Oh v. Choi et al

Filing 51

Minute entry and order for proceedings held before Magistrate Judge Marilyn D. Go on 9/11/12. Appearances by I. Suriyopas and M. Scheinkman for plaintiff; A. Wolinsky and S. Yang for defendants. Rulings made on the record granting in part 46 plai ntiffs motion to compel and denying plaintiffs request for sanctions. Defendants must make a supplemental production of documents by 9/18/12 and provide affidavits by 9/28/12 as to whether documents and emails that have not been produced ever existe d, if they were destroyed and, if so, provide a log of such materials. Defendants must also make a further effort to obtain requested documents that are within their control even if not in their possession. Defendants are warned that further delay in discovery will not be tolerated. Defendant Soo Bok Chois 49 motion for leave to file a counterclaim is granted for the reasons discussed in the attached order. The amended answer must be served by 9/13/12. Next conference scheduled for 11/20/12 at 2:00 p.m. (Proujansky, Josh)

United States District Court
Eastern District of New York
MINUTE ORDER
11cv3764 (DLI)(MDG) OH v. CHOI
This Order sets forth rulings made on the record at a
conference on September 11, 2012 granting defendant Soo Bok Choi’s
motion for leave to file a counterclaim (ct. doc. 49).
Rule 15(a) of the Federal Rules of Civil Procedure provides
that leave to amend a pleading should be "freely give[n] . . . when
justice so requires."

See Zenith Radio Corp. v. Hazeltine

Research, Inc., 401 U.S. 321 (1971); Andersen News LLC v. American
Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012).
to amend extends to an answer to the complaint."
393 F.3d 390, 400 (3d Cir. 2004).

"The liberal right
Long v. Wilson,

Thus, courts should ordinarily

grant leave to amend in the absence of bad faith by the moving
party, undue prejudice or futility.

Friedl v. City of New York,

210 F.3d 79, 87 (2d Cir. 2000); Manson v. Stacescu, 11 F.3d 1127,
1133 (2d Cir. 1993) (citing Foman v. Davis, 371 U.S. 178, 182
(1962)).

The decision to grant or deny a request to amend is

within the discretion of the district court.

Foman, 371 U.S. at

182; John Hancock Mut. Life Ins. Co. v. Amerford Int'l Corp., 22
F.3d 458, 462 (2d Cir. 1994).
Under Rule 15, delay alone does not justify denial of leave to
amend.

See Ruotolo v. City of N.Y., 514 F.3d 184, 191 (2d Cir.

2008); Rachman Bag Co. v. Liberty Mutual Ins. Co., 46 F.3d 230, 234
(2d Cir. 1995); Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d
647, 653 n.6 (2d Cir. 1987).

“The concepts of delay and undue

prejudice are interrelated -- the longer the period of unexplained
delay, the less will be required of the non-moving party in terms
of showing prejudice.”

Davidowitz v. Patridge, 2010 U.S. Dist.

LEXIS 42322, at *5 (S.D.N.Y. 2010).

In evaluating whether

prejudice would result from amendment, a court considers whether
the proposed amendment would: “(1) require the opponent to expend

significant additional resources to conduct discovery and prepare
for trial; (2) significantly delay the resolution of the dispute;
or (3) prevent the plaintiff from bringing a timely action in
another jurisdiction.”

Monahan v. N.Y. City Dept. of Corr., 214

F.3d 275, 284 (2d Cir. 2000) (citing Block v. First Blood
Assocs., 988 F.2d 344, 350 (2d Cir. 1993)).
Plaintiff argues that where a motion to amend has been filed
after the deadline set by a scheduling order, Rule 16(b)’s “good
cause” standard governs.

“A finding of good cause depends on the

diligence of the moving party.”
334 (2d Cir. 2009).

Holmes v. Grubman, 568 F.3d 329,

However, the Second Circuit in Parker v.

Columbia Pictures, 204 F.3d 326 (2d Cir. 2000) (cited by
plaintiff), held only that absent a showing of good cause, it is
within the court’s discretion to deny a motion to amend if it is
untimely, not that the court is required to do so.

See Worldwide

Home Prods., Inc. v. Time, Inc., 2012 WL 1428528, at *3 (S.D.N.Y.
2012); Nycomed U.S. Inc. v. Glenmark Generics Ltd., 2010 WL
1257803, at *9-*10 (E.D.N.Y. 2010); Castro v. City of N.Y., 2010
WL 889865, at *1-*2 (E.D.N.Y. 2010).

Rather, where a motion to

amend is untimely, the more lenient standard under Rule 15(a)
must be balanced against Rule 16(b)’s good cause requirement.
See Holmes, 568 F.3d at 334-35; Grochowski v. Phoenix Constr.,
318 F.3d 80, 86 (2d Cir. 2003).
Defendant has not offered an explanation for failing to
seek leave sooner given that the facts giving rise to the
proposed counterclaim were known to him when he filed his
original answer.

The Court set April 12, 2012 as the deadline

for amendment of the pleadings.

See minute entry dated 11/28/11.

At a conference held on April 25, 2012, the then-counsel for
defendants sought a schedule to move for leave to withdraw.

In

his motion to withdraw, counsel stated that he had not been able
to communicate with his clients since February 2012.
-2-

Leave to

withdraw was granted on May 21, 2012 and discovery was stayed
until June 26, 2012 to permit defendants to retain new counsel.
Defendant first attempted to interpose the counterclaim, which
was subsequently withdrawn, less than three weeks after new
counsel appeared.

See ct. docs. 42, 45.

Thus, defendant’s delay

may be partially attributable to his failure to communicate with
counsel and the subsequent change in counsel.

This Court does

not view the events leading to a change in counsel as a
satisfactory reason for defendant not to have made a timely
motion.

However, excluding the time that the Court stayed this

action arising from withdrawal of counsel, defendant’s actual
delay in seeking leave to amend was less than three months after
the deadline set and relatively short.

However, defendants are

warned that no further delay will be tolerated and no extension
will be given on account of a change in counsel.
Although defendant has not made a showing of diligence to
satisfy the good cause standard, plaintiff will not be prejudiced
by the delay.

Discovery has not concluded and the proposed

counterclaim relating to an alleged unpaid loan to plaintiff will
not require significant additional discovery.
Plaintiff also argues that leave to amend should be denied
as futile under Rule 15.

Construing the proposed counterclaim as

one for breach of contract, plaintiff argues that defendant’s
allegations fail to state a claim.

However, defendant’s proposed

counterclaim is labeled “Unpaid Loan and Unjust Enrichment.”
Under New York law, a claim for unjust enrichment requires proof
that: “(1) the defendant was enriched, (2) at plaintiff’s
expense, and (3) equity and good conscience militate against
permitting defendant to retain what plaintiff is seeking to
recover.”

Briarpatch Ltd., L.P v. Phoenix Pictures Inc., 373

F.3d 296, 306 (2d Cir. 2004).

Defendant’s amendment to add a

counterclaim based on allegations of an unpaid loan to plaintiff
-3-

and the circumstances surrounding their relationship is not
futile.
Upon balancing the factors under Rules 15(a) and 16(b), I
find that the short delay and lack of prejudice to plaintiff
justify granting leave to amend.
SO ORDERED.
Dated:

Brooklyn, New York
September 12, 2012
/s/___________________________
MARILYN D. GO
UNITED STATES MAGISTRATE JUDGE

-4-