IDS Property Casualty Insurance Company v. Kasneci

Filing 23

OPINION and ORDER granting Defendant's 17 Motion to File Counter Complaint. Signed by District Judge Gerald E. Rosen. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
IDS PROPERTY CASUALTY
INSURANCE COMPANY,
Plaintiff,
No. 2:13-cv-11233
Hon. Gerald E. Rosen

vs.
FRANO KASNECI,
Defendant.
___________________________________/

OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO FILE
COUNTER COMPLAINT
Plaintiff IDS Property Casualty Insurance Company filed a three-count
Complaint on March 20, 2013 arising out of a settlement agreement it entered into
with Defendant Frano Kasneci for certain benefits to cover injuries Defendant
sustained during an automobile accident. (Plf’s Compl., Dkt. #1). On April 29,
2013, Defendant moved to dismiss Plaintiff’s Complaint, asserting that this Court
lacked subject-matter jurisdiction and that Plaintiff failed to state a claim for relief.
(Def’s Mtn., Dkt. # 3).

That same day, Defendant also answered Plaintiff’s

Complaint (Def’s Ans., Dkt. # 4) and filed a complaint in Macomb County Circuit
Court against Plaintiff. (Ex. E to Def’s Br., Dkt. # 3-5). The parties subsequently

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dismissed the state court complaint without prejudice pending resolution of
Defendant’s Motion to Dismiss.
After this Court denied Defendant’s Motion to Dismiss (Dkt. # 10),
Defendant moved to file a counter complaint -- one that is similar to the now
dismissed state court complaint.

(Dkt. # 17).

There is no question that

Defendant’s counterclaims are compulsory under Federal Rule of Civil Procedure
13(a)(1)(A). His two causes of action, breach of contract and declaratory judgment
(Def’s Countercl., Dkt. # 16), are rooted in the parties’ April 20, 2012 Settlement
Agreement that sits at the center of Plaintiff’s Complaint. Defendant even admits
as such. (Def’s Mtn., Dkt. # 17, at 3). According to Defendant, he did not file the
counter complaint concurrently with his answer because he “challenged [this
Court’s] jurisdiction and now that the jurisdictional question is resolved,
[D]efendant should [be permitted to] include and plead all counter claims.” (Id. at
2).
Under Rule 15, a party may amend a pleading before trial as a matter of
course (Fed. R. Civ. P. 15(a)(1)), with the opposing party’s written consent (Fed.
R. Civ. P. 15(a)(2)), or by leave of the Court. (Id.). Rule 15(a)(2) makes clear that
a “court should freely give leave when justice so requires.” Id. “The decision as to
when ‘justice requires’ an amendment is within the discretion of the trial judge.”
Head v. Jellico Hous. Auth., 870 F.2d 1117, 1123 (6th Cir. 1989) (citation and

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alteration omitted). A Court should deny leave “in instances of ‘undue delay, bad
faith or dilatory motive on the part of the 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 amendment, etc.’”
Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 458 (6th Cir. 2013) (citation
omitted). An amendment is futile if it would not survive a Rule 12(b)(6) motion to
dismiss. Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir.
2000).
Here, Defendant may only amend his Answer to add the counterclaims with
leave of this Court because he is well beyond the deadline for amendment as a
matter of course and Plaintiff has not provided written consent. Plaintiff’s only
objection to Defendant’s proposed counterclaims is futility, arguing that
Defendant’s two causes of action -- breach of contract and declaratory relief -- are
“the foundation of the claim that is pending before the Court which has been
presented by the Plaintiff.” (Plf’s Resp., Dkt. # 20, at 8). They are, according to
Plaintiff, “futile in the sense that this Court will already dispose of all of the issues
based upon the Plaintiff’s complaint and request for declaratory relief.” (Id. at 89). Importantly, Plaintiff does not argue futility in the sense that Defendant’s
Counter Complaint fails to state a claim for relief.

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There is no disputing that the material facts at play in this litigation will
likely revolve around the nature of Defendant’s past and current physical
limitations, as well as what the parties knew at the time that they entered into the
settlement agreement at issue in this litigation. Under Plaintiff’s version of these
facts, Defendant is not as injured as he claimed (or claims) to be.

Plaintiff

therefore requests that this Court: (1) enter a declaratory judgment setting aside the
settlement agreement; and (2) enter judgment against Defendant to recover a
certain number of payments Plaintiff made to Defendant under the theories of
mistake of fact and unjust enrichment.

(Plf’s Compl., Dkt. #1).

Under

Defendant’s version of these facts, Plaintiff refused to provide Defendant with
certain benefits pursuant to the settlement agreement.

Defendant’s Counter

Complaint therefore requests that this Court: (1) enter a declaratory judgment
finding that the settlement agreement is binding; and (2) enter a judgment against
Plaintiff for breaching the settlement agreement. (Def’s Countercl., Dkt. # 16).
That the parties essentially rely upon the same -- though disputed -- factual
circumstances to support their respective claims against each other cannot mean
that Defendant’s counterclaims are futile. Holding otherwise would mean that any
compulsory counterclaim not brought at time of service would be futile. Here,
both parties request separate (though related) relief from this Court.

A

determination on one parties’ requested relief will not, as Plaintiff claims, just

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“echo[] and restate” a determination on the others’ requested relief. (Plf’s Resp.,
Dkt. # 20, at 8). Defendant’s Counter Complaint is not futile. And, none of the
other factors referenced above that weigh in favor of denying leave are present in
this case.

Consequently, and given that “Rule 15 plainly embodies a liberal

amendment policy,” Morse v. McWhorter, 290 F.3d 795, 800 (6th Cir. 2002),
justice requires that Defendant be permitted to amend his Answer to add his
counterclaims.
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Defendant Frano Kasneci’s Motion to File
Counter Complaint [Dkt. # 17] is GRANTED.
IT IS FURTHER ORDERED that Defendant Frano Kasneci may amend his
answer to add his counterclaims by no later than twenty-one days after entry of this
order.
IT IS SO ORDERED.

Dated: May 6, 2014

s/Gerald E. Rosen
Chief Judge, United States District Court

I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on May 6, 2014, by electronic and/or ordinary mail.
s/Julie Owens
Case Manager, [phone]

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