Petersen v. Bitters et al

Filing 98

MEMORANDUM AND ORDER - The plaintiff's Motion for Leave to Amend (Filing No. 80 ) is GRANTED. The plaintiff shall file a clean copy of the proposed Amended Complaint within three (3) days of the date of this order. The defendants' Motions to Dismiss (Filing Nos. 68 and 70 ) are DENIED, without prejudice to reassertion. The defendants shall answer or otherwise respond to the amended pleading within fourteen (14) days of the date of the filing of the Amended Complaint. Ordered by Judge Robert F. Rossiter, Jr. (Copy mailed to pro se party) (KLF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ESTATE OF JOYCE ROSAMOND
PETERSEN,
8:16CV183
Plaintiff,
vs.

MEMORANDUM AND ORDER

ROBERT W. BOLAND, JR., UNITED
FINANCIAL SERVICES, WILLIAM E.
BITTERS, and JOHN L. HENRY,
Defendants.
This matter is before the Court on the plaintiff’s Motion for Leave to Amend
(Filing No. 80). Also pending are motions to dismiss filed by defendant Robert W.
Boland, Jr. (Filing No. 70) and defendant William E. Bitters, d/b/a United Financial
Services (Filing No. 68). 1 This is an action for breach of fiduciary duty, negligence,
negligent misrepresentation, breach of contract, breach of implied duty of good faith and
fair dealing, fraud, and assumpsit in connection with investment advice and a promissory
note. Jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332.
I.

BACKGROUND
The Plaintiff filed its original Complaint on December 1, 2014, in the United

States District Court for the Eastern District of Texas. Defendant Bitters filed a Motion
to Dismiss under Fed. R. Civ. P. 12(b)(2) (lack of personal jurisdiction), (b)(3) (improper
1

The record indicates that defendant Bitters filed the motion to dismiss only on his
own behalf. However, in his Reply Brief on the Motion to Dismiss, he identifies himself
as William E. Bitters d/b/a United Financial Information Services. The caption of the
Complaint lists “William E. Bitters D/B/A United Financial Information Services, United
Financial Services.” The Complaint identifies Bitters as “William Bitters D/B/A United
Financial Information Services (hereinafter “UFIS”) and/or United Financial Services”
(emphasis added). The Complaint states that Bitters “operates a website under the name
of, and/or does business as, United Financial Information Services and/or United
Financial Services.” No summons was issued with respect to United Financial Services.
It thus appears that United Financial Services is not a separate entity subject to suit and is
not a separate defendant in this case.

venue), and (b)(6) (failure to state a claim) on March 30, 2015. On June 10, 2015,
defendant Boland moved to dismiss under Fed. R. Civ. P. 12(b)(5) (insufficiency of
process), (b)(2) (lack of personal jurisdiction), and (b)(3) (improper venue).

On

August 28, 2015, plaintiff moved to file an Amended Complaint. The Court denied the
motion “without prejudice to seeking leave to file an amended complaint if this Court
finds that the case should proceed in this District.” The Court noted that the plaintiff had
“not shown how his amended complaint would state additional facts regarding proper
venue in [the Eastern District of Texas]” and further stated that “nothing in the motion
indicates how the amended complaint would state facts to show how this Court could
exercise personal jurisdiction over some or all of Defendants here.”

The plaintiff later filed a motion to transfer venue. United States Magistrate Judge
Don D. Bush issued a report and recommendation (“R&R”) discussing both venue and
personal jurisdiction and recommending the motion be granted. The Court later adopted
that recommendation and ordered the action transferred to Nebraska. The then-pending
Motions to Dismiss filed by defendants Boland and Bitters were denied as moot. The
action was then transferred to the District of Nebraska on April 25, 2016.

Defendant Boland and defendant Bitters thereafter filed dismissal motions in this
Court. Those motions are addressed to the original complaint and assert failure to state a
claim and statute of limitations defenses. The proposed amendment to the complaint,
which is attached to the plaintiff’s motion as Exhibit A, will add new claims and factual
allegations. 2 In support of his motion, the plaintiff has shown by affidavit that it recently
became aware of additional information that will support the additional claims.

2

In the proposed Amended Complaint, the plaintiff adds claims for violations of the
Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c); the
Nebraska Uniform Deceptive Trade Practices Act (“NUDTPA”), Neb. Rev. Stat. §87-301, et
seq.; and the Nebraska Consumer Protection Act (“NCPA”), Neb. Rev. Stat.§ 59-1601, et
seq.

II.

DISCUSSION
Under Federal Rule of Civil Procedure 15(a)(l), a party may amend his pleading

once as a matter of course within: “(A) 21 days after serving it, or (B) if the pleading is
one to which a responsive pleading is required, 21 days after service of a responsive
pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is
earlier.” Rule 15(a)(2) further provides that “[i]n all other cases, a party may amend its
pleading only with the opposing party’s written consent or the court’s leave. “The court
should freely give leave when justice so requires.” Id.

The Court has substantial discretion in ruling on a motion for leave to amend
under Rule 15(a)(2). Wintermute v. Kansas Bankers Sur. Co., 630 F.3d 1063, 1067 (8th
Cir. 2011 ). “A court abuses its discretion when it denies a motion to amend a complaint
unless there exists undue delay, bad faith, repeated failure to cure the deficiency in the
pleading through previous amendments, undue prejudice to the non-movant, or futility of
the amendment.” Popoalii v. Correctional Med. Servs., 512 F.3d 488, 497 (8th Cir.
2008). Simple delay is insufficient; at least one of these factors must be present to justify
denying a party’s motion to amend. See id.; Bell v. Allstate Life Ins. Co., 160 F.3d 452,
454 (8th Cir. 1998).

The plaintiff contends it should be permitted to automatically file an Amended
Complaint without leave of court under Rule 15(a)(l)(B) since its motion was filed within
21 days of the filing of Motions to Dismiss by Defendants Boland and Bitters.
Defendants oppose the motion (Filing No. 92). Their opposition is based on the fact that
the District Court in the Eastern District of Texas denied leave to amend. That denial,
however, occurred in the context of inappropriate venue and lack of personal jurisdiction,
and does not involve the merits of the plaintiff’s present motion to amend.

Notwithstanding the fact that amendment may be proper without leave of court,
the Court finds leave to amend should be granted. Despite the fact that the action has

been pending since 2014, this litigation is still in its early stages.

The proposed

additional claims and allegations may cure some alleged deficiencies of the original
Complaint and may affect the parties’ positions and arguments. The plaintiff has shown
good cause for the amendment and the defendants have not shown they will suffer
prejudice as a result of the delay.

The Court finds the plaintiff should be granted leave to amend the Complaint. The
defendants’ Motions to Dismiss are rendered moot by this order and will be denied,
without prejudice to reassertion with respect to the amended complaint.
IT IS ORDERED:
1.

The plaintiff’s Motion for Leave to Amend (Filing No. 80) is GRANTED.

2.

The plaintiff shall file a clean copy of the proposed Amended Complaint
within three (3) days of the date of this order.

3.

The defendants’ Motions to Dismiss (Filing Nos. 68 and 70) are DENIED,
without prejudice to reassertion.

4.

The defendants shall answer or otherwise respond to the amended pleading
within fourteen (14) days of the date of the filing of the Amended
Complaint.

Dated this 8th day of August, 2016.
BY THE COURT:
s/ Robert F. Rossiter, Jr.
United States District Judge