ONEAMERICA FINANCIAL PARTNERS, INC. v. T-SYSTEMS NORTH AMERICA, INC. et al
ORDER granting 97 Motion for Leave to File Second Amended Complaint and granting 134 Motion for Leave to File Excess Pages in Reply. The Second Amended Complaint for Damages attached to Plaintiff's motion as Exhibit A is deemed timely filed as of the date. Signed by Magistrate Judge Denise K. LaRue on 5/13/2016. (CBU)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
T-SYSTEMS NORTH AMERICA, INC.,
Entry and Order on Plaintiff’s Motion for Leave to File Second Amended Complaint [doc. 97]
and Motion for Leave to File Excess Pages in Reply [doc. 134]
OneAmerica Financial Partners, Inc.’s Motion for Leave to File Second Amended
Complaint, seeking to raise additional claims against Defendant T-Systems North
America, Inc. (“TSNA”) and Defendant T-Systems International GmbH (“TSI”), and
Plaintiff’s Motion for Leave to File Excess Pages in Reply come before the Court. Defendants
oppose the motion for leave to amend. The Court decides as follows.
Plaintiff commenced this action in state court on September 24, 2015, asserting
claims for breach of contract, fraudulent inducement, fraud, negligence, and promissory
estoppel against TSNA and breach of guaranty against its German parent company TSI.
Defendants timely removed the action to this Court and answered the Complaint. TSNA
counterclaimed for breach of contract, fraud, and declaratory relief. The parties’ dispute
arises out of TSNA’s and OneAmerica’s agreement that TSNA would provide
information technology (“IT”) services to OneAmerica. Defendants moved for partial
dismissal for failure to state a claim upon which relief can be granted. TSNA has moved
to bifurcate and for a speedy trial on Count III of its counterclaim, which concerns
OneAmerica’s alleged failure to transition to a new service provider. That motion is
before District Judge Tanya Walton Pratt.
In January 2016, Plaintiff moved for leave to file a First Amended Complaint to add
additional factual information to its fraud claims and to eliminate a promissory estoppel
claim. Leave was granted. On January 26, 2016, Plaintiff filed the First Amended Complaint
for Damages, asserting claims for breach of the parties’ Master Information Technology
Services Agreement (“MISTA”) (Count I), breach of contract relating to the Request for
Proposal/Bid Process Agreement (“RFP”) (Count II), fraudulent inducement (Count III),
fraud (Count IV), and negligence (Count V) against TSNA, and breach of the guaranty
(Count VI) against TSI.
One month later, TSNA moved to partially dismiss the amended complaint for
failure to state a claim. TSNA seeks dismissal of the breach of contract claim under the
RFP and the claims for fraudulent inducement, fraud, and negligence. The response to
the motion to dismiss is not due until 14 days after the Court rules on the pending motion
for leave to amend.
On March 1, 2016, the Case Management Plan (“CMP”) was approved by the
Court as amended. The CMP required the parties to file motions seeking leave to amend
the pleadings by February 29, 2016. The CMP’s deadline for non-expert and liability
discovery is August 30, 2016; the dispositive motion deadline is September 30, 2016.
On March 14, 2016, Plaintiff filed a Motion for Leave to File Second Amended
Complaint. The proposed Second Amended Complaint alleges additional claims arising
out of the parties’ separation under the MITSA. Plaintiff also seeks to amend its claims,
addressing alleged deficiencies raised in TSNA’s motion to dismiss; to assert Counts III
through V against TSI as well as TSNA; and to add claims against both Defendants for
conversion, tortious interference with contract, negligent misrepresentation, and
In April 2016, the parties were still negotiating search terms for electronically
stored information and began discussing a discovery protocol and scheduling
depositions. Document production was under way, but still in the early stages. In midApril, TSNA stated that it would take several weeks for the predictive coding process to
be completed and that it was not likely to be completed before early May. Document
production continued into this month, and the parties have agreed to take 10 depositions
in May and June. Document production is to be completed by July 5, 2016.
TSI’s Chief Executive Officer Reinhard Clemens was deposed on April 18, 2016.
Plaintiff represents that he testified essentially that TSNA and TSI effectively operated as
one company and that there was a mid-level board that would have approved the
OneAmerica deal. [Pl.’s Reply Support Motion Leave File Second Am. Compl., doc. 135 at 7
n.2.] Plaintiff has not provided supporting documentation, but states that it will do so if
the Court deems it necessary. The Court will accept Plaintiff’s representations regarding
Clemen’s testimony, while noting that Defendants have not taken issue with them.
A motion to amend a pleading should be freely granted “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). However, a district court may deny leave for several reasons,
including undue delay, undue prejudice, or futility of amendment. Hukic v. Aurora Loan
Servs., 588 F.3d 420, 432 (7th Cir. 2009). In addition, to amend a pleading after the court’s
deadline to amend pleadings has passed, the moving party must demonstrate “good
cause.” CMFG Life Ins. Co. v. RBS Sec., Inc., 799 F.3d 729, 749 (7th Cir. 2015); Fed. R. Civ.
P. 16(b)(4). In determining whether good cause has been shown, the “the primary
consideration … is the diligence of the party seeking amendment.” Alioto v. Town of
Lisbon, 651 F.3d 715, 720 (7th Cir. 2011).
Furthermore, when a motion to amend is made after the deadline for amendments
has passed, the moving party may be required to show that it “failed to act because of
excusable neglect.” Fed. R. Civ. P. 6(b)(1)(B); Stepp v. Rexnord Indus., Inc., No. 1:13-CV00683-TWP, 2014 WL 6978329, at *5 (S.D. Ind. Dec. 9, 2014).1 Neglect is excusable when
it is harmless. United States v. McLaughlin, 470 F.3d 698, 700–01 (7th Cir. 2006); Stepp, 2014
WL 697829, at *5. Whether to grant or deny a motion to amend is within the Court’s
Plaintiff argues that courts in the Seventh Circuit routinely evaluate motions for leave to amend
without referencing the “excusable neglect” standard. The Court need not decide whether a
moving party must show excusable neglect. See Adams v. City of Indianapolis, 742 F.3d 720, 734
(7th Cir. 2014) (citing “excusable neglect” standard in a parenthetical); Long v. Jasper Chair Co.,
No. 3:12-cv-36-RLY-WGH, 2012 WL 4936471, at *2 (S.D. Ind. Oct. 16, 2012) (“An inference from
the Adams holding that demonstrating excusable neglect pursuant to Rule 6(b)(1)(B) is required
for any motion for leave after the CMP deadline has passed … is unwarranted.”). This is because
OneAmerica has demonstrated both good cause and excusable neglect.
sound discretion. Foman v. Davis, 371 U.S. 178, 182 (1962); McCoy v. Iberdrola Renewables,
Inc., 760 F.3d 674, 685 (7th Cir. 2014).
Plaintiff asserts that it seeks to amend in good faith based on “recent developments
in the parties’ relationship” stemming from the separation process, that is, TSNA’s
alleged failure to cooperate and return OneAmerica’s property. Plaintiff argues that,
although the deadline for amendments expired on February 29 and it did not file its
motion until March 14, nothing in the intervening two weeks occurred that would make
an amendment prejudicial to Defendants.
Defendants respond2 by arguing that Plaintiff has not shown good cause or
excusable neglect. They contest whether the proposed amendment is based on “new”
developments, citing earlier pleadings and filings, the CMP, and a January 29, 2016 letter
by Plaintiff’s counsel discussing separation issues. Defendants claim prejudice arising
from the need to file and brief a motion to dismiss. They also suggest amendment may
impact other deadlines, but they point to no other specific prejudice. Finally, Defendants
argue that the proposed new claims would be futile.
Plaintiff moved for leave to amend within a reasonable time of learning the factual
basis for the new allegations regarding TSI’s purported involvement in the alleged
tortious interference. Before filing its motion to amend, Plaintiff had reviewed some
documents including electronically documents and spoke with witnesses, which it says
led it to believe that TSI was directly involved in the tortious acts alleged in the proposed
Defendants filed virtually identical response briefs.
amendments. In particular, based on Plaintiff’s representations, the April 18 deposition
of TSI’s CEO Clemens disclosed information that may provide a factual basis for its new
Although Defendants argue that “the dispute regarding the separation process
and OneAmerica’s transition to a new outsource provider has been a subject of the
pleading since early October” [TSNA’s Response Brief Opp’n Pl.’s Mot. Leave File Second
Am. Compl., doc. 110 at 4], it seems that the proposed amended claims are based on more
recent, and thus new, factual developments. The pleading citied by Defendants, TSNA’s
counterclaim, focused on the end date of the separation and transition process to a new
provider—events that preceded the October 7, 2015 filing date of its counterclaim. [See
TSNA’s Counter-Complaint and Jury Demand, doc. 19, ¶¶ 63-69 (referring to the Billing
Agreement effective July 1, 2014 and an agreement that the separation be completed
within 12 to 18 months from July 2014).] However, Plaintiff’s new claims seem to have
developed as the separation and transition process continued to deteriorate into 2016.
[See Jan. 29, 2016 letter from Plaintiff’s counsel to TSNA’s counsel, doc. 111 at 1 (referring
to TSNA correspondence dated Jan. 22, 2016 and Jan. 27, 2016, regarding separation and
Even if OneAmerica had a sufficient factual basis for its proposed amended claims
at the time of the January 29 letter, it still moved to amend within six weeks’ time. The
brief delay was not unreasonable. See, e.g., Gold v. YouMail, Inc., No. 1:12-CV-0522-TWPTAB, 2013 WL 652549, at *1 (S.D. Ind. Feb. 21, 2013) (allowing amendment where plaintiff
moved to amend approximately one month after receiving the discovery on which the
amendment was based). Even if OneAmerica had sufficient facts on January 12, 2016,
when TSNA filed its motion to bifurcate Count III of its Counter-Complaint, OneAmerica
acted within a reasonable time to seek leave to amend. See, e.g., Long v. Jasper Chair Co.,
No. 3:12-cv-36-RLY-WGH, 2012 WL 4936471, at *2-3 (S.D. Ind. Oct. 16, 2012) (allowing
amendment to include facts relating to termination where three months elapsed between
the plaintiff’s termination and the motion for leave).
There is no evidence of undue delay, dilatory motive, or bad faith on Plaintiff’s
part. In addition, Defendants have not shown that they will suffer undue prejudice if the
amendment is allowed. They claim prejudice from the expense of briefing a partial
motion to dismiss the Second Amended Complaint, but given the liberality of allowing
amendments and the court’s preference to decide cases on the merits, see Long, 2012 WL
4936471, at *2 (granting leave to amend where motion was filed two days after the
deadline passed), the prejudice, if any, has not been shown to rise to the level of undue
prejudice. As Plaintiff suggests, Defendants’ briefs in opposition to the motion to amend
have started them well on their way to briefing a motion to dismiss directed at the
proposed amended claims.
Defendants suggest that the amendment and another motion to dismiss “may”
impact other case management deadlines. However, discovery is still in the early stages.
The parties only recently agreed to the electronically stored information search terms and
began conducting depositions. Although this case is on an aggressive schedule, allowing
the proposed amendment at this time does not appear to jeopardize the remaining case
Finally, Defendants have argued that the proposed amendments are futile.
“‘District courts may refuse to entertain a proposed amendment on futility grounds when
the new pleading would not survive a motion to dismiss.’” McCoy, 760 F.3d at 685
(quoting Gandhi v. Sitara Capital Mgmt., LLC, 721 F.3d 865, 869 (7th Cir. 2013)). In arguing
that the claims would be futile, Defendants raise factual issues that are beyond resolution
on a motion to dismiss. And it is not at all clear that the proposed amended claims would
be futile. Given the strong judicial preference to decide cases on the merits, see Long, 2012
WL 4936471, at *2, the Court in its discretion finds that the better course is to allow
Plaintiff to file the proposed amended complaint.
Plaintiff’s Motion for Leave to File Excess Pages in Reply [doc. 134] is GRANTED and
Plaintiff’s Motion for Leave to File Second Amended Complaint [doc. 97] is GRANTED. The
Second Amended Complaint for Damages attached to Plaintiff’s motion as Exhibit A [see doc.
97-1] is deemed timely filed as of this date.
SO ORDERED: 05/13/2016
Electronic Distribution to All Counsel of Record
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