Navigators Insurance Company v. Union Pacific Railroad Company

Filing 28

ORDER by Judge Claudia Wilken DEFENDANTS 24 MOTION FOR LEAVE TO FILE A THIRD-PARTY COMPLAINT. (ndr, COURT STAFF) (Filed on 2/1/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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NAVIGATORS INSURANCE COMPANY,

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Plaintiff,

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ORDER GRANTING
DEFENDANT’S MOTION
FOR LEAVE TO FILE
A THIRD-PARTY
COMPLAINT
(Docket No. 24)

v.

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UNION PACIFIC RAILROAD COMPANY,

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Defendant.

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United States District Court
For the Northern District of California

No. C 11-2601 CW

________________________________/
Defendant Union Pacific Railroad Company seeks leave to file

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a third-party complaint against Third-Party Defendant Pine Ridge

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Farms (PRF).

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Defendant’s motion.

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submission on the papers.

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the parties, the Court GRANTS Defendant’s motion.

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Plaintiff Navigators Insurance Company opposes
The Court took Defendant’s motion under
Having considered the papers filed by

BACKGROUND
Plaintiff instituted the underlying action on May 4, 2011 in

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the Alameda County Superior Court.

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alleges that it is the insurer of a shipment of cargo of frozen

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pork received and transported by Defendant in July 2010.

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Defendant purportedly agreed to maintain the cargo at -10ºF during

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carriage and to deliver the cargo in the same good order,

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condition and quantity as when received.

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delivered the cargo in a damaged condition, which depreciated the

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value of the cargo by $100,187.81, including mitigation expenses.

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Plaintiff made payment to PRF, the cargo owners and shippers,

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under the terms of its insurance policy with PRF and seeks

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reimbursement from Defendant.

In its complaint, Plaintiff

Defendant allegedly

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Defendant removed the case to federal court on June 1, 2011.

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A case management conference was held on November 22, 2011, and

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the Court subsequently entered a case management order setting

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January 17, 2012 as the deadline to add additional parties or

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claims and February 1, 2012 as the fact discovery deadline.

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Defendant filed the present motion seeking leave to file a

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third-party complaint on December 21, 2011 and noticed it for

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hearing on January 26, 2012.

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seeks to assert claims for breach of contract, breach of express

In its proposed filing, Defendant

United States District Court
For the Northern District of California

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duty to indemnify and declaratory relief against PRF.

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alleges that it had a contract with PRF that specified that PRF

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had a duty to load the cargo properly onto the railcar and that

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this contract required PRF to indemnify Defendant for losses

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relating to damages stemming from the failure of PRF, including

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its agents, to do so.

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Defendant

LEGAL STANDARD
Generally, Federal Rule of Civil Procedure 15(a) provides for

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liberal allowance of amendments to pleadings.

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Civil Procedure 15(a) provides that leave of the court allowing a

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party to amend its pleading “shall be freely given when justice so

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requires.”

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amendment, the nonmoving party bears the burden of demonstrating

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why leave to amend should not be granted.”

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Abbott Laboratories, 127 F.R.D. 529, 530-531 (N.D. Cal. 1989)

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(citing Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 666 (Fed. Cir.

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1986)).

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propriety of a motion for leave to amend: undue delay, bad faith,

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futility of amendment, prejudice to the opposing party and whether

Federal Rule of

Because “Rule 15 favors a liberal policy towards

Genentech, Inc. v.

Courts generally consider five factors when assessing the

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the party has previously amended the pleadings.

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Sys. of Higher Educ., 555 F.3d 1051, 1055 n.3 (9th Cir. 2009).

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Ahlmeyer v. Nev.

If a party seeks to amend the pleadings after the deadline to

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do so as established by a case management order, Rule 16(b)

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applies.

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except upon a showing of good cause and by leave of the district

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judge.” Fed. R. Civ. Pro. 16(b).

Under Rule 16(b), “[a] schedule shall not be modified

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DISCUSSION
The parties dispute whether the scheduling order set January

United States District Court
For the Northern District of California

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17, 2012 as the date by which Defendant’s motion had to be filed

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or the date by which it had to be heard, and thus whether the

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motion is governed by Rule 15 or Rule 16.

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order were read to require that a hearing take place before

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January 17, 2012, Defendant noticed the motion for a hearing less

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than ten days later.

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parties’ briefing, which was completed on January 9, 2012, was

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sufficient to decide this motion, and took it under submission on

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the papers.

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and the Court will consider the motion under Rule 15.

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Even if the minute

Further, this Court determined that the

Thus, any delay beyond January 17, 2012 was minimal,

Plaintiff argues that Defendant has unduly delayed in filing

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its motion, because Defendant knew of the contractual terms of the

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agreement between Defendant and PRF prior to the inception of this

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action.

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against PRF until its expert had reviewed relevant documents

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received in discovery and advised Defendant that it had a claim

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against PRF based on the improper loading practices of PRF’s

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designated agent.

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Defendant knew or should have known of PRF’s agent’s improper

Defendant states that it waited to file a complaint

Plaintiff provides no argument or evidence that

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loading practices, which are central to its third-party complaint.

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Thus, Plaintiff has not shown undue delay by Defendant.

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Plaintiff also asserts that it and PRF are prejudiced by

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Defendant’s delay in filing this motion.

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for PRF to be able to defend the case adequately, the discovery

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deadline and other upcoming deadlines will have to be continued,

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and that PRF may re-take certain Rule 30(b)(6) depositions,

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leading to duplication of effort and expense.

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a proper subject for consideration in connection with Defendant’s

Plaintiff argues that,

Prejudice to PRF is

United States District Court
For the Northern District of California

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motion.

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Cir. 1973) (considering prejudice to the proposed third-party

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defendant when evaluating whether to grant leave to file third-

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party complaint).

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the claims made and has participated in the discovery process and,

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while the fact discovery deadline may need to be extended, it is

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not clear that filing of the third-party complaint will adversely

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impact other case deadlines.

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deposition has been noticed thus far.

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prejudice to the parties from the possible adjustment of case

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management deadlines or limited duplicative discovery is

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outweighed by the additional time and expense that would ensue if

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Defendant filed a new lawsuit against PRF arising out of the same

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events at issue here.

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See Howey v. United States, 481 F.2d 1187, 1190-1191 (9th

PRF has had ample notice of this litigation and

Further, only one Rule 30(b)(6)
The Court finds that any

Finally, Plaintiff argues that Defendant would not be

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benefited by filing the third-party complaint, because Plaintiff,

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as PRF’s subrogated insurer, stands in PRF’s shoes for the

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purposes of this case, and that Defendant may assert the defenses

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it would have against PRF against Plaintiff in PRF’s stead.
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Thus,

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Plaintiff claims that Defendant’s motion is intended to create

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trouble between PRF and Plaintiff, increase litigation costs, and

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to pressure Plaintiff to settle.

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to Defendant’s motivations and provides no evidence of bad faith.

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Further, Defendant points out that it is benefited by filing the

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third-party complaint, because it may not directly sue Plaintiff

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to enforce its indemnity agreement with PRF without first

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obtaining judgment against PRF.

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demonstrated that Defendant has filed this motion in bad faith.

United States District Court
For the Northern District of California

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However, Plaintiff speculates as

Accordingly, Plaintiff has not

CONCLUSION
For the reasons set forth above, the Court GRANTS Defendant’s

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motion for leave to file a third-party complaint (Docket No. 24).

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Defendant shall file it forthwith and serve it as soon as

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possible.

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IT IS SO ORDERED.
Dated: 2/1/2012

CLAUDIA WILKEN
United States District Judge

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