DRE Health Corporation v. Berkley Equity Limited, et al

Filing 48

ORDER granting #37 Defendants' motion to file amended answer. Defendants shall file amended answer on or before 1/17/2023. Signed on 1/11/2023 by District Judge Roseann Ketchmark. (Brown, Jonathan)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
DRE HEALTH CORPORATION,

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Plaintiff,
v.
BERKLEY EQUITY LIMITED,
ANTHONY LYONS,
Defendants.

Case No. 4:22-cv-00031-RK

ORDER
Before the Court is Defendants’ motion to file an amended answer. (Doc. 37.) The motion
is fully briefed. (Docs. 40, 41.) After careful consideration and for the reasons explained below,
the motion is GRANTED. Defendants shall file an amended answer (as attached to their motion,
see Doc. 37-1) on or before January 17, 2023.
I.

Background
Plaintiff DRE Health Corporation filed this civil action against Defendants Berkley Equity

Limited and Anthony Lyons on January 18, 2022. (Doc. 1.) In a joint answer filed on February
2, 2022, Berkley Equity Limited filed a counterclaim and third-party complaint jointly against
DRE Health and Ahmed “Isaac” Bawany (alleged to be DRE Health’s Chief Executive Officer).
(Doc. 7.) Berkley Equity Limited asserted seven counterclaims against DRE Health and Mr.
Bawany. (Id. at 33-40.) Mr. Bawany and DRE Health filed an answer as counterclaim-defendants
on February 25, 2022. (Doc. 16.)
The Court entered a scheduling order on April 4, 2022, including the following deadlines:
(1) joinder of parties/amendment of pleadings – August 1, 2022; (2) completion of discovery –
April 5, 2023; (3) dispositive motions deadline – May 5, 2023; and (4) a trial date of October 2,
2023. (Doc. 27.) The parties initially scheduled a mediation under the Court’s Mediation and
Assessment Program for June 20, 2022 (Doc. 28), and after rescheduling the MAP mediation, the
parties unsuccessfully mediated the case on August 3, 2022. (See Doc. 34.)
Defendants filed the instant motion to amend their pleadings on September 14, 2022. (Doc.
37.) Defendants seek to (1) add a new counterclaim for Abuse of the Corporate Form/Alter Ego,
and (2) to add two additional affirmative defenses (mutuality and mutual assent or ”meeting of the

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minds”). (Id. at 3, ¶¶ 9 & 10.) Defendants state that the necessity for these additions to their
answer arose upon review and evaluation of discovery propounded by DRE Health and Mr.
Bawany in early July. (See generally id.)
II.

Discussion
The issue before the Court largely turns on application of the rules that govern civil

proceedings in district court – namely Rule 6, Rule 15, and Rule 16 of the Federal Rules of Civil
Procedure.
The first, Rule 6, provides that “[w]hen an act may or must be done within a specified time,
the court may, for good cause, extend the time . . . on motion made after the time has expired if
the party failed to act because of excusable neglect.” Rule 6(b)(1)(B). The Eighth Circuit has
explained that the principle of “excusable neglect” for purposes of Rule 6(b) is an “equitable one,
taking account of all relevant circumstances surrounding the party’s own omission.” Hawks v.
J.P. Morgan Chase Bank, 591 F.3d 1043, 1048 (8th Cir. 2010) (citation and quotation marks
omitted). As the United States Supreme Court has recognized, relevant factors include “the danger
of prejudice to the [opposing party], the length of the delay and its potential impact on judicial
proceedings, the reason for the delay, including whether it was within the reasonable control of
the movant, and whether the movant acted in good faith.” Pioneer Inv. Servs. Co. v. Brunswick
Assocs. Ltd. Partnership, 507 U.S. 380, 395 (1993) (citation omitted).
In addition, Rule 16(b)(4) provides that scheduling orders “may be modified only for good
cause and with the judge’s consent.” See also Sherman v. Winco Fireworks, Inc., 532 F.3d 709,
716 (8th Cir. 2008) (evaluating defendant’s motion to amend filed after the scheduling order
deadline for amended pleadings under Rule 16(b)’s good-cause standard).
Finally Rule 15, which governs amended pleadings generally, provides that when a party
is not entitled to amend a pleading as a matter of right and instead must seek leave of court, the
court should “freely give leave [to amend] when justice so requires.” Rule 15(a)(2). As the Eighth
Circuit has explained, district courts should generally deny properly filed motions for leave to
amend a pleading “only in those limited circumstances in which undue delay, bad faith on the part
of the moving party, futility of the amendment, or unfair prejudice to the non-moving party can be
demonstrated.” Roberson v. Hayti Police Dep’t, 241 F.3d 992, 995 (8th Cir. 2001) (citations
omitted). Mere delay alone is not a sufficient reason to deny leave to amend, but the critical inquiry
is whether the delay resulted in unfair prejudice to the opposing party. Id. And here, “[t]he burden
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of proof of prejudice is on the party opposing the amendment.” Id. (citation and quotation marks
omitted). Over all these rules, the Court notes the fundamental purpose of the rules as applied in
every civil case proceeding in federal court is to “secure the just, speedy, and inexpensive
determination” of each case. Fed. R. Civ. P. 1.
In this case, the Court finds Defendants demonstrate good cause and excusable neglect to
file an amended answer as they have proposed here. Two weeks prior to the pleading-amendments
deadline, DRE Health produced 4,200 documents in discovery. In the midst of reviewing this
discovery, Defendants prepared for and participated in the August 3 mediation as required by the
Court. Defendants state that the “newly-produced documents and related information,” combined
with other existing information and knowledge about the underlying circumstances of this
litigation, ultimately gave rise to the additional counterclaim and affirmative defenses. (Doc. 37 at
4.) Under the most recent scheduling order (Doc. 26), the discovery deadline is set for April 2023
and a trial scheduled for October 2023. Neither DRE Health nor Mr. Bawany have shown any
undue or unfair prejudice under these circumstances in allowing Defendants to amend their answer
as they have proposed to do here, and it appears the parties were all acting in good faith in the
production of discovery and otherwise.

Therefore, Defendants’ motion is GRANTED.

Defendants shall file an amended answer as attached to their motion (see Doc. 37-1) on or before
January 17, 2023.1
IT IS SO ORDERED.

s/ Roseann A. Ketchmark
ROSEANN A. KETCHMARK, JUDGE
UNITED STATES DISTRICT COURT
DATED: January 11, 2023

The Court declines to otherwise amend the scheduling order (see Doc. 26) at this time. The Court
will, however, consider any properly filed motion to amend the scheduling order (jointly submitted or
otherwise) as may be necessary.
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