Pownell v. Credo Petroleum Corporation et al

Filing 205

ORDER. Ordered that the Motion to Reconsider the Recommendation re: 194 is Denied. Ordered tht the Court's Recommendation 150 stands by Magistrate Judge Kristen L. Mix on 05/03/11. (jjh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 09-cv-01540-WYD-KLM
TIMOTHY J. POWNELL, an individual,
Plaintiff,
v.
CREDO PETROLEUM CORPORATION, a Delaware corporation, and
JAMES T. HUFFMAN, an individual,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff’s Motion to Reconsider the
Recommendation to Deny Plaintiff’s Motion to Amend Complaint [Docket No. 194;
Filed April 21, 2011] (the “Motion”). Plaintiff seeks reconsideration of the Court’s February
15, 2011 Recommendation [Docket No. 150] that Plaintiff’s Motion for Leave to Amend
Complaint [Docket No. 105] (the “Motion to Amend”) be denied. The Motion to Amend
sought leave to amend the Amended Complaint [Docket No. 16] to add a claim for
promissory estoppel. The Court recommended that the Motion to Amend be denied
because (1) Plaintiff “failed to provide ‘good cause’ pursuant to Fed. R. Civ. P. 16(b) for his
delay in attempting to modify the [Amended] Scheduling Order [Docket No. 22],” and (2)
permitting amendment six months before trial would have been unduly prejudicial to
Defendants. Recommendation [#150] at 5-6. Plaintiff now contends that reconsideration
is appropriate because (1) he has received new documents during the discovery process
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that reveal previously unknown facts that support the proposed promissory estoppel claim,
and (2) the Court did not consider his Reply [Docket No. 135] before issuing its
Recommendation. Motion [#194] at 3. The Court addresses Plaintiff’s contentions in turn.
A.

Standard of Review

A motion for reconsideration “is an extreme remedy to be granted in rare
circumstances.” Brumark Corp. v. Samson Res. Corp., 57 F.3d 941, 944 (10th Cir. 1995).
It is well established in the Tenth Circuit that grounds for a motion to reconsider are
typically limited to the following: “(1) an intervening change in the controlling law; (2) new
evidence previously unavailable; and (3) the need to correct clear error or prevent manifest
injustice.” Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citing
Brumark, 57 F.3d at 948). Therefore, a motion to reconsider is usually “appropriate [only]
where the Court has misapprehended the facts, a party’s position, or the controlling law.
It is not appropriate to revisit issues already addressed or advance arguments that could
have been raised in prior briefing.” Id.
B.

Consideration of Plaintiff’s Reply

Plaintiff is correct that the Court did not address his Reply [#135] in its
Recommendation [#150]. Accordingly, the Court agrees with Plaintiff that consideration of
the Reply is appropriate to ensure that the Court did not misapprehend his position. After
reviewing the Reply, the Court finds that the arguments set forth therein do not warrant a
change to the Recommendation.

In the interest of completeness, the Court briefly

addresses these arguments below.
First, Plaintiff argues in his Reply that he has satisfied his obligation under Fed. R.
Civ. P. 16(b) to demonstrate “good cause” for seeking leave to amend the Amended
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Complaint [#16] after the December 14, 2009 pleading amendment deadline established
in the Amended Scheduling Order [#22]. Reply [#135] at 2-5. Plaintiff explains the
purported good cause for the untimely filing of his Motion to Amend [#105] as follows:
Here, the delay in adding the claim was caused by oversight of counsel.
When the original complaint in the action was drafted and filed, Plaintiff was
represented by a different attorney, Chris Taravella. A claim for promissory
estoppel was not included in that complaint. Undersigned counsel did
represent Plaintiff at the time the first amended complaint was filed, but the
focus of that amendment was to combine the prior sixth and eighth claims for
relief into one claim, and undersigned counsel overlooked the possibility of
then adding a promissory estoppel claim. In reviewing the case and the
claims as a whole, in preparation for the filing of the final pretrial order,
undersigned counsel recognized that the claim never had been included, but
was applicable to the facts of the case.
Id. at 4-5 (emphasis added). In its Recommendation, the Court fully explained that
“inattention” by counsel is not good cause within the meaning of Fed. R. Civ. P. 16(b).
Recommendation [#150] at 3; see also Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D.
684, 687 (D. Colo. 2000) (quoting Dilmar Oil Co., Inc. v. Federated Mutual Ins. Co., 968 F.
Supp. 959, 980 (D.S.C. 1997), aff’d, 129 F.3d 116 (4th Cir. 1997) (“Rule 16(b)’s ‘good
cause’ standard is much different than the more lenient standard contained in Rule 15(a).
. . . Properly construed, ‘good cause’ means that scheduling deadlines cannot be met
despite a party’s diligent efforts. . . . Carelessness is not compatible with a finding of
diligence and offers no reason for a grant of relief.” (emphasis added))); Denmon v.
Runyon, 151 F.R.D. 404, 407 (D. Kan. 1993) (“To establish ‘good cause,’ the party seeking
to extend the deadline must establish that the scheduling order’s deadline could not have
been met with diligence.”). Accordingly, Plaintiff’s Reply does not warrant altering the
Court’s finding that Plaintiff failed to make a showing of good cause under Fed. R. Civ. P.

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16(b) sufficient to justify permitting him to amend his Amended Complaint [#16] one year
after expiration of the pleading amendment deadline. See Recommendation [#150] at 3
(“Plaintiff has not provided any facts that show that he was unable to comply with the
December 14, 2009 pleading amendment deadline despite exercising due diligence.”).1
Plaintiff next argues in his Reply that his Motion to Amend [#105] is timely under
Fed. R. Civ. P. 15(a). Reply [#135] at 5-8. Although Plaintiff is correct that “Rule 15(a)
does not restrict a party’s ability to amend its pleadings to a particular stage in the action,”
Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 (10th Cir. 2006), the Rule does permit the
Court to deny leave to amend pleadings when there has been “undue delay” in seeking
such leave. Foman v. Davis, 371 U.S. 178, 182 (1962). Plaintiff argues that there was no
undue delay in seeking amendment because, at the time he filed the Motion to Amend
[#105] on December 14, 2010, “the trial had not yet been set, the pretrial conference had
not yet occurred, the pretrial order had not yet been entered, and the dispositive motions
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Plaintiff briefly argues in his Reply that he is not required to separately demonstrate
good cause under Rule 16(b) for seeking to amend his Amended Complaint after expiration of the
pleading amendment deadline. Reply [#135] at 2-3. Plaintiff cites cases from the Fifth Circuit, the
Eighth Circuit, and the District of Alabama for the proposition that “[d]elay by [a] plaintiff in filing an
amended claim can be procedurally fatal, but amendment may be allowed where the plaintiff meets
the burden of showing the delay was due to oversight, inadvertence, or excusable neglect.” Id. at
5 (citations omitted). Plaintiff’s argument is not persuasive. It is the practice in this District to
require separate compliance with Fed. R. Civ. P. 16(b) and 15(a) from a plaintiff seeking to amend
his complaint after expiration of the pleading amendment deadline established in the scheduling
order. See, e.g., Nicastle v. Adams County Sheriff’s Office, No. 10-cv-00816-REB-KMT, 2011 WL
1465586, at *1 (D. Colo. Mar. 14, 2011) (unreported decision) (“Because Plaintiff filed his Motion
after the deadline for amending the pleadings, the Court employs a two-step analysis, first
determining whether Plaintiff has shown good cause to modify the Scheduling Order under Fed.
R. Civ. P. 16(b), [and] then evaluating whether Plaintiff has satisfied the standard for amendment
of pleadings under Fed. R. Civ. P. 15(a).”); Pumpco, Inc. v. Schenker Int’l. Inc., 204 F.R.D. 667, 668
(D. Colo. 2001); Colo. Visionary Acad, 194 F.R.D. at 687. This practice stands even though the
Court of Appeals for the Tenth “[C]ircuit has not yet decided whether a party seeking to amend its
pleadings after the scheduling order deadline must show ‘good cause’ under Rule 16(b) in addition
to the Rule 15(a) requirement.” Strope v. Collins, 315 F. App’x 57, 62 n.4 (2009) (internal quotation
omitted).

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deadline had not yet passed.” Reply [#135] at 5. The Court disagrees. When, as here,
a plaintiff provides no explanation beyond inattention, carelessness, or “oversight of
counsel” for his failure to seek leave to amend before expiration of the pleading amendment
deadline, the Court finds “undue delay.” See Recommendation [#150] at 3 (“[Plaintiff] offers
no explanation for his failure to file a motion for leave to amend his Amended Complaint
[#16] before expiration of the December 14, 2009 amendment deadline. He also does not
explain why he allowed an entire year to pass without filing a motion seeking to modify the
Scheduling Order [#22] by reopening and extending the pleading amendment period.
Moreover, Plaintiff’s explanation of his need to amend the Amended Complaint indicates
that his failure to seek leave to amend until this juncture was the result of, at best,
inattention.”).
Finally, Plaintiff argues in his Reply that Defendants will not be unduly prejudiced if
he is permitted to add his proposed promissory estoppel claim. Reply [#135] at 15-17.
Plaintiff asserts that “the underlying facts supporting all of the elements of the promissory
estoppel claim have already been pled, and Defendants have been aware of them since
the filing of the original Complaint.” Id. at 16. Accordingly, Plaintiff argues that “Defendants
have already had ample opportunity to conduct discovery related to any and all of the
factual allegations in Plaintiff’s original Complaint, several of which . . . pertain to Plaintiff’s
promissory estoppel claim.” Id. at 15. The Court is not persuaded by Plaintiff’s argument.
As explained in the Recommendation, undue prejudice under Rule 15 “‘means undue
difficulty in prosecuting [or defending] a lawsuit as a result of a change of tactics or theories
on the part of the other party.’” Recommendation [#150] at 5 (quoting HCA-Healthone LLC
v. Susan Lou Sparks Trust, No. 06-011980-MSK-MEH, 2006 WL 3762024, at *1 (D. Colo.
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Dec. 20, 2006) (unreported decision) (quoting Deakyne v. Comm’rs of Lewes, 416 F.2d
290, 300 (3d Cir. 1969))). “[A] finding of prejudice is not foreclosed when the new claims
arise out of the same subject matter as the previously asserted claims.” Tex. Instruments,
Inc. v. BIAX Corp., No. 07-cv-02370-WDM-MEH, 2009 WL 3158155, at *3 (D. Colo. Sept.
28, 2009) (unreported decision). In its Recommendation, the Court found that Defendants
would have been unduly prejudiced if Plaintiff was allowed to amend his Amended
Complaint to add a claim for promissory estoppel:
The Final Pretrial Conference has occurred, and the parties are now
preparing for trial, which is set for August 22, 2011. Allowing Plaintiff to
amend his Amended Complaint now to add a claim for promissory estoppel
would require Defendants to prepare a new defense based on this new legal
theory. Doing so would distract Defendants from trial preparation. At this
juncture, the Court finds that such distraction would be unduly prejudicial.
Recommendation [#150] at 5. Nothing in Plaintiff’s Reply alleviates the Court’s concerns.
Moreover, if Plaintiff is allowed to add a claim of promissory estoppel, Defendants should
be given an opportunity to file dispositive motions regarding the new claim. Allowing time
to file and adjudicate these motions would almost certainly require rescheduling the trial,
thus delaying the ultimate resolution of this case. See generally 6 Charles Alan Wright et
al., Federal Practice and Procedure § 1488, at 670 (2d ed. 1990) (“[A]s a general rule, the
risk of substantial prejudice increases with the passage of time.”). The Court concludes
that the argument in Plaintiff’s Reply does not warrant altering the Court’s finding that
granting Plaintiff leave to amend is inappropriate given the risk of undue prejudice to
Defendants.
C.

Discovery of Previously Unknown Facts

Plaintiff contends that the Court should reconsider its Recommendation [#150] and
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recommend granting the Motion to Amend [#105] “because significant new evidence was
recently produced to Plaintiff which would have led [him] to file his Motion to Amend sooner
if [he] had known about it sooner.” Motion [#194] at 4; see also id. (“Had Plaintiff had
access to this evidence sooner, . . . he would have filed his Motion to Amend to add a
promissory estoppel claim at that time.”). While Plaintiff may be correct that he would have
filed his Motion to Amend “sooner” if he had received certain documents sooner, this
assertion is inapposite. Plaintiff’s failure to timely file a motion seeking leave to add a
promissory estoppel claim might be excusable if he did not discover the facts necessary
to support the claim until after the December 14, 2009 pleading amendment deadline. But
Plaintiff has not argued – and does not now argue – that he did not know the factual basis
for his proposed promissory estoppel claim until after the pleading amendment deadline.
Instead, Plaintiff has repeatedly stated that he has known the facts underlying his proposed
promissory estoppel claim from the very outset of this case. See, e.g., Motion to Amend
[#105] at 2 (“The underlying facts that form the basis for [the proposed promissory
estoppel] claim are the same underlying facts that form the basis for [Plaintiff’s] current
fraud claims, which are already included in both the initial Complaint and the First Amended
Complaint [#16]. Accordingly, no new or additional discovery will need to be conducted as
a result of this new claim.”); id. at 4 (“[T]he promissory estoppel claim involves the same
set of facts and circumstances as Plaintiff’s existing fraud claims[.]”); id. at 5 (“The
promissory estoppel claim Plaintiff seeks to add in this case is substantially similar to
Plaintiff’s existing fraud claims.”); Reply [#135] at 16 (“[T]he underlying facts supporting all
of the elements of the promissory estoppel claim have already been pled[.]”); id. (“Plaintiff’s
point is that the elements of promissory estoppel are already encompassed in his existing
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factual allegations.”).
Because Plaintiff knew the underlying factual basis for his proposed promissory
estoppel claim from the outset of the case, he must show good cause for his failure to
either (1) seek leave to add the claim before the pleading amendment deadline, or (2) file
a motion seeking to extend the pleading amendment deadline before it expired. See
Recommendation [#150] at 3 (“[Plaintiff] also does not explain why he allowed an entire
year to pass without filing a motion seeking to modify the Scheduling Order [#22] by
reopening and extending the pleading amendment period.”). “[T]he purpose of the deadline
to amend and add contained in the Scheduling Order is to force the parties to make any
known amendments immediately so that all discovery in the case, including the earliest
discovery, is taken with the claims and defenses as the parties expect them to be.”
Sanchez v. City & County of Denver ex rel. Bd. of Water Comm’rs, No. 07-cv-01805-MSKBNB, 2007 WL 4557842, at *1 (D. Colo. Dec. 20, 2007) (unreported decision); see also 6
Wright et al., supra, § 1487, at 643-45, 651 (2d ed. 1990) (noting that where a plaintiff has
had sufficient opportunity to assert a claim, but failed to do so, and where he “knew the
facts on which the claim . . . sought to be added were based at the time the original
pleading was filed,” leave to amend may be denied). Here, Plaintiff admits that he could
have added his proposed promissory estoppel claim at the time he filed his Amended
Complaint [#16] on September 4, 2009. See Reply [#135] at 4 (stating that Plaintiff’s
current counsel was already representing Plaintiff at the time the Amended Complaint was
filed, and admitting that “the delay in adding the [promissory estoppel] claim was caused
by oversight of counsel”). The fact that Plaintiff continued to receive – and continues to
receive – documents from Defendants and nonparties that support his proposed
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promissory estoppel claim does not establish good cause for his failure to seek leave to
assert the claim in a timely manner. While Plaintiff may need the documents he has
recently obtained to ultimately prove his promissory estoppel claim, he did not need them
to plead the claim. In short, a plaintiff should not be permitted to strategically refrain from
adding a claim to his complaint just because he has not yet accumulated all of the evidence
he wants to use to attempt to prove the claim. Otherwise, the pleading amendment
deadline would serve no purpose.
Accordingly, the Court concludes that the fact that Plaintiff is still receiving
documents from Defendants and nonparties as part of the discovery process does not
warrant altering the Court’s finding that Plaintiff failed to show good cause for granting him
leave to add a claim after the pleading amendment deadline.
D.

Conclusion

For the reasons set forth above, the Court concludes that Plaintiff has not provided
valid grounds for the Court to alter its recommendation that the Motion to Amend [#105]
should be denied. Accordingly,
IT IS HEREBY ORDERED that the Motion [#194] is DENIED.
IT IS FURTHER ORDERED that the Court’s Recommendation [#150] stands.

Dated: May 3, 2011

BY THE COURT:
s/ Kristen L. Mix
United States Magistrate Judge
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Kristen L. Mix

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