United States District Court, E.D. Louisiana
KAREN WELLS ROBY, Magistrate Judge.
Before the Court is Plaintiff, Bayou Liberty Property, LLC's ("Bayou Liberty") Motion for Leave to File Supplemental and Amending Complaint (R. Doc. 45), seeking leave of court to file an amending complaint to add additional factual allegations that include new and recent breaches of the lease at issue. The motion is opposed. See R. Doc. 50. The motion was heard on the briefs on Wednesday, March 25, 2015.
This action arises out of the alleged breach of the Ground Lease ("Lease") agreement between Bayou Liberty and the defendants, Best Buy Stores LP and Best Buy Co., Inc. (collectively "Best Buy"), for the rental property located at the northeast quadrant of North Shore Boulevard and U.S. 190, in Slidell, Louisiana. See R. Doc. 1, at 2. Bayou Liberty alleges that the Lease was for a term of twenty (20) years and was entered into on April 10, 2001 and commenced on November 15, 2001.
Bayou Liberty alleges that Best Buy violated the Lease when it: (1) assigned the lease on two occasions without prior written notice; (2) failed to execute a specific assumption of the entire lease with the prospective assignee; (3) failed to use reasonable efforts to find a subtenant or assignee to continue to operate the leased premises; (4) attempted to sale the property that is owned by Bayou Liberty; and (5) failed to maintain insurance coverage. Id. at 9-10. Pursuant to the terms of the Lease, Bayou Liberty alleges that it provided default notices for each violation and gave Best Buy an opportunity to cure the violations, but Best Buy failed to do so.
In the instant motion, Bayou Liberty seeks leave of court to file a supplemental and amending complaint to allege three additional breaches of the Lease: (1) Best Buy's failure to pay all real estate taxes; (2) Best Buy's failure to maintain the leased premises in a state of good condition and repair; and (3) Best Buy's failure ensure there are no hazardous substances on the premise. See R. Doc. 45-3, at 13.
II. Standard of Review
Federal Rule of Civil Procedure ("Rule") 15(a), which governs the amendment of pleadings, provides that leave to amend pleadings "shall be freely given when justice so requires." This, and other federal rules, "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Conley v. Gibson, 355 U.S. 41, 48 (1957). Thus, Rule 15(a) evinces a liberal and lenient amendment policy and a motion to amend should not be denied absent a substantial reason to do so. See Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir. 1998).
Although Rule 15(a) governs the amendments of pleadings, the Fifth Circuit has established that Rule 16(b) "governs the amendment of pleadings after a scheduling order deadline has expired." S & W Enters., LLC v. S. Trust Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003). Rule 16 provides that a scheduling order may only be modified for good cause shown and with the Judge's consent. See Fed. R. Civ. Pro. 16(b)(4). Therefore, only after the movant has satisfied the good cause requirement of Rule 16(b) will the more liberal standard of 15(a) apply. S & W Enters., LLC, 315 F.3d at 536.
In determining whether a party has provided good cause under Rule 16(b), courts may examine four factors: "(1) the explanation for the untimely conduct; (2) the importance of the requested untimely action; (3) the potential prejudice in allowing the untimely conduct; and (4) the availability of a continuance to cure such prejudice." Huey v. Super Fresh/Sav-A-Center, Inc., No. 07-1169, 2008 WL 2633767, at *1 (E.D. La. June 25, 2008) (citing S & W Enters., LLC, 315 F.3d at 535. "The good cause standard requires the party seeking relief to show that the deadlines cannot reasonably be met despite the diligence of the party needing the extension." S & W Enters., LLC, 315 F.3d at 535 (internal quotations and citations omitted).
Bayou Liberty filed the instant motion on March 5, 2015, which is over five months after the September 29, 2014 amendment deadline set forth in the Scheduling Order (R. Doc. 18). As such, the Court must apply Rule 16(b) to determine whether Bayou Liberty has good cause for filing the motion after the Scheduling Order deadline. Thus, the Court will apply the aforementioned Huey factors.
A. Explanation of the untimely conduct
Bayou Liberty argues that its motion for leave to amend is untimely because only recently it became aware of the conditions of the premise and the fact that Best Buy failed to pay the real estate taxes for 2014. See R. Doc. 51-1. Bayou Liberty contends that prior to its inspection of the premise on February 11, 2015, it had no reason to believe that the premise was not being properly maintained. Id. at 2. Bayou Liberty represents that it was on notice of a possible violation of the breach when on October 16, 2014 and January 9, 2015 water filled up in the delivery bay because Best Buy did not have running electricity at the premise. Id. Bayou Liberty contends that these two occasions made Bayou Liberty concerned about the state of the building. Id. Bayou Liberty further ...