Arnett v. Howard et al

Filing 90

MEMORANDUM DECISION and ORDER denying 83 Motion to Amend/Correct; granting 85 Motion to Amend/Correct. Signed by Judge Ted Stewart on 7/16/2014. (blh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
JAMES ARNETT,

MEMORANDUM DECISION AND
ORDER DENYING PLAINTIFF’S
MOTION FOR RELIEF AND GRANTING
PLAINTIFF’S MOTION FOR LEAVE TO
AMEND

Plaintiff,
v.
BENJAMIN SNOW HOWARD;
LIFELINE MEDIA LLC, a Utah entity;
NATIONWIDE AFFORDABLE
HOUSING, a Texas corporation; and the
BEN HOWARD TRUST, an Idaho trust,

Case No. 2:13-CV-591 TS
District Judge Ted Stewart

Defendants.

This matter is before the Court on Plaintiff’s Motion for Relief 1—which the Court
construes as a Motion to Reconsider—and Motion for Leave to Amend. 2 For the reasons
discussed more fully below, the Court will deny Plaintiff’s Motion for Relief and grant
Plaintiff’s Motion for Leave to Amend.
I. BACKGROUND
In 2011, Plaintiff James Arnett and Defendant Benjamin Howard (“Defendant Howard”)
discussed creating a movie and audio book together. After negotiating the terms of the parties’
agreement, Plaintiff traveled to Defendant Howard’s home in Utah to begin working on the
project. Within a few weeks of his arrival, Plaintiff completed his work on the audio book and a
television commercial. Over the following two months, the parties’ relationship soured while
they worked on the film.
1

Docket No. 83.

2

Docket No. 85.

1

Plaintiff alleges that Defendant Howard failed to perform his contractual obligations,
including making payments to Plaintiff. Plaintiff alleges that Defendant Howard’s failure to pay
forced Plaintiff to be so dependent upon Defendant Howard that Plaintiff could not afford to
travel home and had no choice but to continue working on the project. Defendant Howard
allegedly transferred title of a motorcycle to Plaintiff in an attempt to convince Plaintiff to
continue working on the project despite Defendant Howard’s failure to perform. Plaintiff
remained in Utah until the film’s video had been created and returned to his home in Arizona to
complete the audio portion.
In April 2012, Plaintiff filed suit against Defendant Howard and three associated entities,
Lifeline Media, LLC, Nationwide Affordable Housing, and the Ben Howard Trust (the “Trust”),
in the United States District Court for the District of Arizona.
In September 2012, Defendants moved to dismiss Plaintiff’s claims. Before the motion
was fully briefed, Plaintiff moved for leave to amend his Complaint. The Arizona district court
granted leave to amend, rendering the motion to dismiss moot.
In January 2013, Plaintiff filed his First Amended Complaint. Shortly thereafter,
Defendants again moved to dismiss the Complaint. The Arizona court concluded that this Court
was the proper venue and transferred the case to the District of Utah without reaching the merits
of Defendants’ motion.
In July 2013, Plaintiff again moved for leave to amend his Complaint, and shortly
thereafter Defendants filed their third Motion to Dismiss. Before this Court ruled on the
motions, Plaintiff withdrew his request for leave to amend his Complaint and submitted an

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updated motion, his third Motion for Leave to Amend. In March 2014, this Court granted in part
and denied in part both Motions (“March 2014 Order”).
Plaintiff now moves for reconsideration of the Court’s March 2014 Order and yet another
amendment of his Complaint. Plaintiff has not yet submitted a Complaint that complies with the
March 2014 Order.
II. MOTION TO RECONSIDER
“[E]very order short of a final decree is subject to reopening at the discretion of the
district judge.” 3 Federal Rule of Civil Procedure 54(b) expressly allows for revision of an
interlocutory order before entry of final judgment. Rule 54(b) provides, in pertinent part, that
any order or other decision, however designated, that adjudicates fewer than all
the claims or the rights and liabilities of fewer than all the parties does not end the
action as to any of the claims or parties and may be revised at any time before the
entry of a judgment adjudicating all the claims and all the parties’ rights and
liabilities.
This inherent power to review is limited by the long-standing rule that an issue decided
should remain decided. However, “[c]ourts have generally permitted a modification of the law
of the case when substantially different, new evidence has been introduced, subsequent,
contradictory controlling authority exists, or the original order is clearly erroneous.” 4 “Thus, a
motion for reconsideration is appropriate where the court has misapprehended the facts, a party’s

3

Elephant Butte Irrigation Dist. v. U.S. Dep’t of Interior, 538 F.3d 1299, 1306 (10th Cir.
2008) (citation and internal quotation marks omitted).
4

Major v. Benton, 647 F.2d 110, 112 (10th Cir. 1981) (citing Furhman v. U.S. Steel
Corp., 479 F.2d 489, 494 (6th Cir. 1973)).

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position, or the controlling law. It is not appropriate to revisit issues already addressed or
advance arguments that could have been raised in prior briefing.” 5
Plaintiff does not present substantially different and new evidence or subsequent and
contradictory controlling authority. Rather, Plaintiff argues that the Court misapprehended
controlling law, the facts, and Plaintiff’s position. Plaintiff seeks reconsideration of the Court’s
dismissal of Plaintiff’s first fraud claim.
The Court has considered all of Plaintiff’s arguments and concludes that Plaintiff has not
raised issues demonstrating that the Court misapprehended the facts, Plaintiff’s position, or
controlling law. Therefore, for substantially the same reasons described in the Court’s March
2014 Order, the Court will deny Plaintiff’s Motion to Reconsider.
III. MOTION FOR LEAVE TO AMEND
At this stage of the case, the Federal Rules of Civil Procedure only allow Plaintiff to
amend his Complaint “with the opposing party’s written consent or the court’s leave.” 6 Rule 15
also explains that “[t]he court should freely give leave when justice so requires.” 7 “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.’” 8 The Court may refuse to grant leave to amend,
however, 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
5

Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citation omitted).

6

Fed R. Civ. P. 15(a)(2).

7

Id.

8

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)).

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prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of
amendment.” 9
Plaintiff seeks leave to amend his Complaint beyond the scope of the instructions
contained in the Court’s March 2014 Order, to include a new claim for odometer tampering that
names a previously dismissed party, the Ben Howard Trust. Defendant Howard opposes
Plaintiff’s proposed amendments. Specifically, Defendant Howard argues that Plaintiff has
asserted new factual allegations in bad faith concerning the equity share contemplated by the
parties’ agreement, and that Plaintiff’s additional claim for odometer tampering is futile.
A.

ALLEGATIONS OF EQUITY SHARES
Defendant Howard argues that Plaintiff should not be permitted to allege new facts

concerning the equity share contemplated by the parties’ agreement because Plaintiff is using
Rule 15 to make his Complaint a moving target by modifying his allegations to avoid dismissal.
Allegations describing Plaintiff’s understanding of the equity share under the parties’
agreement does not alter the Complaint to make it a moving target. These allegations help to
clarify allegations already contained in Plaintiff’s claim, and appear to be an attempt by Plaintiff
to remedy a deficiency identified in the Court’s prior Order. The Court finds that Plaintiff has
not alleged new facts concerning the equity share in bad faith and will grant Plaintiff leave to
amend the Complaint to include these allegations.
B.

ODOMETER TAMPERING
Plaintiff seeks to add a claim for odometer tampering in violation of 49 U.S.C. §§ 32703,

32710. To state such a claim, Plaintiff must allege that Defendant Howard “disconnected, reset,
9

Id. (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

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or altered, an odometer of a motor vehicle intending to change the mileage registered by the
odometer,” 10 and that Plaintiff did so “with inten[t] to defraud.” 11 Defendant argues that
amendment is futile.
“A proposed amendment is futile if the complaint, as amended, would be subject to
dismissal.” 12 “The futility question is functionally equivalent to the question whether a
complaint may be dismissed for failure to state a claim . . . .” 13 On a 12(b)(6) motion to dismiss,
the Court must “accept as true all well-pleaded factual allegations . . . and view these allegations
in the light most favorable to the plaintiff.” 14 “[C]ourts must consider the complaint in its
entirety, . . . [including] documents incorporated into the complaint by reference . . . .” 15 “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim for relief that is plausible on its face.’” 16 But, the Court “will disregard
conclusory statements.” 17 “We construe a pro se litigant’s pleadings liberally.” 18 “[I]f the court
can reasonably read the pleadings to state a valid claim on which the plaintiff could prevail, it
10

49 U.S.C. § 32703(2).

11

Id. § 32710(a); .

12

Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1018 (10th Cir. 2013) (quoting
Bradley v. Val-Mejias, 379 F.3d 892, 901 (10th Cir. 2004)).
13

Gohier v. Enright, 186 F.3d 1216, 1218 (10th Cir. 1999).

14

Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009).

15

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

16

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)).
17

Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012).

18

Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

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should do so despite the plaintiff’s failure to cite proper legal authority, his confusion of various
legal theories, his poor syntax and sentence construction, or his unfamiliarity with pleading
requirements.” 19 Nonetheless, “it is not ‘the proper function of the district court to assume the
role of advocate for the pro se litigant.’” 20 Courts “will not supply additional factual allegations
to round out a plaintiff’s complaint or construct a legal theory on a plaintiff’s behalf.” 21
Defendant Howard argues that it would be futile to permit Plaintiff to assert a claim for
odometer tampering because the claim “lacks any factual foundation, is based purely on
speculation, and . . . fail[s] to state a claim upon which relief can be granted.” 22 The Court
disagrees.
Plaintiff does allege factual support for the claim. For example, Plaintiff provides a
detailed description of the physical indications of tampering that Plaintiff observed on the
motorcycle. Plaintiff also alleges that the mileage does not correlate with the motorcycle’s age.
Moreover, Plaintiff alleges that Defendant Howard insisted on removing the windshield—which
Plaintiff alleges is necessary to reach the odometer cable—before transferring the motorcycle to
Plaintiff. Therefore, the Court finds that Plaintiff’s proposed amendment states a claim for
odometer tampering against Defendant Howard.

19

Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).

20

Cathey v. Jones, 505 F. App’x 730, 733 (10th Cir. 2012) (unpublished) (quoting Hall,
935 F.2d at 1110).
21

Whitney v. State of N.M., 113 F.3d 1170, 1173–74 (10th Cir. 1997).

22

Docket No. 87, at 8.

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Plaintiff also seeks leave to assert the odometer tampering claim against the motorcycle’s
prior owner, the Trust. The Court previously dismissed the Trust from this case because Plaintiff
had failed to state a claim relating to the motorcycle. Plaintiff now states a claim relating to
tampering with the motorcycle’s odometer and further alleges that Defendant Howard was acting
as an agent of the Trust when he transferred ownership of the motorcycle. Based upon these
allegations, the Court will grant Plaintiff’s request to name the Trust when asserting this claim.
The Court notes, however, that Plaintiff’s repeated requests to amend his Complaint have
created significant delays in this case. Notwithstanding the Court’s aforementioned findings, the
progress of this suit is concerning.
Undue delay is one of the reasons the Supreme Court has provided as a basis for denying
leave to amend. Although “[l]ateness does not of itself justify the denial of the amendment,” 23
“[a] party who delays in seeking an amendment is acting contrary to the spirit of the rule and
runs the risk of the court denying permission because of the passage of time.” 24 “The longer the
delay, ‘the more likely the motion to amend will be denied, as protracted delay, with its attendant
burdens on the opponent and the court, is itself a sufficient reason for the court to withhold
permission to amend.’” 25
The Tenth Circuit “focuses primarily on the reasons for the delay.” 26 “[D]enial of leave
to amend is appropriate ‘when the party filing the motion has no adequate explanation for the
23

R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749, 751 (10th Cir. 1975).

24

Minter, 451 F.3d at 1205 (citation and internal quotation marks omitted).

25

Id. (quoting Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004)).

26

Id.

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delay.’” 27 “Furthermore, ‘[w]here the party seeking amendment knows or should have known of
the facts upon which the proposed amendment is based but fails to include them in the original
complaint, the motion to amend is subject to denial.’” 28
Courts will properly deny a motion to amend when it appears that the plaintiff is
using Rule 15 to make the complaint a moving target, to salvage a lost case by
untimely suggestion of new theories of recovery, to present theories seriatim in an
effort to avoid dismissal, or to knowingly delay[ ] raising [an] issue until the eve
of trial. 29
Plaintiff asserts that he did not discover the alleged odometer tampering until December
2013. The Court takes Plaintiff at his word. Nonetheless, Plaintiff’s repeated amendments have
permitted Plaintiff to slowly refine his claims against Defendant, at Defendant’s expense through
multiple rounds of motions to dismiss. More than two years have passed since Plaintiff initially
filed this suit, and in that time the parties have undergone multiple rounds of amended
complaints—the Motion to Amend currently before the Court is Plaintiff’s fourth such Motion.
Plaintiff has had ample opportunity to notify the Defendant of all of his claims arising from the
parties’ interactions at issue in this case. Consequently, the Court instructs Plaintiff that future
motions to amend will be viewed unfavorably and are unlikely to be granted.
III. CONCLUSION
Based on the foregoing, it is hereby
ORDERED that Plaintiff’s Motion for Relief (Docket No. 83) is DENIED. It is further
27

Id. (quoting Frank v. U.S. West, 3 F.3d 1357, 1365–66 (10th Cir. 1987)).

28

Frank, 3 F.3d at 1366 (quoting Las Vegas Ice & Cold Storage Co. v. Far W. Bank, 893
F.2d 1182, 1185 (10th Cir. 1990)).
29

Minter, 451 F.3d at 1206 (alterations in original) (citations and internal quotation marks

omitted).

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ORDERED that Plaintiff’s Motion for Leave to Amend (Docket No. 85) is GRANTED.
Plaintiff is directed to file an Amended Complaint in full compliance with this Order and
the Court’s March 2014 Order by August 1, 2014.
DATED this 16th day of July, 2014.
BY THE COURT:

Ted Stewart
United States District Judge

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