Caiman Eastern Midstream, LLC v. Hall et al
Filing
74
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION TO AMEND AND DENYING DEFENDANTS' MOTION FOR CONTINUANCE: denying 63 Motion for Leave to File an amended counterclaim and denying 65 Motion for continuance. Signed by Senior Judge Frederick P. Stamp, Jr. on 10/12/12. (copy to counsel of record via CM/ECF)(rjs)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CAIMAN EASTERN MIDSTREAM,
Plaintiff,
v.
Civil Action No. 5:11CV135
(STAMP)
DALE E. HALL and ELAINE L. HALL,
Defendants.
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO AMEND AND
DENYING DEFENDANTS’ MOTION FOR CONTINUANCE
I.
Background
The plaintiff, Caiman Eastern Midstream, LLC, (“Caiman”) filed
a complaint in this Court seeking to enforce a pipeline right-ofway agreement allegedly entered into by the parties to this action
on June 30, 2011.
The defendants (“the Halls”) filed an answer,
which included four counterclaims:
Inducement;
Counterclaim
No.
II:
Counterclaim No. I: Fraudulent
Negligent
Misrepresentation;
Counterclaim No. III: Mutual Mistake; and Counterclaim No. IV:
Trespass. The Halls also moved for judgment on the pleadings based
upon their contention that the right-of-way agreement is invalid
and unenforceable because it violates the statute of frauds.
Following the filing of the Halls’ motion for judgment on the
pleadings, Caiman filed a motion for leave to file an amended
complaint, pursuant to Federal Rule of Civil Procedure 15(a),
wherein Caiman sought to amend its complaint to attach a map which
was allegedly attached to the right-of-way agreement between the
parties,
but
complaint.
inadvertently
not
attached
to
Caiman’s
original
On June 5, 2012, this Court granted the motion to
amend, and denied the Halls’ motion for judgment on the pleadings
without prejudice subject to refiling with regard to Caiman’s
amended complaint.
The Halls did not file an amended motion for
judgment on the pleadings.
Discovery closed in this matter on August 6, 2012, and the
dispositive motions deadline passed without the filing of any
dispositive motions on August 20, 2012.
Following the recent
consolidation of the trial in this case with the trial in Caiman
Eastern Midstream v. Whipkey, Civil Action No. 5:11CV136, trial is
set to begin in this case on November 7, 2012.
However, on
September 14, 2012, the Halls filed a motion for leave to file an
amended counterclaim, in which the Halls request leave to add
further assertions of allegedly misleading or fraudulent statements
made to the Halls by Caiman’s Land Agent, Andrea McCoy, as well as
further allegations of trespass.
On September 21, 2012, the Halls
also filed a related motion for a continuance, seeking further
discovery on the allegations that the Halls seek to add in their
motion to amend. These motions are now both fully briefed, and are
ripe for disposition.
For the reasons that follow, this Court
denies both motions.
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II.
Federal
Rule
of
Applicable Law
Civil
Procedure
15(a)(1)(A)
states,
in
pertinent part, that “[a] party may amend its pleading once as a
matter of course . . . before being served with a responsive
pleading.”
If a party seeks to amend its pleadings in all other
cases, it may only do so “with the opposing party’s written consent
or the court’s leave.
justice so requires.”
Rule
15(a)
The court should freely give leave when
Fed. R. Civ. P. 15(a)(2).
grants
the
district
court
broad
discretion
concerning motions to amend pleadings, and leave should be granted
absent some reason “such as 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, [or]
futility of amendment.”
Foman v. Davis, 371 U.S. 178, 182 (1962);
see also Ward Elec. Serv. v. First Commercial Bank, 819 F.2d 496,
497 (4th Cir. 1987); Gladhill v. Gen. Motors Corp., 743 F.2d 1049,
1052 (4th Cir. 1984).
III.
Discussion
The February 9, 2012 scheduling order in this case delineated
that any amendments to pleadings were to be made on or before June
28, 2012. The Halls’ motion to amend was filed nearly three months
after this deadline, on September 14, 2012. When a motion to amend
a pleading is filed after a scheduling order’s deadline for such
3
motions, “a moving party first must satisfy the good cause standard
of Rule 16(b).
If the moving party satisfies Rule 16(b), the
movant then must pass the tests for amendment under Rule 15(a).”
Marcum v. Zimmer, 163 F.R.D. 250, 254 (S.D. W. Va. 1995); see
Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008)
(“[A]fter the deadlines provided by a scheduling order have passed,
the good cause standard must be satisfied to justify leave to amend
the pleadings.”).
“Rule 16(b)’s ‘good cause’ standard primarily
considers the diligence of the party seeking the amendment . . . .
[T]he focus of the inquiry is upon the moving party’s reasons for
seeking modification.”
Marcum, 163 F.R.D. at 254 (quoting Johnson
v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992)).
In support of this required good cause showing, the Halls
assert that the allegations which they seek to add were not
discovered by their counsel until June 28, 2012, at the deposition
of Dale Hall.
disclosed
The Halls claim that, at this deposition, Mr. Hall
that
he
had
discovered
additional
trespasses
not
previously included in the counterclaim. Further, the Halls assert
that their counsel did not learn of the additional alleged untrue
statements made by Caiman’s Land Agent until that deposition.
Caiman argues that the Halls have not shown good cause.
In
support of this assertion, it maintains that, even by their own
admission, counsel for the Halls learned of these claims at Mr.
Hall’s deposition on June 28, 2012, and the Halls proceeded to file
4
their answer and counterclaims to Caiman’s amended complaint on
June 29, 2012; after counsel allegedly became aware of the claims
at
Mr.
Hall’s
deposition.
Further,
Caiman
notes
that
the
information regarding these new claims was derived from Mr. Hall
himself, who knew of the information long before the amendment
deadline.
This Court agrees.
Initially, the Halls do not explain why, if they discovered
the information regarding the allegations now sought to be added at
Mr.
Hall’s
deposition
before
they
filed
their
answer
and
counterclaims to Caiman’s amended complaint, they did not include
these new allegations therein.
Nor can this Court surmise such a
reason. When the Halls filed this answer to the amended complaint,
they were clearly, by their own admission, fully aware of the
information necessary to make the additional allegations which they
now seek to add.
with
that
However, instead of including this information
answer,
they
filed
an
answer
omitting
this
new
information, and instead waited over two months--just weeks before
the trial in this matter--to seek to amend.
This failure to
expeditiously and diligently amend is unexplainable and exhibits a
lack of good cause for amendment at this late date.
Further, this Court is not convinced that counsel for the
Halls could not have been on notice of the information needed to
make these allegations prior to Mr. Hall’s deposition and prior to
the closure of the period for amendment afforded by the scheduling
5
order.
The Halls admit that all of the information made available
to counsel at Mr. Hall’s deposition, which is now relied upon in
the additional allegations, was offered by Mr. Hall himself.
Mr.
Hall admitted in his deposition that he learned the information
regarding the additional trespass allegations in the Spring of
2012. This information was thus available to counsel for the Halls
prior to the amendment deadline of June 4, 2012.1
Further, any information of which Mr. Hall was aware regarding
further allegations of untrue statements made by Caiman’s Land
Agent would have been known by him even before this lawsuit was
filed, as all of these allegations are offered to support a claim
of fraudulent inducement of the Halls’ original signing of the
pipeline right-of-way agreement--a claim which was included, and
thus known to counsel for the Halls at the time that the original
counterclaims were filed.
Accordingly, this information should
have been discovered prior to the filing of the Halls’ original
counterclaims.
The Halls do not offer any explanation for the above-described
inadequacies in their claims of good cause.
Rather, they only
offer a conclusory statement that, because Mr. Hall’s deposition
1
Additionally, the Halls admit in their briefing of this
motion, that their counsel became aware “of the deviations from the
right-of-way” which are the basis for the additional trespass
allegations sought to be added, on June 5, 2012. This Court is
unable to discern why they now contend that the information
relating to the further trespass allegations was not made available
until Mr. Hall’s deposition.
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did not take place until after the amendment period afforded by the
scheduling order, good cause has been shown. As stated above, this
assertion is insufficient, given the specific facts and history of
this case, to serve as a showing of good cause.
Accordingly, this
Court finds that the Halls have failed to show good cause for the
delay in requesting to amend their counterclaims.
Finally, in addition to the Halls’ failure to demonstrate
cause for the delay in filing this motion to amend, this Court
finds that the bringing of additional allegations merely weeks
prior to trial in this matter would prejudice the defendant.
The
Halls offer a conclusory assertion that no prejudice can occur
simply as a result of delay in requesting leave to amend. However,
discovery is closed in this case, as is the deadline for filing
dispositive motions, and trial is only a few weeks away.
As the
Halls acknowledge in their motion to continue, the addition of
these allegations would require additional discovery--likely to be
quite lengthy--and the continuance of the trial in this matter.
This constitutes undue prejudice to Caiman, which has litigated
this case for over a year, and has prepared for trial to begin as
it was scheduled in the scheduling order.
Further, the interests of judicial efficiency cannot allow for
the addition of allegations the bases for which the Halls were
aware for over two months prior to seeking an amendment, to so
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significantly delay the resolution of these matters.2
As this case
is so near to the scheduled trial date, and discovery has long been
closed, this Court, through its discretion in controlling the
expeditious resolution of litigation before it, declines to further
delay this case due to the plaintiffs’ untimely desire to add
claims of which it should have been aware long before leave was
finally sought.
See Link v. Wabash R. Co., 370 U.S. 626, 630
(1962).
The Halls also request a continuance of all pretrial matters,
which request would also reopen discovery, for a period of 180
days.
In support of this motion, they argue that the additional
allegations which they bring in an amended counterclaim must be
pursued, as they were not included in the original discovery
period. As a result of this Court’s above-findings, this basis for
a continuance is mooted.
However, they also argue that they were
afforded insufficient opportunity to conduct discovery with regard
to Caiman’s Land Agent, Andrea McCoy, as a result of a delayed
notification that Ms. McCoy is no longer employed by Caiman, and
thus
Caiman
is
unable
to
produce
documents
possession for the purposes of this litigation.
in
Ms.
McCoy’s
The Halls claim
that this information was not disclosed to them until August,
requiring the cancellation of Ms. McCoy’s deposition, and due to
2
The Halls request a continuance of all pretrial matters for
180 days.
8
the closure of discovery on August 6, 2012, the Halls’ complete
inability to conduct discovery relating to Ms. McCoy.
However,
again, these matters occurred over two months prior to the Halls’
request for a continuance, and no explanation is given as to why
the motion to continue was not filed until nearly two months
following the close of discovery.
Much of the arguments raised by the Halls in support of their
motion for a continuance amounts to a discovery dispute regarding
Caiman’s assertion that it could not produce documents in Ms.
McCoy’s custody.
They argue that Caiman was untimely in voicing
its objections to interrogatories, and that their inability to
obtain certain documents has made it impossible for them to depose
Ms. McCoy.
However, the Halls never filed a motion to compel, nor
did they request an extension of the discovery deadline at the time
that the problems relating to the discovery relating to Ms. McCoy
surfaced.3
The Halls cannot now, so close to trial and so long
after the close of discovery, seek to reopen these issues about
which they voiced no objection in the past.
Good cause for a
continuance has not been shown, and this motion too is denied.
3
It appears from the timeline offered by the parties, that the
Halls served Caiman with interrogatories on June 27, 2012, and on
August 3, 2012, Caiman informed the Halls that it could not produce
the documents in possession of Ms. McCoy. The motion to continue-this Court’s first notification this issue, was not filed until
September 21, 2012.
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IV.
Conclusion
For the reasons stated above, the Halls’ motion for leave to
file an amended counterclaim (ECF No. 63) is DENIED.
Further, the
Halls’ motion for a continuance (ECF No. 65) is DENIED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
October 12, 2012
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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