Title Resources Guaranty Company v. American Title Services Company et al

Filing 58

ORDER denying as moot 38 Motion to Dismiss; granting 51 Motion to Amend/Correct/Modify complaint, by Magistrate Judge Boyd N. Boland on 5/30/2014.(trlee, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 14-cv-00366-RM-BNB
TITLE RESOURCES GUARANTY COMPANY, a Texas corporation,
Plaintiff,
v.
AMERICAN TITLE SERVICES COMPANY, a Colorado corporation,
AMERICA’S HOME TITLE, LLC, a Colorado limited liability company,
AMERICAN TITLE CORP., a Colorado corporation,
ESTATE OF RICHARD TALLEY, a Colorado decedent,
CHERYL TALLEY, individually and in her capacity as successor to Richard Talley or
representative for the Estate of Richard Talley, and
BILL KRIEG, an individual,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the plaintiff’s Motion for Leave to File an Amended Complaint
and Jury Demand [Doc. # 51, filed 4/30/2014] (the “Motion to Amend”). Also pending is the
Motion to Dismiss Verified Complaint and Jury Demand Against Cheryl Talley or
Alternatively for a More Definite Statement [Doc. # 38, filed 3/26/2014] (the “Motion to
Dismiss”). The Motion to Amend [Doc. # 51] is GRANTED, and the Motion to Dismiss [Doc. #
38] is DENIED as moot.
Although the action was commenced on February 10, 2014, it has encountered slow
progress through no fault of the plaintiff. There were early skirmishes for a temporary
restraining order, which was denied. I allowed expedited discovery in order to ascertain and
preserve assets. Bill Krieg was first to respond to the Complaint, filing an answer on February

28, 2014. Cheryl Talley was granted an extension within which to respond, and filed the Motion
to Dismiss on March 26, 2014. American Title Services notified the court on March 17, 2014,
that it had filed a voluntary petition for bankruptcy, and claims against it are subject to the
automatic stay under 11 U.S.C. § 362. Counsel for America’s Home Title were allowed to
withdraw on April 14, 2014. As a result, the scheduling conference was postponed until June 24,
2014.
Whether to allow an amendment to a pleading is controlled by Fed. R. Civ. P. 15(a) and
the cases construing it. The standard is set out in Frank v. U.S. West, Inc., 3 F.3d 1357, 1365
(10th Cir. 1993):
Rule 15(a) provides that leave to amend “shall be freely given
when justice so requires.” Refusing leave to amend is generally
only justified upon a showing of undue delay, undue prejudice to
the opposing party, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or futility of
amendment.
Amendments of pleadings are liberally allowed in recognition of one of the basic policies of the
rules of civil procedure--that pleadings are not an end in themselves but are only a means to
assist in the presentation of a case to enable it to be decided on the merits.
Defendant Cheryl Talley opposes the Motion to Amend, arguing that the information
sought to be added through amendment was known to the plaintiff when the original complaint
was filed and should have been included there. In addition, Talley argues that the amendment is
futile.
As noted, the case is in its earliest stages. No schedule has been entered and only limited
discovery has been allowed to identify and preserve assets. I find that the plaintiff has not
unduly delayed in bringing the amendment. Nor is it obvious that the additional allegations of
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the proposed amended complaint were known to the plaintiff at the time of the original
complaint, which was filed urgently in connection with irregularities discovered during an audit
commenced on February 3, 2014, and following the suicide of Richard Talley, apparently in
response to the audit.
Finally, I cannot say on the record now before me and as a matter of law that the
proposed amendment is futile. To the contrary, in my view Talley’s futility argument “seems to
place the cart before the horse” and attempts improperly to “force a Rule 12(b)(6) motion into a
Rule 15(a) opposition brief.” General Steel Domestic Sales, LLC v. Steelwise, LLC, 2008 WL
2520423 (D. Colo. June 20, 2008).
IT IS ORDERED:
(1)

The Motion to Amend [Doc. # 51] is GRANTED;

(2)

The Clerk of the Court is directed to accept for filing the Amended Complaint and

Jury Demand [Doc. # 51-1]; and
(3)

In view of the Amended Complaint, Talley’s Motion to Dismiss [Doc. # 38] is

DENIED as moot.
Dated May 30, 2014.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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