SDIF Limited Partnership 2 v. Tentexkota, LLC et al

Filing 65

OPINION AND ORDER. Signed by U.S. District Judge Charles B. Kornmann on 12/20/2017. (SAC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA

FILED

PEC 2 a2017

NORTHERN DIVISION

1: 17-CV-O 1002-CBK

SDIF LIMITED PARTNERSHIP 2, A
SOUTH DAKOTA LIMITED
PARTNERSHIP;
Plaintiff,

OPINION AND ORDER

vs.
TENTEXKOTA, LLC, A SOUTH
DAKOTA LIMITED LIABILITY
COMPANY; W. KENNETH ALPHIN,
TIMOTHY J. CONRAD, MICHAEL R.
GUSTAFSON, GEORGE D. MITCHELL,
DALE MORRIS, MARC W. OSWALD,
RONALD W. WHEELER, DWIGHT P.
WILES,
Defendants.

Defendants filed a motion to amend their answer, counterclaim, and third party
complaint to include a request for declaratory relief. Plaintiff resists the motion,
contending that the proposed amendment would be futile.
Pursuant to Fed. R. Civ. P. 15(a)(2), the "court should freely give leave [to amend
a pleading] when justice so requires." "Unless there is a good reason for denial, 'such as
undue delay, bad faith, or dilatory motive, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the non-moving party, or futility of
the amendment, leave to amend should be granted."' Becker v. Univ. of Nebraska at
Omaha, 191F.3d904, 907-08 (8th Cir. 1999) (quoting Brown v. Wallace, 957 F.2d 564,
566 (8th Cir. 1992)). The motion to amend was filed within the time set for filing such
motions in the scheduling order issued by the Court pursuant to the parties' proposed
dates. There is no undue delay, bad faith, or dilatory motive shown in this case. There is

also no undue prejudice to the plaintiff. The only prejudice would be legal prejudice if
defendants are successful on the merits of the claim for declaratory relief.
The proposed amended claim for declaratory relief seeks a ruling on the
application of SDCL 47-34A-303 to the liability of the individual defendants and third

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party plaintiffs for the debts of Tentexkota, LLC. Plaintiff contends that the amendment
is futile, suggesting that I rule on the merits of the application of SDCL 47-34A-303 in
the first instance. I decline to do so. The United States Court of Appeals for the Eighth
Circuit has held that the '[l]ikelihood of success on the new claim or defenses is not a
consideration for denying leave to amend unless the claim is clearly frivolous." Becker
v. Univ. ofNebraska at Omaha, 191 F.3d at 908. The new claim is not clearly frivolous.

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Now, therefore,

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IT IS ORDERED that the motion, Doc. 53, to amend the answer, counterclaim,
and third-party complaint is granted.
DATED this 20th day of December, 2017.
BY THE COURT:

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CHARLES B. KORNMANN
United States District Judge

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