Gilliland et al v. Harley-Davidson Motor Company Group, LLC

Filing 164

ORDER denying 143 Motion to Amend to Request an Award of Punitive Damages. Ordered by Magistrate Judge Thomas D. Thalken. (JSF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

TERRENCE N. GILLILAND,
DENISE M. GILLILAND, and
LUIS S. GALLEGOS,

8:12CV384

Plaintiffs,
ORDER
vs.
HARLEY-DAVIDSON MOTOR
COMPANY GROUP, LLC,
Defendant.
This matter is before the court on the plaintiffs’ Motion to Amend to Request an
Award of Punitive Damages (Filing No. 143). The defendant filed a brief (Filing No.
147) and index of evidence (Filing No. 148) in response. The plaintiffs filed a brief
(Filing No. 162) in reply.

BACKGROUND
This case arises out of injuries Terrence Gilliland (Gilliland) and Luis Gallegos
sustained as a result of a single vehicle motorcycle accident on April 22, 2010, in Mills
County, Iowa.

At the time of the accident, Gilliland was operating a 2007 Harley-

Davidson VRSCAW V-Rod motorcycle (the motorcycle). Gallegos was a passenger.
Neither Gilliland nor Gallegos can recall, or knew at the time, what caused the accident.
The plaintiffs claim the accident occurred because the center post of the motorcycle’s
triple-tree assembly came apart, causing the crash.
The plaintiffs initially filed their complaint against the defendant in the District
Court of Douglas County, Nebraska, on December 13, 2010, alleging theories of
negligent manufacturing, negligent failure to warn, negligent inspection/testing,
negligent training, and strict liability, with respect to the motorcycle. The case was
subsequently dismissed, without prejudice, on June 7, 2012, for lack of prosecution. On
October 12, 2012, the plaintiffs filed a second complaint against the defendant in the
District Court of Dodge County, Nebraska, alleging similar claims.

The defendant

removed the action to this court on October 30, 2012. See Filing No. 1 - Notice of
Removal.
As relevant to the instant motion, in the court’s initial progression order, the court
set April 1, 2013, as the deadline for the plaintiffs to amend the pleadings. See Filing
No. 10. Following a telephone planning conference on June 14, 2013, the court entered
a final progression order. See Filing No. 18. As is common, because the deadline to
amend the pleadings passed, and no party sought an extension, the court did not renew
the deadline for the plaintiffs to amend the pleadings in the final progression order.
Thereafter, this case progressed in accordance with the court’s progression orders.
On October 10, 2013, the defendant deposed the plaintiffs’ expert, Chris
Hoffman. See Filing No. 55 - Ex. D Hoffman Depo. During the deposition, Mr. Hoffman
referenced Service Bulletin 1215 and 1215A. Id. p. 17-18. On November 15, 2013, the
plaintiffs served a request for production of Service Bulletin 1215B. See Filing No. 29;
Filing No. 50 - Howard Aff. ¶ 4 and Ex. A. The defendant produced Service Bulletin M1215 on December 16, 2013. See Filing No. 50 - Ex. A.1 According to the defendant,
Service Bulletin M-1215 “was not generated to address any safety issue or concern with
the 2007 Harley-Davidson VRSC model motorcycles (or any other model motorcycle
covered by the service bulletin).” See Filing No. 55 - Ex. A Hejlik Aff. ¶ 8. Instead, the
defendant generated Service Bulletin M-1215 in response to customer complaints about
a “clunking” noise in the front end of certain Dyna, Softail
and VRSC platform motorcycles, which was determined to
arise from a loss of clamp load on the steering head joint or
a “looseness” that typically manifested itself in a “clunking”
noise when riding over a significant road imperfection and/or
when the motorcycle’s front brakes were applied.
Id.

The defendants generated Service Bulletin M-1215A “to correct a part number

applicable to Dyna and Softail platforms” and Service Bulletin M-1215B “to clarify that
model year 2008 VRSC and FX Springer Softail model motorcycles were not within the
scope of the bulletin.” Id. ¶ 9.
Subsequent to the disclosure of Service Bulletin M-1215, the plaintiffs sought an
extension of various case progression deadlines.

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Following a contentious debate

The defendant failed to file a certificate of service for the response as required by NECivR 34.1.
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concerning the scheduling of matters in this case, the court2 held a hearing on March
12, 2014, to discuss the parties’ motions and objections. See Filing No. 76 - Text
Minute Entry. The court determined a six-month extension of the progression deadlines
was warranted due to then-recent discovery disclosures. See Filing No. 77 - Order.
The court entered an amended final progression order and then a second amended
final progression order upon motion of the parties. See Filing No. 78 - Amended Final
Progression Order; Filing No. 80 - Joint Motion to Extend the Case Deadlines; Filing No.
82 - Second Amended Final Progression Order. The plaintiffs did not request to renew
the deadline to amend the pleadings in any of their motions. See Filings No. 27, 49, 64,
66, and 80. As such, the court did not renew the deadline for the plaintiffs to amend the
pleadings. Further, the court stated in its final progression order and amended orders
that any “[m]otions to alter dates . . . shall not be considered in the absence of a
showing by counsel of due diligence in the timely development of this case for trial and
the recent development of circumstances, unanticipated prior to the filing of the motion,
which require that additional time be allowed.” See Filing No. 82 - Second Amended
Final Progression Order.
On January 13, 2015, following the court’s ruling on evidentiary motions and the
defendant’s summary judgment motion, the court entered an order rescheduling the
final pretrial conference for March 20, 2015, and trial for April 21, 2015. See Filing No.
124 - Amended Order. On March 19, 2015, the day prior to the final pretrial conference
and a month before trial, the plaintiffs moved to amend their complaint to add a claim for
punitive damages. See Filing No. 143 - Motion. After the final pretrial conference, on
the court’s own motion, trial was rescheduled for November 17, 2015. See Filing No.
146 - Text Order.
In the motion to amend, the plaintiffs seek leave to amend the complaint to add a
request under Iowa Code § 668A.1 for punitive damages. See Filing No. 143 - Motion.
The plaintiffs propose to add the following claim: “Defendant willfully disregarded a
known or obvious risk that was so great to make it highly probable that harm would
2

At the time, Senior District Judge Joseph F. Bataillon presided over the case. On May 22, 2014, this
case was reassigned to Chief District Judge Laurie Smith Camp and remained with the undersigned
magistrate judge for judicial supervision and processing of all pretrial matters. See Filing No. 87 Reassignment Order.
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follow, and which thus is usually accompanied by a conscious indifference to the
consequences under Iowa Code § 668A.1.” See Filing No. 143-1 - Proposed Amended
Complaint ¶ 54.

The plaintiffs state “[s]ignificant additional discovery took place

following the Court’s [March 17, 2014,] Order (Filing No. 77) allowing additional
discovery into Service Bulletin M-1215.” See Filing No. 143 - Motion ¶ 2. The plaintiffs
argue evidence at trial will include sufficient proof of punitive damages under Iowa Code
§ 668A.1. Id. ¶¶ 3-4. The plaintiffs also argue allowing a jury instruction on punitive
damages will not change the evidence or testimony at trial, thus there is no surprise to
the defendant. Id. ¶¶ 3-4.
In response, the defendant argues the plaintiffs’ motion, which, before the court
continued the trial date, was an eleventh-hour motion, should be denied because the
plaintiffs have failed to show good cause for the amendment and the amendment is
futile. See Filing No. 147 - Response. The defendant argues the court’s most recent
progression order, which the plaintiffs reference, does not include a deadline to amend
the pleadings because such deadline expired almost two years ago. Id. at 4-6. The
defendant asserts the referenced Service Bulletin M-1215 does not excuse the plaintiffs’
delay. Id. The defendant argues the plaintiffs knew of Service Bulletin M-1215 since
late 2013 and discovery involving Service Bulletin M-1215 ended around April 25, 2014,
when plaintiffs’ counsel deposed the defendant’s engineer, Korry Vorndran. Id. The
defendant further contends the plaintiffs’ allegation “significant additional discovery”
followed after the court’s March 2014 Order blatantly ignores the fact Service Bulletin M1215 had almost no effect on the plaintiffs’ expert’s revised report. Id. Lastly, the
defendant argues the amendment is futile because the claim for punitive damages is not
sufficiently alleged and it lacks evidentiary support. Id. at 6-8.
In reply, the plaintiffs contend, with trial scheduled for November 17, 2015, there
is no disruption of the trial schedule or unfair prejudice caused by granting the motion.
See Filing No. 162 - Reply.

The plaintiffs argue their amendment is not frivolous

because “[t]he avalanche of new evidence in the form of customer contacts, engineering
analysis, and the complete redesign of the triple tree assembly and development of the
critical Service Bulletins support a finding that Defendant knew, with a high degree of
certainty, that its aluminum on steel triple tree assembly was destined to result in a
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motorcycle accident with the catastrophic results found in the present case.” Id. The
plaintiffs assert the court should, at minimum, defer final ruling on punitive damages
until evidence has been presented at trial. Id.

ANALYSIS
The plaintiffs’ motion to amend implicates the standards for leave to amend
under both Rule 15(a) and Rule 16(b) of the Federal Rules of Civil Procedure. “If a
party files for leave to amend outside of the court’s scheduling order, the party must
show cause to modify the schedule.” Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497
(8th Cir. 2008) (citation omitted). “A schedule may be modified only for good cause
and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4) (emphasis added); see also
Hartis v. Chicago Title Ins. Co., 694 F.3d 935, 948 (8th Cir. 2012). “The primary
measure of good cause is the movant’s diligence in attempting to meet the order’s
requirements.” Hartis, 694 F.3d at 948 (citation omitted). “While the prejudice to the
nonmovant resulting from modification of the scheduling order may also be a relevant
factor, generally, [the court] will not consider prejudice if the movant has not been
diligent in meeting the scheduling order’s deadlines.” Sherman v. Winco Fireworks,
Inc., 532 F.3d 709, 717 (8th Cir. 2008). “Where there has been no change in the law,
no newly discovered facts, or any other changed circumstance . . . after the scheduling
deadline for amending pleadings, then we may conclude that the moving party has
failed to show good cause.” Hartis, 694 F.3d at 948 (internal quotation marks omitted)
(alteration in original). In addition to the good cause requirement, “on motion made after
the time has expired,” the court may extend time “if the party failed to act because of
excusable neglect.” See Fed. R. Civ. P. 6(b)(1)(B).
However, a court should grant leave to amend freely “when justice so requires.”
Fed. R. Civ. P. 15. Nevertheless, “[a] district court may deny leave to amend if there
are compelling reasons such as undue delay, bad faith, or dilatory motive, repeated
failure to cure deficiencies by amendments previously allowed, undue prejudice to the
non-moving party, or futility of the amendment. Duplicative and frivolous claims are
futile.” Reuter v. Jax Ltd., Inc., 711 F.3d 918, 922 (8th Cir. 2013) (internal quotation
and citation omitted). There is no absolute right to amend. See Hartis, 694 F.3d at
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948. Whether to grant a motion for leave to amend is within the sound discretion of the
district court. See Popoalii, 512 F.3d at 497. Additionally, the court may consider
whether the “late tendered amendments involve new theories of recovery and impose
additional discovery requirements.” Id. at 497.
A district court’s denial of leave to amend a complaint may be justified if the
amendment would be futile. See Silva v. Metro. Life Ins. Co., 762 F.3d 711, 719 (8th
Cir. 2014); see also Geier v. Mo. Ethics Comm’n, 715 F.3d 674, 678 (8th Cir. 2013).
“The party opposing such amendment ha[s] the burden of establishing that leave to
amend would be . . . futile.” Sokolski v. Trans Union Corp., 178 F.R.D. 393, 396
(E.D.N.Y. 1998) (citation omitted).

The court is mindful of the liberal policy toward

amendments and “the underlying purpose of Rule 15–to facilitate decision on the merits
rather than on the pleadings or technicalities.” Sharper Image Corp. v. Target Corp.,
425 F. Supp. 2d 1056, 1080 (N.D. Cal. 2006) (internal citation omitted); see Am. Family
Mut. Ins. Co. v. Hollander, 705 F.3d 339, 348 (8th Cir. 2013). A motion to amend
should be denied on the merits “only if it asserts clearly frivolous claims or defenses.”
Becker v. Univ. of Neb. at Omaha, 191 F.3d 904, 908 (8th Cir. 1999) (internal
quotations and citations omitted). “[L]ikelihood of success on the new claim or defense
is not a consideration for denying leave to amend unless the claim is clearly frivolous” or
“legally insufficient on its face.” Becker, 191 F.3d at 908; Williams v. Little Rock Mun.
Water Works, 21 F.3d 218, 225 (8th Cir. 1994) (citation omitted). “When the court
denies leave [to amend] on the basis of futility, it means the district court has reached
the legal conclusion that the amended complaint could not withstand a motion to
dismiss under Rule 12(b)(6)[.]” Briscoe v. Cnty. of St. Louis, Mo., 690 F.3d 1004,
1015 (8th Cir. 2012) (first alteration in original) (citation omitted).
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “[A]lthough a complaint need not include detailed factual
allegations, ‘a plaintiffs obligation to provide the grounds of his entitlement to relief
requires more than labels and conclusions, and a formulaic recitation of the elements of

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a cause of action will not do.’” C.N. v. Willmar Pub. Schs., Indep. Sch. Dist. No. 347,
591 F.3d 624, 629-30 (8th Cir. 2010) (quoting Twombly, 550 U.S. at 555).
In determining whether the proposed amended complaint contains a claim for
punitive damages that is plausible on its face, this court must review Iowa law on
punitive damages. Iowa Code § 668A.13 governs the award of punitive damages. In
Iowa, to succeed on a claim for punitive damages, a party must show:
by a preponderance of clear, convincing, and satisfactory
evidence, the conduct of the defendant from which the claim
arose constituted willful and wanton disregard for the rights
or safety of another . . . [and] the conduct of the defendant
was directed specifically at the claimant, or at the person
from which the claimant’s claim is derived.
I.C.A. § 668A.1(1)(a) and (b). “Willful and wanton conduct is shown when an actor has
intentionally done an act of an unreasonable character in disregard of a known or
obvious risk that was so great as to make it highly probable that harm would follow, and
. . . usually accompanied by a conscious indifference to the consequences.” Cawthorn
v. Catholic Health Initiatives Iowa Corp., 743 N.W.2d 525, 529 (Iowa 2007) (internal
quotation marks omitted). “Punitive damages serve as a form of punishment, and as
such, mere negligent conduct is not sufficient to support such a claim.” Cawthorn, 743
N.W.2d at 529.
Punitive damages are only recoverable when the defendant
acted with actual or legal malice. Actual malice may be
shown by such things as personal spite, hatred, or ill-will and
legal malice may be shown by wrongful conduct committed
with a willful or reckless disregard for the rights of
another. . . .
Thus, merely objectionable conduct is
insufficient. . . . To receive punitive damages, plaintiff must
offer evidence of defendant’s persistent course of conduct to
show that the defendant acted with no care and with
disregard to the consequences of those acts.
Id.; see also Miranda v. Said, 836 N.W.2d 8, 34 (Iowa 2013), reh’g denied (Sept. 11,
2013).
The plaintiffs have failed to show good cause to modify the court’s progression
orders. Specifically, the plaintiffs have not demonstrated diligence in seeking to amend
3

The court previously concluded Iowa law applies in this case. See Filing No. 122 - Memorandum and
Order p. 16-17.
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the complaint to add a punitive damages claim. The plaintiffs reference the court’s most
recent progression order and state it did not include a deadline for amendment of
pleadings as if that is justification for their late motion. However, the plaintiffs never
sought to extend the deadline to amend the pleadings in prior motions to amend the
progression orders.

See Filings No. 27, 49, 64, 66, and 80.

The plaintiffs also

reference Service Bulletin M-1215 and state significant additional discovery occurred
following its disclosure. However, absent generalized statements, the plaintiffs have not
clarified how Service Bulletin M-1215 delayed the plaintiffs’ motion to amend, or, at
minimum, seeking to extend the deadline to amend. The plaintiffs have been aware of
Service Bulletin M-1215 since late 2013. While discovery ensued following Service
Bulletin M-1215’s disclosure, it appears the plaintiffs could have sought to amend the
complaint as early as February 13, 2014, when the plaintiffs argued the defendant’s
knew of steering issues involving the plaintiffs’ motorcycle. See Filing No. 63 - Brief p.
14 (“Something was wrong with the steering on those motorcycles. Defendant knew
it.”). The plaintiffs have failed to sufficiently explain why they could not have sought to
amend the complaint earlier. See Freeman v. Busch, 349 F.3d 582, 589 (8th Cir.
2003) (holding that district court did not abuse its discretion by denying plaintiff’s motion
to amend complaint to add punitive damages where motion was filed seven weeks
before end of discovery but ten months after district court entered scheduling order and
where plaintiff provided no reason why those damages could not have been alleged
earlier and no good cause for late filing of motion to amend). Additionally, there has
been no change in law and the plaintiffs have not articulated any other circumstances
justifying the plaintiffs’ late motion. Accordingly, the plaintiffs have not met their burden
under Rule 16(b) to warrant a departure from the court’s progression orders.
Furthermore, the plaintiffs have not demonstrated they “failed to act because of
excusable neglect.” See Fed. R. Civ. P. 6(b)(1)(B).
Even if this court found good cause under Rule 16(b), the court would deny the
amendment under Rule 15(a) because of the amendment’s futility.

The proposed

amended complaint merely alleges negligence claims. “Mere negligent conduct is not
sufficient to support a claim for punitive damages.” McClure v. Walgreen Co., 613
N.W.2d 225, 230 (Iowa 2000); see also Cawthorn, 743 N.W.2d at 529. The proposed
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amended complaint is devoid of any allegation the defendant acted willfully and
wantonly or with actual or legal malice. Instead, at the end of the proposed amended
complaint, the plaintiffs simply include an abbreviated, barebones recitation of punitive
damages under I.C.A. § 668A.1. While detailed factual assertions are not required, the
plaintiffs are required to provide more than just labels, conclusions, and speculation.
After reviewing the proposed amended complaint, in applying the standard applicable to
the determination of a motion to dismiss for failure to state a cause of action, the court
finds the proposed amended complaint does not contain sufficient factual matter, which
if accepted as true, states a “claim to relief [for punitive damages] that is plausible on its
face.” Twombly, 550 U.S. at 570. Upon consideration,

IT IS ORDERED:
The plaintiffs’ Motion to Amend to Request an Award of Punitive Damages (Filing
No. 143) is denied.

ADMONITION
Pursuant to NECivR 72.2 any objection to this Order shall be filed with the Clerk
of the Court within fourteen (14) days after being served with a copy of this Order.
Failure to timely object may constitute a waiver of any objection. The brief in support of
any objection shall be filed at the time of filing such objection. Failure to file a brief in
support of any objection may be deemed an abandonment of the objection.

Dated this 14th day of April, 2015.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge

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