Louisiana Pacific Corporation v. The Teaford Co., Inc.

Filing 61

ORDER re 59 MOTION to Amend Complaint and Revise Scheduling Order. Accordingly, this matter is set for further discussion and argument for Thursday, April 25, 2013, at 2:00 p.m. CTD. To participate in the conference call, parties will call 615-695-2851 promptly at the scheduled time. Signed by Magistrate Judge Joe Brown on 4/22/13. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(tmw)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
LOUISIANA PACIFIC CORPORATION,

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Plaintiff
v.
THE TEAFORD CO., INC.,
Defendant

No. 3:11-0317
Magistrate Judge Brown
Jury Demand

O R D E R
The Plaintiff in this matter has filed a motion to amend
its complaint and to revise the scheduling order (Docket Entry 59).
Plaintiff

(LP)

has

attached

a

copy

of

the

proposed

amended

complaint as Docket Entry 59-1. The first five counts of the
amended complaint appear to be identical to the original complaint.
The proposed Count 6 alleges a breach of contract against
LP’s insurance

agent, Holman and Company (Holman) alleging that

Holman failed to obtain proper insurance as was required by the
contract between LP and Defendant Teaford Co., Inc. (Teaford).
Plaintiff contends that Teaford was required to obtain professional
liability insurance, for bodily injury and property damage arising
out of any design, fabrication, and manufacturing performed by
Teaford away from the Clark County plant. They alleged that Holman
was aware this was a requirement of the contract and that Holman
failed to obtain proper insurance.

They contend that they are an

intended beneficiary between Teaford and Holman to acquire the
necessary insurance that would protect LP.

Count 6 alleges a negligence claim by LP against Holman.
This claim essential argues that Holman was negligent in not
determining that the insurance secured contained the appropriate
coverage.
policies

They contend that Holman failed, by not examining the
issued by Colony Insurance Co. (Colony), to determine if

they contained an exclusion purporting to exclude any coverages
relating to the Clark County project regardless of whether bodily
injury or property damages arose on work that was performed by
Teaford on site or off site.
Finally, they propose adding Count 7, an insured loss
claim, against Teaford. They allege that LP had a totally separate
global insurance policy to provide coverage for them in this matter
regardless of any other coverage. They allege this policy had a $2
million deductible and that they have sustained $2 million in
uninsured losses because of the accident at the Clark County
facility.
In

this

count

they

allege

that

another

insurance

company’s (ACE) policy should have provided some coverage for this
accident. However, it does not appear that ACE is being added as an
additional defendant in this proposed amended complaint.
The motion is not accompanied by a separate memorandum of
law and no law is actually cited in the motion.
Teaford has filed an objection to the proposed second
amended complaint (Docket Entry 60).

2

The objection is devoid of

any case citation, but simply argues that this is a violation of
Federal Rule of Evidence § 411 in that it would be bring insurance
coverage into the case.

They further argue that LP has taken an

inconsistent position in opposing Teaford’s earlier motion for
summary judgment (Docket Entry 42, p. 2). They further object that
the second amended complaint is untimely. They contend allowing an
amendment at this point would be unfair, unjust, and prejudicial.
Neither party cites a single case in support of their
positions.
Rule 15 of the Fed. R. Civ. P. recognizes that amendments
to pleadings in the interest of justice should be freely given.
Amendments under Rule 15 can denied for a number of reasons. The
Supreme Court in Foman v. Davis, 371 U.S. 178 (1962) held that in
the absence of any apparent or declared reason, such as 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, utility of the amendment, leave to
amend, should be freely given.
Where the court has set a deadline for amending pleadings
the standard for allowing an amendment substantially changes. Under
Rule 16 once a deadline passes the freely-given standard of Rule 15
changes under Rule 16 to good cause shown.
249 F.3d 888, 905-906 (6th Cir. 2003).

3

See Leary v. Dasschner,

In reviewing the scheduling

orders in the Court does not see that it set a firm deadline for
motions to amend.

However, the Court did set a deadline for

completion of all discovery of April 30, 2011 (Docket Entry 58).
Even had the Court granted the motion to amend on the day it was
filed (March 12, 2013) it would have been impossible to get a new
defendant served and to complete a reasonable amount of discovery
on the new issues by that deadline.
On the other hand the Magistrate Judge understands that
all claims against Teaford because of the bankruptcy proceedings
are limited to insurance coverage and as such Teaford does not have
a substantial dog in this fight.
In the motion (Docket Entry 59) they point out that they
believe they have been sandbagged by Teaford and the insurance
companies when suddenly all insurance coverage is removed and
various lawsuits trying to enforce that coverage are dropped.
Unfortunately, no dates are provided when these various
events occurred.

The Court is therefore unable to determine

whether there is undue delay in attempting to file this amended
complaint.
Of course, allowing additional defendants in the matter
will undoubtedly require a new scheduling order and a new trial
date.

Additionally, the Magistrate Judge has this case on consent

and absent the consent of all new defendants, the matter would have
to be remanded back to the District Judge.

4

Given the competing legal standards under Rules 15 and
16, as well as a lack of knowledge as to when certain events were
known to the Plaintiff the Magistrate Judge is uncomfortable ruling
on this motion without some additional information.
this

matter

is

set

for

further

discussion

Thursday, April 25, 2013, at 2:00 p.m. CTD.

and

Accordingly,
argument

for

To participate in the

conference call, parties will call 615-695-2851 promptly at the
scheduled time.
The Magistrate Judge requests the parties addressing the
issue of when LP knew of these various insurance matters, whether
this affects in any way the relief from the bankruptcy stay
allowing LP to proceed claims against Teaford in addition to the
other items mentioned that govern Rules 15 and 16. Although Holman
is not a party to this proceeding, it is requested that if counsel
for LP or Teaford know the address of Holman’s attorney they
forward a copy of this order to that person, and that attorney will
be permitted to join the conference as an interested entity.
Clearly, if the amendment is allowed, an entirely new
scheduling order will have to be entered with significant input
from the new defendants.
While the Plaintiff has taken one position in connection
with a summary judgment motion, which the Court did not fully
adopt, Fed. R. Civ. P. 8 does not prevent a party from seeking
relief in the alternate.
5

It is so ORDERED.
/s/ Joe B. Brown
JOE B. BROWN
United States Magistrate Judge

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