Chavez et al v. Liberty Acquisitions Servicing, LLC
Filing
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MEMORANDUM OPINION AND ORDER. Plaintiff's motion to amend (Doc. 38) is GRANTED. Entered by Judge John L. Kane on 04/02/15.(jhawk, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-01973-JLK
DEANNA CHAVEZ and SAMANTHA WALKER, minor child,
Plaintiffs,
v.
LIBERTY ACQUISITIONS SERVICING, LLC, a Delaware limited liability company,
Defendant.
MEMORANDUM OPINION AND ORDER
Kane, J.
Before me is Plaintiffs’ Motion for Leave to Amend the Complaint (Doc. 38), filed
February 12, 2015, Defendant’s response (Doc. 40), and Plaintiff’s Reply (Doc. 41). Defendant
has also moved (Doc. 42) to file a sur-reply (Doc. 43) in opposition to Plaintiff’s motion, and
because I agree that Plaintiffs’ reply makes new arguments, that motion is GRANTED, and I
have considered Defendant’s sur-reply as well. For the reasons that follow, Plaintiff’s Motion for
Leave to Amend is GRANTED.
Background
Plaintiffs filed their complaint in this action on July 16, 2014, asserting a claim for
violation of the Fair Debt Collections Act and a claim for negligence arising out of Defendant’s
obtaining a default judgment on a debt and thereby garnishing Plaintiffs’ wages. Under the
operative Revised Scheduling Order in this action (Doc. 37), the deadline to amend the
pleadings was February 12, 2015. On that date, Plaintiffs moved to amend the Complaint in
order to replace their negligence claim with a claim for wrongful garnishment. Doc. 38.
Defendant opposes the motion. See Doc. 40.
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Standard
Under Fed. R. Civ. P. 15(a)(2), a party may amend its complaint only with the court’s
leave, and “[t]he court should freely give leave when justice so requires.” Fed. R. Civ. P.
15(a)(2). The rule's purpose “is to provide litigants the maximum opportunity for each claim to
be decided on its merits rather than on procedural niceties.” Minter v. Prime Equip., 451 F.3d
1196, 1204 (10th Cir. 2006) (internal quotations omitted). Therefore, “[r]efusing 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.” Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir.1993); accord
Foman v. Davis, 371 U.S. 178, 182 (1962).
Analysis
Defendant argues that leave to amend should be denied because (1) Plaintiffs have
unduly delayed in seeking amendment and (2) because the amendment would be futile, as
Colorado has not recognized a common-law claim for wrongful garnishment. Doc. 38 at 6-9.
Although the facts underlying Plaintiffs’ wrongful garnishment claim may have been known to
Plaintiffs earlier than the deadline, because they have met the deadline for amending the
pleadings set in the Scheduling Order, I find that there has been no undue delay in seeking
amendment.
The question of whether the proposed amendment is futile “is functionally equivalent to
the question of whether a complaint may be dismissed for failure to state a claim.” Gohier v.
Enright, 186 F.3d 1216, 1218 (10th Cir. 1999) (citing Jefferson Cnty. Sch. Dist. No. R–1 v.
Moody's Investor's Servs., 175 F.3d 848, 859 (10th Cir. 1999)). When addressing questions of
Colorado law, this Court must try to predict how the Colorado Supreme Court would resolve
those questions. See Blackhawk-Central City Sanitation Dist. v. American Guarantee and
Liability Ins. Co., 214 F.3d 1183, 1188 (10th Cir. 2000). The parties have not cited, and the I
have not found, any cases in Colorado addressing whether Colorado law recognizes a claim for
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wrongful garnishment, and thus this appears to be an issue of first impression in Colorado.
However, I find that the Colorado Supreme Court, if presented with this question, would find a
cause of action for wrongful garnishment under Colorado law. As Plaintiffs point out, “[m]ost
states recognize a cause of action for damages for wrongful garnishment.” 38 C.J.S.
Garnishment § 453; Doc. 38 at 6 & n.14. In addition, the Colorado Court of Appeal has held
that consequential damages are available under tort principles in the similar context of a
wrongful attachment. See C.R.C.P. 102(n)(2); Vanderbeek v. Vernon Corp., 25 P.3d 1242,
1244 (Colo.App. 2000); see also Anderson Boneless Beef, Inc. v. Sunshine Health Care Center,
Inc., 878 P.2d 98, 100 (Colo.App. 1994) (upholding an award of attorney’s fees as a sanction for
wrongful garnishment). I find that Colorado law would not leave Plaintiffs without a remedy
where, as alleged here, Plaintiff was not properly served with the complaint regarding the
underlying debt, the judgment giving rise to the garnishment was obtained by default, and
Plaintiff has suffered consequential damages as a result. Accordingly, I find that Plaintiffs
proposed amendment is not futile.
Conclusion
For the reasons given above, Plaintiff’s motion to amend (Doc. 38) is GRANTED.
Dated: April 2, 2015
s/ John L. Kane
Senior U.S. District Court Judge
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