The University of Notre Dame (USA) in England v. TJAC Waterloo, LLC et al

Filing 104

Judge Allison D. Burroughs: MEMORANDUM AND ORDER entered.For the reasons stated in the Order, the 90 Plaintiff's motion to Amend and Supplement Complaint is GRANTED with respect to adding the new factual allegations and two new counts(currently identified as Counts VI and VIII) that seek recognition of a the foreign judgment under Massachusetts law and an attachment, but DENIED as to adding the declaratory judgmentcount (currently identified as Count VII). (Montes, Mariliz)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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THE UNIVERSITY OF NOTRE DAME
(USA) IN ENGLAND,
Plaintiff,
v.
TJAC WATERLOO, LLC AND ZVI
CONSTRUCTION CO., LLC,
Defendants.

Civil Action No. 16-cv-10150-ADB

MEMORANDUM AND ORDER
BURROUGHS, D.J.
Currently pending before this Court is the University of Notre Dame (USA) in England’s
(“Notre Dame”) motion to amend and supplement its complaint pursuant to Federal Rule of Civil
Procedure 15(d). [ECF No. 90]. For the reasons stated below, the motion is GRANTED IN
PART AND DENIED IN PART.
I.

BACKGROUND

On January 29, 2016, Notre Dame filed a complaint in Suffolk Superior Court against
TJAC Waterloo, LLC (“TJAC”) and ZVI Construction Co., LLC (“ZVI”), which was ultimately
removed to this Court on February 1, 2016. Notre Dame amended the complaint on February 16,
2016. [ECF No. 28]. The amended complaint contained five counts: Confirmation of Foreign
Arbitral Award under 9 U.S.C. § 207 (Count I); Attachment (Count II); Temporary and
Preliminary Injunctive Relief (Count III); Recognition of Foreign Judgment Pursuant to Mass.
Gen. L. ch. 235, § 23A (Count IV); and Declaratory Judgment (Count V). [ECF No. 28]. On
February 17, 2016, Notre Dame filed a “Motion to Confirm Foreign Award and to Issue Security
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Pursuant to the Convention and Fed. R. Civ. P. 64, 65, and for Expedited Consideration.” [ECF
No. 30]. On April 7, 2016, the Court confirmed the foreign arbitral award at issue (the Expert’s
Determination on Liability), and ordered an attachment as to TJAC’s and ZVI’s property in the
amount of $7.2 million, pending the Expert’s determination on damages (hereinafter, “the Order”
or “the April 7, 2016 Order”). [ECF No. 56]. The Court also dismissed Counts III through V. On
April 11, 2016, Defendants appealed the Order [ECF No. 57], and the First Circuit affirmed it on
June 28, 2017 [ECF Nos. 101, 102].
In the meantime, on August 8, 2016, the English High Court issued a judgment awarding
Notre Dame ₤81,239.57 for costs incurred in litigating a separate case brought by ZVI in the
English High Court, which challenged whether the Expert’s Determination was binding on ZVI
specifically. [ECF Nos. 85-1, 86-1]. On February 3, 2017, while the appeal was still pending and
following ZVI’s alleged failure to pay the judgment, Notre Dame moved to amend the operative
complaint to seek enforcement of the English High Court’s order. [ECF No. 90]. On February
14, 2017, Defendants opposed the motion [ECF No. 95], and Notre Dame filed a reply brief on
February 22, 2017 [ECF No. 98].
II.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 15(d), “[o]n motion and reasonable notice, the
court may, on just terms, permit a party to serve a supplemental pleading setting out any
transaction, occurrence, or event that happened after the date of the pleading to be
supplemented.” Permitting a party to supplement its pleading under Rule 15(d) is subject to the
district court’s discretion. U.S. ex rel. Gadbois v. PharMerica Corp., 809 F.3d 1, 6 (1st Cir.
2015), cert. denied, 136 S. Ct. 2517 (2016). Rule 15(d) itself “contains no standards at all to
guide the district court’s analysis,” and “courts customarily have treated requests to supplement

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under Rule 15(d) liberally.” Id. at 7. The Court may deny a motion to supplement “when the
request would ‘unduly delay resolution of the case’” as determined by “weigh[ing] totality of the
circumstances,” be futile, result in prejudice to the opposing party, or if the moving party
unreasonably delayed in attempting to supplement. Id. at 7 (quoting Hall v. CIA, 437 F.3d 94,
101 (D.C. Cir. 2006)).
III.

DISCUSSION

In the proposed supplemented complaint, Notre Dame seeks to add factual allegations
regarding the English High Court’s order and three new counts against ZVI: recognition of
foreign judgment pursuant to M.G.L. ch. 235, § 23A; declaratory judgment “concerning ZVI’s
ability and/or willingness to satisfy or pay an award of damages to UND in the amount of
₤81,239.57;” and attachment.1 TJAC and ZVI argue that the motion to supplement should be
denied because: (1) all claims in the operative complaint [ECF No. 28] have already been
adjudicated in this case by the Court’s April 7, 2016 Order, and (2) alternatively, that certain
proposed allegations are futile.2
Although once a “final judgment” is entered, “the district court ha[s] no power to allow
an amendment to the complaint because there [is] no complaint left to amend,” Mirpuri v. ACT
Mfg., Inc., 212 F.3d 624, 628 (1st Cir. 2000), the Court’s April 7, 2016 Order was not a final
judgment as the issue of damages remained unresolved. “An order is usually considered final

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Notre Dame clarifies in its reply brief that “UND does not seek to supplement or amend
[Counts III through V] in any way, as UND recognizes that those counts have been dismissed by
this Court.” [ECF No. 98 at 4]. Accordingly, any amended complaint should reflect that those
counts have been dismissed and those counts should thus be deleted from any subsequently filed
supplemental complaint.
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Defendants also argue that the Court lacks jurisdiction given the appeal to the First Circuit.
Because the First Circuit has since rendered an opinion affirming the Court’s decision, the
argument is moot.
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when it resolves a contested matter, leaving nothing to be done except execution of the
judgment.” In re Nineteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litig., 982
F.2d 603, 608 (1st Cir. 1992). At the time the Court confirmed the Determination on Liability,
because the parties had agreed to bifurcate the arbitration proceedings, the Expert had not yet
issued a final arbitration award as to damages. See Liberty Mut. Ins. Co. v. Wetzel, 424 U.S.
737, 744, (1976) (holding that “grant of partial summary judgment [that was] limited to the issue
of petitioner’s liability” was “by [its] terms interlocutory,” and such judgments, “where
assessment of damages or awarding of other relief remains to be resolved[,] have never been
considered to be ‘final’ within the meaning of 28 U.S.C. § 1291” (citing former Fed. R. Civ. P.
56(c)); see also DeJohn v. Temple University, 537 F.3d 301, 307 (3rd Cir. 2008) (noting that
“‘[i]t is a well-established rule of appellate jurisdiction . . . that where liability has been decided
but the extent of damage remains undetermined, there is no final order’”); In re Fugazy Express,
Inc., 982 F.2d 769, 775 (2d Cir. 1992) (“[A]n order determining liability but directing that an
accounting be held is not final until after the accounting has been completed.”); City of N.Y. v.
Milhelm Attea & Bros., No. 06-03620, 2012 WL 4959502, at *2 (E.D.N.Y. Oct. 17, 2012)
(holding that order that determined liability but did not assess amount of civil penalties was not
final). Accordingly, because the issue of damages remains unresolved and there is thus more that
remains of the case beyond merely executing a judgment, the Court retains the power to allow an
amendment under Rule 15(d).
TJAC and ZVI argue, in the alternative, that the new declaratory judgment count is futile
because it does not identify a case or controversy, but rather seeks post-judgment asset
discovery. Notre Dame responds that, by asserting the new declaratory judgment count, it “seeks
a declaration that injunctive relief is necessary to preserve UND’s rights and prevent the

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dissipation, encumbrance or transfer of funds or assets beyond its reach during the pendency of
the remaining proceedings in England.” [ECF No. 98 at 4]. Although the Court dismissed a
substantially similar count in its April 7, 2016 Order, finding that it served no additional purpose
given the relief granted on the other counts, Notre Dame argues that a similar determination here
would be premature because the Court has not yet granted any relief on the new proposed counts.
“A declaratory judgment is appropriate ‘(1) when the judgment will serve a useful
purpose in clarifying and settling the legal relations in issue, and (2) when it will terminate and
afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.’”
Boston’s Children First v. Bos. Sch. Comm., 183 F. Supp. 2d 382, 396 (D. Mass. 2002) (quoting
Charles Alan Wright et al., Federal Practice and Procedure § 2759 (3d ed. 1998)), aff’d sub nom.
Anderson ex rel. Dowd v. City of Bos., 375 F.3d 71 (1st Cir. 2004). A district court may exercise
its discretion to dismiss a claim for declaratory judgment. Wilton v. Seven Falls Co., 515 U.S.
277, 288 (1995) (“If a district court, in the sound exercise of its judgment, determines after a
complaint is filed that a declaratory judgment will serve no useful purpose, it cannot be
incumbent upon that court to proceed to the merits before staying or dismissing the action.”).
Notre Dame has failed to show how the proposed declaratory judgment count would
resolve a controversy as to any unsettled legal rights between the parties. It does not appear that
the proposed count would clarify or settle legal relations among the parties, or provide certainty
on the controversy giving rise to this proceeding. At bottom, Notre Dame seeks to enforce a
purported final foreign court judgment, and the proposed declaratory judgment count, by seeking
an adjudication of Defendants’ ability to pay, seemingly has no purpose but to justify postjudgment asset discovery or discovery to aid in obtaining a preliminary injunction. Moreover,
where Notre Dame again seeks recognition of a foreign judgment and an attachment, such a

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declaratory judgment count will ultimately serve no purpose once these counts are resolved.
Accordingly, Notre Dame may not supplement the complaint to add the declaratory judgment
count.
Finally, TJAC and ZVI argue that Notre Dame has not sufficiently alleged facts to justify
piercing the corporate veil and thus Notre Dame should not be permitted to supplement its
complaint with a request that the Court “[a]ttach the assets of ZVI, together with its affiliates,
members, corporate parents and subsidiaries, control persons and those acting in concert with
them, with an additional attachment of $101,378.26, plus interest as permitted by law.” [ECF No.
91-1 at 21]. Notre Dame asserts that the Court implicitly rejected this argument in its April 7,
2016 Order when it ordered an attachment against both TJAC and ZVI. Although the Court’s
April 7, 2016 Order attached the assets of both TJAC and ZVI because their apparently close
relationship indicated that they jointly owned assets, it made no specific findings as to the
propriety of piercing the corporate veil and that issue was not before the Court. Accordingly,
Notre Dame may supplement its complaint to add the attachment count and the merits of the
count will be determined in due course.
IV.

CONCLUSION

For the reasons stated above, Notre Dame’s motion to supplement its complaint [ECF
No. 90] is granted with respect to adding the new factual allegations and two new counts
(currently identified as Counts VI and VIII) that seek recognition of a the foreign judgment
under Massachusetts law and an attachment, but denied as to adding the declaratory judgment
count (currently identified as Count VII).

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So Ordered.
Dated: July 19, 2017
/s/ Allison D. Burroughs
ALLISON D. BURROUGHS
U.S. DISTRICT COURT JUDGE

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