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NAZ, LLC v. Philips Healthcare

United States District Court, E.D. Louisiana

August 28, 2018


         SECTION: “F” (4)



         Before the Court is a Motion for Leave to File Amended Complaint (R. Doc. 101) filed by the Plaintiffs. The motion is opposed. R. Doc. 104. Oral argument was heard on June 20, 2018.

         I. Background

         The instant litigation arises from the purchase of allegedly faulty MRI equipment by a medical facility, the manufacturer's allegedly shoddy installation and service of the MRI equipment, and the failure to provide the purchaser with the hardware and software components that should have been delivered when the MRI equipment was installed. Plaintiffs in the action are the owner and operational entity of a medical facility who treat patients who undergo diagnostic testing. The principal of the Plaintiff is Dr. Morteza Shamsnia, who sought to purchase an Ingenia 3.0T Omega MRI and eventually decided to purchase the machine from defendant Philips Healthcare.

         Plaintiffs allege that Philips marketed its product with promises and representations that the MRI package was suited to achieve the purposes of Dr. Shamsnia. The parties negotiated in an attempt to reach an agreement as to the sale terms and conditions as well as the services, instructions, and recommendations by Philips. Philips delivered the MRI prior to the completion of the negotiations and the Plaintiffs agreed to follow the recommendation of the experts, engineers, and installers.

         On December 22, 2014, Plaintiffs state that they were informed by Philips that the machine was safe for patient use and began using it believing it to be safe. On January 13, 2015, it was discovered that the MRI machine had moved several inches and Philips engineers ordered a “de- energizing” of the MRI which involved the release of helium through a vent in the roof. However, two days later it was discovered that rainfall had entered the opening in the roof due to the carelessly executed quenching process of the MRI, which caused the Plaintiffs to pay $850, 000 to repair the damage to the building. Plaintiffs allege they spent more time and money to repair the problems caused by Philips and the MRI equipment was not activated until April 2016. During this time the Plaintiffs discovered the computer software and hardware that was central to the agreement to purchase the machine from Philips was not installed. After being unable to resolve their difference the Plaintiffs filed the instant suit asserting claims of gross fault and breach of contract.

         The instant motion before the Court was filed by the Plaintiffs, who seek leave to amend the complaint to add causes of action for fraud and violation of Louisiana Unfair Trade Practices Act. R. Doc. 101. They state that they seek to file the Second Amended Complaint in accordance with the Court's scheduling order and Federal Rule of Civil Procedure 15 because discovery has revealed information to support these claims.

         The motion is opposed. R. Doc. 104. Defendant argues that this is the fourth attempt to amend the complaint and Plaintiffs once again seek to add a LUTPA claim, a claim which the Court denied leave to amend to add previously. It argues that neither documents or law support the Plaintiffs' claims and the claims could not survive a 12(b)(6) motion. Further, the Defendant argues that this amended complaint is based on documentation produced in 2017 and Plaintiffs should have asserted any allegations then. Instead, these allegations are an attempt to “recapture” prior fraud and LUTPA claims the court summarily dismissed so that Plaintiffs can pursue punitive damages that were also dismissed by Judge Feldman. It argues the motion is without substantial reason, dilatory, may unduly burden the proceedings, and constitutes an attempt to cure otherwise disallowed claims.

         II. Standard of Review

         Federal Rule of Civil Procedure (“Rule”) 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 (1957).

         “Rule 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 994).

         III. Analysis

         At hearing on the motion, Plaintiffs argued that Dr. Shamsnia and the Defendant engaged in a day long negotiation and agreed to the MRI and specific items in the package and signed the specific signature page of the quote, Revision 10. They further argue that on May 14, 2012, Defendant then sent Dr. Shamsnia a new quote with items removed and under a different revision number-Revision 12-sent this information to Dr. Shamsnia while he was traveling and asked him to sign and send it back. Plaintiffs indicate to the Court that at no time did Defendant inform Dr. Shamsnia that certain items were removed from the package. Further, they argued that it was very difficult to compare the two documents and determine what the differences were between Revision 10 and Revision 12. Plaintiffs argue at no point were the differences in Revision 10 and 12 explained to Dr. Shamsnia and that Revision 12 ...

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