R3 Composites Corporation v. G&S Sales Corp.

Filing 101

OPINION AND ORDER: Defendant's Motion for Leave to File Sur-Reply Brief Regarding Plaintiff's Motion for Leave to File Supplemental Complaint or in the Alternative for Judicial Notice of Facts Relating to MDG Sales Corporation 87 is GR ANTED. The Clerk is DIRECTED to show Defendants proposed surreply (ECF 87-3) as filed. Plaintiff is afforded to and including 10/21/2020, to file a surresponse, not to exceed five pages, if it deems necessary. Signed by Magistrate Judge Susan L Collins on 10/14/2020. (shk)

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
R3 COMPOSITES CORPORATION,
Plaintiff,
v.
G&S SALES CORP.,
Defendant.

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Cause No. 1:16-cv-00387-HAB-SLC

OPINON AND ORDER
Before the Court is a Motion for Leave to File Sur-Reply Brief Regarding Plaintiff’s
Motion for Leave to File Supplemental Complaint or in the Alternative for Judicial Notice of
Facts Relating to MDG Sales Corporation, filed by Defendant on August 25, 2020. (ECF 87).
Plaintiff filed a memorandum in opposition to the motion on September 4, 2020 (ECF 92), and
Defendant filed a reply on September 7, 2020 (ECF 95). Accordingly, the matter is ripe for
ruling. For the following reasons, Defendant’s motion (ECF 87) is GRANTED.
A. Background
By way of background, Plaintiff filed its Motion for Leave to File Supplemental
Complaint on July 24, 2020, seeking to add a claim that Plaintiff is entitled to “50% of the
commissions and other amounts which [Defendant] may recover in this action,” because Mark
Glidden, a former employee of Plaintiff and representative of Defendant, assigned to Plaintiff his
rights to any such recovery obtained by Defendant in this action. (ECF 81). Defendant opposes
that motion on the grounds that allowing Plaintiff to supplement its complaint would
unnecessarily complicate and delay this action, in part because it would require a determination
of whether there was any agreement between Defendant and Glidden that would give rise to any
rights for him to assign to Plaintiff. (ECF 84 ¶ 5; see also ECF 85 at 16-21). Defendant

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contends that any such agreement concerning commissions was between it and MDG Sales
Corporation (“MDG”), a corporation of whom Glidden was the sole shareholder. (Id.). Further,
Defendant asserts that allowing Plaintiff to amend its complaint would require MDG to be joined
in this action as an indispensable party under Federal Rule of Civil Procedure 19, destroying
diversity and divesting this Court of subject-matter jurisdiction. (ECF 85 at 21-26).1
In its reply, Plaintiff asserts that there was in fact an agreement between it and Glidden
individually (ECF 86 at 1-2), but in any event, that MDG was automatically dissolved in 2012
after it had failed to file its annual reports as required by Michigan law (id. at 3-4). Thus, by
application of Michigan law, MDG’s remaining assets—including its rights vis-à-vis Plaintiff—
passed to its sole shareholder, Mark Glidden. (Id.). Defendant, in its current motion, seeks leave
to file a surreply because on August 19, 2020, MDG filed its overdue annual reports, and
according to Defendant, that means MDG’s corporate existence has been renewed “‘as though a
dissolution . . . had not taken place.’” (ECF 87 ¶ 4 (quoting Mich. Comp. Laws § 450.1925(2))).
In its memorandum in opposition to the motion for leave to file a surreply, Plaintiff primarily
asserts that the motion should be denied as it “is of little import to the issue before the Court,”
because allowing Plaintiff to bring its supplemental claim would facilitate the “efficient
administration of justice” regardless of MDG’s status. (ECF 92 at 2-3). Further, Plaintiff
accuses Defendant of engaging in a “shifting sands approach to this litigation,” and claims that
allowing Defendant to file a surreply would allow briefing of this matter to “go on in perpetuity.”
(Id. at 2). In its reply, Defendant contends that “[t]he Court should be aware of the new facts
when deciding [Plaintiff’s] motion for leave to file a supplemental complaint.” (ECF 95 at 4).

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MDG has since filed a motion to intervene in this matter which is also currently pending. (ECF 90).

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B. Legal Standard
The Local Rules permit parties to file a motion, a response, and a reply, but do not
contemplate the filing of a surreply. Lafayette Life Ins. Co. v. City of Menasha, Wis., No. 4:09
CV 64, 2010 WL 4553667, at *1 (N.D. Ind. Nov. 3, 2010) (citing N.D. Ind. L.R. 7-1(a)).
Accordingly, “[t]his Court generally doesn’t permit litigants to file a surreply brief.” Hall v.
Forest River, Inc., No. 3:04-CV-259-RM, 2008 WL 1774216, at *1 n.1 (N.D. Ind. Apr. 15,
2008) (citation omitted). The Court, however, has allowed a surreply when it raises or responds
to a new issue or development in the law. See id.; see also Merril Lynch Life Ins. Co. v. Lincoln
Nat. Life Ins. Co., No. 2-09-CV-158, 2009 WL 3762974, at *1 (N.D. Ind. Nov. 9, 2009) (citation
omitted).
C. Analysis
Here, there seems to be little doubt that MDG’s purported reinstatement is a new factual
matter which did not occur until after Defendant filed its response to Plaintiff’s motion for leave
to supplement its complaint. Further, without addressing the merits of Plaintiff’s motion for
leave, the Court is cognizant of how the dispute regarding Defendant’s relationship with Glidden
individually or MDG could be relevant to whether or not Defendant would suffer undue
prejudice if Plaintiff were permitted to supplement its complaint. See In re Ameritech Corp., 188
F.R.D. 280, 283 (N.D. Ill. July 14, 1999) (“A motion for leave to amend will be denied when the
timing of such amendment would cause ‘undue prejudice’ to the opposing party. Undue
prejudice occurs when the amendment ‘brings entirely new and separate claims, adds new
parties, or at least entails more than an alternative claim or a change in the allegations of the
complaint’ and when the additional discovery is expensive and time-consuming.” (internal
citations omitted)); see also Masonite Corp. v. Craftmaster Mfg., Inc., No. 09 cv 2131, 2011 WL

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1642518, at *1 (N.D. Ill. Apr. 29, 2011) (“To determine whether ‘just terms’ exist for motions to
supplement under Rule 15(d), the court uses the same factors as those used for motions to amend
under 15(a).”).
Additionally, Plaintiff’s fear that granting leave to file a surreply would allow briefing of
this matter to continue “in perpetuity” is unfounded. The Court notes that Defendant has already
filed its proposed surreply as an attachment to its motion. (ECF 87-3). As such, Plaintiff has
already had an opportunity to evaluate Defendant’s proposed surreply, and by Plaintiff’s own
words, finds its contents of “little import” to the issue before the Court. (ECF 92 at 2-3). The
Court does agree with Plaintiff, though, that because Defendant is being granted leave to file a
surreply, Plaintiff should be granted leave to file a surresponse “as a matter of equity.” (Id. at 2).
Accordingly, Plaintiff is afforded to and including October 21, 2020, to file a surresponse, not to
exceed five pages, if it deems necessary. After that, the Court will consider Plaintiff’s Leave to
File Supplemental Complaint (ECF 81) fully briefed.
C. Conclusion
In summary, Defendant’s Motion for Leave to File Sur-Reply Brief Regarding Plaintiff’s
Motion for Leave to File Supplemental Complaint or in the Alternative for Judicial Notice of
Facts Relating to MDG Sales Corporation (ECF 87) is GRANTED. The Clerk is DIRECTED to
show Defendant’s proposed surreply (ECF 87-3) as filed. Plaintiff is afforded to and including
October 21, 2020, to file a surresponse, not to exceed five pages, if it deems necessary.
SO ORDERED.
Entered this 14th day of October 2020.
/s/ Susan Collins
Susan Collins
United States Magistrate Judge

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