TRAVELERS CASUALTY AND SURETY COMPANY et al v. BECTON DICKINSON AND COMPANY
OPINION AND ORDER granting 66 Motion to Amend the answer to Defendant's counterclaim. Signed by Magistrate Judge James B. Clark on 1/24/17. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TRAVELERS CASUALTY AND
SURETY COMPANY, et al.,
BECTON DICKINSON AND COMPANY,
Civil Action No. 14-4410 (JMV)
OPINION AND ORDER
CLARK, Magistrate Judge
Currently pending before the Court is Plaintiffs Travelers Casualty and Surety Company
and Travelers Property and Casualty Company of America’s (collectively, “Plaintiffs”) Motion
for Leave to Amend their Answer to Defendant’s Counterclaim. [Dkt. No. 66]. Defendant
Becton Dickson and Company (“Defendant”) opposes Plaintiffs’ motion [Dkt. No. 70], and
Plaintiffs have replied [Dkt. No. 76]. The Court has fully reviewed and considered all arguments
made in support of, and in opposition to, Plaintiffs’ motion. The Court considers this motion
without oral argument pursuant to Fed. R. Civ. P. 78 and L. Civ. R. 78.1(b). For the reasons set
forth more fully below, Plaintiffs’ motion is GRANTED.
As the parties are intimately familiar with the facts underlying this matter, the Court will
address only those facts relevant to the pending motion. Plaintiffs filed their operative
(amended) complaint on July 18, 2016, seeking a declaratory judgment that they are not
obligated to defend or indemnify Defendant with respect to a number of underlying antitrust
lawsuits filed against Defendant. [See Dkt. No. 4]. Plaintiffs also seek a declaration that
Defendant breached its contracts with Plaintiffs, and thus forfeited rights to insurance coverage
with respect to the underlying lawsuits. [See id.].
According to the complaint, Plaintiffs issued policies to Defendant for several years, from
approximately 1978 through at least 1999. [See id.]. These policies provided coverage for
certain occurrences but required notice pursuant to the terms in the policies. [See id.]. Plaintiffs
claim that Defendant did not notify them of the underlying lawsuits until after they had been
filed and settled. [See id.].
On September 16, 2014, Defendant filed an answer to the amended complaint and
asserted a counterclaim against Plaintiffs seeking a declaration of coverage for the underlying
lawsuits. [Dkt. No. 9]. Plaintiffs filed an answer to Defendant’s counterclaim on October 7,
2014. [Dkt. No. 11]. On November 24, 2014, Plaintiffs moved for judgment on the pleadings
pursuant to Fed. R. Civ. P. 12(c). [Dkt. No. 12]. Approximately three months later, Plaintiffs
filed an application to stay discovery pending adjudication of their Rule 12(c) motion, which the
Court granted on February 27, 2015. [Dkt. Nos. 22, 24]. Plaintiff’s motion for judgment on the
pleadings was denied on April 5, 2016. [Dkt. No. 43]. On May 10, 2016, the Court entered a
scheduling order. [Dkt. No. 52]. The scheduling order permitted the parties to file any motion to
amend no later than July 22, 2016. [Dkt. No. 52]. On July 22, 2016, Plaintiffs filed the present
The decision of whether to grant leave to amend is always within the discretion of the
court. See Fourte v. Countrywide Home Loans, Inc., No. 07-1363, 2009 WL 2998110, at *7
(D.N.J. Sept. 15, 2009) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed.
2d 222 (1962)). Pursuant to Federal Rule of Civil Procedure 15(a), leave of court to amend
pleadings “shall be freely given as justice so requires.” Fed. R. Civ. P. 15(a). Further, Rule
15(a) encompasses amending an answer to include an affirmative defense. Charpentier v.
Godsil, 937 F.2d 859, 863–64 (3d Cir. 1991) (and cases cited). Similarly, leave to amend to add
a counterclaim may be granted if the pleader has omitted the counterclaim “through oversight,
inadvertence, or excusable neglect, or when justice requires.” Fed. R. Civ. P. 13(f). Whether to
allow such amendments is within the discretion of the court. See Lorenz v. CSX Corporation, 1
F.3d 1406, 1413–14 (3d Cir. 1993) (citing Foman, 371 U.S. at 182). Although the rule requires
that leave to amend be “freely given,” it is appropriate to deny such a request in the event that the
court finds “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party
by virtue of allowance of the amendment, or futility of the amendment.” Id. (and cases cited).
The Third Circuit has established that “prejudice to the non-moving party is the
touchstone for the denial of an amendment.” Cornell & Co. v. Occupational Safety & Health
Review Comm'n, 573 F.2d 820, 823 (3d Cir. 1978). While mere delay is insufficient to constitute
denial of leave to amend, a delay in asserting an amendment may cause prejudice sufficient to
warrant such a denial. See Phillips v. Borough of Keyport, 179 F.R.D. 140, 144 (D.N.J. 1998).
“As a practical matter, however, any delay in asserting an affirmative defense for a significant
period of time will almost invariably result in some ‘prejudice’ to the nonmoving party.”
Advocat v. Nexus Indus., Inc., 497 F. Supp. 328, 331 (D. Del. 1980). Thus, the proper standard
requires balancing the length of the delay against the resulting prejudice. Id. Moreover, the
court should balance concerns of possible prejudice to the non-moving party against the moving
party’s reason for delay in seeking to amend. Coventry v. United States Steel Corp., 856 F.2d
514, 520 (3d Cir. 1988) (citing Adams v. Gould, Inc., 739 F.2d 858, 868–69 (3d Cir. 1984), cert
denied, 469 U.S. 1122, 105 S. Ct. 806, 83 L.Ed.2d 799 (1985)). Prejudice to the nonmoving
party is greater when the amendment requires a reopening of discovery and less when application
of a new issue of law to already existing facts will facilitate a ruling. See Harrison Beverage Co.
v. Dribeck Imps., Inc., 133 F.R.D. 463, 469 (D.N.J. 1990).
Plaintiffs seek to amend their answer to Defendant’s counterclaim to add the following
affirmative defense: “To the extent [Defendant] claims that it satisfied its notice obligation
respecting the [underlying lawsuits], as required by [Plaintiffs’ applicable policies], at some time
prior to [Defendant’s] tenders and requests for coverage as to those actions in, respectively,
December 2013 and June 2014, [Defendant’s] claims against [Plaintiff] may be barred by
applicable statutes of limitation.” [Dkt. No. 66-2]. Defendant argues that Plaintiffs’ motion to
amend should be denied because the affirmative defense that Plaintiffs wish to include would
prove futile, the affirmative defense was waived by waiting too long to assert the same, and that
Plaintiffs filed the motion with undue delay. [See Dkt. No. 70]. Defendant further argues that
granting Plaintiff’s motion would “significantly prejudice” it, and that Plaintiffs filed their
motion in bad faith and with dilatory motive. [Id.].
Defendant first argues that the proposed statute of limitations affirmative defense is futile
because it lacks facial plausibility. [Dkt. No. 70 at 15]. Specifically, Defendant avers that it
filed its counterclaims within the applicable statute of limitations period, and thus Plaintiffs
cannot show that the action is time-barred. [See id.]. Defendant further argues that the
Plaintiffs’ statute of limitations defense was waived by waiting too long to assert the same. [Id.].
With regard to any futility analysis, Defendant’s arguments in opposition to Plaintiffs’
motion for leave to amend would overlap significantly with those made in support of a motion to
dismiss. The Court, in its discretion, will not consider the futility arguments in connection with
its review of Plaintiffs’ present motion. See In re Aetna UCR Litig., No. 07-3541, 2015 WL
3970168, at *8 (D.N.J. June 30, 2015) (and cases cited). In the interests of judicial economy and
in the absence of undue prejudice, the Court may decline to engage in a detailed futility analysis
where the Court finds that these arguments are better suited for consideration in the context of a
motion to dismiss. See id. at *8; Strategic Envtl. Partners, LLC v. Bucco, No. 13-5032, 2014
WL 3817295, at *2 (D.N.J. Aug. 1, 2014) (preserving futility argument for anticipated motions
to dismiss); Diversified Indus., Inc. v. Vinyl Trends, Inc., No. 13-6194, 2014 WL 1767471, at *1
n.1 (D.N.J. May 1, 2014) (finding, “in the interest of judicial economy and in the absence of
prejudice,” that the amended counter-claim should be treated as the operative pleading for the
purposes of a motion to dismiss despite the fact that the Court had not yet granted leave to
With regard to Defendant’s arguments of undue delay and prejudice, the Court finds
these points unavailing. There is no presumptive period in which a motion for leave to amend is
deemed “timely” or in which delay becomes “undue.” Fourte, 2009 WL 2998110 at *8. Delay
alone does not justify denying a motion to amend. Cureton v. Nat’l Collegiate Athletic Ass’n,
252 F.3d 267, 273 (3d Cir. 2001) (and case cited). Rather, only when the delay places an
unwarranted burden on the court or on the opposing party is a denial on the basis of delay
appropriate. See Adams, 739 F.2d at 868 (and cases cited). Moreover, unless the delay at issue
will prejudice the non-moving party, a movant does not need to establish compelling reasons for
its delay. Heyl & Patterson Int’l, Inc. v. F.D. Rich Housing of Virgin Islands, Inc., 663 F.2d 419,
426 (3d Cir. 1981). In gauging prejudice, the Court should consider whether an amendment
would “require the opponent to expend significant additional resources to conduct discovery and
prepare for trial” or “significantly delay the resolution of the dispute.” Ruotolo v. City of New
York, 514 F.3d 184, 192 (2d Cir. 2008) (and case cited).
Here, Plaintiffs successfully argue that they did not act with undue delay in filing their
motion. After answering Defendant’s counterclaim and before a scheduling order was entered,
the Court stayed discovery pending adjudication of Plaintiffs’ Rule 12(c) motion. [See Dkt. No.
24]. After Plaintiffs’ motion was denied, the Court entered a scheduling order on May 10, 2016.
[Dkt. No. 52]. Plaintiffs claim that during the course of responding to Defendant’s subsequent
discovery requests, they located relevant information that Defendant used to claim prior notice in
a related action. [See Dkt. No. 66 at 6; Dkt. No. 76 at 5]. It appears that Plaintiffs then sought
consent to amend their answer to Defendant’s counterclaim to add a statute of limitations
defense. [Dkt. No. 66 at 6 n.1]. Unable to obtain Defendant’s consent, Plaintiff filed the instant
motion, less than two months after the discovery stay was lifted and within the deadline set by
the Court to file leave for a motion to amend. Based on these facts, the Court does not find that
Plaintiffs acted with undue delay.
Notably, Defendant would also face minimal prejudice at this time. Defendant argues
that Plaintiffs’ proposed amended would cause it undue hardship by expending additional
resources to overcome a defense that Plaintiffs could have asserted years ago. [See Dkt. No. 70
at 20]. Defendant further argues that granting Plaintiffs’ amendment request will necessitate
additional discovery which will further delay resolution of this matter. [See id. at 20–21].
Presently, no pre-trial conference has occurred, no trial date has been set, and the parties have
not yet finished discovery. In fact, the parties jointly requested an extension of fact discovery
until September 11, 2017, which the Court granted. [Dkt. No. 99]. Thus, the Court effectively
cured any prejudice to Defendant by extending the timeline for discovery. See Koch Materials
Co. v. Shore Slurry Seal, Inc., 216 F.R.D. 301, 306 (D.N.J. 2003) (holding the same). Defendant
argues that it will be prejudiced by the amount of paperwork and discovery that it may have to
perform should Plaintiffs’ requested relief be granted. Defendant, however, has not
demonstrated that it will be denied the opportunity to present facts or evidence to support its
counterclaim. See id. Although this litigation has been ongoing for more than two years, it does
not present the kind of situation that has often led courts to deny a motion to amend in the
interest of judicial economy. See Fourte, 2009 WL 2998110 at *9.
Finally, the Court does not find that Plaintiffs acted with bad faith or dilatory motive.
The timing of Plaintiffs’ motion appears to be dictated by the progress of discovery, which was
delayed pending a decision on Plaintiffs’ motion for judgment on the pleadings. After the
motion was denied, the Court entered a scheduling order and the discovery stay was lifted. In
light of evidence that surfaced during discovery thereafter, Plaintiffs sought leave to amend their
answer to Defendant’s counterclaim, pursuant to Fed. R. Civ. P. 15, to add a statute of limitations
defense. Although Defendant may suggest otherwise, the Court has no reasonable basis to
believe that Plaintiffs were deliberately obfuscating or acting in bad faith or with a dilatory
motive in raising the present affirmative defense. [See Dkt. No. 70 at 17-18, 21-22].
Accordingly, Plaintiffs’ motion for leave to amend the answer to Defendant’s
counterclaim is GRANTED.
The Court having considered the papers submitted pursuant to Fed. R. Civ. P. 78 and
L. Civ. R. 78.1(b), and for the reasons set forth above;
IT IS on the 24th day of January, 2017,
ORDERED that Plaintiffs’ Motion for Leave to Amend the Answer to Defendant’s
Counterclaim is GRANTED; and it is further
ORDERED that Plaintiffs shall file the proposed Amended Answer to Defendant’s
Counterclaim within fourteen (14) days of this Order; and it is further
ORDERED that the Clerk of the Court terminate the aforementioned motion [Docket
Entry No. 66] accordingly.
s/James B. Clark, III
JAMES B. CLARK, III
UNITED STATES MAGISTRATE JUDGE
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