FORD MOTOR CREDIT COMPANY LLC v. JIM TRUE FORD MERCURY, INC. et al
ORDER denying Defendants Jim True Ford Mercury and James E. True's 155 Motion for Leave to File a second amended answer, second amended counterclaim, and first third party complaint. See Order for details. Signed by Magistrate Judge Tim A. Baker on 9/9/2021. (SWM)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
FORD MOTOR CREDIT COMPANY LLC,
JIM TRUE FORD MERCURY, INC.
d/b/a JIM TRUE FORD, INC.,
JAMES E. TRUE Individually,
FCN BANK NATIONAL ASSOCIATION
d/b/a FCN BANK,
ORDER ON MOTION FOR LEAVE TO FILE
SECOND AMENDED ANSWER, SECOND AMENDED COUNTERCLAIM,
AND FIRST THIRD PARTY COMPLAINT
Before the Court is a motion for leave to file a second amended answer, second amended
counterclaim, and first third party complaint by Defendants Jim True Ford Mercury, Inc. d/b/a
Jim True Ford, Inc. and James E. True. Defendants allege that since the entry of the Court's
February 23, 2021, order on Plaintiff Ford Motor Credit Company LLC's motion to dismiss,
"additional facts have been made known to the Counterclaim Plaintiffs by investigation of
counsel that give rise to causes of action at the time of the filing of the Second Amended
Counterclaim allowing for affirmative monetary recovery against Ford Credit." [Filing No. 155,
at ECF p. 3.] Defendants predominately rely on claims of delays necessitated by the COVID-19
pandemic, as well as unsubstantiated claims of theft and interference by unknown third persons.
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For reasons set forth in more detail below, Defendants' motion [Filing No. 155] is denied.
Defendants do not set forth good cause for seeking these amendments almost 17 months after the
Case Management Plan deadline for amending pleadings and almost six months after the Court's
ruling on Plaintiff's motion to dismiss. Moreover, this litigation has been pending for almost two
years. The Court recognizes the hardships faced by all parties due to the current landscape of the
global pandemic and has freely granted leave for extensions of time as needed. However,
consistent with Fed. R. Civ. P. 1, the Court and the parties are charged with securing the just,
speedy, and inexpensive determination of this action. To allow additional amendments and
claims at this stage would only further derail resolution of this matter. Thus, Defendants' motion
Ford Credit initiated its complaint against Defendants on October 28, 2019. [Filing No.
1.] On December 23, 2019, the True Defendants filed their answer and counterclaim. [Filing
No. 37; Filing No. 38.] On January 13, 2020, Ford Credit filed its motion to dismiss Defendants'
counterclaim. [Filing No. 40.] Defendants amended their counterclaim as a matter of right
pursuant to Fed. R. Civ. P. 15. [Filing No. 65.] On March 27, 2020, Ford Credit moved to
dismiss Defendants' first amended counterclaim. [Filing No. 67.] On May 13, 2020, Defendants
also filed an amended answer adding additional affirmative defenses. [Filing No. 85.]
On February 23, 2021, following motions for extensions of time to file response and
reply briefs and an unsuccessful attempt at settling the matter in a settlement conference with the
undersigned magistrate judge, the Court entered its order on Ford Credit's motion to dismiss.
[Filing No. 113.] The Court dismissed Defendants' counterclaims for: (1) breach of contract; (2)
fraud, trickery, and conversion; (3) estoppel; (4) tortious interference with contracts; (5)
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unconscionable contract; and (6) breach of fiduciary duty. [Filing No. 113.] However, the Court
allowed Defendants' counterclaim to proceed for defamation based on a statement purportedly
made by employee Bryan Banks.
Since the entry of the Court's dismissal order, the parties engaged in discovery and
completed all liability discovery by the deadline, which the Court extended to September 13,
2021. [Filing No. 106.] On August 2, 2021, Defendants filed their motion seeking leave to file a
second amended answer, second amended counterclaim, and first third party complaint, which
now pends. [Filing No. 155.]
Defendants' second amended counterclaim sets forth five new counts in addition to the
claim for defamation, including: breach of peace, breach of contract, tortious interference with
contractual relationships, and tortious interference with business relationships. [Filing No. 1552.] In addition, Defendants seek to amend their answer to assert additional affirmative defenses
"that arise from a more fulsome understanding of the operative facts" surrounding the underlying
actions. [Filing No. 155-1.] Finally, Defendants seek to initiate a third-party action [Filing No.
155-2, at ECF p. 23] against "Doe Defendants" to preserve a cause of action and seek relevant
discovery in relation to alleged home and electronic interference at Jim True's home and with his
electronic devices. [Filing No. 155, at ECF p. 4.]
A motion for leave to amend a pleading is generally evaluated under Fed. R. Civ. P.
15(a)(2), which states: "[A] party may amend its pleading only with the opposing party's written
consent or the court's leave. The court should freely give leave when justice so requires."
Generally, motions to amend pleadings are treated favorably under Rule 15's liberal amendment
policy. See id. However, when a party seeks to amend the pleadings after the deadline set by the
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court, "the district court is entitled to apply the heightened good-cause standard of Rule 16(b)(4),
before considering whether the requirements of Rule 15(a)(2) [are] satisfied." Adams v. City of
Indianapolis, 742 F.3d 720, 734 (7th Cir. 2014) (internal citation and quotation marks omitted).
In this case, the burden shifts to the moving party to show good cause for the belated
amendments. See, e.g., Trustmark Ins. Co. v. General & Cologne Life Re of America, 424 F.3d
542, 553 (7th Cir. 2011) ("To amend a pleading after the expiration of the trial court's
Scheduling Order deadline to amend pleadings, the moving party must show 'good cause.' "). "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
Defendants argue that while the last day cited in the Case Management Plan for
amending proceedings was March 27, 2020, this date "has proven to be premature[.]" [Filing
No. 155, at ECF p. 5.] In support, Defendants note that the Court did not rule on Plaintiff's
motion to dismiss until February 23, 2021, and Defendants claim that additional facts were
discovered during that time that had not been known prior to filing the amended counterclaim in
December 2019. [Filing No. 155, at ECF p. 5.] However, Defendants do not otherwise explain
why it took 17 months to investigate these allegedly new facts—all of which appear to date back
to 2019—and file a motion for leave to amend.
Defendants' arguments are vague. Defendants claim, without further support, that
"[m]any matters set forth in the Amended Counterclaim were unknown at the time of the filing
of the Amended Counterclaim such as Ford Credit served as a lender to a new dealership that in
November, 2019, therefore there was a motive to remove True Ford as a competitor of the new
dealership." [Filing No. 155, at ECF p. 5.] Similarly, Defendants ambiguously claim that it was
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"unknown until recently" that True Ford's books and records had been altered or unauthorized
actions had been taken to establish new credit card accounts within the dealership. [Filing No.
155, at ECF p. 5.] Defendants provide no explanation for their extraordinary delay in seeking to
file a third set of counterclaims nearly 17 months after the deadline to amend or otherwise
explain why they could not have made these amendments sooner. Ford Credit disputes
Defendants' claim that they could not have discovered these facts sooner, arguing that all of
Defendants' new allegations could have been discovered months, if not years, ago. [Filing No.
163, at ECF p. 10.]
For instance, Defendants' proposed Second Amended Counterclaim alleges that Ford
Credit was involved in negotiations to provide financing to another dealership under new
ownership located near Jim True Ford and that Ford Credit forced Jim True Ford out of business
to eliminate them as a competitor. These allegations rely on filings by the other dealership and
Ford Credit's Financing Statement, all of which Ford Credit represents were publicly filed in
2019. [Filing No. 163, at ECF p. 10.] In addition, Jim True Ford has had exclusive control over
its books and records since Jim True purchased the dealership in 2007, and Defendants provide
no explanation for why their new allegations of books and records being altered or other
unauthorized actions could not have been discovered and pleaded in their initial or amended
Defendants contend in their reply brief that counsel has faced unprecedent circumstances
including a worldwide pandemic, criminal trespass into the client's home, and no access to client
via phone or email. [Filing No. 165, at ECF p. 2.] While the pandemic has certainly altered the
workplace, it has not stopped litigation from moving forward. Lawyers and the Court have
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adjusted in this ever-changing landscape. The Court closed its doors to the public1 and
suspended jury trials, but found new, adaptive ways to make progress in pending matters. Civil
and criminal proceedings are now frequently held telephonically or by video, rather than in
person. The Court installed drop boxes at each courthouse in the Southern District of Indiana for
paper filings, eliminating the need to visit the Clerk's Office. For matters that are proceeding in
person, social distancing measures have been implemented in every courtroom, and masks are
currently required (and readily provided) regardless of vaccination status. As trials have
resumed, jury selection days have been staggered in order to minimize any risk to individuals
asked to serve.
This is not meant to minimize the challenges faced by counsel, in this litigation and all
pending matters, since March 2020. In recognition of this, the Court has freely granted
reasonable motions for extensions of time or requests for accommodations as needed to address
COVID-19 related concerns and delays. However, Defendants' motion simply does not set forth
sufficient good cause related to the pandemic for allowing an extensive amendment to their
answer and counterclaim this late in this litigation. Defendants have already filed two sets of
counterclaims in this case and now seek another opportunity to amend only days before the
extended discovery deadline. See, e.g., Kuhn v. United Airlines, Inc., 640 Fed. App'x 534, 537
Defendants' reply brief describes the brief of time from March 13, 2020, to April 5, 2021, as a
"sequestration or hiatus." [Filing No. 165, at ECF p. 3.] Defendants argue that counsel was
prevented from fully participating in this litigation as a result of an act of God. While the
Courthouse doors may have been closed to the public during this time and jury trials were
suspended, the Court never took a hiatus. As noted above, the Court found ways to adapt to the
changing landscape and safely continue to resolve disputes, just like others did around the globe
in all areas of life. Though litigating in the midst of a global pandemic has presented hardships,
cases continued to progress, motions were resolved, discovery was conducted, and matters
settled or were ruled on by the Court. While the pandemic has had a lasting impact on Court
operations and litigation practice, the pandemic has not stopped litigation from moving forward.
Counsel's characterization of a "hiatus" is grossly inaccurate.
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(7th Cir. 2016) (affirming denial of leave to amend for failure to establish good cause when
motion was filed "just days before the close of discovery"). Defendants simply have not set forth
good cause for doing so.
Defendants also seek to initiate a third party action against Doe Defendants to preserve
causes of action allegedly perpetrated by third persons "unknown at this time[.]" [Filing No.
155, at ECF p. 4.] Defendants ambiguously claim that their client has faced criminal trespass
and tampering with electronic communications from unknown third persons. These arguments
seem somewhat fanciful. While a suit against an unnamed, or "John Doe," defendant in federal
court is a practice nether condoned nor condemned by the Federal Rules of Civil Procedure, the
Seventh Circuit generally disfavors the practice. The Seventh Circuit has consistently noted that
naming a John Doe defendant does not toll the statute of limitations. See, e.g., Sassi v. Breier,
584 F.2d 234, 235 (7th Cir. 1978) ("We do not consider that the naming of a 'John Doe'
defendant in the complaint tolls the statute of limitations until such time as a named defendant
may be substituted. It constitutes a change of parties within Rule 15(c), and the newly named
defendant sought to be substituted for 'John Doe' becomes a new party."). See also Herrera v.
Cleveland, __ F.4th __, __, 2021 WL 3447681, at *4 (7th Cir. Aug. 6, 2021) ("[N]aming a John
Doe defendant does not constitute a 'mistake' within the meaning of Rule 15(c)(1)(C)(ii).").
These reasons further weigh against Defendants' request for leave to amend and initiate a third
party complaint almost two years after this lawsuit was filed against an unknown defendant.
Finally, even if Defendants could satisfy the good cause standard, their motion would still
fail due to undue delay, as noted, and undue prejudice. See, e.g., Airborne Beepers & Video, Inc.
v. AT&T Mobility LLC, 499 F.3d 663, 666 (7th Cir. 2007) ("Reasons for finding that leave
should not be granted include undue delay, bad faith or dilatory motive on the part of the
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movant, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment, futility of the
amendment[.]" (Internal citation, quotation marks, and emphasis omitted)). In addition to
failing to establish their diligence during this time of significant delay, granting leave to amend
would unduly prejudice Ford Credit. Despite the parties' disagreements about discovery, written
discovery is nearly complete, and depositions are expected to be completed in the coming weeks.
Allowing Defendants to amend would widen the scope of potential issues and topics for the
depositions and assuredly require additional discovery, which would further delay resolution of
this matter and increase costs. Accordingly, Defendants' motion for second amended answer,
second amended counterclaim, and first third party complaint is denied.2 [Filing No. 155.]
As the Court has concluded that Defendants failed to set forth good cause to allow Defendants
to amend and that granting leave to amend is improper due to undue delay and undue prejudice,
the Court does not address Ford Credit's arguments regarding futility.
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Defendants have already had an opportunity amend their counterclaims, and filed this
motion requesting leave to file a third set of counterclaims nearly 17 months after the deadline to
amend the pleadings. Defendants have not established good cause for the Court to grant their
belated motion. "A good judge sets deadlines, and the judge has a right to assume that deadlines
will be honored." Spears v. City of Indianapolis, 74 F.3d 153, 157 (7th Cir. 1996). The Court's
goal is to bring this case to a resolution, not extend or prolong it. The best way to do that is not
to expand the claims nearly two years after litigation began, based on facts that appear to predate the initial cause of action and could have been discovered sooner. Accordingly, Defendants'
motion [Filing No. 155] is denied.
Tim A. Baker
United States Magistrate Judge
Southern District of Indiana
All ECF-registered counsel of record via email
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