provisions, and also alleged that “failure to disclose
prior arthritis treatment in 1999 was not a material misrepresentation warranting rescission.”
(Doc. 54-2, pp. 2–3). The case was remanded to the Court “for further proceedings on that
claim.” (Doc. 54-2, p. 3).
The remaining breach of contract claim currently before the Court on remand is that
found in the Patels’ amended complaint (Doc. 16). In particular, the Patels allege that they had
life insurance policies with New York Life designated Policy Numbers 46-524-686 (“686”), 46638-979 (“979”), and 46-408-470 (“470”); that these policies insured Jaswanti Patel; that these
policies each contained a provision that stated that if the insured became disabled, premiums
would be waived; that following a car wreck, Jaswanti Patel injured her back, underwent
surgery, and was declared disabled; that she was then entitled to waiver of her premiums under
policies 686, 979, and 470; that she made a claim for waiver; that her claim was denied and that
New York Life rescinded the waiver-of-premium provisions in the policies; and that New York
Life’s actions breached the contract. New York Life has filed a motion for summary judgment
on this issue. The Patels’ have responded, and have filed a motion for leave to file a second
amended complaint. They have also moved the Court to shorten the time New York Life has to
respond to the Patels’ request for the production of documents, so that the Patels can seek leave
to amend their pleadings based on the contents of that document production.
The current scheduling order (Doc. 67) sets a deadline of October 14, 2014 to request
leave to amend the pleadings. Once the time for amending a complaint as a matter of right has
passed, “a party may amend its pleading only with the opposing party’s written consent or the
court’s leave. The court should freely give leave when justice so requires.” Fed. R. Civ. P.
15(a)(2). In general, denial is justified only when there has been undue delay or bad faith on the
part of the moving party, if amendment would be futile, or if allowing the amendment would
result in unfair prejudice to the opposing party. Krispin v. May Department Stores Co., 218 F.3d
919, 924 (8th Cir. 2000). “An amendment can be proper after remand to the district court even if
the claim was presented for the first time on appeal or had not been presented to the district court
in a timely fashion.” City of Columbia, Mo. v. Paul N. Howard Co., 707 F.2d 338, 341 (8th Cir.
1983) (emphasis added). After a complaint has been dismissed, however, a district court may in
its discretion refuse to allow an amendment that changes the theory of the case when the party
seeking leave to amend has not shown a valid reason for failing to present the new theory earlier.
Sweat v. City of Fort Smith, Ark., 265 F.3d 692, 699 (8th Cir. 2001).
Although the court of appeals affirmed this Court’s decision on the Patels’ other claims,
the court of appeals reversed this Court’s dismissal of the breach of contract claim and remanded
for further proceedings on that claim. (Doc. 54-2, p. 2–3). So while the breach of contract claim
remains, the Court considers the Patels’ complaint to have otherwise been dismissed. The Court
approves of amendments to the Patels’ complaint that would provide a more definite statement of
their breach of contract claim, as should be clear from the Court’s memorandum opinion and
order (Doc. 13) that initially ordered the same, and led the Patels’ to file the amended complaint
(Doc. 16) that was the subject of dismissal and appeal. However, the proposed second amended
complaint (Doc. 87-1) appears to be an attempt to expand the Patels’ claims beyond breach of
contract. For example, the proposed second amended complaint references Defendant’s “bad
faith” and asks for punitive damages. (Doc. 87-1, ¶¶ 44, 46). It is well-settled under Arkansas
law that “[o]rdinarily, punitive damages for breach of contract are not allowed.” L.L. Cole &
Sons, Inc. v. Hickman, 665 S.W.2d 278, 280 (Ark. 1984).
The references to bad faith and punitive damages seem to be an attempt by the Patels to
raise tort claims at this late stage of litigation. Furthermore, the Court has some concern that the
factual allegations regarding the actions of now-dismissed insurance agent Vikram Trivedi are an
attempt to resurrect fraudulent inducement claims that have already been dismissed. Because
dismissal of the non-breach claims the Patels first sought to bring has been affirmed, the burden
is on the Patels to show a valid reason for not bringing any additional claims earlier. Sweat, 265
F.3d at 699. Their motion for leave to amend gives no reason. All of the facts alleged appear to
be facts that were known to the Patels when they initially filed this complaint in late 2010, and
the time for pleading those claims was then—not a month before the close of discovery.
The Eighth Circuit has made clear that amendment after remand might be acceptable,
even when a new theory is raised or when there has been delay in amending. City of Columbia,
Mo., 702 F.2d at 341. However, seeking to amend with new theories a month before discovery
closes, and nine months after the case was returned to this Court, is evidence of undue delay, and
would no doubt prejudice the defendants, whose prelitigation efforts since remand have focused
only on the breach of contract claim. 2 The Court remains receptive to an additional motion
seeking leave to amend the breach of contract claim, especially to the extent any such motion
seeks to further clarify that claim.
An amendment allowing new claims or resurrecting
previously dismissed claims is not required to do justice in this case, and the instant motion for
leave to file an amended complaint will accordingly be denied.
Turning to New York Life’s motion for a protective order, the Court notes that this is
essentially a discovery dispute seeking to limit discovery on the breach of contract claim. The
Court expects counsel to remain collegial and cooperative during pretrial litigation (even when,
as here, counsel for one party has been substituted multiple times) in order “to secure the just,
speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.
Unless the Court orders otherwise, the Federal Rules allow discovery pertaining to “any
nonprivileged matter that is relevant to any party’s claim or defense,” and clarify that “[r]elevant
information need not be admissible at the trial if the discovery appears reasonably calculated to
lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1).
New York Life has attached to its motion for a protective order the Patels’ Rule 30(b)(6)
notice duces tecum from which New York Life seeks relief. The Patels have a pending breach of
contract claim on policies 686, 979, and 470. The notice duces tecum appears directed at
discovering evidence relevant to the Patels’ breach of contract claim, including the amount of
damages on that claim. Information regarding premium payments New York Life received from
For example Defendant’s pending motion for summary judgment (Doc. 75) focuses on
the Patels, and regarding which of the Patels’ several policies those payments were applied to, is
relevant to damages for breach, and therefore discoverable. The same is true for the other areas
of discovery identified in the notice duces tecum. Discovery is proper to the extent it is relevant
to the breach of contract claim. New York Life has given no reason why it should be insulated
from a request for discoverable material. Accordingly, New York Life’s motion for a protective
order will be denied.
Finally, the scheduling order in this case requires that all motions for leave to amend the
pleadings be filed no later than October 14, 2014. The Patels ask the Court to shorten by four
days the time New York Life has to respond to the Patels’ request for production so that they can
review those documents and seek leave to make a final amendment to their complaint. While the
basis of the Patels’ motion appears to be concern for the amount of damages and fees they can
seek, and while New York Life may take issue with the Patels’ damages model, New York Life’s
opposition is not founded in any claimed inability to produce by the deadline. Rather, it seems to
be based in New York Life’s opposition to any future amendment of the Patels’ breach of
contract claim. As the Court has expressed, however, an amended complaint that gives a more
definite statement to the pending breach of contract claim would be appropriate. Accordingly,
the Patels’ motion will be granted.
IT IS THEREFORE ORDERED that Plaintiffs’ motion for leave to file a second
amended complaint (Doc. 87) is DENIED without prejudice to a future motion to amend.
IT IS FURTHER ORDERED that Defendant’s motion for a protective order (Doc. 93) is
IT IS FURTHER ORDERED that Plaintiff’s motion to shorten Defendant’s time to
respond to Plaintiff’s Rule 34 request for production (Doc. 97) is GRANTED. Defendants are
ordered to produce by October 6, 2014.
IT IS SO ORDERED this 19th day of September, 2014.
/s/P. K. Holmes, III
P.K. HOLMES, III
CHIEF U.S. DISTRICT JUDGE
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