Advocare International LP v. Scheckenbach et al

Filing 361

ORDER denying 309 Motion for Leave to File Third Amended Complaint by Judge Ronald B. Leighton.(JAB)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 v. RICHARD PAUL SCHECKENBACH, et al., Defendants.

HONORABLE RONALD B. LEIGHTON

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA ADVOCARE INTERNATIONAL, L.P., a Texas limited partnership Plaintiff, Case No. C08-5332 RBL ORDER DENYING MOTION TO AMEND

This matter is before the Court on the Plaintiff's Motion for Leave to file a third amended complaint.

18 [Dkt. #309]. Advocare seeks to add as Defendants Norman Pendell and Moss Adams, LLP, who were and 19 are accountants doing work for Defendant Sheckenbach and other defendants. Advocare asserts that Moss 20 Adams conspired with these Defendants to defraud Advocare. 21 Advocare concedes that the date for adding additional parties or claims has long since passed. It

22 claims, however, that it did not and could not have discovered Moss Adams' role in the alleged conspiracy 23 until it received the Sailer privilege log (after a Motion to compel), and, subsequently, four documents in 24 March 2010. Those documents, Advocare claims, demonstrated for the first time that Moss Adams was 25 involved in the efforts to hide and otherwise shield Sheckenbach's assets from his judgment creditor, 26 Advocare. Advocare claims it has been diligent and that it has shown good cause for adding Moss Adams 27 at this late date, under both Rule 16 (relating to modification of a scheduling order) and Rule 15 (governing 28 amendment).
ORDER Page - 1

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The Defendants emphasize that Advocare was aware of Moss Adams' involvement much earlier than

2 its receipt of the documents, and that it has not been diligent in seeking to add Moss Adams as a party 3 Defendant. Specifically, They also emphasize the prejudice that would necessarily result from the addition 4 of a party to this already cumbersome litigation at this stage. This prejudice includes expense and delay of 5 the impending trial date. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
ORDER Page - 2

Under Fed.R.Civ.P. 15(a), leave to amend shall be freely granted where justice so requires: A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise 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. This does not mean, however, that leave to amend is always granted. In ruling on a Motion to Amend, the court considers a number of factors, including undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to opposing parties, harm to the movant if leave is not granted, and futility of the amendment. Foman v. Davis, 37 U.S. 178, 182 (1962); Martinez v. Newport Beach City, 125 F.3d 777, 785 (9th Cir. 1997). The court recognizes that the very nature of the case is a continuing effort by the Plaintiff to uncover what it claims are myriad and fraudulent efforts to conceal assets, and to conceal those efforts. Accordingly, the extent of the efforts has only been slowly revealed. However, the court must also manage its cases and its calendar, and it is clear that Moss Adams could have been added at, say, the time the attorney defendants were added. Adding another full layer of Defendants to the case at this stage would clearly prejudice the Defendants, and that prejudice could not be entirely addressed by a continuance. The Motion for Leave to Amend [Dkt. # 309] is DENIED. IT IS SO ORDERED.

DATED this 29th day of September, 2010.

A

RONALD B. LEIGHTON UNITED STATES DISTRICT JUDGE