Leprino Foods Company v. JND Thomas Company, Inc., et al.

Filing 38

ORDER VACATING MARCH 8, 2017 HEARING AND GRANTING PLAINTIFFS APPLICATION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT 31 . Plaintiff shall file the second amended complaint within four days of the date of entry of this order. Signed by Magistrate Judge Stanley A. Boone on 2/17/2017. (Hernandez, M)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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LEPRINO FOODS COMPANY,
Plaintiff,

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Case No. 1:16-cv-01181-LJO-SAB
ORDER VACATING MARCH 8, 2017
HEARING AND GRANTING PLAINTIFF’S
APPLICATION FOR LEAVE TO FILE
SECOND AMENDED COMPLAINT

v.

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JND THOMAS COMPANY, INC., et al.,

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Defendants.

(ECF No. 31)
FOUR-DAY DEADLINE
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Currently before the Court is Plaintiff Leprino Foods Company’s application for leave to

19 file an amended complaint. The Court, having reviewed the record, finds this matter suitable for
20 decision without oral argument. See Local Rule 230(g). Accordingly, the previously scheduled
21 hearing set on March 8, 2017, will be vacated and the parties will not be required to appear at
22 that time.
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I.

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PROCEDURAL HISTORY

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On August 10, 2016, Plaintiff filed this action against Defendants JND and Thomas

26 alleging claims for breach of contract, declaratory relief, implied indemnity, and negligence.
27 (ECF No. 1.) Defendants JND and Thomas were served on September 6, 2016. (ECF Nos. 5-1,
28 5-2.) On October 28, 2016, entry of default was entered against Defendants JND and Thomas.

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1 (ECF Nos. 11, 12.)
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Plaintiff filed a motion for entry of default judgment on November 23, 2016. (ECF Nos.

3 13-16.) On December 12, 2016, an order issued requiring Plaintiff to show cause why the
4 complaint should not be dismissed for failure to properly allege diversity jurisdiction and
5 addressing specific deficiencies in the motion for entry of default judgment. (ECF No. 19.)
6 Plaintiff filed a first amended complaint on December 16, 2016. (ECF No. 20.) On December
7 19, 2016, Plaintiff filed a response to the order to show cause and requested additional time to
8 file a supplemental declaration and evidence. (ECF No. 21.) On December 20, 2016, an order
9 issued discharging the order to show cause and granting Plaintiff’s request to file a supplemental
10 declaration and evidence. (ECF No. 22.)
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On December 22, 2016, Plaintiff filed two declarations in support of the motion for

12 default judgment. (ECF Nos. 23, 25.) During oral argument on December 28, 2016, Plaintiff
13 was permitted to file supplemental briefing addressing Colorado law. (ECF Nos. 26, 28.) On
14 January 6, 2017, Plaintiff filed a supplemental memorandum of points and authorities. (ECF No.
15 29.) On January 12, 2017, the undersigned issued findings and recommendations recommending
16 granting in part and denying in part, Plaintiff’s motion for entry of default judgment. (ECF NO.
17 30.)
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On January 24, 2017, Plaintiff filed an application to amend the complaint and “further

19 points and authorities in support of motion for default judgment against Dennis Thomas” which
20 the Court construes as objections to the findings and recommendations. (ECF Nos. 31, 32.) On
21 January 26, 2017, Plaintiff was ordered to file a supplemental declaration in support of the
22 request for attorney fees. (ECF No. 33.) On January 30, 2017, Plaintiff filed a supplemental
23 declaration. (ECF No. 34.) On February 10, 2017, Chief Judge Lawrence J. O’Neill issued an
24 order adopting the findings and recommendations in part and granting the motion for entry of
25 default judgment against Defendant JND Thomas Company and holding in abeyance the
26 recommendation regarding Defendant Dennis Thomas subject to decision on the application for
27 leave to amend the complaint. (ECF No. 35.)
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II.

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LEGAL STANDARD
Under Rule 15(a) of the Federal Rules of Civil Procedure, a party may amend the party’s

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4 pleading once as a matter of course at any time before a responsive pleading is served. Fed. R.
5 Civ. P. 15(a)(1). Otherwise, a party may amend only by leave of the court or by written consent
6 of the adverse party, and leave shall be freely given when justice so requires. Fed. R. Civ. P.
7 15(a)(2).
In determining whether to grant leave to amend, the court considers five factors: “(1) bad

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9 faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5)
10 whether the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805,
11 808 (9th Cir. 2004). The factors are not given equal weight and futility alone is sufficient to
12 justify the denial of a motion to amend. Washington v. Lowe’s HIW Inc., 75 F. Supp. 3d 1240,
13 1245 (N.D. Cal. 2014), appeal dismissed (Feb. 25, 2015). “[I]t is the consideration of prejudice
14 to the opposing party that carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc.,
15 316 F.3d 1048, 1052 (9th Cir. 2003). “Absent prejudice, or a strong showing of any of the
16 remaining [ ] factors, there exists a presumption under Rule 15(a) in favor of granting leave to
17 amend.” Id.
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III.

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DISCUSSION
Plaintiff seeks leave to file an amended complaint to cure the deficiencies identified in

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21 the findings and recommendations.1 Plaintiff seeks to add the following two paragraphs to the
22 complaint:
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Defendant Thomas is a citizen of the state of California, and he resides in
Riverdale, California. Defendant Thomas is an employee, the President and CEO
of Defendant JND. (Attached as Exhibit C is the Statement of Information for
JND Thomas filed on January 8, 2007 and re-affirmed on February 18, 2015).
Plaintiff is informed and believes Defendant Thomas personally directed the work
of JND, and personally directed, oversaw and supervised the acts and omissions
alleged below.

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Pursuant to Rule 5 of the Federal Rules of Civil Procedure no service of the amended complaint is required on a
party who is in default unless it asserts a new claim for relief. Fed. R. Civ. P. 5(a)(2). Plaintiff’s amended
complaint does not assert a new claim for relief.

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1 (ECF No. 31-1 at 2 (emphasis in original).)
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Defendant Thomas personally signed the agreement, performed, or directed the
performance of his employees at JND in the matters set forth in this complaint.
Defendant Thomas owed an independent duty of care to comply with the state of
California water code. Specifically, the Regional Board found “the deposition of
wastes that could affect the quality of waters of the state without obtaining waste
discharge requirements is a violation of Sections 13260 and 13264 of the
California Water Code.” (Page 2, NOV issued September 21, 2015). Defendant
Thomas personally directed the acts and omissions giving rise to the NOV and the
violation of the water code. It is foreseeable that violating a water quality statute
intended to protect the health and safety of all persons and corporations living and
working in California would damage the hiring party, in this case LFC.

8 Id.
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A.

Factors in Determining if Leave to Amend Should be Granted

In determining whether leave to amend should be granted, the Court addresses the factors

11 of “bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and
12 (5) whether the plaintiff has previously amended his complaint.” Nunes, 375 F.3d at 808.
13 Plaintiff does not address the factors the Court is to consider in determining if leave should be
14 granted to file an amended complaint.
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1.

Bad Faith

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Bad faith is shown where the party acts with a wrongful motive. DCD Programs, Ltd. v.

17 Leighton, 833 F.2d 183, 187 (9th Cir. 1987). There is no evidence that Plaintiff has acted in bad
18 faith in seeking leave to file an amended complaint.
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Undue Delay

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In assessing undue delay in the Ninth Circuit, the Court is to consider “whether the

21 moving party knew or should have known the facts and theories raised by the amendment in the
22 original pleading.” AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 953 (9th Cir.
23 2006) (citations omitted).

Where the new facts or theories sought to be included in the

24 amendment were available prior to a previous amendment to the complaint, the court may
25 conclude that the motion to amend was made after undue delay. Chodos v. W. Publ’g Co., 292
26 F.3d 992, 1003 (9th Cir. 2002).
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After the motion for entry of default judgment was filed, the Court reviewed the

28 complaint and issued an order on December 12, 2016, requiring Plaintiff to show cause why the

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1 complaint should not be dismissed. (ECF No. 19.) The order also specifically addressed the
2 deficiencies in the motion for default judgment and required Plaintiff to address the law that
3 applied to the substantive claims in the complaint as well as the sufficiency of the complaint as
4 to each claim for relief asserted. (ECF No. 19 at 4.) Plaintiff filed a response to the order to
5 show cause and requested leave to file an amended complaint that was granted. (ECF Nos. 21,
6 22.) Plaintiff’s first amended complaint was filed on December 16, 2016. (ECF No. 20.)
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Additionally, after the hearing on the motion for default judgment, an order issued on

8 December 29, 2016, in which Plaintiff was specifically required to file supplemental briefing
9 regarding the claims against Defendant Thomas including how the allegations in the complaint
10 were sufficient to state a plausible claim against Defendant Thomas. (ECF No. 28.)
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Finally, the Court issued findings and recommendations on January 12, 2017, finding that

12 the complaint was insufficient to state a plausible claim against Defendant Thomas and Plaintiff
13 did not file the application for leave to amend until January 24, 2017, approximately two weeks
14 later. (ECF Nos. 30, 31.)
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Plaintiff should have been aware by the December 12, 2016 order and no later than the

16 December 29, 2016 order that the complaint was not sufficient to state a negligence claim against
17 Defendant Thomas.

Yet, Plaintiff waited until after the Court had issued findings and

18 recommendations addressing the motion for default judgment to bring the current application.
19 Reviewing the two paragraphs which are to be included in the second amended complaint, there
20 are no facts alleged that were not known to Plaintiff at the time that this action was filed.
21 Plaintiff has not provided any reason for the delay in seeking amendment of the complaint.
22 Therefore, the Court finds that Plaintiff did delay seeking leave to file the amended complaint.
23 However, the Court notes that the delay in seeking amendment once it should have been apparent
24 was only about ten weeks, and “delay alone no matter how lengthy is an insufficient ground for
25 denial of leave to amend.” United States v. Webb, 655 F.2d 977, 980 (9th Cir. 1981).
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Prejudice to the Opposing Party

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The most important consideration is prejudice to the opposing party. Jackson v. Bank of

28 Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). The party opposing the amendment has the burden

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1 of showing prejudice. DCD Programs, Ltd., 833 F.2d at 187. “ ‘Undue prejudice’ means
2 substantial prejudice or substantial negative effect[.]”

Hip Hop Beverage Corp. v. RIC

3 Representcoes Importacao e Comercio Ltda., 220 F.R.D. 614, 622 (C.D. Cal. 2003).
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In this instance, the claim sought to be amended existed in the complaint filed on August

5 10, 2016. Defendants were aware of the claim because they were served with the complaint, but
6 they have failed to appear to defend in this action. Accordingly, the Court finds no prejudice to
7 Defendants if leave to file an amended complaint is granted.
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Futility of Amendment

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In determining whether amendment would be futile, the court uses the same test used in

10 considering the sufficiency of the pleadings in a motion to dismiss for failure to state a claim
11 pursuant to Rule 12(b)(6). Kuschner v. Nationwide Credit, Inc., 256 F.R.D. 684, 687 (E.D. Cal.
12 2009) (citing Miller v. Rykoff–Sexton, Inc., 845 F.2d 209, 214 (9th Cir.1988)). An amendment
13 is futile where it “appears beyond doubt that the plaintiff's proposed amended complaint would
14 not remedy the deficiencies in the previous complaints.” An amendment is therefore futile only
15 where no set of facts can be proven under the amendment that would constitute a valid claim or
16 defense. Kuschner, 256 F.R.D. at 687.
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Here, Plaintiff seeks to amend the first amended complaint due to the January 12, 2017

18 findings and recommendations finding that the allegations were insufficient to state a negligence
19 claim against Defendant Thomas.
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Under Colorado law, the elements of negligence are the existence of a duty, a breach of

21 that duty, causation, and damages. Redden v. SCI Colorado Funeral Servs., Inc., 38 P.3d 75, 80
22 (Colo. 2001), as modified on denial of reh’g (Jan. 14, 2002); Westin Operator, LLC v. Groh, 347
23 P.3d 606, 612, reh’g denied (May 11, 2015). A negligence claim fails where it is predicated on
24 circumstances for which the law does not impose a duty of care, therefore, the first question to be
25 addressed is whether the defendant owed a duty of care to the plaintiff.

HealthONE v.

26 Rodriguez, 50 P.3d 879, 888 (Colo. 2002). In making this determination, the court considers
27 multiple factors, including “(1) the risk involved, (2) the foreseeability and likelihood of injury
28 as weighed against the social utility of the actor’s conduct, (3) the magnitude of the burden

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1 guarding against injury or harm, and (4) the consequences of placing the burden upon the actor.”
2 HealthONE, 50 P.3d at 888. These factors are not exhaustive and “the question of whether a
3 duty should be imposed in a particular case is essentially one of fairness under contemporary
4 standards—whether reasonable persons would recognize a duty and agree that it exists.” Id.
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In the January 12, 2017 findings and recommendations, the Court found that the first

6 amended complaint had not included sufficient factual allegations to show that Defendant
7 Thomas had any duty of care to Plaintiff and was insufficient for the Court to reasonably
8 conclude that Defendant Thomas was liable for the negligence alleged. (ECF No. 30 at 14.)
9 Plaintiff seeks to file a second amended complaint to include allegations that Defendant Thomas
10 was an “employee, the President and CEO of Defendant JND” and “personally directed the work
11 of JND, and personally directed, oversaw and supervised the acts and omissions alleged” in the
12 complaint. (ECF No. 31-1 at 2.) Further, Plaintiff seeks to include allegations that Defendant
13 Thomas owed an independent duty of care to comply with the state of California water code and
14 the Regional Board found “the deposition of wastes that could affect the quality of waters of the
15 state without obtaining waste discharge requirements is a violation of Sections 13260 and 13264
16 of the California Water Code.” Id.
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The Court does not find the proposed Second Amended Complaint to be futile under the

18 circumstances.
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5.

Previous Amendment to Complaint

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A court’s discretion to grant or deny leave to amend is particularly broad when it has

21 previously permitted amendment of the complaint. Chodos, 292 F.3d at 1003. While the fact
22 that Plaintiff has previously been granted leave to amend the complaint, and the facts alleged in
23 the second amended complaint were within Plaintiff’s knowledge in filing the previous
24 complaints, weighs against granting the application to file an amendment to the complaint, the
25 Court finds that due to the lack of prejudice to Defendants leave to amend should be granted in
26 this instance.
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IV.

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CONCLUSION AND ORDER

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Based on the foregoing, IT IS HEREBY ORDERED that:

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1.

The hearing set for March 8, 2017 at 10:00 a.m. in Courtroom 9 is VACATED;

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2.

Plaintiff’s application for leave to file a second amended complaint is
GRANTED; and

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3.

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Plaintiff shall file the second amended complaint within four days of the date of
entry of this order.

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IT IS SO ORDERED.

11 Dated:

February 17, 2017
UNITED STATES MAGISTRATE JUDGE

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