Mid-America Foundation Supply Inc v. Konga Marine Logistics LLC et al

Filing 84

OPINION AND ORDER DENYING 77 MOTION to Amend/Correct Answer by Defendants/ Cross Defendants Al Malins Insurance Inc, Chuck Hahn. Signed by Magistrate Judge Roger B Cosbey on 10/16/13. (cer)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
MID-AMERICA FOUNDATION SUPPLY,
INC. (D/B/A POSEIDON BARGE),
Plaintiff,
vs.
KONGA MARINE LOGISTICS, LLC;
AL MALINS INSURANCE, INC.; AND
CHUCK HAHN,
Defendants,
KONGA MARINE LOGISTICS, LLC,
Third-Party Plaintiff,
vs.
ABYSS MARITIME, INC.; CERTAIN
UNDERWRITERS AT LLOYD’S LONDON
namely PEMBROKE UNDERWRITING,
SYNDICATE 4000 – 100%; and ATLANTIC
SPECIALITY INSURANCE COMPANY
Third-Party Defendants.

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Cause: 1:12-CV-328

OPINION AND ORDER
I. INTRODUCTION
Before the Court in this breach of contract and negligence case is the Defendants Al
Malins Insurance, Inc. and Chuck Hahn’s Motion to Amend Answer to Include Additional
Notice of Non-Party Fault, filed September 19, 2013. (Docket # 77.) The Defendants seek to
add non-party, Matthew J. Valcourt, an attorney for Cross-Claimant Konga Marine Logistics,
LLC (“Konga”). Konga filed a brief in opposition to the Defendants’ motion on October 2, 2013
(Docket # 81), and the Defendants filed a reply brief on October 7, 2013. (Docket # 83.)

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Although not addressed by either party, because the Defendants filed the instant motion
ten weeks after the July 1, 2013 deadline to amend the pleadings, and have failed to show good
cause for amendment under Federal Rule of Civil Procedure 16(b), the motion will be DENIED.
II. FACTUAL AND PROCEDURAL BACKGROUND
Konga allegedly hired the Defendants, an insurance brokerage and its employee, to
procure proper insurance policies for several barges they had leased to perform dredging
services. The Defendants allegedly procured insurance policies for Konga from (1) Certain
Underwriters at Lloyd’s London, namely Pembroke Underwriting, Syndicate 4000 -100%
(“Lloyds”); and (2) Atlantic Specialty Insurance Company (“Atlantic”). Information about these
insurance policies was discussed through email correspondences between Konga, Valcourt, and
the Defendants.
Later, the owner of the barges discovered that several barges they had leased to Konga
were damaged and asserted a claim against the insurance policies. Lloyd and Atlantic each
denied the claims, stating that proper insurance coverage had not been obtained.
Consequently, the owner of the barges filed suit against the Defendants and Konga on
August 23, 2012. (Docket # 1.) In turn, Konga filed a cross-claim against the Defendants
alleging negligence, breach of contract, and breach of fiduciary duty, on February 5, 2013.
(Docket # 22.) On March 8, 2013, the Defendants filed their Answer to Konga’s cross-claim.
(Docket # 25.)
On May 8, 2013, the parties held a Rule 26(f) Preliminary Pretrial Conference, after
which the Court adopted the Amended Report of the Parties’ Planning Meeting and set July 1,
2013 as “[t]he last date for Defendants Malins and Hahn to seek leave of court to join additional

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parties and to amend the pleadings.” (Docket # 53, 57.)
Nevertheless, more than ten weeks after the July 1, 2013 deadline, on September 19,
2013, the Defendants filed the instant motion. In their motion the Defendants seek to add
Valcourt as a non-party pursuant to Indiana’s Comparative Fault Act. The Defendants argue
they should be allowed to amend their Answer because the discovery deadline is not until
February 28, 2014, and that Konga is not prejudiced by the addition because they had the
information about Valcourt within its control at the time the cross-claim was filed.
In response, Konga argues that Florida’s–not Indiana’s–Comparative Fault Act should be
applied, and the Defendants have not satisfied this Act’s pleading requirements for asserting
non-party liability. In reply, the Defendants argue that their motion satisfies both state’s
Comparative Fault Act pleading requirements and that they should be allowed to amend their
pleadings in accordance with Rule 15.
Both Konga and the Defendants, however, overlook the fact that Defendants’ motion was
filed more than ten weeks after the deadline for amending the pleadings without any effort to
show good cause. Put another way, the Defendants need to first show compliance with Rule 16
before proceeding to the applicability of Rule 15.
III. LEGAL STANDARD
Under Rule 15, a party may amend its pleading once as a matter of course at any time
before a responsive pleading is served; otherwise, it may amend only by leave of the court or by
written consent of the adverse party. Leave to amend is freely given when justice so requires.
Id. However, this right is not absolute, Brunt v. Serv. Emps. Int’l Union, 284 F.3d 715, 720 (7th
Cir. 2002), and can be denied for undue delay, bad faith, dilatory motive, prejudice, or futility.

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Ind. Funeral Dirs. Ins. Trust v. Trustmark Ins. Corp., 347 F.3d 652, 655 (7th Cir. 2003).
Moreover, the requirements of Rule 15 must be read in conjunction with the requirements
of Rule 16, because once the district court has filed a pretrial scheduling order pursuant to Rule
16 establishing a time table for amending pleadings, that rule’s standards control. Menendez v.
Wal-Mart Stores East L.P., No. 1:10-CV-53, 2012 WL 2159250, at *2 (N.D. Ind. June 13, 2012)
(citing Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011); BKCAP, LLC v. Captec
Franchise Trust 2000-1, 3:07-CV- 637, 2010 WL 1222187, at *2 (N.D. Ind. Mar. 23, 2010));
Tschantz v. McCann, 160 F.R.D. 568, 570-71 (N.D. Ind. 1995). Rule 16(b)(3)(A) requires that
the scheduling order “limit the time to join other parties, amend the pleadings, complete
discovery, and file motions.”
Thus, a party seeking to amend a pleading after the final date specified in a scheduling
order must first show “good cause” for the amendment under Rule 16(b); then, if good cause is
shown, the party must demonstrate that the amendment is proper under Rule 15. Tschantz, 160
F.R.D. at 571. A court’s evaluation of good cause is not co-extensive with an inquiry into the
propriety of the amendment under Rule 15. Id. (citing Johnson v. Mammoth Recreations, Inc.,
975 F.2d 604, 607-08 (9th Cir. 1992). The good cause standard focuses on the diligence of the
party seeking the amendment. Id. In other words, to demonstrate good cause, a party must show
that despite its diligence, the time table could not reasonably have been met. Id.
IV. ANALYSIS
Here, the deadline for the Defendants to amend their pleadings was July 1, 2013, and the
Defendants filed their motion on September 19, 2013. Because the Defendants motion was filed
after the deadline, they must first establish “good cause” for the untimely amendment. As

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indicated above, however, because the Defendants overlooked their noncompliance with Rule 16
and proceeded to argue the applicability of Indiana’s Comparative Fault Act and Rule 15, they
have not proffered any reasons establishing “good cause” for their untimely amendment.
Therefore, because the Defendants have failed to demonstrate good cause, the motion will be
DENIED.
Even had the Defendants asserted a good cause argument, they would have difficulty
showing that despite their diligence, Valcourt could not have reasonably been added as a nonparty prior to the July 1, 2013 deadline. The Defendants’ reply brief indicates that the
information about Valcourt–a series of correspondences, dated July 14, 2011, between Hahn,
Konga, and Valcourt indicating that Valcourt was Konga’s attorney1–was produced by the
Defendants to Konga in June 2013. Because the Defendants were aware that Valcourt was
Konga’s attorney in 2011 and because the Defendants were the party that produced these
documents, it is evident that they had the information they now seek as the basis to amend their
answer within their control at the time their initial answer was filed.
As such, the Court is unconvinced that the Defendants could not have, with the exercise
of reasonable diligence, anticipated the need to add Valcourt as a non-party prior to their July 1,
2013 deadline to amend pleadings. Tschantz, 160 F.R.D. at 572 (denying plaintiff’s motion to
amend pleadings because they failed to show good cause where plaintiff was aware they were
suing the wrong defendant prior to the deadline to amend passing); see Menendez, 2012 WL
2159250, at *3 (denying defendant’s motion to amend answer to add nonparty because the

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Specifically, the Defendants Reply Brief Exhibit A states “Please forward Matt [Valcourt] our complete
insurance documents and coverages. Matthew [Valcourt] is our attorney, we have some issues Matthew [Valcourt]
is handling for us.”

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amendment was filed almost a year after the deadline for amendments and defendants failed to
demonstrate good cause).
V. CONCLUSION
For the foregoing reasons, the Defendants’ Motion to Amend Answer to Include
Additional Notice of Non-Party Fault is DENIED.
SO ORDERED.
Enter for the 16th day of October, 2013.
/S/ Roger B. Cosbey
Roger B. Cosbey
United States Magistrate Judge

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