Zeco Equipment v. Greentown Oil Company et al

Filing 55

MEMORANDUM DECISION AND ORDER granting 47 Motion to Amend 38 Answer to Third Party Complaint. Signed by Magistrate Judge Brooke C. Wells on 9/21/17 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
ZECO EQUIPMENT, LLC,
Plaintiff, CounterDefendant

MEMORANDUM DECISION AND ORDER
GRANTING MOTION FOR LEAVE TO
AMEND PLEADINGS

v.
Case No. 2:15-cv-464 DN
GREENTOWN OIL COMPANY, PACIFIC
ENERGY & MINING COMPANY,
Defendant,
Counterclaimants and
Third Party Plaintiffs

District Judge David Nuffer
Magistrate Judge Brooke Wells

v.

ENERGY DRILLING LLC, JOHN DOES I-X,
Third-Party Defendants

Third-Party Defendant Energy Drilling LLC (Defendant) moves the court for leave to file
an Amended Answer to Third-Party Plaintiffs’ Greentown Oil Company LLC’s and Pacific
Energy & Mining Company’s Complaint. Under Federal Rule of Civil Procedure Rule 15 1 and
as set forth below, the circumstances in this case support Energy Drilling’s motion to amend and
therefore the court grants the motion.
BACKGROUND
In June 2015 Plaintiff Zeco Equipment filed suit against Pacific Energy and Mining
Company LLC and Greentown Oil Company alleging that they failed to pay for services

1

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

provided and damaged Zeco’s gas buster. 2 Following some discovery, Pacific and Greentown
(collectively Plaintiffs) filed a Third-Party Complaint against Energy Drilling on August 23,
2016 alleging apportionment of fault, breach of contract and warranty, and negligence. 3
Defendant filed a suggestion of bankruptcy on September 22, 2016, which stayed proceedings in
this matter. 4 On January 19, 2017, the U.S. Bankruptcy Court lifted the stay as to Pacific and
Greentown permitting them to pursue their claims against Defendant.
Energy Drilling filed is Answer to the Third-Party Complaint in February 2017. 5 In the
Amended Scheduling Order filed thereafter, the parties were given March 30, 2017 as the last
day to amend pleadings. 6 Energy Drilling brings the instant motion nearly six months later
seeking to amend its Answer with the affirmative defenses of res judicata and collateral estoppel.
Defendant claims its bankruptcy, lack of employees, resources and addition to this suit more than
a year after it started all contributed to its failure to assert certain affirmative defenses in its
Answer.
DISCUSSION
Energy Drilling seeks to amend its Answer with the affirmative defenses of res judicata
and collateral estoppel. Rule 8 of the Federal Rules provides that a party in “responding to a
pleading must … affirmatively state any avoidance or affirmative defense, including: … estoppel

2

Complaint ¶¶ 57-64.

3

Docket no. 34.

4

Docket no 37.

5

Docket no. 38.

6

Docket no. 40. The subsequent amended schedule did not alter the deadline to amend pleadings. See order
granting motion to extend scheduling order deadlines, docket no. 50.

2

[and] res judicata.” 7 Thus it is clear under the Rules that if Energy Drilling is not permitted to
amend their Answer then it cannot raise these affirmative defenses.
Rule 15 of the Federal Rules states that a “party may amend its pleading only with the
opposing party’s written consent or the court’s leave. The court should freely give leave when
justice so requires.” 8 “The district court has ‘wide discretion to recognize a motion for leave to
amend in the interest of a just, fair or early resolution of litigation.’” 9 Leave to amend may be
refused if there is a “’showing of undue delay, undue prejudice to the opposing party, bad faith
or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of
amendment.’” 10
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.’” 11 In determining whether a movant has unduly
delayed in bringing a motion to amend, the Tenth Circuit “focuses primarily on the reasons for
the delay.” 12 For example, courts may deny leave to amend when the movant “has no adequate
explanation for the delay.” 13
Plaintiffs argue there was “undue delay on the part of Energy Drilling.” 14 Plaintiffs point
to the history of this case, which includes Defendant being a part of this case since February 22,

7

Fed. R. Civ. P. 8(c).

8

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

9

Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (quoting Calderon v. Kan. Dep't of Soc. & Rehab. Servs.,
181 F.3d 1180, 1187 (10th Cir. 1999)).
10

Id. (quoting Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993)).

11

Minter v. Prime Equipment Co. 451 f.3d 1196, 1205 (10th Cir. 2006) (quoting Steir v. Girl Scouts, 383 F.3d 7, 12
(1st Cir. 2004)).
12

Id. at 1206.

13

Id. (quoting Frank v. U.S. West, 3 F.3d 1357, 1365-66 (10th Cir. 1993)).

14

Op. p. 7, docket no. 48.

3

2017, the close of fact discovery being August 30, 2017 and being on the “verge of trial.”
Additionally, Plaintiffs take issue with Defendant’s reasons for the delay arguing that Energy
Drilling’s counsel “made no efforts over the past seven (7) months to investigate any of the
proceedings” 15 even though access was available through the Wyoming matter and the
bankruptcy proceedings. Plaintiffs cite to Frank v. U.S. West, Inc. in support of their arguments
noting that where “”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.’” 16
Here, all parties recently agreed to an amended schedule extending discovery deadlines.
The new deadlines undermine some of Plaintiffs arguments. Trial is set to begin in December
2018 over a year away and fact discovery is now set to close in January 2018. 17 In focusing on
the reasons for the delay, 18 the undersigned finds Energy Drilling has an adequate explanation
for the delay. The bankruptcy created much of the delay and the court finds Defendant’s
explanation that resources and employees were scarce following the bankruptcy credible. Such
circumstances also likely inhibited counsel’s ability to know about facts upon which the
amendment is based. Based upon these unique circumstances the court will grant the motion to
amend.

15

Id. p. 8.

16

Frank v. U.S. W., Inc., 3 F.3d 1357, 1366 (quoting Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d
1182, 1185 (10th Cir. 1990)).

17

Docket no. 49, docket no. 50.

18

See Minter. 451 f.3d at 1206.

4

ORDER
IT IS HEREBY ORDERED that the Motion to Amend/Correct Answer is GRANTED. 19
Energy Drilling is granted leave to file the proposed Amended Answer on or before September
29, 2017.

DATED this 21 September 2017.

Brooke C. Wells
United States Magistrate Judge

19

Docket no. 47.

5