Marble Bridge Funding Group, Inc v. Euler Hermes American Credit Indemnity Company

Filing 170

ORDER granting in part and denying in part 137 Motion for Leave to File Amended Complaint. Plaintiff shall file an amended complaint consistent with the discussion above within 10 days of the date this order is filed. Signed by Judge Edward J. Davila on 9/3/2014. (ejdlc1S, COURT STAFF) (Filed on 9/3/2014)

1
2
3
4
5
6
7

IN THE UNITED STATES DISTRICT COURT

8

FOR THE NORTHERN DISTRICT OF CALIFORNIA

9

SAN JOSE DIVISION
CASE NO. 5:12-cv-02729 EJD

MARBLE BRIDGE FUNDING GROUP,
INC.,

11
For the Northern District of California

United States District Court

10

12

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S
MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT

Plaintiff(s),
v.

13
14

EULER HERMES AMERICAN CREDIT
INDEMNITY COMPANY,

[Docket Item No(s). 137]

15
Defendant(s).
16

/

17
Presently before the court is Plaintiff Marble Bridge Funding Group Inc.’s (“Plaintiff”)
18
Motion for Leave to File an Amended Complaint. See Docket Item No. 137. Defendant Euler
19
Hermes American Credit Indemnity Company (“Defendant”) has filed written opposition to the
20
motion. See Docket Item No. 160. The court found this matter suitable for decision without oral
21
argument pursuant to Civil Local Rule 7-1(b) and vacated the associated hearing date.
22
Federal jurisdiction arises pursuant to 28 U.S.C. § 1332. Having carefully considered the
23
pleadings filed by the parties, the court finds and orders as follows:
24
1.

Since this motion was filed after the court-imposed deadline for amendment to the

25
pleadings (see Docket Item No. 85), Plaintiff must initially demonstrate sufficient
26
“good cause” to modify the scheduling order. Johnson v. Mammoth Recreations Inc.,
27
975 F.2d 604, 607-608 (1992). “Rule 16(b)’s ‘good cause’ standard primarily
28
1
CASE NO. 5:12-cv-02729 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT

1

considers the diligence of the party seeking the amendment.” Id. at 609. Plaintiff

2

was diligent under the circumstances because, despite the expressed intentions of

3

Plaintiff’s president, Plaintiff’s former attorneys did not pursue potential claims

4

against Liquid Capital Exchange, Inc., Liquid Captial of Colorado, Sol Roter and

5

Bruce Dawson (hereafter the “Liquid Capital Defendants”) due to a conflict of

6

interest. This motion to add new claims and new parties was filed within a

7

reasonable period of time after Plaintiff engaged new counsel. Accordingly, the court

8

finds that Plaintiff has satisfied the burden to demonstrate good cause under Rule 16.

9

2.

Plaintiff must also show that its proposed amendments are appropriate under Federal
Rule of Civil Procedure 15. Although the Rule 15 standard is a liberal one, a request

11
For the Northern District of California

United States District Court

10

for leave to amend may be denied where the amendment would cause the opposing

12

party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or

13

creates undue delay. Foman v. Davis, 371 U.S. 178, 182 (1962); Janicki Logging Co.

14

v. Mateer, 42 F.3d 561, 566 (9th Cir. 1994). The consideration of prejudice to the

15

opposing party “carries the greatest weight.” Eminence Capital, LLC v. Aspeon,

16

Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Here, the court is not persuaded that any

17

of the proposed amendments would be futile or that Plaintiff is seeking to amend in

18

bad faith. In addition, the request (a) to add claims against Defendant for aiding and

19

abetting a fraud and fraud and deceit by misrepresentation and concealment, (b) to

20

change the negligence claim to one for negligent misrepresentation, and (c) to more

21

specifically plead the existing claims against Defendant, neither creates undue delay

22

nor results in undue prejudice to Defendant. Accordingly, the motion is granted as to

23

those claims.

24

3.

However, the court does find that adding claims against the Liquid Capital

25

Defendants would unduly delay this and the related action, and would ultimately

26

result in undue prejudice to Defendant. Adding new parties to what has already

27

become a sufficiently-complex and convoluted insurance coverage action would

28
2
CASE NO. 5:12-cv-02729 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT

1

transform this case into something entirely different. In addition, the Liquid Capital

2

Defendants would inevitably file various motions, including those challenging the

3

pleadings and challenging jurisdiction - particularly since one of the Liquid Capital

4

Defendants is an international resident - which would delay this case further. And

5

although discovery has not yet closed, it is about to, but that deadline would need to

6

be expanded far into the future to allow the existing parties and the Liquid Capital

7

Defendants to conduct further investigation. But as the court docket demonstrates,

8

getting this case to proceed in some reasonable fashion has taken near heroic efforts

9

by counsel, this court, and the assigned magistrate judge. Sidetracking the case at
this point, or perhaps putting it back at the starting line, would render all of these past

11
For the Northern District of California

United States District Court

10

efforts meaningless. Such a result is prejudicial to all involved and is entirely

12

unnecessary because Plaintiff can pursue its claims against the Liquid Capital

13

Defendants in a separate action. Accordingly, the motion is denied as to the request

14

to add the Liquid Capital Defendants and assert claims against them in this action.

15

Based on the foregoing, Plaintiff’s Motion for Leave to File an Amended Complaint (Docket

16

Item No. 137) is GRANTED IN PART and DENIED IN PART. Plaintiff shall file an amended

17

complaint consistent with the discussion above within 10 days of the date this order is filed.

18

IT IS SO ORDERED.

19
20

Dated: September 3, 2014
EDWARD J. DAVILA
United States District Judge

21
22
23
24
25
26
27
28

3
CASE NO. 5:12-cv-02729 EJD
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR LEAVE TO FILE
AMENDED COMPLAINT