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Traxler Construction, Inc. v. 300 Mile Investments, Ltd.

United States District Court, W.D. Louisiana, Alexandria Division

December 2, 2014



DEE D. DRELL, Chief District Judge.

Pending before the Court is a Motion for Summary Judgment (Doc. 14) filed by Counter-Defendant Timothy M Brandon Architect APC ("Brandon" or "Architect"), a Motion for Leave to File a First Supplemental and Amended Counterclaim (Doc. 16) filed by Counter-Claimant 300 Mile Investments, Ltd. ("300 Mile"), and a Motion for Summary Judgment (Doc. 27) filed by Counter-Defendant Traxler Construction, Inc. ("Traxler"). For the following reasons, 300 Mile's motion (Doc. 16) and Traxler's motion (Doc. 27) will be GRANTED and Brandon's motion (Doc. 14) will be DENIED with the right to refile.

I. Background

Plaintiff Traxler, a Louisiana construction company, brought suit in Louisiana state court for nonpayment of $74, 556 for construction work performed by Traxler. Defendant 300 Mile, a Texas-based investment company, removed the suit to this Court and counterclaimed against Traxler as well as against Brandon with breach of contract claims under Louisiana law. Counter Plaintiff 300 Mile asserts that it had to sell the property at a loss as a result of defects in both design and construction, which were the fault of Brandon and Traxler, respectively.

Brandon answered 300 Mile's counterclaim by asserting a defense of res judicata (Doc. 13) and moved for summary judgment (Doc. 14) on the grounds that 300 Mile's claim is precluded by a compromise agreement between 300 Mile and Brandon. In short, there were four separate contracts between 300 Mile and Brandon, but all pertained generally to projects on contiguous tracts of land owned by 300 Mile in Natchitoches. A number of disputes arose and, in August of 2010, the parties, including Brandon and 300 Mile, entered into a compromise agreement that purports to resolve all the issues and release Brandon from any future claims arising out of any engagements involving the projects on 300 Mile's property in Natchitoches. The counterclaim against Brandon, here, pertains to the first of those four contracts, which Brandon argues was covered by the compromise agreement. In response to Brandon's Answer, 300 Mile filed its motion to amend the counter-complaint to include a claim for reformation, or alternatively rescission, of the compromise agreement (Doc. 16), to which both Brandon and 300 Mile object.

Traxler's motion for summary judgment (Doc. 27) posited that 300 Mile has no rights under the contract because: (a) 300 Mile was not a party to the contract; and (b) Hotel St. Denis, LLC ("Hotel St. Denis") was prohibited by a contractual nonassignment clause from assigning its rights to 300 Mile.

II. Law and Analysis

A. Motion to Amend

Under Fed.R.Civ.P. 15(a)(2), "a party may amend its pleading only with the opposing party's written consent or the court's leave." Neither Brandon nor Traxler consents to the proposed amendments, and 300 Mile seeks leave to amend its original counterclaim. In this situation, Rule 15(a)(2) directs that "[t]he court should freely give leave when justice so requires." Id . Moreover, in deciding this motion, the Court "must entertain a presumption in favor of granting parties leave to amend." Mayeaux v. La. Health Serv. and Indem. Co., 376 F.3d 420, 425 (5th Cir.2004).

Prior to the entry of judgment in a case, Rule 15(a) "endows a district court with virtually unlimited discretion' to allow amendments" to the pleadings. Benson v. St. Joseph Reg'l Health Ctr., 575 F.3d 542, 550 (5th Cir.2009) (quoting Vielma v. Eureka Co., 218 F.3d 458, 468 (5th Cir.2000)). A district court's denial of a motion to amend is subject to review for abuse of discretion. See, e.g., Coghlan v. Wellcraft Marine Corp., 240 F.3d 449, 452 (5th Cir.2001). The Fifth Circuit has noted that, in light of the presumption in favor of liberal pleading, "the term discretion' in this context may be misleading, because [Rule] 15(a) evinces a bias in favor of granting leave to amend.'" Mayeaux, 376 F.3d at 425.

In fact, while we retain broad authority to allow amendments to the pleadings, our discretion is restrained against denying a timely motion to amend: "[A]bsent a substantial reason' such as undue delay, bad faith, dilatory motive, repeated failures to cure deficiencies, or undue prejudice to the opposing party, [1] the discretion of the district court is not broad enough to permit denial.'" Id . (quoting Martin's Herend Imports, Inc. v. Diamond & Gem Trading U.S. of Am. Co., 195 F.3d 765, 770 (5th Cir. 1999)). As such, when a proposed amended pleading states potentially viable claims, the Court is strongly compelled to grant a motion to amend by the principles described above. See Coghlan, 240 F.3d at 452 ("It contravenes the liberal pleading presumption of Rule 15(a) and constitutes an abuse of discretion for a district court to deny a timely motion to amend where the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief.").

Here, 300 Mile timely filed its motion to amend and we see no substantial reason to deny the motion. The parties had not yet filed a plan of work nor had we set any separate deadlines to amend pleadings. It appears that the purpose of the proposed amendment is to respond to an unforeseen defense, rather than some dilatory or other bad faith purpose. Furthermore, 300 Mile avoided undue delay by filing its motion within thirty days of Brandon's Answer. For the foregoing reasons, 300 Mile's motion will be GRANTED.

B. Summary Judgment

A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A dispute of material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). We consider all "evidence in the light most favorable to the party resisting the motion." Trevino v. Celanese Corp., 701 F.2d 397, 407 (5th Cir.1983). However, the non-moving party does not establish a genuine dispute with "some metaphysical doubt as to the material facts, ' by conclusory allegations, ' by unsubstantiated assertions, ' or by only a scintilla' of evidence." Little, 37 F.3d at 1075 (citations ...

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