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Johnson v. Safepoint Insurance Co.

United States District Court, E.D. Louisiana

January 7, 2019

STEVEN JOHNSON
v.
SAFEPOINT INSURANCE CO.

         SECTION: “H” (1)

          JANE TRICHE MILAZZO, JUDGE

          ORDER AND REASONS

          Janis Van Meerveld, United States Magistrate Judge

         Defendant SafePoint Insurance Company (“SafePoint”) moves for leave to file a First Amended Affirmative Defenses and Answer. (Rec. Doc. 19). For the following reasons, the Motion for Leave to File First Amended Affirmative Defenses and Answer (Rec. Doc. 19) is GRANTED; SafePoint's First Amended Affirmative Defenses and Answer shall be entered into the record.

         Background Facts

         Mr. Johnson's house was destroyed by fire on or about October 14, 2017. At the time, the property was insured by SafePoint. In February 2018, SafePoint denied Mr. Johnson's claim for losses resulting from the fire on the basis of Mr. Johnson's failure to cooperate with the investigation by refusing to provide certain requested documents. The denial of claim letter also states that SafePoint was not waiving any additional policy defenses and reserved “all rights to reserve certain policy defenses at any time.” Mr. Johnson filed this lawsuit in Louisiana state court against SafePoint alleging that SafePoint was arbitrary and capricious and acted without probable cause in failing to pay his claim. On March 27, 2018, SafePoint removed the action to this Court, invoking this Court's diversity jurisdiction.[1]

         The district court issued a scheduling order, which sets trial to begin on September 9, 2019. The deadline to complete discovery is June 17, 2019. The deadline to amend pleadings was December 6, 2018. On that date, SafePoint filed the present Motion for Leave to File First Amended Affirmative Defenses and Answer. Its proposed amendment supplements the Fourth Affirmative Defense. In the original answer, the Fourth Affirmative Defense referenced the applicable insurance policy and asserted “the conditions, limitations, exclusions, and coverage, all of which are pled as if copied herein, in extenso, citing any and all policy exclusions, provisions, qualifications, and conditions including, but not limited to, the following.” It then quoted from the policy's conditions for “concealment or fraud” and “your duties after loss.” The proposed amendment to the Fourth Affirmative Defense keeps this and adds a quote from the policy's exclusion for “intentional loss.” Neither the original defense nor the proposed amendment provide any factual basis for asserting the policy defenses.

         Law and Analysis

         1. Standard for Motion to Amend Complaint

         Under Federal Rule of Civil Procedure 15(a)(2), when the time period for amending a pleading as a matter of course has passed, a party may amend its pleadings by consent of the parties or by leave of court. “The court should freely give leave when justice so requires.” Fed. R. Civ. Proc. 15(a)(2). Thus, the United States Court of Appeals for the Fifth Circuit instructs that the “district court must possess a ‘substantial reason' to deny a request for leave to amend.” Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004). Nonetheless, “that generous standard is tempered by the necessary power of a district court to manage a case.” Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d 170, 177 (5th Cir. 2016) (quoting Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003)). The court may consider numerous factors when deciding whether to grant a motion for leave to amend, including “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 by virtue of allowance of the amendment, and futility of the amendment.” Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003).

         Where a party seeks to amend its answer to assert a new affirmative defense, courts note that a defendant must affirmatively state its affirmative defenses in responding to a pleading to avoid waiver of the defense. See, e.g., Lachney v. O'Reilly Auto. Stores, Inc., No. 1:16-CV-00478, 2017 WL 5178773, at *2 (W.D. La. Nov. 6, 2017); Scott v. E.I. du Pont de Nemours & Co., No. CV 13-741-SDD-EWD, 2016 WL 1464565, at *3 (M.D. La. Apr. 13, 2016). As the court in Scott explained, an affirmative defense is not waived where the defendant raises the defense “at a pragmatically sufficient time, and [the plaintiff] was not prejudiced in its ability to respond.” Scott, 2016 WL 1464565, at *3 (quoting Pasco ex rel. Pasco v. Knoblauch, 566 F.3d 572, 577 (5th Cir. 2009)) (alteration in original). Courts “look at the overall context of the litigation and have found no waiver where no evidence of prejudice exists and sufficient time to respond to the defense remains before trial.” Id. (quoting Pasco, 566 F.3d at 577).

         In Lachney, for example, the court allowed the defendants to amend their answer to assert a new affirmative defense. 2017 WL 5178773, at *6. The court found no undue delay or prejudice to the plaintiff where leave to amend was sought on the last day allowed by the scheduling order and where plaintiff was still able to conduct discovery on the defense in advance of trial. Id. at *4. Further, the court found the defendant's proposed amendment to add an affirmative defense was not futile. Id. at *6. The proposed amendment stated “Defendants plead the affirmative defense of sudden emergency and that they are not liable for the sudden medical emergency of [the defendant driver] that may have led to, caused or contributed to the incident forming the basis of this litigation.” Id. The court found this defense contained a short description of the factual basis for the defense and was sufficient to give the plaintiff fair notice of defendants' position. Id.

         2. Parties' Arguments

         Here, SafePoint argues that the amendment should be allowed because it was timely filed and Mr. Johnson would not be unfairly prejudiced. SafePoint asserts that the fire was determined by an expert to be “incendiary in origin and . . . caused by the deliberate actions of an individual or individuals.” In its memorandum in support of its motion, SafePoint explains that it has decided to raise ...


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