TVBI Company Limited v. Hong Thoa Thi Pham

Filing 106

ORDER ON DEFENDANT'S MOTION FOR LEAVE TO FILE A COUNTERCLAIM denying 100 Motion for Leave to File; granting 105 Ex Parte Application. (Illston, Susan) (Filed on 6/5/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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TVBI COMPANY LIMITED,
Plaintiff,

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v.

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United States District Court
Northern District of California

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Case No. 17-cv-05858-SI

HONG THOA THI PHAM, et al.,
Defendants.

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ORDER ON DEFENDANT’S MOTION
FOR LEAVE TO FILE A
COUNTERCLAIM
Re: Dkt. No. 100

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Defendant Hong Thoa Thi Pham has moved for leave to file a counterclaim against TVBI,

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in this case which is set for jury trial approximately one month from now, on July 8, 2019. Dkt. No.

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100. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution

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without oral argument and VACATES the hearing set for June 14, 2019. The Court DENIES the

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motion.1

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Plaintiff TVBI filed its complaint in October 2017. Dkt. at 1. A year later, in October 2018,

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defendant substituted attorneys, retaining her current counsel. Dkt. No. 67. On May 7, 2019, Ms.

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Pham filed the instant motion seeking leave to file a counterclaim “to offset the amounts [she] put

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into Lido Enterprise … to keep the night club afloat.” Dkt. No. 100 at 5. After defendant retained

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her current counsel, (1) the parties submitted several discovery disputes to the Court (Dkt. Nos. 77

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and 88), (2) the parties submitted a February 5, 2019 stipulation to continue trial deadlines (Dkt.

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No. 80), (3) Ms. Pham filed an April 5, 2019 opposition to plaintiff’s motion for summary judgment

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(Dkt. No. 93), and (4) the parties submitted an April 26, 2019 stipulation to further continue trial

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105.

The Court GRANTS Ms. Pham’s ex parte application for leave to file her reply. Dkt. No.

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deadlines (Dkt. No. 97).

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In her opposition to plaintiff’s motion for summary judgment, Ms. Pham argued that “at the

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end of the day … TVBI could end up owing her money” based on an estimated $289,366.97 Ms.

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Pham alleges she contributed to the Lido Nightclub. Dkt. No. 93 at 8 (Defendants’ Opposition to

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MSJ). Therefore, at a minimum, Ms. Pham was aware of the arguments regarding these payments

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in March/April 2019 when she was preparing her opposition. Yet, despite this, and despite the

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parties being heavily involved in discovery, which surely crystalized this issue earlier, only now has

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Ms. Pham moved to file a counterclaim.
Ms. Pham admits the deadline to file a counterclaim has passed but urges the Court to grant

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her leave to file such a claim due to “excusable neglect” pursuant to FRCP 6(b)(1)(B).2 Dkt. No.

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United States District Court
Northern District of California

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100 at 2. To determine whether a party’s failure to meet a deadline constitutes “excusable neglect,”

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courts apply a four-factor test examining: (1) the danger of prejudice to the opposing party; (2) the

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length of the delay and its potential impact on the proceedings; (3) the reason for the delay, including

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whether it was within the reasonable control of the movant; and (4) whether the movant acted in

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good faith. Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd P’ship, 507 U.S. 380, 395 (1995). Ms.

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Pham has not met these elements.

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First, because the trial date is imminent, plaintiff would be prejudiced by not having the

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opportunity to file a motion to dismiss or a motion for summary judgment – not to mention being

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precluded from conducting discovery specifically targeted towards the proposed counterclaim.

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Second, while it is true Ms. Pham’s counsel was retained this past October 2018, that means
counsel waited seven months to raise this issue. This delay is unexplainable and inexcusable.

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Third, the reason for the delay is entirely within Ms. Pham and her counsel’s control. Ms.

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Pham argues that when she changed counsel she also hired an expert to assess damages and “[d]uring

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that process it was identified that Ms. Pham had made substantial contributions to Lido Enterprise

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FRCP 6(b)(1): Extending Time: In General. When an act may or must be done within a
specified time, the court may, for good cause, extend the time:
(A) With or without motion or notice if the court acts, or if a request is made, before the
original time or its extension expires; or
(B) On motion made after the time has expired if the party filed to act because of
excusable neglect. (emphasis added)
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to keep the business afloat and those losses were not borne equally by TVBI.” Dkt. No. 100 at 3-4.

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However, Ms. Pham surely did not need an expert to tell her that she put nearly $300,000 of her

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own money into the business. The Court also notes that Ms. Pham’s motion is silent with respect

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to the date when the expert was retained and when this “discovery” was made.

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Fourth, the Court has serious questions as to whether Ms. Pham has acted in good faith,

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given the fact that this motion was filed only after the parties submitted a stipulation to move the

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trial date on April 26, 2019 – without any mention of the instant request to file a counterclaim.
Ms. Pham also argues FRCP 15(a)3 requires the Court to grant her leave to file a

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counterclaim. It does not. FRCP 15(a) states that leave to file an amended pleading be “freely given

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when justice so requires.” But the Supreme Court has made clear that this is only true “[i]n the

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United States District Court
Northern District of California

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absence of any apparent or declared reason—such as undue delay, bad faith, or dilatory motive on

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the part of the movant, repeated failure to cure deficiencies by amendments previously allowed,

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undue prejudice to the opposing party by virtue of allowance of the amendment, futility of

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amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). The Court has already discussed

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above its serious concerns about the timing of the instant motion – prejudicing plaintiff and

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implicating both undue delay and bad faith.

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Ms. Pham’s motion for leave to file a counterclaim is therefore DENIED.

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IT IS SO ORDERED.
Dated: June 5, 2019
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SUSAN ILLSTON
United States District Judge

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FRCP 15(a)(2): Other Amendments. In all other cases, 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.
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