Wells Fargo Bank NA v. Heber City Commercial II et al
Filing
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MEMORANDUM DECISION and Ordergranting 28 Motion for Leave to file Amended Counterclaim. Signed by Judge Dale A. Kimball on 9/18/12. (jlw)
______________________________________________________________________________
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
WELLS FARGO BANK, N.A.,
Plaintiff,
MEMORANDUM DECISION AND
ORDER GRANTING LEAVE TO FILE
PROPOSED AMENDED
COUNTERCLAIM
vs.
HEBER CITY COMMERCIAL II, LLC;
LEROY L. ANDERSON, III; and
JONATHAN OLCH,
Case No. 2:10CV1103DAK
Judge Dale A. Kimball
Defendants.
This matter is before the court on Defendants Heber City Commercial II, LLC, LeRoy L.
Anderson, III, and Jonathan Olch’s Motion for Leave to Amend Counterclaim. The court does
not believe that a hearing would significantly aid in its determination of this motion. Having
fully considered the motions, memoranda, and exhibits submitted by the parties as well as the
facts and law relevant to this motion, the court enters the following Order.
Defendants have brought a motion to amend their counterclaim under Rule 15 of the
Federal Rules of Civil Procedure. Rule 15 provides that “a party may amend the party’s pleading
only by leave of court or by written consent of the adverse party; and leave shall be freely given
when justice so requires.” Fed. R. Civ. P. 15(a). In assessing whether leave to amend is proper,
courts consider the presence or absence of undue delay, bad faith, dilatory motive, repeated
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failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and
futility of the proposed amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); Frank v. U.S.
West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).
Defendants proposed Amended Counterclaim seeks to add a claim for fraudulent
inducement. Defendants argue that their claim is based on additional evidence they received
recently by taking the deposition of Plaintiff Wells Fargo Bank’s Rule 30(b)(6) witness, Steven
Walker. Wells Fargo opposes Defendants’ motion for leave to amend, asserting that the motion
is untimely and futile.
A. Timeliness
“It is well settled in [the Tenth Circuit] that untimeliness alone is a sufficient reason to
deny leave to amend, especially when the party filing the motion has no adequate explanation for
the delay.” Frank, 3 F.3d at 1365. Defendants, however, argue that they have an adequate
explanation for the delay and the delay is not undue or prejudicial. Defendants assert that they
waited to seek leave to add a counterclaim for fraudulent inducement until they had enough
evidence to meet the heightened pleading standards for such a claim. Although Wells Fargo
disputes this explanation, the court finds it is adequate. In addition, the court does not find the
delay undue or prejudicial. Defendants moved to amend when there was still over three months
left of the discovery period. Although that time period has expired while the motion has been
briefed and considered, the court grants the parties an additional 90 days of discovery. All other
deadlines in the parties’ April 27, 2012 Amended Scheduling Order will also be extended 90
days.
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B. Futile
Wells Fargo also argues that leave to amend should be denied because Defendants’
counterclaim would not survive a motion for summary judgment. Specifically, Wells Fargo
contends that (1) Defendants did not reasonably rely on Walker’s alleged misrepresentations; (2)
the proposed amended counterclaim is barred by the parties’ pre-negotiation agreement; and (3)
the proposed amended counterclaim is barred by the statute of limitations.
Another court in this district, however, has warned that the “futility objection should not
turn into a mini-trial or summary judgment proceeding, without the safeguards normally present
for maturation and merits-based resolution of claims.” Clearone Communications, Inc. v.
Chiang, 2007 WL 2572380, at *1 (D. Utah Sept. 5, 2007). “No matter how likely it may seem
that a [party] may be unable to prove his case, he is entitled, upon averring a claim, to an
opportunity to prove it.” Id.
Wells Fargo does not assert that Defendants have failed to plead the counterclaim
adequately under the relevant pleading standards. And, while the legal issues Wells Fargo raises
may prevail on a motion to dismiss or motion for summary judgment, those issues are better
decided at that stage of the litigation. Defendants have cited cases allowing a claim for fraud in
the inducement in the face of a fully integrated contract, finding pre-negotiation agreements
illusory, and allowing counterclaims to relate back to the filing date of the Complaint. Therefore,
the court does not find amendment to be futile.
Based on Rule 15's dictate to provide leave freely, the court grants Defendants’ Motion
for Leave to Amend Counterclaim. Defendants shall file their Answer and Amended
Counterclaim, as presented in the attachment to their motion, within five days of the date of this
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Memorandum Decision and Order. As stated above, all deadlines in the parties’ April 27, 2012
Amended Scheduling Order are extended by 90 days. In a separate notice, the court will notify
the parties of the new dates for their final pretrial trial conference and trial.
DATED this 18th day of September, 2012.
BY THE COURT:
DALE A. KIMBALL
United States District Judge
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