American Family Mutual Insurance Company v. Kirby et al
OPINION AND ORDER: DENYING 37 MOTION to Amend/Correct Amend Answer by Dfts Zorine Kirby, William Woldt and DENYING 41 RULE 12(f) MOTION to Strike 40 Reply to Response to Motion, to Amend Answer and Renewed Motion to Amend and Motion for Leave to File Sur-Reply by Pla American Family Mutual Insurance Company. Signed by Magistrate Judge John E Martin on 1/8/2018. (lhc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
AMERICAN FAMILY MUTUAL
ZORINE KIRBY, et al.
CAUSE NO.: 2:15-CV-301-JVB-JEM
OPINION AND ORDER
This matter is before the Court on a Motion to Amend Answer [DE 37], filed by Defendants
Zorine Kirby and William Woldt on June 27, 2017, and on Plaintiff’s Motion to Strike Defendants’
Reply in Support of Motion to Amend Answer and Renewed Motion to Amend and Plaintiff’s
Motion for Leave to File Sur-Reply [DE 41], filed on July 21, 2017.
On August 14, 2015, Plaintiff filed a Complaint for declaratory judgment regarding liability
under an insurance policy. At a Rule 16 Preliminary Pretrial Conference held on February 18, 2016,
the Court set a deadline of June 2, 2016, for Defendants to amend their pleadings and a deadline of
April 1, 2017, for the close of discovery. On June 27, 2017, after discovery had closed, the Moving
Defendants filed the instant Motion to Amend, seeking leave to file an amended answer to add a
counterclaim of bad faith and breach of the covenant of good faith and fair dealing against Plaintiff.
On July 7, 2017, Plaintiff filed a document entitled “Plaintiff’s Response to Defendants’ Motion to
Amend Answer and Plaintiff’s Motion to Strike,” in which Plaintiff objected to the Motion to
Amend and, additionally, asked the Court to strike an affidavit that was attached as an exhibit to the
Motion to Amend. On July 14, 2017, the Moving Defendants filed their reply in support of the
Motion to Amend, and on July 21, 2017, filed a response to the Plaintiff’s request to strike the
affidavit. Plaintiff filed the instant Motion to Strike on July 21, 2017, requesting that the Court strike
the Moving Defendants’ reply in support of their Motion to Amend. The Moving Defendants
responded to that Motion to Strike on July 28, 2017, and Plaintiff filed a reply on August 11, 2017.
Standard of Review
A party may amend a pleading with the Court’s leave, and the Court “should freely give
leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). The decision to grant or deny a motion to
amend lies within the Court’s sound discretion, but leave to amend is “inappropriate where there is
undue delay, bad faith, dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, or futility of the amendment.” Villa v. City of Chicago, 924 F.2d 629,
632 (7th Cir. 1991); Campbell v. Ingersoll Milling Mach. Co., 893 F.2d 925, 927 (7th Cir. 1990).
While “[d]elay on its own is usually not a reason for a court to deny a Motion to Amend . . . the
longer the delay, the greater the presumption against granting leave to amend.” Soltys v. Costello,
520 F.3d 737, 743 (7th Cir. 2008) (quotations and citations omitted). An amendment is futile if the
new claims “could not withstand a motion to dismiss for lack of subject matter jurisdiction or for
failure to state a claim upon which relief can be granted.” Moore v. State of Ind., 999 F.2d 1125,
1128 (7th Cir. 1993).
A scheduling order set by the Court “may be modified only for good cause and with the
judge’s consent.” Fed. R. Civ. P. 16(b)(4). Furthermore, under Federal Rule of Civil Procedure 6,
“[w]hen an act may or must be done within a specified time, the court may, for good cause, extend
the time . . on motion made after the time has expired if the party failed to act because of excusable
neglect.” Fed. R. Civ. P. 6(b)(1). To determine whether the neglect in filing a request for extension
after the deadline expired was excusable, the Court must “tak[e] into consideration all relevant
circumstances including the danger of prejudice to the non-moving party, the length of the delay and
its potential impact on judicial proceedings, the reason for the delay, including whether it was within
the reasonable control of the movant, and whether the movant acted in good faith.” Marquez v.
Mineta, 424 F.3d 539, 541 (7th Cir. 2005) (quotations and citations omitted).
The Moving Defendants filed their Motion to Amend more than a year after the deadline to
amend the pleadings and almost three months after the close of discovery. In their Motion to Amend,
the Moving Defendants acknowledge that the 21-day period in which they could have amended their
pleading as a matter of course under Federal Rule of Civil Procedure 15(a) has passed and that
discovery has closed. Nevertheless, they argue that delay on its own is not enough reason to deny
an otherwise-valid Motion to Amend. The remainder of the argument centers on the merits of the
proposed counterclaim, which is based chiefly on events alleged to have occur in connection with
a mediation in April 2015. However, the Moving Defendants do not mention that the deadline to
amend their pleading pursuant to the Court’s scheduling order expired more than a year earlier. They
do not include any information regarding the reason for their delay in requesting an extension to the
deadline to amend their pleading, nor does their motion provide good cause for granting any
extension. Plaintiff argues that there is no good cause to extend the deadline for amending pleadings
in this matter. Additionally, Plaintiff argues that even if the Court were to consider the Motion to
Amend on its merits, the proposed counterclaim was compulsory, arising out of the same facts that
gave rise to the original suit, and was therefore waived long ago. In their reply, moving Defendants
argue that a February 24, 2017, state court judgment against them constituted a “new fact” that they
did not know of prior to the deadline to amend their answer, and creates good cause for their belated
The Moving Defendants did not move for leave to amend until over a year after the deadline
to amend. “In making a Rule 16(b) good-cause determination, the primary consideration for district
courts is the diligence of the party seeking amendment.” Alioto v. Town of Lisbon , 651 F.3d 715,
720 (7th Cir. 2011) (citations omitted). The Moving Defendants’ proposed counterclaim is based
on events that occurred in April 2015, before this lawsuit was even filed. The Moving Defendants
did not act diligently – that is, carefully, conscientiously – to ensure that the appropriate
counterclaims were included with their answer before the time expired. Although they argue that
the February 24, 2017, state court judgment against them was a new event giving raise to the
counterclaim, that fact does not create good cause to extend the amendment deadline. The state
lawsuit was pending for some time prior to judgment, and the Moving Defendants had ample notice
that Plaintiff did not intend to defend or indemnify them in that suit. Moreover, even if the state
court judgment constituted a “new fact” giving rise to the counterclaim, the Moving Defendants still
waited five months between that judgment and the filing of their Motion to Amend. The Court
therefore finds no good cause for granting the requested extension and concludes that the Moving
Defendants’ delay in seeking to extend that deadline was not due to excusable neglect. Furthermore,
allowing the Moving Defendants to assert a counterclaim at this late stage of the proceedings would
unduly prejudice Plaintiff and delay the proceedings. Accordingly, it is inappropriate to allow the
amendment or to reopen discovery at this time.
Plaintiff moves to strike the Moving Defendants’ reply brief, repeatedly reiterating the wellsettled proposition that arguments first raised in a reply brief are waived. Here, the arguments raised
by the Moving Defendants in the reply brief were not “new;” they were posed in reply to a challenge
raised by Plaintiff in its response. Plaintiff has had sufficient opportunity to respond to the
arguments. Plaintiff also requests leave to file a sur-reply in opposition to the Motion to Amend, a
briefing that is unnecessary in this case. Finally, Plaintiff also requests that the Court strike the
affidavit of William Woldt, attached as an exhibit to the Motion to Amend. The Court did not
consider the affidavit of Mr. Woldt in determining that amendment is inappropriate, so Plaintiff’s
request is moot.
For the foregoing reasons, the Court hereby DENIES the Motion to Amend Answer [DE 37]
and DENIES Plaintiff’s Motion to Strike Defendants’ Reply in Support of Motion to Amend
Answer and Renewed Motion to Amend and Plaintiff’s Motion for Leave to File Sur-Reply .
SO ORDERED this 8th day of January, 2018.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
All counsel of record
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