Capital Asset Recovery, LLC v. Tomasi et al
ORDER granting 33 Motion to Dismiss First Amended Complaint. Signed by District Judge Lawrence P. Zatkoff. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
CAPITAL ASSET RECOVERY, L.L.C.,
Case No. 10-14059
Hon. Lawrence P. Zatkoff
ERIC TOMASI, STELLAR REO PROPERTIES, LLC
TSE PROPERTIES, LLC, SHEILA TOMASI, AMY
WESCOM, DIANA FRISBY, ALLY GODINEZ,
CATHY KNOEFREL, and FIDELITY NATIONAL
OPINION AND ORDER
AT A SESSION of said Court, held in the United States Courthouse,
in the City of Port Huron, State of Michigan, on February 3, 2012
PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
This matter is before the Court on Defendants’ Motion to Dismiss or Strike Plaintiff’s First
Amended Complaint [dkt 33]1. Plaintiff has filed a Response in Opposition to this Motion [dkt 34].
Defendants have not filed a reply and the time period to do so has lapsed The Court finds that the
facts and legal arguments are adequately presented in the parties’ papers and the decision process
would not be significantly aided by oral argument. Therefore, pursuant to E.D. MICH. L.R. 7.1(f)(2),
it is hereby ORDERED that the Motion be decided on the briefs submitted. For the following
The Court shall construe the instant Motion as a Motion to Strike Plaintiff’s first
Amended Complaint, and grants the Motion as such. Thus, the Court need not address the issue
of “dismissal” of the Amended Complaint.
reasons, Defendant’s Motion is GRANTED.
Plaintiff, Capital Asset Recovery, LLC (“Capital Asset”) filed a Complaint in state court
against Eric Tomasi, Stellar Reo, LLC, TSE Properties, LLC, Shelia Tomasi, Amy Wescom, Diana
Frisby, and Ally Godinez (the “Tomasi Defendants”); and Fidelity National Title Company and
Cathy Knoeferl (“Fidelity Defendants”). Defendants removed the action to this Court on October
11, 2010. The original Complaint set forth the following counts:
Breach of Contract;
Fraud and Misrepresentation;
Breach of Warranty;
RICO Violations under 18 USC 1962(c);
RICO Conspiracy under 28 USC 1962(d);
Breach of Contract/Negligence against the Fidelity Defendants.
The Tomasi Defendants and the Fidelity Defendants filed timely Answers and Affirmative Defenses
to the Complaint on October 18 and 19, 2011, respectively.
On December 15, 2010, the Court held a Scheduling Conference, at which time Plaintiff
informed the Court that it wished to amend its pleadings to add several parties to the case. The Court
granted Plaintiff leave to amend the Complaint for the limited purpose of adding additional
Defendants. Plaintiff did not request, and the Court did not consent to, additional amendments to
the Complaint to assert new causes of action against the Tomasi Defendants. The Court then
instructed Plaintiff that it had the duty of ensuring that counsel for the additional Defendants
attended the rescheduled conference regardless of the additional Defendants’ deadlines to answer
the Complaint. The Scheduling Conference was subsequently adjourned to May 17, 2011.
On April 5, 2011, Plaintiff filed its amended Complaint in which it added the following
Defendants: Acorn Investment Co., Oak Management Co., Elm Investment Co., Rex Construction
Co., Circle B, LLC, Sartre, LLC, and Distressed Asset Fund XVII, LLC (“Additional Defendants”).
The Amended Complaint also contained the same eight Counts as the original Complaint, but added
an additional ninth Count. The added Count (“Count IX”) alleged a violation of the Michigan
Occupational Code against various Tomasi Defendants for acting as unlicensed real estate brokers.
Count IX was never discussed with the Court or the Tomasi Defendants.
On May 17, the Court held the second Scheduling Conference, which the Additional
Defendants’ counsel did not attend. On May 26, 2011, the Court entered an Order dismissing the
Additional Defendants from the case because of Plaintiff’s failure to obey the Court’s directive with
respect to attendance by all parties at the Scheduling Conference. On June 8, 2011, Plaintiff’s
Motion for Reconsideration was Denied. Defendants subsequently filed the instant Motion on June
8, 2011. Plaintiff filed its response on June 22, 2011, requesting that Plaintiff’s second Amended
Complaint be dismissed or stricken.
III. LEGAL STANDARD
A party may amend its pleadings only with the opposing party’s written consent or the
court’s leave. Fed. R. Civ. P. 15(a)(2). In general, if an amendment that cannot be made as a matter
of course is served without obtaining the court’s leave or the opposing party’s consent, the
amendment is without legal effect and any new matter it contains will not be considered unless the
amendment is resubmitted for the court’s approval. United States ex rel. Mathews v. Healthsouth
Corp. 332 F.3d 293, 295 (7th Cir. 2003) (citing 6 Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1484 (3d ed. 2001)).
The Court finds that Plaintiff improperly amended its Complaint by adding Count IX in
addition to the Additional Defendants. First, the Amended Complaint was not one of “course,” as
it was made more than twenty-one days after Defendants answered the original Complaint. See Fed.
R. Civ. P. 15(a)(1). In fact, Plaintiff sought to add the additional cause of action in Count IX almost
six months after the Defendants filed their answer to the original Complaint.
Next, although the amendment adding Defendants was done with the Court’s leave, the
amendment adding an additional cause of action was not. The addition of Count IX should have
thus been submitted for the Court’s approval. The Court may strike new theories of recovery that
a party adds without the Court’s leave or consent of the opposing party, after the court has granted
leave to amend for a limited purpose. See FDIC v. Kooyomjian, 220 F.3d 10, 17 (1st Cir. 2000).
Because Plaintiff added a new cause of action in Count IX without leave of Court, and did so almost
six months after Defendants filed their responsive pleadings, it is entirely within the Court’s
discretion to dismiss this new cause of action. See Tucker v. Middleburg-Legacy, LLC, 539 F.3d
545, 551–52 (6th Cir. 2008) (finding that the district court did not abuse its discretion in denying a
further amendment where the amending party did not request leave to amend or proffer the proposed
amendment). Therefore, the Court shall strike Plaintiff’s second Amended Complaint, as Count IX
was inappropriately added and the Additional Defendants have since been dismissed from this case.
Accordingly, it is ORDERED that Defendants’ Motion to Dismiss or Strike Plaintiff’s
Amended Complaint [dkt 33] is GRANTED, thereby striking Plaintiff’s first Amended Complaint
in its entirety.
IT IS FURTHER ORDERED that Plaintiff’s original Complaint [dkt 1], and Defendants’
Answers [dkt 6, 7], shall constitute the operative pleadings in this case.
IT IS SO ORDERED.
S/Lawrence P. Zatkoff
LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
Dated: February 3, 2012
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of this Order was served upon the attorneys of
record by electronic or U.S. mail on February 3, 2012.
S/Marie E. Verlinde
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