Bakken Waste LLC v. Great American Insurance Company of New York et al

Filing 44

ORDER granting 37 Motion for Leave To Amend Complaint, by Magistrate Judge Michael E. Hegarty on 06/30/15.(nmarb, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 15-cv-00303-CMA-MEH
BAKKEN WASTE, LLC,
Plaintiff,
v.
GREAT AMERICAN INSURANCE COMPANY OF NEW YORK,
MATTHEW GEE & ASSOCIATES, INC., and
MATTHEW GEE,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
Michael E. Hegarty, United States Magistrate Judge.
Before the Court is Plaintiff’s Opposed Motion for Leave to Amend Complaint [filed June
8, 2015; docket #37]. The motion is sufficiently briefed, and oral argument would not materially
assist the Court in its adjudication. For the reasons that follow, the Court grants the Motion.
BACKGROUND
Defendant removed this case to U.S. District Court for the District of Colorado from Denver
County District Court on February 12, 2015. Docket #1. Plaintiff’s Complaint asserts a claim
against its insurer, Defendant Great American Insurance Company of New York (“Great
American”), seeking indemnity for property damage to a wastewater treatment tank that it asserts
should have been covered under a building and personal property insurance policy. Complaint,
docket #5 at 4. Plaintiff also brings claims against the Matthew Gee & Associates Insurance
Agency, Inc. (“MGIA”) and its principal, Matthew Gee (“Gee”) for negligence and breaches of
warranty related to the sale of the Great American insurance policy to Plaintiff. Id. Great American

answered the Complaint on February 18, 2015 (see docket #12); Gee answered the Complaint on
March 13, 2015 (see docket #26). A Scheduling Order set a May 1, 2015 deadline for amendment
of pleadings. Docket #28.
The Court held a Settlement Conference in the case on June 2, 2015. See docket #36. At
the Conference, Plaintiff learned of additional facts and at least one, and potentially other, witnesses
supporting what it asserts are additional claims against Great American. Motion to Amend
Complaint, docket #37 at 2. Plaintiff thus now moves the Court for leave to amend its Complaint
“in order to correct and clarify certain factual allegations, add additional factual allegations, and to
add claims against Great American for violation of C.R.S. §§ 10-3-1115 and 10-3-1116 and bad faith
breach of insurance contract.” Id. at 1-2. Plaintiff asserts that its proposed Amended Complaint will
“clarify the issues to be tried, will not burden the Court, and is not prejudicial to Great American.”
Id.
Great American opposes the Motion because the deadline “is long past” and asserts that
Plaintiff misleads the Court and acts in bad faith in feigning ignorance about the additional fact
witness, “someone that Bakken was aware of all along.” Defendant Great American’s Response,
docket #40 at 1.
ANALYSIS
Because Plaintiff filed his motion after the deadline for amendment of pleadings, granting
Plaintiff’s motion pursuant to Rule 15(a) would require a modification of the Scheduling Order.
Thus, the Court employs a two-step analysis.

First, the Court evaluates whether Plaintiff

demonstrates good cause allowing modification of the Scheduling Order. Second, if Plaintiff shows
good cause, he must also meet the requirements of Fed. R. Civ. P. 15(a).

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I.

Good Cause for Modification under Rule 16(b)
A scheduling order may be modified only upon a showing of “good cause” under Fed. R.

Civ. P. 16(b). The standard for “good cause” is the diligence demonstrated by the moving party in
attempting to meet the Court’s deadlines. Colorado Visionary Acad. v. Medtronic, Inc., 194 F.R.D.
684, 687 (D. Colo. 2000). “Rule 16 erects a more stringent standard [than Rule 15(a)], requiring
some persuasive reason as to why the amendment could not have been effected within the time
frame established by the court.” Id. In order to show good cause, Plaintiff “must provide an
adequate explanation for any delay” in meeting the scheduling order’s deadline. Minter v. Prime
Equip. Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006).
Notably, rigid adherence to the scheduling order is not advisable. Sil-Flo, Inc. v. SHFC, Inc.,
917 F.2d 1507, 1519 (10th Cir. 1990). A failure to seek amendment within the deadline may be
excused if due to oversight, inadvertence or excusable neglect. Id. Additionally, learning
information underlying the amendment through discovery that occurs after the deadline set forth in
the scheduling order constitutes good cause to justify an extension of that deadline. Pumpco, Inc.
v. Schenker Int’l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001).
The Court finds that Plaintiff has demonstrated good cause to modify the Scheduling Order
in this case. First, Plaintiff contends that certain information he seeks to add to his Complaint was
learned through the settlement process. Motion to Amend Complaint, docket #37 at 2. I know this
to be true. Second, there is no indication that Plaintiff has been less than diligent in his pursuit of
discovery in this case. Therefore, the Court finds that a request to act on information first learned
through settlement efforts in this case demonstrates good cause to modify the deadline for
amendment of pleadings. Thus, the deadline for amendment of pleadings in this case is extended

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to June 8, 2015, the date on which Plaintiff filed the present motion. See docket #37-1.
II.

Undue Delay and Prejudice under Rule 15
In the Tenth Circuit, untimeliness alone may be a sufficient basis for denying a party leave

to amend. See Duncan v. Manager, Dep’t of Safety, 397 F.3d 1300, 1315 (10th Cir. 2005); Hayes
v. Whitman, 264 F.3d 1017, 1026 (10th Cir. 2001). The important inquiry is not simply whether
Plaintiff has delayed, but whether such delay is undue. Minter, 451 F.3d at 1206. Delay is undue
“when the party filing the motion has no adequate explanation for the delay,” Frank v. U.S. West,
Inc., 3 F.3d 1357, 1365-66 (10th Cir. 1993), or when “the party seeking amendment knows or should
have known of the facts upon which the proposed amendment is based but fails to include them in
the original complaint.” Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185
(10th Cir. 1990) (quoting State Distribs., Inc. v. Glenmore Distilleries Co., 738 F.2d 405, 416 (10th
Cir. 1984)).
According to Rule 15, once a 21-day period after a responsive pleading to the complaint is
filed lapses, a party may amend its pleading only by leave of the court or by written consent of the
adverse party. Fed. R. Civ. P. 15(a). The grant or denial of leave is committed to the discretion of
the court. See Duncan, 397 F.3d at 1315. The court must heed Rule 15’s mandate that the “court
should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2); see also Foman v.
Davis, 371 U.S. 178, 182 (1962); Duncan, 397 F.3d at 1315. “If the underlying facts or
circumstances relied upon by a [claimant] may be a proper subject of relief, he ought to be afforded
an opportunity to test his claim on the merits.” Foman, 371 U.S. at 182. Leave to amend should be
refused “only on 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

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amendment.” Duncan, 397 F.3d at 1315; see also Foman, 371 U.S. at 182.
In the Tenth Circuit, the “most important ... factor in deciding a motion to amend the
pleadings ... is whether the amendment would prejudice the nonmoving party.” Minter, 451 F.3d
at 1207. “Courts typically find prejudice only when the amendment unfairly affects the defendants
‘in terms of preparing their defense to the amendment.’” Id. (citing Patton v. Guyer, 443 F.2d 79,
86 (10th Cir. 1971)). “Most often, this occurs when the amended claims arise out of a subject matter
different from what was set forth in the complaint and raise significant new factual issues.” Id.
(citations omitted). “As a general rule, a plaintiff should not be prevented from pursuing a valid
claim ... ‘provided always that a late shift in the thrust of the case will not prejudice the other party
in maintaining his defense upon the merits.’” Evans v. McDonald’s Corp., 936 F.2d 1087, 1090-91
(10th Cir. 1991).
Here, the Court does not believe that allowing Plaintiff to amend its Complaint in the manner
requested would cause undue delay or unduly prejudice Defendants at this stage in the litigation.
Discovery was barely more than two months old at the time of the settlement conference in this case.
The discovery period does not end for another seven months. In no respect has there been undue
or prejudicial delay here.
CONCLUSION
Accordingly, for the reasons stated above and based on the entire record herein, the Court
grants Plaintiff’s Opposed Motion for Leave to Amend Complaint [filed June 8, 2015; docket #37].

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Dated at Denver, Colorado, this 30th day of June, 2015.
BY THE COURT:

Michael E. Hegarty
United States Magistrate Judge

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