Georgelas v Call

Filing 38

MEMORANDUM DECISION AND ORDER granting 29 Motion for Leave to Amend Complaint. Signed by Magistrate Judge Paul M. Warner on 4/27/20. (dla)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

TAMMY B. GEORGELAS, as Receiver for
ROGER S. BLISS, an individual, and
ROGER S. BLISS d/b/a ROGER BLISS
AND ASSOCIATES EQUITIES, LLC, a
Utah limited liability company, ROGER
BLISS AND ASSOCIATES CLUB, LLC,
and BLISS CLUB, LLC,

MEMORANDUM DECISION
AND ORDER
Case No. 2:16-cv-00511-RJS-PMW

Plaintiff,
Chief District Judge Robert J. Shelby
v.
Chief Magistrate Judge Paul M. Warner
STANTON CALL,
Defendant.

This matter was referred to Chief Magistrate Judge Paul M. Warner by Chief District
Judge Robert J. Shelby pursuant to 28 U.S.C. § 636(b)(1)(A). 1 Before the court is Plaintiff
Tammy B. Georgelas’ (“Plaintiff” or “Receiver”) motion for leave to amend complaint. 2 The
court has carefully reviewed the motion and memoranda submitted by the parties. Pursuant to
civil rule 7-1(f) of the United States District Court for the District of Utah Rules of Practice, the
court elects to determine the motion on the basis of the written memoranda and finds that oral
argument would not be helpful or necessary. See DUCivR 7-1(f).

1

See ECF Nos. 11, 26.

2

See ECF No. 29.

BACKGROUND
Plaintiff is the court-appointed Receiver for all assets of Robert S. Bliss (“Bliss”). On
June 6, 2016, Plaintiff filed the present lawsuit against Defendant Stanton Call (“Defendant”)
alleging receipt of fraudulent transfers totaling $950,000 from Bliss. After engaging in
discovery, Plaintiff has uncovered evidence demonstrating Defendant’s wife, Janet Call, was an
initial recipient of fraudulent transfers from Bliss. Based on this new information, Plaintiff seeks
to add Janet Call as an additional defendant.
The Scheduling Order in this case established July 31, 2019, as the deadline to add
parties and amend pleadings. The instant motion to amend is made after the deadline for the
deadline for amendments established in the Scheduling Order. Opposing the motion, Defendant
argues that Plaintiff’s motion is untimely and the proposed amendment would be futile.
Specifically, Defendant argues Plaintiff did not seek discovery until nearly two months after the
deadline for amendment and did not seek leave to amend until days prior to the close of expert
discovery. Additionally, Defendant asserts Plaintiff “cannot state a claim for relief against [Janet
Call] as an initial transferee of funds from Roger Bliss because she is actually a subsequent
transferee under the law.” 3
DISCUSSION
Since the instant motion to amend was made after the deadline for amending pleadings,
this court applies the following analysis, pursuant to rules 15 and 16 of the Federal Rules of Civil
Procedure, in deciding whether to add Janet Call as a defendant in this case:
Once a scheduling order’s deadline for amendment has passed, a
movant must first demonstrate to the court that it has “good cause”
3

ECF No. 31 at 5.

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for seeking modification of the scheduling deadline under Rule
16(b). If the movant satisfies Rule 16(b)’s “good cause” standard,
it must then pass the requirements for amendment under Rule
15(a). . . .
Rule 16(b)’s “good cause” standard is much different than the
more lenient standard contained in Rule 15(a). Rule 16(b) does not
focus on the bad faith of the movant, or the prejudice to the
opposing party. Rather, it focuses on the diligence of the party
seeking leave to modify the scheduling order to permit the
proposed amendment. Properly construed, “good cause” means
that the scheduling deadlines cannot be met despite a party’s
diligent efforts. In other words, this court may modify the schedule
on a showing of good cause if [the deadline] cannot be met despite
the diligence of the party seeking the extension. Carelessness is not
compatible with a finding of diligence and offers no reason for a
grant of relief.
Pumpco, Inc. v. Schenker Int'l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001) (quotations and
citation omitted) (alterations in original).
Plaintiff asserts that good cause exists to extend the deadline for amendment because
Plaintiff received new information through discovery that allowed her to identify Janet Call as a
likely initial recipient of funds from Bliss. In response to Defendant’s arguments regarding
untimeliness, Plaintiff argues that she was unable to uncover such information by the amend
deadline because Defendant provided incomplete financial records during the period in which the
parties engaged in informal discovery. After Plaintiff initiated formal discovery, Defendant did
not provide the new information to Plaintiff until November 27, 2019.
The court finds Plaintiff’s delay in filing the present motion to be reasonable in light of
how discovery unfolded in this case. Having acquired the information after the expiration of the
deadline to add parties, Plaintiff could not have met the deadline with diligent effort. See id.
(“[I]nformation learned through discovery . . . if occurring after the deadline to amend contained

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in the Scheduling Order constitutes good cause to justify an extension of that deadline.”). In
short, the court finds that Plaintiff proffered an adequate explanation demonstrating good cause,
thus satisfying the first step in the analysis.
The second step in the analysis is whether Plaintiff satisfied the rule 15(a) standard for
amending pleadings. Rule 15 provides that “the court should give leave [to amend] when justice
so requires.” Fed. R. Civ. P. 15(a)(2); see Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th
Cir. 2006). The decision about whether to provide a party leave to amend its pleadings “is within
the discretion of the trial court.” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir.
2006) (quotations and citation omitted). “Refusing leave to amend is generally only justified
upon 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.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (quotations and citation
omitted). Defendant contends that leave to amend should not be granted because the motion is
untimely and the requested amendment is futile. Because the court has found that there was good
cause for Plaintiff’s untimely motion, it now turns to the futility argument.
A court “is justified in denying a motion to amend as futile . . . if the proposed
amendment could not withstand a motion to dismiss or otherwise fails to state a claim.” Beckett
ex rel. Cont’l W. Ins. Co. v. United States 217 F.R.D. 541, 543 (D. Kan. 2003). A court,
however, “may not grant dismissal ‘unless it appears beyond doubt that the plaintiff can prove no
set of facts in support of his claim which would entitle him to relief.’” Id. (quoting Sutton v. Utah
State Sch. for Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)) (other citation omitted).

4

At this juncture, the court cannot conclusively determine whether Plaintiff’s proposed
amendment is futile. As to Defendant’s argument that Janet Call is not an initial transferee but a
subsequent transferee, the court concludes that the Utah Fraudulent Transfer Act allows recovery
from both initial and subsequent transferees. Thus, under the alleged facts and law as represented
to the court, it appears the amendment is not futile. In the court’s view, those determinations
would be best made through a dispositive motion or at trial. Indeed, “[a] 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 Commc'ns, Inc. v.
Chiang, No. CIV. 2:07CV00037TC, 2007 WL 2572380, at *1 (D. Utah Sept. 5, 2007).
Furthermore, the court does not find evidence of bad faith, dilatory motive, or undue prejudice.
CONCLUSION AND ORDER
After considering the relevant factors, and given the liberal standard for allowing leave to
amend pleadings, the court concludes that Plaintiff should be provided with leave to amend her
complaint. Accordingly, IT IS HEREBY ORDERED that Plaintiff’s motion for leave to amend
complaint 4 is GRANTED.
IT IS SO ORDERED.
DATED this 27th day of April, 2020.
BY THE COURT:

________________________________
PAUL M. WARNER
Chief United States Magistrate Judge

4

See ECF No. 29.

5