Streambend Properties II, LLC et al v. Ivy Tower Minneapolis, LLC et al
Filing
96
ORDER (Written Opinion). Signed by Judge Joan N. Ericksen on July 24, 2012. (slf)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Streambend Properties II, LLC, and
Streambend Properties VIII, LLC,
Plaintiffs,
v.
Civil No. 10-4257 (JNE/AJB)
MEMORANDUM
Ivy Tower Minneapolis, LLC, Ivy Tower
Development, LLC, Moody Group, LLC,
Goben Enterprises, LP, Wischerman Holdings,
LLC, Jeffrey Laux, Gary Benson, Burnet
Realty, LLC, Commonwealth Land Title
Insurance Company, LLC, John Doe, Mary
Rowe, and XYZ, Corp.,
Defendants.
In an Order dated June 29, 2012, the Court denied Plaintiffs’ Motion for Leave to Amend
Complaint insofar as Plaintiffs sought leave to assert claims against Burnet Realty, LLC; granted
Plaintiffs an opportunity to submit a memorandum of law that addressed any error they discerned
in the Order; and afforded Burnet Realty an opportunity to respond. Having reviewed the
memoranda submitted by Plaintiffs and Burnet Realty, the Court perceives no error in the June
29 Order.
According to Plaintiffs, the magistrate judge’s “practice of striking motions to amend
filed after motions to dismiss prevented [them] from seeking amendment before judgment was
entered.” In support, they cited one order issued by the magistrate judge in another case. In that
case, the defendants moved for summary judgment on the sole federal claim, and they asserted
that supplemental jurisdiction over the state-law claims should not be exercised. Defendants’
Memorandum of Law, Streambend Properties, LLC v. Carlyle Condos, LLC, Civil No. 09-2102
(D. Minn. Nov. 25, 2009). A few weeks later, the plaintiff moved for leave to amend. The
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magistrate judge struck the plaintiff’s motion to “further[] the interest of efficient management of
[the] litigation.” Order, Streambend Properties, Civil No. 09-2102 (D. Minn. Dec. 22, 2009).
The magistrate judge indicated that the plaintiff could consider filing the motion to amend after
resolution of the defendants’ motion. Id. Later, the magistrate judge recommended that the
defendants be granted summary judgment on the federal claim and that supplemental jurisdiction
over the state-law claims be declined. Report and Recommendation, Streambend Properties,
Civil No. 09-2102 (D. Minn. May 18, 2010). Notwithstanding the order striking the plaintiff’s
motion to amend, the magistrate judge also recommended that the plaintiff’s motion to amend be
denied as moot:
Plaintiff has moved for leave to file an amended complaint which adds
parties and various state law claims, eliminates a state law statutory claim, and
modifies other counts, including the ILSA action. The proposed amended
complaint contains no allegations which would cause the court to alter its analysis
and conclusions with regard to application of the ILSA and the exercise of federal
jurisdiction in this matter. The motion to amend should therefore be denied as
moot.
Id. at 16. Adopting in part and rejecting in part the Report and Recommendation, the district
judge denied the defendants’ motion for partial summary judgment, vacated the magistrate
judge’s order denying the plaintiff’s motion for leave to amend, and vacated the magistrate
judge’s order striking the plaintiff’s motion for leave to amend. Order, Streambend Properties,
Civil No. 09-2102 (D. Minn. Aug. 2, 2010).
Having reviewed the case on which Plaintiffs relied to establish the magistrate judge’s
practice of striking a motion to amend filed after a motion to dismiss, the Court discerns no such
practice. One order striking a motion to amend filed after a motion to dismiss hardly constitutes
a practice, especially when the magistrate judge recommended that the motion to amend be
denied as moot notwithstanding the earlier order striking it and the district judge vacated the
order striking the motion to amend. In addition, the magistrate judge does not routinely strike a
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motion to amend filed after a motion to dismiss. See Amusemints, LLC v. Webb Candy Co., Civil
No. 11-3210, 2012 WL 2359655, at *1 (D. Minn. June 18, 2012) (noting magistrate judge
granted motion to amend filed after motion to dismiss). Nevertheless, the Court assumes for
present purposes that a practice of striking a motion to amend filed after a motion to dismiss
existed. The putative practice did not prevent Plaintiffs from amending their Complaint.
Plaintiffs commenced this action on October 15, 2010. Burnet Realty filed its motion to
dismiss on November 10, 2010. Plaintiffs could have amended their Complaint “once as a
matter of course” within 21 days after service of Burnet Realty’s motion. Fed. R. Civ. P.
15(a)(1)(B); see Fed. R. Civ. P. 15 advisory committee notes, 2009 amendments (“[T]he right to
amend once as a matter of course terminates 21 days after service of a motion under Rule 12(b)
. . . . This provision will force the pleader to consider carefully and promptly the wisdom of
amending to meet the arguments in the motion.”). Although Plaintiffs considered an amendment
to their Complaint during the time that they could have amended “once as a matter of course,”
they did not amend it.
After the expiration of the 21-day period of Rule 15(a)(1)(B), Plaintiffs still could have
sought leave to amend. See Fed. R. Civ. P. 15(a)(2). Assuming that Plaintiffs refrained from
moving to amend because of the putative practice, the Court discerns no explanation for
Plaintiffs’ failure to file a motion to amend in the immediate aftermath of the Order that granted
Burnet Realty’s motion. Assuming that Plaintiffs refrained from seeking leave to amend before
resolution of the remaining defendants’ motions to dismiss, the Court discerns no explanation for
Plaintiffs’ failure to seek leave to amend in the immediate aftermath of the Order dated April 14,
2011. See United States ex rel. Roop v. Hypoguard USA, Inc., 559 F.3d 818, 823 (8th Cir. 2009)
(“[P]ost-judgment leave to amend may be granted if timely requested.”).
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Finally, a practice of routinely striking a motion to amend filed after a motion to dismiss
is procedurally improper. See Pure Country, Inc. v. Sigma Chi Fraternity, 312 F.3d 952, 956
(8th Cir. 2002) (“[T]he district court ignored [plaintiff’s] motion to amend, granted [defendant’s]
motion to dismiss the original complaint, and then denied [plaintiff’s] motion to amend the
complaint as moot. That approach, as a procedural matter, was plainly erroneous. If anything,
[plaintiff’s] motion to amend the complaint rendered moot [defendant’s] motion to dismiss the
original complaint.”). But by acquiescing in the putative practice, Plaintiffs failed to preserve
their right to amend. See In re 2007 Novastar Fin. Inc., Sec. Litig., 579 F.3d 878, 884-85 (8th
Cir. 2009) (“‘[I]n order to preserve the right to amend the complaint, a party must submit the
proposed amendment along with its motion.’” (quoting Clayton v. White Hall Sch. Dist., 778
F.2d 457, 460 (8th Cir. 1985)); Evergreen Invs., LLC v. FCL Graphics, Inc., 334 F.3d 750, 757
(8th Cir. 2003) (“A party may not stand idly by, watching the proceedings and allowing the
district court to commit error on which the party subsequently complains.”); Steele v. City of
Bemidji, 257 F.3d 902, 905 (8th Cir. 2001) (“[A]lthough [plaintiff] argues on appeal that he
should have been allowed to amend his complaint, he cannot fault the District Court for failing to
grant him leave to amend when he did not seek permission to do so.”).
The June 29 Order adequately addresses the remaining arguments asserted by Plaintiffs in
their Memorandum dated July 13, 2012. The Court discerns no error in the June 29 Order.
Dated: July 24, 2012
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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