RxUSA Inc et al v. Capital Returns Inc et al

Filing 117

ORDER signed by Chief Judge Rudolph T Randa on 01/30/2009 granting 85 Motion to Amend/Correct. The Clerk of Court is DIRECTED TO file the amended complaint, which is attachment two to RxUSAs motion for leave to file an amended complaint. (cc: all counsel) (Koll, J)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

R x U S A , INC., a n d RxUSA INTERNATIONAL INC., Plaintiff, v. C A P I T A L RETURNS, INC., CLAUDE A. DANCE, PETE M. SKLADANDEK, and JOHN DOES 1-10, Defendants. C a s e No. 06-C-790

DECISION AND ORDER

T h is matter is before the Court on the motion of the Plaintiffs, RxUSA, Inc. and R x U S A International, Inc. (collectively "RxUSA"), for leave to file an amended complaint. T h e proposed amended complaint makes the following changes: (1) removes the counts d is m is s e d by the Court's September 14, 2007, Decision and Order granting judgment on the p le a d in g s to the extent that four of the eight counts of the Complaint were dismissed; (2) adds D e f en d a n ts Claude A. Dance ("Dance") Dance and Pete M. Skladandek ("Sklandanek") to the f ra u d claim against Defendant Capital Returns, Inc. ("Capital Returns") and adds factual a lle g a t io n s with respect to Dance and Skladanek's fraudulent representations; (3) adds a b re a ch of contract claim against Capital Returns; and (4) eliminates the Defendants identified

a s John Does 1-10.1 RxUSA states that the new matters resulted from evidence uncovered d u r in g discovery and pose no prejudice to the Defendants. T h e Defendants oppose the motion to amend, except to the extent that it amends th e Complaint to reflect the Court's decision on the motion for judgment on the pleadings and c o u ld add a limited breach of contract claim alleging that Capital Returns breached a section o f the Service Agreement with regard to the passing along of the shipping charges. (Defs.' M e m . Opp'n Mot. Leave File Am. Compl. 5 n.4.) The Defendants state that amendment of th e complaint to include Dance and Skladanek in the fraud claim, and the breach of contract claim as proposed, which is also based on pre-contractual communications between the parties, w o u ld be futile. In so contending, the Defendants maintain that the fraud claim against Dance a n d Skladanek and that portion of the breach of contract claim based on pre-contractual c o m m u n ic a tio n s would not survive a motion to dismiss. The Defendants do not state that they w o u ld be prejudiced by the proposed amendments. RxUSA did not file a reply. Federal Rule of Civil Procedure 15(a) provides that if a party is not entitled to a m e n d a pleading as a matter of course, it may amend "with the opposing party's written c o n s e n t or the court's leave." The Court "should freely give leave when justice so requires." F e d . R. Civ. P. 15(a)(2). "Although the rule reflects a liberal attitude towards the amendment o f pleadings, courts in their sound discretion may deny a proposed amendment if the moving p a r t y has unduly delayed in filing the motion, if the opposing party would suffer undue

RxUSA does not mention the latter change made by its proposed amended complaint, which is attached to i t s motion. Also pending is the motion for summary judgment filed by Capital Returns, Dance, Skladandek, and John D o e s 1-10 (collectively the "Defendants") dismissing RxUSA's remaining claims against them. That motion will be a d d r e s s e d a separate decision.

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p re ju d ic e , or if the pleading is futile." Soltys v. Costello, 520 F.3d 737, 742 (7th Cir. 2008) (quoting Campania Mgmt. Co. v. Rooks, Pitts & Poust, 290 F.3d 843, 848-49 (7th Cir. 2002)). D e la y on its own is usually not reason enough for a court to deny a motion to amend. Soltys, 5 2 0 F.3d at 742. If an amended claim would not survive a motion to dismiss, the amendment is futile. Vargas-Harrison v. Racine Unified Sch. Dist., 72 F.3d 964, 974-75 (7th Cir. 2001). T o state a claim upon which relief may be granted a plaintiff, must provide only "enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests, and, th ro u g h his allegations, show that it is plausible, rather than merely speculative, that he is e n title d to relief." Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008). (Citations o m itte d ). The Wisconsin common law of intentional misrepresentation requires that a p la in tif f prove that: "(1)[t]he defendant made a factual representation; (2) which was untrue (3 ) the defendant made the representation knowing it was untrue or made it recklessly without c a rin g whether it was true or false; (4) the defendant made the representation with intent to d e f ra u d and to induce another to act upon it; and, (5) the plaintiff believed the statement to be tru e and relied upon it to his/her detriment." (Court's September 14, 2007, Decision and Order 1 8 (quoting Kaloti Enters., Inc. v. Kellogg Sales Co., 699 N.W.2d 205, 211 (Wis. 2005).) P r e v io u s ly, the Court held that the allegations of the Complaint regarding Capital Returns' f r a u d u le n t scheme, when read in their entirety and construed in the light most favorable to R x U S A , alleged facts indicating that upon entering into the Service Agreement Capital R e tu rn s had no intention of actually performing as promised. (Court's September 14, 2007,

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D e c is io n and Order 19.) The proposed amended complaint adds similar allegations about f ra u d u le n t representations made by Dance and Skladanek. Dance and Skladanek proffer their testimony indicating that they performed the S e rv ic e Agreement. However, at the pleading stage, their testimony does not establish that R x U S A has not alleged a plausible fraud claim against them. Therefore, the amended c o m p la in t will be allowed as to the allegations of fraud against Dance and Skladanek. See U .S . Oil Co. v. Midwest Auto Care Servs., Inc., 440 N.W.2d 825, 827 (Wis. Ct. App. 1989) (c itin g Hartwig v. Bitter, 139 N.W.2d 644, 646 (Wis. 1966)). See also, Friends of Kenwood v . Green, 619 N.W.2d 271, 275 (Wis. Ct. App. 2000). The Defendants also oppose the proposed breach of contract claim against C a p ita l Returns, except to the extent that it alleges that Capital Returns breached a section of th e Service Agreement with regard to the passing along of the shipping charges. The D e f e n d a n ts assert that RxUSA's other breach of contract allegations are based on c o m m u n ic a tio n s by the parties prior to signing the Service Agreement on October 20, 2003,2 a n d that RxUSA may not assert such claims because the Service Agreement contains an in te g ra tio n clause. The integration clause in Service Agreement may provide a defense to a b rea ch of contract claim based on pre-contractual communications. See In re Spring Valley M e a ts , Inc., 288 N.W.2d 852, 856 (Wis. 1980). However, there are circumstances under

The Defendants' memorandum states the date of the Service Agreement was October 10, 2003. (Defs.' Mem O p p 'n Mot. for Leave to File Am. Compl. 5.) However the Service Agreement attached as a Exhibit A to the m e m o r a n d u m is dated October 20, 2003. The Court has corrected the error.

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w h ic h the inclusion of an integration clause in a contract may not bar the additional terms. See id. The Defendants have not established that RxUSA's proposed claims are futile b e c au s e they would not survive a motion to dismiss. The Defendants have also not contended th a t they would be prejudiced by the amendment of the complaint. Therefore, the Court grants R x U S A 's motion for leave to file an amended complaint. NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY O R D E R E D THAT: R x U S A ' s motion for leave to file an amended complaint (Docket No. 85) is GRANTED. T h e Clerk of Court is DIRECTED TO file the amended complaint, which is a tta c h m e n t two to RxUSA's motion for leave to file an amended complaint. Dated at Milwaukee, Wisconsin this 30th day of January, 2009. BY THE COURT s / Rudolph R. Randa Hon. Rudolph T. Randa C h ie f Judge

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