United States District Court, E.D. Louisiana
ORDER AND REASONS
WELLS ROBY UNITED STATES MAGISTRATE JUDGE
the Court is a Motion for Leave to File First
Supplemental and Amended Counterclaim (R.
Doc. 71) filed by the Housing Authority of New
Orleans (“HANO”) seeking an order from the Court
to allow it to file its first supplemental and amended
counterclaim. The motion is opposed. R. Doc. 72. The motion
was submitted on January 11, 2017. For the following reasons,
the motion for leave to file is GRANTED.
diversity action was filed on May 8, 2015 by the Plaintiff
Parkcrest Builders, LLC (“Parkcrest”) seeking a
Declaratory Judgment and Judgment for Damages in connection
with a contract dispute between itself, as the original
contractor, and Defendant HANO. R. Doc. 21, p. 2. Parkcrest
alleges that on March 4, 2013 it entered into a contract with
Defendant for the construction of the Florida Avenue: New
Affordable Housing Units (“the Project”) for the
amount of $11, 288, 000.00 R. Doc. 1, p. 3. During work on
the Project, there were a number of delays which Parkcrest
argues were not in its control. As a result of these delays,
Parkcrest states that on April 10, 2015 HANO sent a Notice of
Final Default and Termination to Parkcrest stating that
Parkcrest was in final default of the contract and
terminating Parkcrest's right to complete the project. R.
Doc. 1, p. 7. Parkcrest alleges that the delays HANO cited as
the justification for the notice of default were not
attributable to Parkcrest. R. Doc. 21, p. 2. As such, arguing
that it was not in default, Parkcrest alleges that the
termination was “for convenience” and therefore
entitles it to remuneration under its contract with HANO. R.
Doc. 21, p. 3. Parkcrest has also alleged that HANO has
breached the contract. Id. HANO has filed a
counterclaim alleging that the delays were the sole fault of
Parkcrest and seeking damages for the delays. R. Doc. 23.
HANO also asserted claims against Parkcrest that arose after
a Takeover Agreement was executed with Liberty Mutual.
September 1, 2016, Liberty Mutual intervened and filed a
separate complaint against HANO. R. Doc. Liberty Mutual
alleges that it issued a payment and performance bond in
connection with the Project pursuant to the Louisiana Public
Works Act, La. R.S. 38:2216 and 2242. R. Doc. 32, p. 3.
Liberty Mutual states that the bond named the Plaintiff as
the principal and the Defendant as obligee. Further, Liberty
Mutual alleges that in June 2015 it executed a Takeover
Agreement with the Defendant regarding the Project
following the termination of Plaintiff from the Project.
Id. p. 5. As part of that agreement, Liberty Mutual
retained the Plaintiff as the “completion
contractor” to carry out the contract work and to deal
directly with the Defendant for the remainder of the Project.
However, after executing the Takeover Agreement, Liberty
Mutual argues that HANO immediately began violating the terms
by: not making timely payments for unpaid Project funds;
failing to timely respond to change order proposals or
finalize change orders; failing to timely process pay
applications and timely pay Liberty; timely issue punch
lists; and did not grant substantial completion for the
project when it received Certificates of Completion and
Occupancy on November 18, 2015. Id. at p. 6-8.
Thereafter, on June 29, 2016, Liberty Mutual alleges that it
was wrongfully terminated from the Project by HANO, who
intended to complete the punch lists items with a third-party
contractor. As such, Liberty asserts claims of breach of
contract, bad faith breach of contract, and two counts of
wrongful termination against HANO. Id. at 9-15.
on September 22, 2016, HANO filed a counterclaim against
Liberty. R. Doc. 37, p. 17. HANO argues that after executing
the Takeover Agreement Liberty acted as a de-facto contractor
and was therefore liable for amounts in excess of the penal
sum of the Bond. Id. at p. 18. HANO further asserts
that Liberty breached the terms of the Takeover Agreement and
that the breach was done in bad faith. Id. HANO also
asserts that Liberty fraudulently induced HANO into signing
the Takeover Agreement. Id. HANO also avers that
Liberty is liable for liquidated damages as set for in the
Takeover Agreement as well as all damages resulting from
Liberty's breach of the agreement. Id. at p. 19.
December 19, 2016, Liberty filed a motion for judgment on the
pleadings seeking dismissal of HANO's counterclaims that:
(i) Liberty made fraudulent representations to HANO; (ii)
Liberty breached the Takeover Agreement by naming Parkcrest
as the completion contractor; and (iii) Liberty was the
de-facto contractor. R. Doc. 67.
on December 28, 2016, HANO filed the subject motion to amend
and supplement its counterclaim. R. Doc. 71. In its motion,
HANO argues that the motion to amend and supplement should be
granted because the motion to amend is filed within the
deadline for such amendments in accordance with the District
Court's scheduling order. R. Doc. 71-1, p. 2.
it does not wholesale oppose the granting of HANO's
motion, Liberty opposes HANO's motion to amend and
supplement its counterclaim insofar as it relates to the
above mentioned claims at issue in the pending motion for
judgment on the pleadings. R. Doc. 72, p. 3. Liberty argues
that HANO's attempted amendment is futile because it does
not correct the problems with those claims. Id. at
p. 2. Additionally, Liberty also argues that any allegations
that Liberty fraudulently withheld the dual nature of its
Project presentative/non-testify expert Meridian Consulting
Group, LLC (“Meridian”) are prejudicial in that
they are an attempt to circumvent discovery into
Liberty's assertion of attorney-client and work product
privileges associated with Meridian as a non-testifying
expert. Id. at p. 2-3.
Standard of Review
Federal Rule of Civil Procedure 15(a) governs the amendment
of pleadings before trial. Rule 15(a) allows a party to amend
its pleadings “only with the other party's written
consent or the court's leave.” Fed.R.Civ.P.
15(a)(2). Moreover, the Rule urges that the Court
“should freely give leave when justice so
requires.” Id. In taking this liberal
approach, the Rule “reject[s] 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
15(a) requires a trial court ‘to grant leave to amend
freely, ' and the language of this rule ‘evinces a
bias in favor of granting leave to amend.'”
Jones v. Robinson Prop. Grp., 427 F.3d 987, 994 (5th
Cir. 2005) (internal quotations marks omitted) (quoting
Lyn-Lea Travel Corp. v. Am. Airlines, 283 F.3d 282,
286 (5th Cir.2002)). When denying a motion to amend, the
court must have a “substantial reason”
considering such factors as “‘undue delay, bad
faith or dilatory motive on the part of the movant, repeated
failures to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party ...and
futility of the amendment.'” Marucci Sports,
LLC v. Nat'l Collegiate Athletic Ass'n, 751 F.3d
368, 378 (5th Cir. 2014) (quoting Jones, 427 F.3d at
amendment is deemed to be futile if it would be dismissed
under a Rule 12(b)(6) motion. Id. (citing Briggs
v. Miss., 331 F.3d 499, 508 (5th Cir 2003)). “It
is well-established, of course, that the Rule 12(b)(6)
analysis necessarily incorporates the federal pleading
standard articulated in Bell Atlantic Corp. v.
Twombly: ‘To pass muster under Rule 12(b)(6), [a]
complaint must have contained ‘enough facts to state a
claim to relief that is plausible on its face.'”
Int'l Energy Ventures Mgmt., L.L.C. v. United Energy
Grp., 818 F.3d 193, 200 (5th Cir. 2016). As such, the
Court must accept all well-plead facts as true and view them
in the light most favorable to the non-moving party.
Martin K. Eby Constr. Co. v. Dallas Area Rapid
Transit, 369 F.3d 464, 467 (5th Cir.2004) (internal
quotation omitted). A claim is facially plausible “when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the ...