INDECS CORP. et al v. CLAIM DOC, LLC

Filing 90

OPINION & ORDER, granting 60 Claim Doc's motion for leave to file an Amended Counterclaim; Claim Doc shall file and serve its Amended Counterclaim within fourteen (14) days from the date of this Order; etc. Signed by Magistrate Judge James B. Clark on 01/30/2019. (sms)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

INDECS CORP and WIREROPE
WORKS, INC.,

Civil Action No. 16-4421 (KM)

Plaintiffs,

OPINION AND ORDER

v.
CLAIM DOC, LLC,
Defendant.

CLARK, Magistrate Judge
THIS MATTER comes before the Court on a motion by Defendant Claim Doc, LLC
(“Claim Doc” or “Defendant”) for leave to amend its Counterclaim [Dkt. No. 60]. Plaintiffs
INDECS Corp. (“INDECS”) and Wirerope Works, Inc. (“Wirerope”) (collectively “Plaintiffs”)
oppose Claim Doc’s motion [Dkt. No. 66]. For the reasons set forth below, Claim Doc’s motion to
amend is GRANTED against INDECS and DENIED as moot against Wirerope. 1
I.

BACKGROUND
As the parties are intimately familiar with the facts surrounding this matter, the Court will

only address those relevant to the present motion. 2 INDECS administers and manages claims in
connection with the employee health benefits plan of Wirerope. See Dkt. No. 1, Plaintiffs
Complaint (“Pl. Compl.”) ¶¶ 15, 18. INDECS in turn used Claim Doc as a vendor to provide claim
review services for Wirerope and other customers. Id. at ¶¶ 2, 20. Under a three-way contract

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During the January 29, 2019 telephone status conference with the Court, the parties informed the undersigned that all
claims, cross claims, counterclaims, or other claims as to Wirerope only, have been settled, releasing Wirerope from the
present litigation.
2
A factual background of this matter is set forth in the January 9, 2018 Opinion of the Honorable Judge Kevin
McNulty, U.S.D.J. [Dkt. No. 44].
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between the parties, Claim Doc would provide the legal defense of “balance bills” which were bills
sent from healthcare providers to patients to cover the difference between the amount billed and the
amount the insurer reimbursed. Id. Claim Doc would handle appeals and provide, at no cost under
Wirerope’s plan, a legal defense against non-patient responsibility in the balance bills. Id. at ¶ 22.
In return, Claim Doc would receive service fees from INDECS on behalf of the plan. Id. at ¶ 28.
Claim Doc also undertook to act as a fiduciary for all of its actions under the agreement with
Wirerope and INDECS. Id. at ¶ 38.
On July 20, 2016, INDECS and Wirerope filed a Declaratory Judgment Complaint in this
Court alleging that Claim Doc had breached this three-way contract (Count I), that Claim Doc
breached its fiduciary duty to Wirerope and INDECS (Count II), and that Claim Doc has a duty to
indemnify Wirerope for defending outstanding balance bills (Count III). See Dkt. No. 1, Pl. Compl.
On September 14, 2016, Claim Doc filed its Answer to Plaintiffs’ Complaint with
Counterclaim. See Dkt. No. 11, Defendant’s Answer and Counterclaim (“Def. Answer and
Countercl.”. In its Initial Counterclaim, Claim Doc asserts five (5) causes of actions: Count I,
Breach of Contract against INDECS; Count II, Breach of Contract against Wirerope; Count III,
Tortious Interference with Contract against INDECS and Wirerope; Count IV, Civil Conspiracy
against INDECS and Wirerope; and Count V, Quantum Meruit/Unjust Enrichment against
Wirerope. Id. On October 5, 2016, Plaintiffs answered Claim Doc’s Initial Counterclaim.
Subsequently, the Court entered a Pretrial Scheduling Order on December 5, 2016 and the parties
engaged in discovery on this matter. See Dkt. No. 18.
However, after multiple discovery disputes and extensions, Claim Doc moved for leave to
file an Amended Counterclaim against INDECS and Wirerope on June 7, 2018. See Dkt. No. 60.
Claim Doc’s Amended Counterclaim contains additional factual allegations, amends its unjust

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enrichment/quantum meruit claim to include 2017-2018 fees related to the design and set-up of a
benefit program on behalf of Wirerope; and asserts a new breach of contract claim against INDECS.
See Dkt. No. 60-4, Defendant’s Amended Counterclaim (“Def. Am. Countercl.”).
II.

DISCUSSION
Pursuant to Federal Rule of Civil Procedure 15(a), “a party may amend its pleading only

with the opposing party’s written consent or the court’s leave” and “[t]he court should freely give
leave when justice so requires.” The decision to grant leave to amend rests within the sound
discretion of the trial court. Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321, 330
(1970). In determining a motion for leave to amend, Courts consider the following factors: (1)
undue delay on the part of the party seeking to amend; (2) bad faith or dilatory motive behind the
amendment; (3) repeated failure to cure deficiencies through multiple prior amendments; (4) undue
prejudice on the opposing party; and/or (5) futility of the amendment. See Great Western Mining &
Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 174 (3d Cir. 2010) (quoting Foman v. Davis,
371 U.S. 178, 182 (1962)). In addition, “[t]he Third Circuit has consistently emphasized the liberal
approach to pleading embodied by Rule 15.” Endo Pharma v. Mylan Techs Inc., 2013 U.S. Dist.
LEXIS 32931, at *4 (D. Del. Mar. 11, 2013). The Court should only deny leave when these factors
“suggest that amendment would be ‘unjust’. . . .” Arthur v. Maersk, Inc., 434 F.3d 196, 203 (3d Cir.
2006).
Plaintiffs do not challenge Claim Doc’s assertion of a second breach of contract claim against
INDECS. See Dkt. No. 66-2, Plaintiffs Brief in Opposition (“Pl. Opp. Br.”). Instead, Plaintiffs only
argue the futility of (1) the additional allegations asserted under Claim Doc’s tortious interference
with contract claim against Plaintiffs and (2) Claim Doc’s amendment of its unjust
enrichment/quantum meruit claim to include 2017-2018 fees related to a design and set-up of a benefit

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program on behalf of Wirerope. Id. at pgs. 1-2. First, in regard to Claim Doc’s amendments to its
tortious interference with contract claim, Plaintiffs claim the amendments are futile because Claim
Doc terminated a joinder agreement, which was part of the three-way contract between the parties,
and that Claim Doc has “failed to otherwise plead facts sufficient to establish that it sustained any
damages as a result of the allegedly tortious conduct of INDECS or Wirerope.” Id. at pg.1. Second,
in regard to Claim Doc’s amendment of its unjust enrichment/quantum meruit claim, Plaintiffs claim
the amendments are futile because Claim Doc has failed to plead facts sufficient to establish that it
sustained any damages under theories of unjust enrichment/quantum meruit beyond damages already
pleaded in its original Counterclaim.” Id. at pg. 2. Plaintiffs do not claim any other grounds on which
the Court may deny Claim Doc’s motion, such as undue delay, prejudice, or the result of any bad
faith. Id.
An amendment will be considered futile if it “is frivolous or advances a claim or defense that
is legally insufficient on its face.” Harrison Beverage Co. v. Dribeck Imps., Inc., 133 F.R.D. 463,
468 (D.N.J. 1990) (citations omitted). In determining whether an amendment is insufficient on its
face, the Court employs the same standard as in a Rule 12(b)(6) motion to dismiss. In re Burlington
Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997) (citation omitted). Under a Rule 12(b)(6)
analysis, the question is not whether the movant will ultimately prevail and detailed factual allegations
are not necessary to survive such a motion. Antoine v. KPMG Corp., 2010 WL 147928, at *6 (D.N.J.
Jan. 6, 2010). However, if a proposed amendment is not clearly futile, then denial of leave to amend
is improper. Meadows v. Hudson County Bd. of Elections, 2006 WL 2482956, at *3 (D.N.J. Aug.
24, 2006).
While Plaintiffs may be correct in their assertions, the Court finds that a ruling on Plaintiffs’
arguments in the context of the present motion would require legal determinations better suited for a

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motion to dismiss. Accordingly, because the Court declines to find that Claim Doc’s proposed
amendments are clearly futile at this juncture and because Plaintiffs make no argument that the
remaining factors considered under Fed. R. Civ. P. 15 weigh against allowing Claim Doc to amend,
Claim Doc’s motion for leave to file an Amended Counterclaim as to INDECS is GRANTED.
Moreover, because the parties have indicated to the Court, that all claims, cross claims,
counterclaims, or other claims as to Wirerope only, have been settled, releasing Wirerope from the
present litigation, Claim Doc’s motion for leave to file an Amended Counterclaim as to Wirerope is
DENIED as moot.
III.

CONCLUSION AND ORDER
The Court having considered the papers submitted pursuant to Fed. R. Civ. P. 78, and for the

reasons set forth above;
IT IS on this 30th day of January, 2019,
ORDERED that Claim Doc’s motion for leave to file an Amended Counterclaim [Dkt. No.
60] is GRANTED and it is further
ORDERED that Claim Doc shall file and serve its Amended Counterclaim within fourteen
(14) days from the date of this Order.

s/ James B. Clark, III
JAMES B. CLARK, III
United States Magistrate Judge

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