Ferrell Mobile Homes, Inc. et al v. Champion Home Builders, Inc.

Filing 31

MEMORANDUM AND ORDER re: 26 MOTION for Leave to File First Amended Complaint filed by Plaintiff River City Mobile Home Sales, Inc., Plaintiff Ferrell Mobile Homes, Inc. IT IS HEREBY ORDERED that plaintiffs' motion for leave to file an amended complaint (#26) is GRANTED. Signed by District Judge Stephen N. Limbaugh, Jr on 4/17/18. (CSG)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
FERRELL MOBILE HOMES, INC.,
and RIVER CITY MOBILE HOME
SALES, INC. d/b/a MONTY’S MOBILE
HOMES,

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)
)
)
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Plaintiffs,
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)
v.
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CHAMPION HOME BUILDERS, INC., )
)
Defendant.
)

Case No. 1:17-CV-65-SNLJ

MEMORANDUM AND ORDER
This matter is before the Court on plaintiffs’ motion for leave to file an amended
complaint (#26). The motion is briefed and ripe. Because plaintiffs have shown good
cause to modify the scheduling order, the Court will grant the motion.
This case is about an alleged contract dispute. Defendant manufactures mobile
homes, while plaintiffs sell mobile homes. According to plaintiffs, defendant approached
them about opening a new manufacturing facility in Kentucky. Hoping to break into the
market for entry-level mobile homes, defendant needed “high volume” dealers to
compete in this new market. Given plaintiffs’ expertise and track record in the entrylevel mobile home market, defendant thought plaintiffs would be a valuable asset as a
distributor. The parties then agreed that plaintiffs would serve as defendant’s distributor
for its entry-level mobile homes.

1

A few months later, plaintiffs completed Champion Retail Dealer applications,
which required them to disclose “closely guarded business information.” (#6 at 3, ¶ 13.)
During this time, plaintiffs also worked with defendant to design an entry-level mobile
home. Eventually, plaintiffs submitted a “calculated design” (#6 at 4, ¶ 19) to defendant
and provided defendant with purchase orders that authorized defendant to construct two
entry-level mobile home units. A month later, defendant notified plaintiffs that it had
decided not to sell its entry-level mobile homes to plaintiffs. Defendant ultimately
delivered two entry-level mobile homes—the two that plaintiffs originally ordered—to
Pioneer Manufactured Homes (“Pioneer”), one of plaintiffs’ competitors. Plaintiffs
brought suit alleging breach of contract, promissory estoppel, and unjust
enrichment/quantum meruit.
Plaintiffs filed the case in state court in March 2017, and defendant removed.
Four weeks after defendant removed, plaintiffs served a third-party subpoena for
documents on Pioneer, and Pioneer produced the documents in late June 2017. Seven
months later, in January 2018, plaintiffs served a notice of deposition on Pioneer. “Due
to the unavailability of Pioneer’s witness, the deposition did not take place until March 9,
2018.” (#27 at 2, ¶4.) During the deposition, plaintiffs learned defendant promised
Pioneer that it would be defendant’s dealer in southeast Missouri for defendant’s entrylevel mobile homes. Defendant allegedly made this promise about two months before it
made the same promise to plaintiffs. About three weeks after the deposition, plaintiffs
filed this motion, asking for leave to file an amended complaint that includes counts for
fraudulent and negligent misrepresentation.
2

Because plaintiffs ask to amend a pleading after the deadline set in the Case
Management Order (#15), plaintiffs must satisfy Rule 16(b)’s good-cause standard.
Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 716 (8th Cir. 2008). “The primary
measure of good cause is the movant’s diligence in attempting to meet the order’s
requirements.” Id. at 716–17 (quoting Rahn v. Hawkins, 464 F.3d 813, 822 (8th Cir.
2006)).
Here, plaintiffs’ delay in adding the two new claims is justified. Per the Case
Management Order, the deadline for amending the pleadings was September 6, 2017.
But discovery is open until May 7, 2018. It was during discovery that plaintiffs
learned—for the first time—that defendant allegedly made this promise to Pioneer.
Three weeks after learning of the promise, plaintiffs filed this motion. Defendant argues
“plaintiffs have not established good cause, as the depositions of non-party witnesses in
which plaintiffs allege new information was obtained were not taken until March 9, 2018,
six months after the . . . deadline to amend pleadings in the Scheduling Order.” (#29 at
2.) This Court disagrees. Taking defendant’s argument to its logical conclusion, to show
good cause, a party must complete all non-party discovery before the deadline for
amending the pleadings. The deadline to complete discovery is much longer than the
deadline to amend the pleadings, and for good reason. Plaintiffs were well within the
discovery deadline when they deposed Pioneer’s witness, and courts routinely find that
good cause is satisfied when an amendment is based on “newly discovered facts.” See,
e.g., Hartis v. Chicago Title Ins. Co., 694 F.3d 935, 948 (8th Cir. 2012).

3

Next, defendant claims it will be prejudiced by the amendment because “exploring
the merits of such new claims . . . will require additional discovery, including the possible
re-taking of depositions already completed and additional written discovery, which has
already been undertaken.” (#29 at 2.) Even if additional discovery is necessary, it will
likely be minimal. The amendment is based on most of the same facts alleged in the
original petition, which suggests defendant will not be prejudiced. Also, as plaintiffs
point out, “the facts necessary to defend against . . . the proposed new claims are known
or readily available to [defendant] because [defendant] was [a] party to the secret
agreement at issue.” (#30 at 4.) As such, defendant has not shown that it will be
prejudiced, and the motion will be granted.
Accordingly,
IT IS HEREBY ORDERED that plaintiffs’ motion for leave to file an amended
complaint (#26) is GRANTED.
So ordered this

17th

day of April 2018.

STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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