De Marco et al v. LaPay et al
MEMORANDUM DECISION and ORDER granting in part and denying in part 94 Plaintiffs' Motion to Amend/Correct; granting 98 Defendants' Motion for Joinder. Signed by Judge Ted Stewart on 10/27/2011. (tls)
IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
JAMES DEMARCO, et al.
MEMORANDUM DECISION AND
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION TO AMEND
COMPLAINT AND GRANTING
DEFENDANTS’ MOTION FOR
MICHAEL LAPAY, et al.
Case No. 2:09-CV-190 TS
This matter is before the Court on Plaintiffs’ Motion to Amend Complaint 1 and
Defendants Joe Wrona and Wrona Offices, P.C.’s (collectively “Wrona”) Motion for Joinder in
Defendants Paladin Development Partners, LLC, Michael LaPay, Rory Murphy, George Bryan,
and Christopher Conabee’s (“Paladin”) Partial Opposition to Plaintiffs’ Motion for Leave to
Amend. 2 For the reasons set forth below, the Court will grant in part and deny in part Plaintiffs’
Motion to Amend Complaint and grant Defendant Wrona’s Motion for Joinder.
Docket No. 94.
Docket No. 98.
I. LEGAL STANDARD
Where, as in this case, a responsive pleading has been served, Federal Rule of Civil
Procedure 15(a)(2) dictates that “a party may amend its pleading only with the opposing party's
written consent or the court's leave.” The Rule specifies that “[t]he court should freely give
leave when justice so requires.” 3 “The purpose of the Rule is to provide litigants ‘the maximum
opportunity for each claim to be decided on the merits rather than on procedural niceties.’” 4
However, the Court may refuse to grant leave to amend where it finds evidence of “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, [or] futility of amendment.” 5 “Lateness does not of itself justify
the denial of [an] amendment.” 6 However, “denial of leave to amend is appropriate ‘when the
party filing the motion has no adequate explanation for the delay.’” 7
The “most important . . . factor in deciding a motion to amend the pleadings, is whether
the amendment would prejudice the nonmoving party.” 8 “Courts typically find prejudice only
Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (quoting Hardin v.
Manitowoc-Forsythe Corp., 691 F.2d 449, 456 (10th Cir. 1982)).
Id. (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
Id. at 1205 (quoting R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749, 751 (10th Cir.
1975)) (internal quotation marks omitted).
Id. at 1206 (quoting Frank v. U.S. West, 3 F.3d 1357, 1365-66 (10th Cir. 1993)).
Id. at 1207.
when the amendment unfairly affects the defendants ‘in terms of preparing their defense to the
Where an amendment is sought after the deadline for the amendment of pleadings set
forth in a scheduling order, most circuits require that the parties show good cause as required
under Rule 16(b). 10 The Tenth Circuit “has not ruled on [this] question in the context of an
amendment to an existing pleading.” 11 However, it has noted the “rough similarity between the
‘good cause’ standard of Rule 16(b) and [the Tenth Circuit’s] ‘undue delay’ analysis under Rule
15” 12 and that “appellate courts that have applied Rule 16 have afforded wide discretion to
district courts’ applications of that rule.” 13 When applied, the “good cause” standard “requires
the nonmoving party to show that it has been diligent in attempting to meet the deadlines, which
means it must provide an adequate explanation for any delay.” 14
Plaintiffs filed the present Motion on September 10, 2011, requesting “leave to amend
their complaint to clarify the various, but obtusely pled, causes of action in the original
complaint to add: (1) violation of the Interstate Land Sales Act as a legal theory of recovery; and,
Id. at 1208.
Bylin v. Billings, 568 F.3d 1224, 1231 n.8 (10th Cir. 2009); see Fed.R.Civ.P. 16(b)(4)
(AA schedule may be modified only for good cause and with the judge's consent.@).
Bylin, 568 F.3d at 1231 n.8.
Minter, 451 F.3d at 1205.
Bylin, 568 F.3d at 1231.
Id. at 1205 n.4.
(2) to properly state causes of action against Prudential and the agents who represented the
Plaintiffs as their real estate agents.” 15 Plaintiffs argue that they should be granted leave to
amend because “1) [at the date of the filing of the present Motion], not a single deposition [had]
been completed and all discovery that [had] been completed [had] covered all of the issues raised
in the Amended Complaint” and “2) Defendants’ [sic] will have ample opportunity to conduct
discovery related to plaintiffs’ additional claims.” 16 Furthermore, Plaintiffs argue that their
Motion should be granted because “Defendants’ [sic] would not be prejudiced by the amended
complaint.” 17 Defendant Paladin has submitted a Partial Opposition to Plaintiffs’ Motion, and
Defendant Wrona has filed a Motion to join Paladin’s Partial Opposition.
STATE-MANDATED UNIFORM AGREEMENT
Defendant Paladin argues that Plaintiffs’ Amended Complaint is improper in that
Plaintiffs’ sixth, seventh, eighth, and ninth causes of action are “based, in part, on the allegation
that Paladin was required by Utah Admin Code R162-6-1-6.2.3 to use a state-mandated uniform
real estate construction agreement.” 18 Plaintiffs argue that these allegations are appropriate
because it is Defendants’ failure to comply with the regulatory requirements that is at issue, not
their failure to disclose those requirements. However, this Court has previously held that “this
Docket No. 95, at 1.
Id. at 2.
Docket No. 97, at 3. These allegations are contained in Plaintiffs’ Proposed Amended
Complaint, Docket No. 95 ¶ 119 (a)–(h), (j)–(l).
administrative rule does not create a private right of action.” 19 Due to a lack of a private right of
action, this Court held that there was “no legal basis for fraud, no duty to disclose, and a failure
to meet the specific pleading requirements of Rule 9(b).” 20 Therefore, as the allegations
contained in paragraphs 119 (a)–(h) and (j)–(l) of Plaintiffs’ Proposed Amended Complaint do
not support a claim for fraud, the Court finds that it would be futile to grant Plaintiffs leave to
file an Amended Complaint containing those allegations. Therefore, the Court will deny
Plaintiffs’ Motion to the extent that Plaintiffs seek to re-allege those claims.
FEDERAL INTERSTATE LAND SALES FULL DISCLOSURE ACT
Paladin argues that Plaintiffs’ Motion to Amend Complaint is improper in that it adds a
new cause of action for violation of the Federal Interstate Land Sales Full Disclosure Act.
Paladin claims this is inappropriate because the scheduling order would need to be modified to
complete discovery on this new issue, as the current discovery deadline was September 16, 2011.
Paladin argues that Plaintiff must show good cause for the amendment when granting leave to
amend would require modification of a scheduling order. 21 However, the Federal Rules of Civil
Procedure are liberal in allowing amendment, even stating that “the court should freely permit an
amendment [during trial] when doing so will aid in presenting the merits and the objecting party
fails to satisfy the court that the evidence would prejudice that party’s action or defense on the
Docket No. 27, at 23.
Id. at 25.
Docket No. 97, at 5 (citing Alexander v. AOL Time Warner, Inc., 162 F. App’x 267,
269 (11th Cir. 2005); Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th Cir. 1998)).
merits.”22 Prejudice can also be reduced by “grant[ing] a continuance to enable the objecting
party to meet the evidence.” 23
In the present action, the Court finds that amendment adding this cause of action is
appropriate. Although this case is more than three years old, “not a single deposition [had been]
taken or completed” when Plaintiffs filed the present Motion. Furthermore, the scheduling order
was stricken 24 and the only events currently scheduled are the discovery deadline, which recently
passed; the final pretrial conference; and the trial, which is set for March 12, 2012. After these
three events were scheduled, counsel represented that they will need an extension of the
deadlines. 25 As both parties have already indicated that they will need an extension, the Court
finds that granting Plaintiffs’ Motion with respect to this cause of action would not prejudice
Defendants. Finally, as the scheduling order would already need to be modified, the Court finds
a good cause analysis unnecessary. The Court will therefore grant Plaintiffs’ Motion to file an
amended complaint including this claim.
Paladin does not object to the clarification of existing claims contained in Plaintiffs’
Proposed Amended Complaint. The Court finds no reason not to allow this clarification and will
permit Plaintiffs to file an amended complaint that does so. Paladin also notes, but does not
Docket No. 90.
Docket No. 96.
object to, the re-addition of Heather Peterson, Carrie Shoaf, Gregg N. Orrell aka Dusty Orrell,
Keelie West, Dick Stoner and Prudential Utah Real Estate (“Prudential Defendants”). These
parties were dismissed from the case on November 17, 2009. 26 None of the Prudential
Defendants have filed Oppositions to the present Motion, presumably because they were
dismissed from the case over 23 months ago.
Plaintiffs have not demonstrated why the remaining claims against the Prudential
Defendants were not alleged prior to this late date. Plaintiffs have also not alleged any newly
emerged facts that support bringing the Prudential Defendants back into this case. The Court,
therefore, finds undue delay by Plaintiffs, with no adequate explanation for the delay.
Furthermore, as the Prudential Defendants were dismissed over 23 months ago and have not
been involved in the litigation since that time, the Court finds that they would be prejudiced by
allowing an amended complaint bringing new claims against them. Therefore, Plaintiffs Motion
will be denied with respect to adding the Prudential Defendants.
Based on the foregoing, it is therefore
ORDERED that Plaintiffs’ Motion to Amend Complaint (Docket No. 94) is GRANTED
IN PART AND DENIED IN PART, pursuant to Plaintiffs’ filing of an amended complaint
consistent with the Court’s rulings contained herein. It is further
ORDERED that Defendant Wrona’s Motion for Joinder (Docket No. 98) is GRANTED.
The hearing currently set for October 31, 2011 at 3:00 p.m. is STRICKEN. The parties are
Docket No. 27, at 27.
directed to file a stipulated scheduling order with the Court within 14 days in light of the current
March 12, 2012 trial date.
DATED October 27, 2011.
BY THE COURT:
United States District Judge
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