BANKERS BANK NORTHEAST V. AYER et al

Filing 172

ORDER ON MOTION TO AMEND granting 168 Motion to Amend. REMINDER: After entry of this Order, if Amending a COMPLAINT, counsel are REQUIRED to separately file the AMENDED COMPLAINT Document. By JUDGE GEORGE Z. SINGAL. (lrc)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

BANKERS’ BANK NORTHEAST,
Plaintiff,
v.
EVERETT L. AYER, et al.,
Defendants.

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ORDER ON MOTION TO AMEND
Before the Court is Plaintiff’s Motion to Amend the Complaint (ECF No. 168). For
reasons briefly explained herein, the Court GRANTS the Motion.
In this case, Plaintiff claims the Defendants engaged in negligent misrepresentation and
professional malpractice in connection with an $18 million loan Plaintiff made to the Savings
Bank of Maine (“SBM”) on September 16, 2008 (the “Loan”).

By this Motion, Plaintiff

Banker’s Bank Northeast (“BBN”) seeks to amend its Complaint to add as plaintiffs nine
community banks (collectively with BBN, the “Consortium”) that jointly participated, with
BBN, in funding the Loan. In its original Complaint (ECF No. 1), BBN clearly alleged that
“BBN represented a consortium of community banks that would each provide a portion of the
money loaned to SBM and is authorized to bring this action.”1 (Compl. ¶ 2.) In the Complaint
& Plaintiff’s May 27, 2011 Initial Disclosures (ECF No. 170-1), Plaintiff also clearly indicated

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It appears that each Defendant initially answered this allegation by asserting that they lacked knowledge or
information that would allow them to admit or deny this particular allegation. (See Answers (ECF Nos. 40, 41, 42,
50, 60, 116, 152) ¶ 2.)

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that its damages included “$9 million in principal.” (Id. at 4.) There is no genuine dispute that
this amount reflects the amount lost by the Consortium, not BBN alone.
Having conducted some discovery, it appears Defendants now wish to dispute whether
BBN is appropriately “authorized” to seek as damages the losses of the other members of the
Consortium. In the context of this case, such a dispute is readily resolved by allowing the
members of the Consortium to join as plaintiffs thereby ensuring that the real parties in interest
are named. Allowing the joinder of the nine other banks involved in the Loan is clearly
contemplated under the letter and spirit of Rule 17. See Fed. R. Civ. P. 17(a)(3) (“The court may
not dismiss an action for failure to prosecute in the name of the real party in interest until, after
an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be
substituted into the action. After ratification, joinder, or substitution, the action proceeds as if it
had been originally commenced by the real party in interest.”) Moreover, joinder of the other
banks best serves the interests of justice and judicial efficiency.
Alternatively, the Court readily concludes that the amendment sought in this case is also
allowable under the “liberal” standard of Rule 15 and the “good cause” standard of Rule 16.
Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 327 (1st Cir. 2008) (“Our case
law clearly establishes that Rule 16(b)'s ‘good cause’ standard, rather than Rule 15(a)'s ‘freely
give[n]’ standard, governs motions to amend filed after scheduling order deadlines.”). First, the
amendment is not futile. Second, the Court finds that Plaintiff has exhibited the requisite
diligence in seeking amendment of the Complaint. Third, on the record presented, the Court fails
to see how Defendants can claim they are prejudiced by the proposed amendment. The proposed
amendment does not add claims or increase the damages sought.

Rather, Defendants had

adequate notice as to the inclusion of the losses of the proposed additional plaintiffs from the

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outset of this litigation. While Defendants argue that they would be prejudiced because they
would seek additional discovery from these nine other banks and discovery “has nearly
concluded,” any discovery-related prejudice is readily resolved by Defendants moving for an
extension of the discovery deadline and/or seeking additional amendments to the scheduling
order. In short, there is ample good cause to support allowing the proposed amendment of the
Complaint.
Therefore, Plaintiff’s Motion to Amend is hereby GRANTED.

To the extent that

Plaintiff still wishes to file the motion for summary judgment outlined in its February 5, 2013
Notice (ECF No. 158) & February 13, 2013 Memorandum (ECF No. 161), after reviewing this
ruling, Plaintiff shall notify the Court within seven days of today. In the absence of receiving
notification of the intention to file summary judgment, the Court will lift the stay of discovery
and set new scheduling order deadlines on April 26, 2013.
SO ORDERED.
/s/ George Z. Singal
United States District Judge
Dated this 19th day of April, 2013.

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