COUNTY OF ESSEX et al v. AETNA INC. et al
Filing
109
OPINION denying 90 Defendants' Motion for leave to file an Amended Answer. Signed by Magistrate Judge Cathy L. Waldor on 12/13/2019. (sm)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
COUNTY OF ESSEX and THE ESSEX
COUNTY
BOARD
OF
CHOSEN
FREEHOLDERS
Civ. No. 17-13663 (SDW)(CLW)
Plaintiffs,
v.
AETNA INC., AETNA LIFE INSURANCE
COMPANY, INC., ABC CORPS. 1-100, and
JOHN DOES 1-100,
Defendants.
WALDOR, Magistrate Judge,
THIS MATTER comes before the Court on Defendants’, Aetna Inc. and Aetna Life Insurance Company
(collectively, “Aetna”), Motion for Leave to Amend and Supplement their Answer and Counterclaim. ECF
No. 90. Plaintiffs, County of Essex and the Essex County Board of Chosen Freeholders (collectively, the
“County”) oppose Aetna’s motion. ECF No. 100. Decided without oral argument under Federal Rule of
Civil Procedure 78, Aetna’s motion is DENIED.
BACKGROUND
The Court assumes the parties’ familiarity with the factual and procedural history of this action and
addresses only those facts necessary for the resolution of the instant motion. The underlying suit involves
a dispute over the terms of insurance plans Aetna provided to Plaintiffs for its employees and retirees. See
generally ECF Nos. 1, 2.
On March 2, 2018, this Court entered its original Pretrial Scheduling Order (“Scheduling Order”)
that included an August 31, 2018 deadline for any motion to amend the pleadings. ECF No. 11. On at least
three separate occasions, at the parties’ request, the Court amended the deadlines in the Scheduling Order.
See ECF Nos. 13, 26, 29. While certain dates were amended based on the Court’s Orders, the Court did not
modify the deadline for filing motions to amend pleadings and no request for such a modification was ever
submitted by the parties.
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
In 2018, the parties cross moved for judgment on the pleadings. (ECF Nos. 14, 20), and Judge
William H. Walls (deceased) (“Judge Walls”) issued an Opinion and Order on those motions on December
13, 2018. ECF Nos. 30, 31. On January 9, 2019, the County filed a Motion for Reconsideration of the
December 13, 2018 Opinion and Order, which Defendants opposed on February 25, 2019, and on March
12, 2019, the County replied. ECF Nos. 32, 40, 41. In response to Plaintiffs’ Motion for Reconsideration,
Judge Walls issued an Opinion and Order on May 1, 2019, determining that Plaintiffs were entitled to
judgment on the pleadings for all contract years except 2010.1 ECF Nos. 50, 51. Defendants then moved
for reconsideration of the May 1, 2019 Opinion and Order. ECF No. 59-8. Defendants argued, among other
things, the County’s December 21, 2015 public resolution (the “2015 Resolution”) (ECF No. 40-3), that
Aetna was a party to (ECF No. 40-3 at 12), and the County referenced in its Complaint (ECF No. 1-2 ¶¶
17, 21), precipitated Plaintiffs’ to change their theory of the case. ECF No. 59-8 at 16-21. On August 15,
2019, Judge Susan D. Wigenton (“Judge Wigenton”) denied Defendant’s Motion for Reconsideration
because Defendants’ posited new arguments based upon information already in their possession and their
position was “nothing more than a disagreement with the Court’s ruling.” ECF Nos. 83. On October 22,
2019, this Court issued an Order directing the parties to pursue damages discovery. ECF No. 98.
Now, to circumvent the Opinions and Orders issued by Judges’ Walls and Wigenton, on September
27, 2019, Defendants brought the instant motion to amend its answer, add affirmative defenses, and
counterclaims2. ECF No. 90-1. This motion comes over a year after the deadline to amend. ECF No. 90.
Plaintiff filed its response to the instant motion, (ECF No. 100), and Defendant filed its reply (ECF No.
107).
DISCUSSION
“Any dispute over the parties’ agreements and performance in 2011 through 2016 has been resolved.” ECF No. 50
at 12.
1
Defendants’ further demonstrate their disregard for the previous Opinions and Orders in this case when they
included in their draft Answer (ECF No. 107-3 at 61) a request for declaratory relief with regard to the 2011-2016
contracts, which was adjudicated by Judge Walls on May 1, 2019 (ECF No. 50) and reconsideration of the issue
denied by Judge Wigenton on August 15, 2019 (ECF No. 83).
2
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
In Defendants’ moving brief, they seek leave to file an Amended Answer pursuant to Federal Rule
of Civil Procedure 15(a) and state that Federal Rule of Civil Procedure 16 is inapplicable. ECF No. 90-1.
Plaintiffs’ opposed Defendants’ motion. ECF No. 100. In Defendants’ reply, they briefly address Rule 16
“good cause” but incorrectly recite the standard, specifically stating that “‘good cause’ exists where . . . the
movant seeks leave to amend in response to material developments in the case.” ECF No. 107 at 6.
Under Rule 15 of the Federal Rules of Civil Procedure, “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.” Fed. R. Civ. P. 15(a)(2). However, in situations such as those present in this case, if a party
seeks to amend “after the deadline for doing so set by the Court, the movant must satisfy the [good cause
standard] of Rule 16 before the Court will turn to Rule 15.” Karlo v. Pittsburgh Glass Works, LLC, 2011
WL 5170445, at 2 (W.D.Pa. Oct. 31, 2011); see also Dimensional Commc’n, Inc. v. OZ Optics, Ltd., 148
F. App’x 82, 85 (3d Cir. 2005) (adopting the Rule 16 good cause standard on a motion to amend where the
deadline to amend had elapsed).
Good cause is determined based “on the diligence of the moving party” who must show that despite
its efforts, “the deadlines set forth in the scheduling order could not reasonably be met.” Harbor Laundry
Sales, Inc. v. Mayflower Textile Servs. Co., No. 09-6259, 2011 WL 6303258, at *3 (D.N.J. Dec. 16, 2011).
The District of New Jersey has found that “allowing extensions in the absence of good cause . . . deprive[s]
trial judges of the ability to effectively manage the cases on their overcrowded dockets and severely
impair[s] the utility of scheduling orders.” Monroe v. City of Hoboken, No. 11-2556, 2012 WL 1191177,
at *5 (D.N.J. Apr. 10, 2012) (citations omitted). If a movant had the knowledge necessary to file a motion
to amend prior to the expiration of the Court’s deadline set forth in the scheduling order, and if the movant
can provide no satisfactory explanation for the delay, the Court may, in its discretion, deny the motion.”
Lasermaster International Inc. v. Netherlands Insurance Co., 2018 WL 6191901 15-cv-7614 (D.N.J. Nov.
28, 2018).
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Defendants failed to demonstrate that they diligently pursued the proposed amendments and
therefore, have not demonstrated the necessary “good cause” for the Court to amend its scheduling order.
As an initial matter, Defendant’s motion to amend is untimely because it was submitted more than a year
after the deadline for amendment of the pleadings had passed. As noted above, the Court amended the
Scheduling Order at least three (3) separate occasions and Defendants never sought an extension of time to
file an amended pleading. “Because this motion is untimely, Defendant[s] ha[ve] the burden to demonstrate
that [they] acted diligently” in presenting their amended answer, additional affirmative defenses and
counterclaims. Lasermaster, 2018 WL 6191901 (D.N.J. Nov. 28, 2018). However, Defendants’ briefing
completely failed to provide any evidence that they acted diligently in seeking this motion to amend. Out
of an abundance of caution, the Court also applied Defendants’ Rule 15 arguments concerning their lack of
undue delay in seeking leave to amend to this Rule 16 analysis. Defendants’ arguments are unavailing
because, as noted above, Defendants had multiple opportunities to seek to amend the and failed to do so.
Defendants’ asserted three reasons for why “good cause” existed for their proposed amendments:
(1) that they have “good cause” to add counterclaims because Plaintiff changed its legal theory of the case
in its March 12, 2019 reply (ECF No. 41) that was based upon the public 2015 Resolution; (2) that the
deposition of Alan Abramowitz supports their mitigation defense (ECF No. 107 at n. 6); and (3) that the
Court’s approval of the parties Stipulation of Partial Dismissal with Prejudice (ECF No. 102) regarding the
2010 contract year supports their additional affirmative defenses. Defendants’ state that that “good cause”
exists where “the movant seeks leave to amend in response to material developments in the case.” ECF No.
107 at 6. However, as noted above, this is not the crux of a Rule 16 analysis, rather “good cause” rests upon
the moving parties’ diligence in its pursuit of amending the pleadings. GlobespanVirata, Inc. v. Texas
Instruments, Inc., 2005 WL 1638136, at *3 (D.N.J. July 12, 2005) (quoting Rent-A-Ctr. v. Mamaroneck
Ave. Corp., 215 F.R.D. 100, 104 (S.D.N.Y. Apr. 9, 2003) ); Chancellor v. Pottsgrove Sch. Dist., 501
F.Supp.2d 695, 702 (E.D.Pa. Aug. 8, 2007) (“[a]bsent diligence, there is no ‘good cause.’ ”); see also Fed.
R. Civ. P. 16(b), advisory committee’s note (1983 Amendment) (“[T]he court may modify the schedule on
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
a showing of good cause if it cannot reasonably be met despite the diligence of the party seeking the
extension.”).
The Court finds Defendants’ arguments in support of “good cause” unpersuasive. First,
Defendants’ did not direct the Court to any evidence demonstrating they diligently pursued amending and
supplementing their answer and counterclaims. ECF Nos. 90-1, 107 at 6-9. Second, Defendants’ point the
Court to a few lines in Plaintiffs’ reply to Defendants opposition to Plaintiffs’ Motion for Reconsideration
that was predicated on the public 2015 Resolution that was expressly referenced in the County’s Complaint
(ECF No. 1-2 ¶¶ 17, 21), and Aetna was a party to (ECF No. 40-3 at 12). Given that Defendants’ theory for
adding counterclaims rests upon a publicly available document from 2015, that was referenced in the
County’s Complaint, and that Aetna signed in November 2015 (ECF No. 40-3 at 12), Defendants’ were
surely aware of or in possession of the 2015 Resolution as early as November 2015 or at the latest,
December 27, 2017, the date the Complaint was filed. When “the party knows or is in possession of the
information that forms the basis of the later motion to amend at the outset of the litigation, the party is
presumptively not diligent.” Price v. Trans Union, LLC, 737 F.Supp.2d 276, 280, 2010 WL 3310241, at
*2–3 (E.D.Pa. Aug. 17, 2010).
Third, the admissions against interest made during recent deposition testimony does not support
granting Defendants’ motion because the alleged admissions against interest pertain to mitigation of
damages, which will be resolved through a damages trial.3 Lastly, the dismissal of the 2010 contract year
in this action was entered upon a joint stipulation by the parties and does not provide Defendants with “good
cause” to amend its answer to assert additional affirmative defenses.
Because the Court has found that Defendants’ have not me the standard under Rule 16, the Court
need not address the application of Rule 15.
CONCLUSION
Defendants’ argument is also illogical because they are claiming that a motion filed on September 27, 2019 (ECF
No. 90-1) satisfies the “good cause” standard in Rule 16 because of a deposition testimony that took place in
November 2019, at least a month after the initial motion had been filed. ECF No. 107 at 7-8.
3
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
The Court having considered the papers submitted pursuant to Fed. R. Civ. P. 78, and for the reasons set
forth above;
13
IT IS on this ___ day of December 2019,
ORDERED that Defendants’ motion for leave to file an Amended Answer (ECF No. 90) is DENIED.
___//s Cathy L. Waldor____________
HONORABLE CATHY L. WALDOR
UNITED STATES MAGISTRATE JUDGE
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