BLAKLEY et al v. CELADON GROUP, INC. et al
ORDER denying 62 Motion to Amend/Correct - The Court DENIES Plaintiffs' request for leave to file its Third Amended Complaint nunc pro tunc and GRANTS Plaintiffs an extension of seven days from the date of this Order to file its response to Celadon's Motion to Dismiss. (See Order.) Signed by Judge Larry J. McKinney on 3/2/2017. (LDH)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
WILLIAM BLAKLEY on behalf of
himself and those similarly situated,
HELEN BLAKLEY on behalf of herself
and those similarly situated, and
KIMBERLY SMITH on behalf of
herself and those similarly situated,
CELADON GROUP, INC.,
CELADON TRUCKING SERVICES,
QUALITY COMPANIES, LLC,
QUALITY EQUIPMENT LEASING,
JOHN DOES 1-10,
ORDER ON MOTION TO FILE AMENDED COMPLAINT NUNC PRO TUNC
This matter comes before the Court on Plaintiffs’, William Blakely, Helen Blakely,
and Kimberly Smith, on behalf of themselves and all other similarly situated (collectively,
“Plaintiffs’”), Motion to File Amended Complaint Nunc Pro Tunc, or in the Alternative,
Extend the Time to Respond to Defendants’ Motion to Dismiss (the “Motion to Amend”).
Dkt. No. 62. In their Motion to Amend, Plaintiffs request that the Court consider its Third
Amended Complaint or, in the alternative, grant Plaintiffs a seven-day extension to
respond to the Motion to Dismiss filed by Defendants, Celadon Group, Inc., Celadon
Trucking Services, Inc., Quality Companies, Inc., and Quality Equipment Leasing, Inc.
(collectively, “Celadon”). Id.
I. BACKGROUND & ARGUMENTS
Plaintiffs initiated this action on February 12, 2016, by filing its original Complaint
against Celadon. Dkt. No. 1. On April 13, 2016, Plaintiffs filed their First Amended
Complaint, Dkt. No. 21, and Celadon answered the First Amended Complaint on May 2,
2016. Dkt. No. 24. In response to the Court’s December 2, 2016 Order dismissing Counts
IV, V, and VI of Plaintiffs’ First Amended Complaint without prejudice, Dkt. No. 50,
Plaintiffs filed their Second Amended Complaint on December 15, 2016. Dkt. No. 52.
The Amended Case Management Plan approved on July 6, 2016, bifurcated
discovery in this action to allow the parties to conduct pre-certification discovery to inform
Plaintiffs’ anticipated motion for conditional and class certification. Dkt. No. 36 at 7. The
Amended Case Management Plan set the pre-certification discovery deadline for
December 19, 2016, Id., but on December 21, 2016, the Court granted the parties’ Joint
Motion to Extend the pre-certification discovery deadline to March 6, 2017. Dkt. No. 56.
To date, the parties have conducted extensive pre-certification discovery, including
depositions of each of the named plaintiffs and several Celadon employees, as well as
substantial written discovery. Dkt. No. 63 at 5, Ex. A.
On January 12, 2017, Celadon filed its Motion to Dismiss Counts IV, V, and VI of
Plaintiffs’ Second Amended Complaint, pursuant to Federal Rules of Civil Procedure 8(a)
and 12(b)(6) (the “Motion to Dismiss”). Dkt. No. 59. On January 25, 2017, one day before
the deadline to respond to Celadon’s Motion to Dismiss, Plaintiffs filed their Third
Amended Complaint. Dkt. No. 61. In their Third Amended Complaint, Plaintiffs seek to
name Element Financial Corporation (“Element”) as a defendant and to assert a claim of
civil conspiracy against all defendants. Id. Although the Court informed Plaintiffs on
January 26, 2017, that they would need to seek leave of the Court to amend their
complaint, Plaintiffs believed that they could file their Third Amended Complaint as a
matter of course pursuant to Federal Rule of Civil Procedure 15 (“Rule 15”), after Celadon
filed its Motion to Dismiss. See Dkt. No. 63, Ex. A-1.
Plaintiffs filed their Motion to Amend on January 30, 2017, in which they argue that
they could amend their pleading as a matter of course following Celadon’s Motion to
Dismiss under Rule 15, but seek leave of the Court to amend “out of an abundance of
caution.” Dkt. No. 62, ¶¶ 7-8. Plaintiffs further assert that their Third Amended Complaint
is necessary because Plaintiffs only learned about the extent of Element’s involvement in
relation to the claims at issue in this action through pre-certification discovery efforts and
indicate that their new allegations “do not make changes to the factual pleadings
challenged in [the] Motion to Dismiss.” Id. at ¶¶ 12-14. If the Court were to deny them
leave to amend their pleading, Plaintiffs alternatively request that the Court grant them an
extension of seven days to file their response to Celadon’s Motion to Dismiss. Id. at 3.
In response to Plaintiffs’ Motion to Amend, Celadon argues that Plaintiffs should
not be given leave to amend their pleading because allowing such an amendment would
(1) unduly delay this litigation, (2) unduly prejudice the defendants in this action, (3) fail
to cure the deficiencies in Plaintiffs’ Second Amended Complaint, and (4) be futile. Dkt.
No. 63 at 5-10. Celadon also contends that Plaintiffs should not receive an extension of
time to respond to its Motion to Dismiss because Plaintiffs could have responded to the
Motion to Dismiss within the permissible time period while simultaneously filing its Third
Amended Complaint since, as Plaintiffs concede, the Third Amended Complaint did not
address the allegations challenged in the Motion to Dismiss. Id. at 10. Furthermore,
Celadon asserts that Plaintiffs’ misinterpretation of Rule 15 does not meet the standard
of “excusable neglect” to justify granting an extension of time after the deadline for a
response has expired. Id. at 10-11.
A. LEAVE TO AMEND
Under Rule 15(a)(1), “[a] party may amend its pleading once as a matter of course”
within (1) twenty-one days of serving the pleading, (2) twenty-one days after service of a
responsive pleading, or (3) twenty-one days “after service of a motion under Rule 12(b),
(e), or (f).” In all other instances, “a party may amend its pleading only with the opposing
party’s written consent or the court’s leave,” and “[t]he court should freely give leave when
justice so requires.” Fed. R. Civ. P. 15(a)(2).
While Plaintiffs rely on Rule 15 to contend that their Third Amended Complaint
could be filed as a matter of course, Plaintiffs “effectively used up” their right to amend
their pleading as a matter of course by amending their complaint for the first time on April
13, 2016, and “[a]ny further amendment required leave of the court.”
Silverstein, 939 F.3d 463, 471 (7th Cir. 1991). See also, Rodgers v. Lincoln Towing Serv.,
Inc., 771 F.2d 194, 203 (7th Cir. 1985) (“[A] party has a right to amend his pleading ‘once
as a matter of course at any time before a responsive pleading is served,’ and Rodgers
has already amended his complaint once.”) (internal citations omitted); Davis v.
Anderson, No. 2:16-CV-120-PPS-PRC, 2016 WL 5724470 at *1 (N.D. Ind. Sept. 30,
2016) (“Though [p]laintiffs had the right to amend their pleading once as a matter of
course, they have already amended their pleading once, so that right has been
extinguished.”). Therefore, in order for Plaintiffs to amend their pleading, or for the Court
to consider Plaintiffs’ Third Amended Complaint, Plaintiffs must obtain leave of the Court.
Although Rule 15 requires that leave to amend a pleading be freely given as justice
requires, the Court has “ʻbroad discretion to deny leave to amend where there is undue
delay, bad faith, dilatory motive, repeated failure to cure deficiencies, undue prejudice to
the defendants, or where the amendment would be futile.’” Hueck v. Aurora Loan Servs.,
588 F.3d 420, 432 (7th Cir. 2009) (quoting Arreola v. Godinez, 546 F.3d 788, 796 (7th
Cir. 2008)). Delay alone may be insufficient to deny leave to amend; the degree of
prejudice to an opposing party is typically considered a more significant factor when
determining whether denial of leave is justified. See Dubicz v. Commonwealth Edison
Co., 377 F.3d 787, 792-93 (7th Cir. 2004) (quoting Park v. City of Chicago, 297 F.3d 606,
612 (7th Cir. 2002)).
Plaintiffs’ request for leave to amend is seemingly guided by a dilatory motive and
would create an undue delay in this litigation. Although Plaintiffs argue that they did not
understand the significance of Element’s role in connection to the misconduct alleged in
this action as it relates to the putative class, Dkt. No. 65 at 2, Plaintiffs noted in their Third
Amended Complaint that each of the named plaintiffs entered into agreements with
Element in 2015. Dkt. No. 61, ¶¶ 45-49. Specifically, the Third Amended Complaint
alleges that all three named plaintiffs entered into agreements with Element in 2015 that
required them to restrict their use of leased vehicles solely to use for Celadon. Id. at ¶¶
William Blakely and Kimberly Smith also entered into agreements with
Element in 2015, in which they assigned certain amounts of their earnings to Element to
pay for tools necessary to perform their jobs.
Id. at ¶¶ 47, 49.
Based on these
agreements between the named plaintiffs and Element, Plaintiffs have been on notice
that Element could be a proper defendant in this action since its inception. Plaintiffs
further admit that each of their prior complaints included the factual allegations giving rise
to their new claim of civil conspiracy. Dkt. No. 65 at 7.
Because Plaintiffs were on notice of Element’s involvement with the claims in this
action, and because Plaintiffs alleged the facts necessary that support their new civil
conspiracy claim in each of their prior complaints, there is no reason why Plaintiffs could
not have included these new aspects of their Third Amended Complaint in an earlier
pleading. Plaintiffs seemingly only assert these new allegations now in an attempt to
render Celadon’s Motion to Dismiss moot. See id. at 12 (arguing that filing an amended
complaint “moots any pending motion to dismiss a previous complaint”). Furthermore,
allowing Plaintiffs to amend their pleading to make allegations that could have been made
in Plaintiffs’ initial Complaint at the close of the designated pre-certification discovery
period would unduly delay the adjudication of this action.
Celadon and Element would also be unduly prejudiced if the Court were to allow
Plaintiffs to amend their pleading. If the Court granted Plaintiffs leave to amend to allow
them to name Element as a new defendant at this time, Element would likely be unable
to participate in any pre-certification discovery prior to the March 6, 2017, deadline,
despite being potentially liable to the putative class. This would be especially prejudicial
to Element because, as stated above, Plaintiffs were on notice of Element’s role in this
action and could have named Element as a defendant at the beginning of this litigation.
Celadon would also be prejudiced if the Court were to grant Plaintiffs leave to amend now
because Celadon, which has been conducting extensive pre-certification discovery, likely
would have conducted pre-certification discovery relating to this civil conspiracy claim as
well if it had known Plaintiffs would assert such a claim. However, because Plaintiffs seek
leave to amend so close to the March 6, 2017, pre-certification discovery deadline,
Celadon would likely be precluded from conducting any pre-certification discovery in
relation to Plaintiffs’ new claim of civil conspiracy.
Celadon further argues that Plaintiffs’ new claim for civil conspiracy is futile
because Indiana law does not recognize such claims. Dkt. No. 63 at 9-10. A civil
conspiracy under Indiana law is defined as “a combination of two or more persons who
engage in a concerted action to accomplish an unlawful purpose or to accomplish some
lawful purpose by unlawful means.” Birge v. Town of Linden, 57 N.E.3d 839, 845 (Ind.
2016) (internal quotations omitted). While it is true that Indiana law does not recognize
civil conspiracy as an independent cause of action, a plaintiff may be entitled to damages
as a result of a civil conspiracy. See Best Chair Inc. v. Factory Direct Wholesale, LLC,
121 F. Supp. 3d 828, 839 (S.D. Ind. 2015). Although Indiana law clearly permits recovery
of damages resulting from a civil conspiracy when a plaintiff asserts an underlying tort,
see Birge, 57 N.E.3d at 846, it is not clear whether Indiana law would allow a plaintiff to
recover damages for a civil conspiracy to violate statutory rights, like those at issue in this
case. The Court need not decide whether the Plaintiffs’ claim of civil conspiracy is futile
in this instance, however, because the Court denies Plaintiffs leave to amend based on
dilatory motive, undue delay, and undue prejudice.
B. EXTENSION OF TIME TO RESPOND TO MOTION TO DISMISS
In their Motion to Amend, Plaintiffs alternatively request that the Court grant them
an extension of seven days in which to file their response to Celadon’s Motion to Dismiss.
Dkt. No. 62 at 3. A court may grant an extension of time, for good cause, to a party after
the deadline for action has passed “if the party failed to act because of excusable neglect.”
Fed. R. Civ. P. 6(b)(2). A court will consider “ʻall relevant circumstances surrounding the
party’s omission’” when determining whether excusable neglect exists, including “the
danger of prejudice, the length of the delay and its potential impact on judicial
proceedings, the reason for the delay, and whether the movant had acted in good faith.”
Lewis v. School Dist. #70, 523 F.3d 730, 740 (7th Cir. 2008).
While “[t]he excusable neglect standard can never be met by a showing of inability
or refusal to read and comprehend the plain language of the federal rules,” a plausible
misinterpretation of a federal rule can justify finding excusable neglect. Prizevoits v. Ind.
Bell Tel. Co., 76 F.3d 132, 133-34 (7th Cir. 1996) (internal quotations omitted). See also,
Lewis, 523 F.3d at 740; Robb v. Norfolk & W. R. R. Co., 122 F.3d 354, 360-61 (7th Cir.
1997). Cf. Lorenzen v. Emps. Ret. Plan of the Sperry and Hutchinson Co., Inc., 896 F.2d
228, 231-32 (7th Cir. 1990); Parke-Chapley Constr. Co. v. Cherrington, 865 F.2d 907,
911-12 (7th Cir. 1989). Even if the proper legal interpretation of a particular rule is
available, an attorney’s misinterpretation of the rule can be considered excusable neglect
if the attorney acted in good faith. See Feeder Line Towing Serv., Inc. v. Toledo, P. & W.
R.R. Co., 539 F.2d 1107, 1109 (7th Cir. 1976) (“Although the resolution to this apparent
conflict [between a statutory provision of law and a rule of court] was within access of
counsel, we cannot say that the district court abused its discretion in finding counsel’s
good faith, though erroneous interpretation of the law ‘excusable neglect.’”).
Although Seventh Circuit law makes clear that a complaint cannot be amended as
a matter of course after the complaint is amended for the first time, see Perkins, 939 F.3d
at 471, a party’s inability to file subsequent amended pleadings as a matter of course
within twenty-one days after an opposing party filed a Rule 12(b) motion is not readily
apparent from Rule 15’s plain language. Therefore, Plaintiff’s interpretation of Rule 15,
which would have permitted them to file their Third Amended Complaint as a matter of
course, was arguable and constitutes excusable neglect.
Furthermore, there is no
evidence that Plaintiffs acted in bad faith in formulating its interpretation of Rule 15, and
it is unlikely that Celadon would prejudiced by the delay in Plaintiffs’ response to their
Motion to Dismiss. Because Plaintiffs’ misinterpretation of Rule 15 establishes excusable
neglect, the Court will grant Plaintiffs a seven-day extension in order to respond to
Celadon’s Motion to Dismiss.
For the foregoing reasons, the Court DENIES Plaintiffs’ request for leave to file its
Third Amended Complaint nunc pro tunc and GRANTS Plaintiffs an extension of seven
days from the date of this Order to file its response to Celadon’s Motion to Dismiss.
IT IS SO ORDERED this 2d day of March, 2017.
LARRY J. McKINNEY, JUDGE
United States District Court
Southern District of Indiana
Adam C. Smedstad
SCOPELITIS GARVIN LIGHT HANSEN & FEARY P.C.
Christopher C. Heery
SCOPELITIS GARVIN LIGHT HANSON & FEARY P.C.
SCOPELITIS GARVIN LIGHT HANSON & FEARY PC
Braden Kenneth Core
SCOPELITIS GARVIN LIGHT HANSON & FEARY PC
Christopher J. Eckhart
SCOPELITIS GARVIN LIGHT HANSON & FEARY PC
Gregory M. Feary
SCOPELITIS GARVIN LIGHT HANSON & FEARY PC
Justin L Swidler
Matthew D. Miller
Richard S. Swartz
SWARTZ SWIDLER LLC
Joshua Samuel Boyette
SWARTZ SWIDLER, LLC
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