Hilsen v. American Sleep Alliance et al
Filing
85
MEMORANDUM DECISION: granting 45 Motion to Amend/Correct for Leave to File Amended Answer and Counter Complaint; granting 63 Motion to Permit Revisions to Movants' proposed Amended Answer and Counter-Complaint. Defendants may immediately file an amended answer and counter complaint if the form attached to their second motion to amend (ECF No. 63, Ex1.) Signed by Magistrate Judge Dustin B. Pead on 11/16/2016. (kpf)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
KENNETH L. HILSEN,
Plaintiff,
MEMORANDUM DECISION
v.
Case No. 2:15-cv-00714-DBP
AMERICAN SLEEP ALLIANCE, LLC, et
al.
Magistrate Judge Dustin B. Pead
Defendants.
BACKGROUND
The parties consented to this court’s jurisdiction under 28 U.S.C. § 636(c). (ECF No. 24.)
Presently before the court are two motions to amend the answer and counterclaim filed by
Defendants American Sleep Alliance, Ryan N. Gregerson, and the Ryan Gregerson Asset
Protection Trust (“Defendants”). (ECF Nos. 45, 63.) The court did not hear oral argument. After
considering the briefs the parties submitted the court GRANTS Defendants’ motions.
ANALYSIS
Defendants initially filed their counter-complaint on October 29, 2015. Defendants first
sought leave to file an amended complaint on June 21, 2016, the day before the court entertained
oral argument on the parties’ competing dispositive motions. (ECF Nos. 45, 47.) The court
denied Defendants’ motion to dismiss during the June 22 hearing. (ECF No. 47.) The court
denied Plaintiff’s motion for judgment on the pleadings by Memorandum Decision entered on
July 19, 2016. Approximately one month after the court entered its Order, Defendants filed an
additional motion to “permit revisions” to their proposed amended answer and counter-
complaint. While this second motion appears to be another motion to amend, Defendants never
withdrew their first motion to amend.
Plaintiff Kenneth L. Hilsen (“Plaintiff”) opposes both motions to amend. (ECF Nos. 52, 66.)
Plaintiff argues the motions should be denied on the grounds of undue delay, prejudice to
Plaintiff, and futility.
I.
Defendants’ motions to amend
Rule 15 instructs the court to “freely give leave [to amend] when justice so requires.” Fed. R.
Civ. P. 15(a)(2). “The purpose of the Rule is to provide litigants ‘the maximum opportunity for
each claim to be decided on its merits rather than on procedural niceties.’” Minter v. Prime
Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006). As such, the court enjoys “wide discretion to
recognize a motion for leave to amend in the interest of a just, fair or early resolution of
litigation.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009). Nonetheless, a motion to
amend may be properly denied where the court finds “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, futility
of amendment, etc.” Minter at 1204 (quoting Foman v. Davis, 371 U.S. 178 (1962)).
a. Timeliness
Plaintiff correctly notes that the court has discretion to deny an amendment based on undue
delay. See Minter v. Prime Equipment Co., 451 F.3d 1228 (10th Cir. 2007). Yet, this necessarily
requires the court to consider the delay’s “attendant burdens on the opponent and the court.” Id.
at 1205. Plaintiff has not convinced the court that denial is warranted here.
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Defendants moved to amend their answer and counter-complaint approximately eight months
after it was first filed. 1 (ECF No. 52.) During this same eight-month period no discovery could
have occurred because the parties’ scheduling conference did not take place until the day after
Defendants filed their motion to amend. (See ECF Nos. 44, 47.) Likewise, the motion to amend
was not filed after the expiration of any deadline for amended pleadings because a scheduling
order had not yet been entered.
Finally, Plaintiff asserts several times that Defendants have no explanation for the timing of
their amendment. The court disagrees. Defendants retained additional counsel, who filed both
motions to amend. While addition of counsel may not justify upsetting the status quo in a more
mature case, it does explain and justify a revision of a pleading at the beginning of the discovery
period. Based on these facts, the court is not persuaded that denial of Defendants’ motion to
amend is appropriate under these circumstances.
1. Plaintiff’s opposition to the second motion to amend or “permit revisions”
does not persuade the court that the amendment is untimely
The court is likewise not persuaded that the additional two months between the first and
second motion to amend justify denial of the motion as untimely. The case was still in its infancy
and discovery was in its early stages. Plaintiff adds the additional argument that Defendants have
made “a moving target” of their pleading. Minter at 1206. This argument likewise does not
adequately demonstrate any burden on the court or the parties that justifies denial of the
amendment. First, Plaintiff complains that Defendants removed two claims. The court finds the
removal of claims against him creates zero burden on Plaintiff.
1
Plaintiff does not suggest that eight months–or any other time period–constitutes an undue
delay based solely on passage of time.
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Next, Plaintiff suggests that Defendants’ attempt to reassert an unjust enrichment claim in the
second proposed amended counter-complaint (which claim Defendants sought to remove in the
first iteration of their proposed amended counter-complaint) imposes a burden. Plaintiff’s
argument has superficial appeal. Generally, the reassertion of a claim burdens an adversary. Yet,
in this case, the unjust enrichment counterclaim is currently pending against Plaintiff and has
been since Defendants first filed their counter-complaint. (ECF No. 20.) The court does not find
that maintaining the status quo imposes any burden on Plaintiff. Accordingly, the court
concludes Defendants have not made a moving target of their counter-complaint.
b. Prejudice
Plaintiff’s prejudice argument fairs no better. The court agrees that prejudice caused by
amendment may be the “most important” factor governing amendments. Minter, 415 F.3d at
1207. Nonetheless, Plaintiff demonstrates no prejudice here. Plaintiff’s only assertion of
prejudice is that the amended answer and counter-complaint will expand the scope of discovery.
Plaintiff does not cite to a single case in which a court found a motion to amend filed at the
outset of discovery created prejudice by expanding the scope of discovery that had not yet begun.
The court declines to pioneer this proposed approach. 2
c. Futility
As Defendants point out, the court’s memorandum decision denying Plaintiff’s motion for
judgment on the pleadings has changed the landscape regarding several arguments, in particular
Plaintiff’s arguments regarding various statutes of limitation.3 (ECF No. 58 at 6–12.) Plaintiff
2
Likewise, the additional two-month delay between the first and second motions to amend does
not create a burden severe enough to refuse the requested amendment.
3
This should not be read as a wholesale endorsement of Defendants’ position regarding the
court’s memorandum decision denying Plaintiff’s motion for judgment on the pleadings. That
Order speaks for itself.
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does not address futility in his opposition to the second motion to amend, or “permit revisions.”
(See ECF No. 66.) Plaintiff’s omission is understandable given the somewhat odd procedural
path Defendants have taken in seeking to amend their pleadings. Nonetheless, the court is unsure
whether Plaintiff has abandoned some or all of these futility arguments. “Accordingly, the
[c]ourt—preserving its scarce resources—will not at this time consider the question whether the
amendments should be denied on grounds of futility because they fail to state plausible claims
for relief.” Stender v. Cardwell, No. 07-CV-02503-WJM-MJW, 2011 WL 1235414, at *3 (D.
Colo. Apr. 1, 2011). “The [c]ourt will consider that question if and when Defendants file a
motion to dismiss on those grounds.” Id.; see Christison v. Biogen Idec Inc., No. 2:11-CV01140-DN-DBP, 2016 WL 3546242, at *4 (D. Utah June 23, 2016) (collecting cases) (“Several
courts have wisely declined to engage in a futility analysis at the motion to amend phase.”). The
court believes the most expedient course of action here is to allow the amendment, and invite
Plaintiff to file any appropriate motion or responsive pleading to the amended counter-complaint.
ORDER
Based on the foregoing, the court GRANTS Defendants’ motions to amend. (ECF No. 45,
63.) Defendants may immediately file an amended answer and counter-complaint in the form
attached to their second motion to amend. (ECF No. 63, Ex. 1.)
Dated this 16th day of November 2016.
By the Court:
Dustin B. Pead
United States Magistrate Judge
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