MW Builders, Inc. v. Fire Protection Group, Inc.

Filing 57

ORDER granting 49 Motion to Amend Complaint. Plaintiff is directed to file forthwith its amended complaint. Signed by Magistrate Judge James P. O'Hara on 9/7/2017. (srj)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
MW BUILDERS, INC.,
Plaintiff,
v.

Case No. 16-2340-JAR

FIRE PROTECTION GROUP, INC.,
Defendant.
ORDER
MW Builders, Inc. (“MW”), a general contractor, asserts negligence and breachof-contract claims against Fire Protection Group, Inc. (“FPG”), a subcontractor, arising
from FPG’s installation of a fire suppression system during the construction of an
apartment building owned by nonparty Lamey Bridge Senior Dev, LLC (“Lamey”). MW
claims FPG’s negligence and breach of contract resulted in the bursting of a pipe, which
caused water damage to the interior of the building. MW seeks to recover the costs it
incurred to repair the damage. Since the filing of the instant suit, Lamey has filed a
related action against MW and FPG in the Circuit Court of Harrison County, Mississippi
(the “Mississippi suit”),1 and MW has brought a declaratory judgment action in this
district court against FPG’s insurer, Gemini Insurance Company (the “declaratory
judgment action”).2
MW now seeks to amend its complaint to assert a claim for contractual
1

Lamey Bridge Senior Dev., LLC v. MW Builders, Inc., et al., No. A2402-16-151.

2

MW Builders, Inc. v. Gemini Ins. Co., No. 17-2275-CM.
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indemnification against FPG for the damages sought by Lamey in the Mississippi suit;
clarify that MW’s original breach-of-contract claim against FPG includes a claim for
contractual indemnification for the claims asserted by Lamey that MW paid for, are
subrogated to, and covered under the contractual indemnity agreement between MW and
FGP; and assert a claim that MW is owed its attorney’s fees under the subcontract for its
prosecution of the declaratory judgment action, the instant case, and its defense of the
Mississippi suit (ECF No. 49). For the reasons set forth below, the motion is granted.
As an initial matter, the court observes that FPG doesn’t oppose MW’s motion in
its entirety. Specifically, FPG doesn’t oppose MW’s proposed amendment to assert a
claim for attorney’s fees under the subcontract for MW’s prosecution of the instant
matter, on the basis that MW’s original petition asserts that claim in its prayer for relief
on the breach-of-contract claim. Accordingly, the court grants plaintiff’s motion as
unopposed with respect to this amendment, and proceeds to evaluate the remaining
proposed amendments.
Under Fed. R. Civ. P. 15(a)(2), once a responsive pleading has been filed and 21
days have passed, “a party may amend its pleading only with the opposing party’s written
consent or the court’s leave.” Rule 15 dictates the court “should freely give leave when
justice so requires.”3 When the deadline set in the scheduling order for amending
pleadings has passed, however, Fed. R. Civ. P. 16(b)(4) also is implicated.4

3

Fed. R. Civ. P. 15(a)(2).
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Rule

16(b)(4) provides that a scheduling order may be modified “only for good cause.” Thus,
the Tenth Circuit has directed courts to use “Rule 16’s good cause requirement as the
threshold inquiry to consider whether amendments should be allowed after a scheduling
order deadline has passed.”5 In this case, the scheduling order set a deadline of October
17, 2016, for amending the pleadings.6 Because MW didn’t file the instant motion until
July 27, 2017, the court will begin its analysis by applying Rule 16’s good-cause
standard.
A.

Rule 16(b)(4)

To establish “good cause” under Rule 16(b)(4), MW must show it could not have
met the October 17, 2016 scheduling-order deadline for amending pleadings despite its
“diligent efforts.”7 “Rule 16’s good cause requirement may be satisfied, for example, if a
plaintiff learns new information through discovery or if the underlying law has changed.
If the plaintiff knew of the underlying conduct but simply failed to raise tort claims,
however, the claims are barred.”8 “While a scheduling order is not a frivolous piece of

4

Gorsuch, Ltd., B.C. v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1240–41
(10th Cir. 2014).
5

Id. at 1241. If the court finds good cause lacking, it need not reach the Rule
15(a) issue. Id. at 1242.
6

ECF No. 7 at 7. Neither the amended scheduling order (ECF No. 25) nor the
second amended scheduling order (ECF No. 51) modified the deadline for amendment of
pleadings.
7

Gorsuch, 771 F.3d at 1240.

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paper, idly entered, which can be cavalierly disregarded by counsel without peril, rigid
adherence to the . . . scheduling order is not advisable.”9 Ultimately, whether to modify
the scheduling order lies within the court’s sound discretion.10
MW claims it could not have amended its complaint to assert its proposed
contractual-indemnity claims before the October 17, 2016 deadline because Lamey had
not yet filed the Mississippi suit against MW and FPG, and MW had not filed the
declaratory judgment action against FPG’s insurer, Gemini Insurance Company
(“Gemini”). MW explains its declaratory judgment action was precipitated by Gemini’s
alleged failure and refusal to respond to MW’s tender for defense and indemnity.
The court finds good cause for the proposed amendments arising from the
Mississippi suit and the declaratory judgment action (i.e., MW’s proposed claim for
contractual indemnification for the damages sought by Lamey in the Mississippi suit, and
MW’s proposed claim for attorney’s fees under the subcontract for its defense of the
Mississippi suit and its prosecution of the declaratory judgment action). FPG doesn’t
dispute that the Mississippi suit and the declaratory judgment action were filed on
November 9, 2016, and May 15, 2017, respectively, after the deadline expired for
amending pleadings. MW sought leave to amend within six months of being served with

8

Id. at 1240 (internal citations omitted).

9

Deghand v. Wal-Mart Stores, Inc., 904 F. Supp. 1218, 1221 (D. Kan. 1995)
(internal quotations omitted).
10

Paris v. Sw. Bell Tel. Co., 94 F. App’x 810, 816 (10th Cir. 2004).
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the Mississippi suit,11 and within three months of filing the declaratory judgment action.
The court finds that MW has been sufficiently diligent with respect to these amendments.
As previously indicated, MW also seeks to clarify that its original breach-ofcontract claim includes a claim for contractual indemnification. Although a closer call,
the court finds the proposed “clarification” sufficiently related to the above amendments
to support a finding of good cause.
B.

Rule 15(a)

Because MW has satisfied Rule 16(b)(4)’s good-cause standard, the court goes on
to the Rule 15(a) analysis.
amendment of pleadings.

As mentioned above, Rule 15(a) anticipates the liberal
Nonetheless, a court may deny leave to amend upon “a

showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory
motive, failure to cure deficiencies by amendments previously allowed, or futility of
amendment.”12 FPG argues that MW should be denied leave to amend its complaint on
the basis of undue delay, prejudice, and futility.
FPG argues MW unduly delayed in seeking to clarify its original breach-ofcontract claim, claiming the amendment is neither a clarification of an existing claim, nor
dependent on the filing of the Mississippi suit. FPG also claims MW unduly delayed

11

According to FPG, MW was not served with the Mississippi suit until February,
2017. ECF No. 53 at 10.
12

Wilkerson v. Shinseki, 606 F.3d 1256, 1267 (10th Cir. 2010) (quoting Duncan v.
Manager, Dep’t of Safety, City & Cnty. of Denver, 397 F.3d 1300, 1315 (10th Cir.
2005)).
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with respect to its proposed claims for contractual indemnification for the damages
sought by Lamey in the Mississippi suit, and for attorney’s fees for its defense of the
Mississippi suit, on the basis that MW waited six months after being served with the
Mississippi suit to file its motion to amend. MW simultaneously argues these claims are
premature. FPG asserts that MW’s claim for attorney’s fees for its prosecution of the
declaratory judgment action is futile, arguing there is no provision in the subcontract
providing that FPG is liable for MW’s attorney’s fees incurred as a result of suits brought
by MW against third parties. Finally, FPG claims it will be prejudiced by the newlyasserted claims at this stage of the proceedings.
For the same reasons the court concluded that MW has been sufficiently diligent
in seeking its proposed amendments, the court rejects FPG’s assertions of undue delay.
Additionally, on this record, the court declines to find that the amendments are futile, and
instead defers consideration of FPG’s futility arguments to the presiding U.S. District
Judge, if and when FPG files a motion to dismiss the amended complaint. Finally,
although the court is unpersuaded MW’s attempting to “sandbag” FPG in seeking to
amend its complaint, the court recognizes the potential prejudice to FPG resulting from
an amended complaint at this stage of the proceedings. Specifically, the court observes
that while discovery remains open until December 27, 2017, the expert-disclosure
deadlines have passed. Accordingly, to alleviate any prejudice to FPG, and to ensure no
tactical advantage to MW in seeking to amend its complaint at this juncture, the court
will favorably entertain a motion by FPG to designate experts on any new claims,
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affording MW the opportunity to designate only rebuttal experts; any such motion by
FPG, however, must be filed by September 18, 2017.
IT IS SO ORDERED.
Dated September 7, 2017, at Kansas City, Kansas.
s/ James P. O’Hara
James P. O=Hara
U.S. Magistrate Judge

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