Mid-Vol Coal Sales, Inc. v. Balli Steel, PLC
Filing
99
MEMORANDUM OPINION AND ORDER: The court GRANTS defendant's 70 MOTION to Amend its Answer and Counterclaim. Balli Steel, PLC ("Balli") is directed to file its amended answer and counterclaim within ten days of entry of this Memorandum Opinion and Order. The Court DENIES without prejudice Mid-Vol Coal Sales, Inc.'s ("Mid-Vol") 58 AMENDED MOTION to Dismiss the Counterclaim. Plaintiff may renew its motion to dismiss once the amended counterclaim is filed by refiling the same motion or file a new motion responsive to the amended counterclaim if appropriate. Likewise, the court DENIES without prejudice Balli's 26 MOTION to Strike Mid-Vol's Affirmative Defenses. Signed by Senior Judge David A. Faber on 5/29/2014. (cc: all counsel of record) (arb)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
MID-VOL COAL SALES, INC.,
Plaintiff,
v.
CIVIL ACTION No. 1:11-0985
BALLI STEEL PLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the court is defendant’s motion for leave to
amend its Answer and Counterclaim.
(Doc. No. 70).
In the motion
to amend, Balli Steel PLC (“Balli”) sought leave to add an
additional party, Concept Mining, Inc.; a fraudulent inducement
claim; and a tortious interference claim against ArcelorMittal
S.A., alleged to be plaintiff Mid-Vol Coal Sales, Inc.’s (“MidVol”) parent company.
Thereafter, by Notice of Partial
Withdrawal of Motion for Leave to Amend, Balli informed the court
that it was withdrawing the proposed amendments except for the
fraudulent inducement claim against Mid-Vol.
(Doc. No. 95).
Rule 15(a) of the Federal Rules of Civil Procedure permits a
party to amend its pleading "once as a matter of course at any
time before a responsive pleading is served . . . [o]therwise 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."
In Foman v. Davis, 371 U.S.
178, 182 (1962), the United States Supreme Court noted that
amendment under Rule 15(a) should be freely given absent "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."
However, “[o]nce the scheduling order’s deadline for
amendment of the pleadings has passed, a moving party first must
satisfy the good cause standard of Rule 16(b) [of the Federal
Rules of Civil Procedure].
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) (citing Lone Star Transp. Corp. v. Lafarge Corp., Nos. 931505, 93-1506, 1994 WL 118475 (4th Cir. April 7, 1994)).
After a review of the record, it appears to the court that
the defendant has shown good cause for amendment of its answer
and counterclaim.
Likewise, the court concludes that there has
been no undue delay, bad faith, or dilatory motive on the part of
Balli in filing its motion to amend.
Furthermore, the court
finds that Mid-Vol would not suffer undue prejudice by the filing
of an amended answer and counterclaim.
Indeed, the only 15(a)
factor really implicated, and the one on which Mid-Vol bases the
majority of its opposition to the proposed amendment, is whether
such an amendment would be futile.
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The court cannot find that Balli’s fraudulent inducement
claim is futile.
Mid-Vol’s opposition makes clear that its
futility argument rests in large part upon factual disputes and
how those disputes affect the merits of the parties’ respective
arguments. While the fraudulent inducement claim may ultimately
be subject to dismissal or the entry of judgment in Mid-Vol’s
favor, it is not clear at this point in the proceeding that such
a claim is futile.
See, e.g., Smithfield Foods, Inc. v. United
Food & Commercial Workers Intern. Union, 254 F.R.D. 274, 280
(E.D. Va. 2008) (“Further, even where the possibility of relief
is remote, leave to amend is to be permitted because it is the
possibility of recovery, and not its likelihood, that guides this
Court’s analysis.”).
As to plaintiff’s futility argument with respect to Balli’s
failure to obtain a certificate of authority from the West
Virginia Secretary of State authorizing it to conduct business in
West Virginia, that argument likewise fails.
While Mid-Vol
insists that Balli is required to obtain a certificate, pursuant
to West Virginia Code § 31D-15-1502(a), Balli counters that it
was not required to obtain such a certificate for a number of
reasons.
The court need not resolve the issue of whether Balli
is required to obtain a certificate in order to proceed on its
counterclaim because even if it is, the counterclaim would not be
subject to dismissal.
Rather, the proper remedy would be to stay
3
the proceedings in order to allow Balli to obtain the requisite
certificate.
See W. Va. Code § 31D-15-1502(c) (“A circuit court
may stay a proceeding commenced by a foreign corporation, its
successor or assignee until it determines whether the foreign
corporation or its successor requires a certificate of authority.
If it so determines, the circuit court may further stay the
proceeding until the foreign corporation or its successor obtains
the certificate.”); see also Dieter Engineering Services, Inc. v.
Parkland Development, Inc., 199 W. Va. 48, 55, 483 S.E.2d 48, 55
(1996) (holding fact that plaintiff did not obtain certificate of
authority as foreign corporation until after action was commenced
did not require dismissal of action).
Accordingly, the court
cannot say that Balli’s motion to amend is futile.
Based on the foregoing, defendant has established that it is
entitled under Rules 15 and 16 to amend its answer and
counterclaim.
Accordingly, the motion to amend is GRANTED.
Balli is directed to file a copy of its amended answer and
counterclaim within ten days of entry of this Memorandum Opinion
and Order.
Furthermore, because of the court’s ruling on the
motion to amend, plaintiff’s amended motion to dismiss the
counterclaim (Doc. No. 58) is DENIED without prejudice.
Plaintiff may renew its motion to dismiss once the amended
counterclaim is filed by refiling the same motion or file a new
motion responsive to the amended counterclaim if appropriate.
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Likewise, Balli’s motion to strike Mid-Vol’s affirmative defenses
(Doc. No. 26) is DENIED without prejudice.
The Clerk is directed to send copies of this Memorandum
Opinion and Order to all counsel of record.
IT IS SO ORDERED this 29th day of May, 2014.
ENTER:
David A. Faber
Senior United States District Judge
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