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Najor v. Plaquemines Clay Co., LLC

United States District Court, E.D. Louisiana

January 17, 2019


         SECTION “J” (2)



         Plaintiff's Motion for Leave to File an Amended Complaint is before me. Record Doc. No. 117. These are consolidated diversity cases originally brought by plaintiff and judgment creditor Robert Najor against defendant and judgment debtor Hai Nguyen ("Nguyen") and defendant Trustee of the Nguyen Family Trust ("the Trustee"). The more recently filed of the two cases seeks to recover property and damages as a result of Nguyen's transfer of real estate to the Nguyen Family Trust ("the Trust"), all in execution of a judgment in Najor's favor against Nguyen and his company Plaquemines Clay Co., LLC ("Plaquemines Clay") for $350, 000, plus interest and costs. Record Doc. No. 23.

         Plaintiff's motion seeks to amend his complaint to assert a Louisiana state law oblique action against Nguyen and his company National Marine Financing Corporation ("National Marine"). The Trustee opposes the motion on the ground that plaintiff's right to bring an oblique action has prescribed under Louisiana law and amendment is therefore futile. Record Doc. No. 122 at p. 2. Plaintiff also seeks to assert an attorney's fees claim against all defendants based on fraud. Record Doc. No. 117-1 at pp. 22-23; Record Doc. No. 123-1 at p. 9. Defendant opposes this claim on the grounds that it would be prejudiced in having to defend against the claim. Record Doc. No. 122 at p. 4.


         Plaintiff's proposed amended complaint reiterates the facts pled in his initial complaint, specifically, that in December 2002, Nguyen and/or National Marine acting under Nguyen's direction transferred immovable property located at 1725 Lakeshore Drive, New Orleans, Louisiana 70122 ("the Property"), to the Trust for $600, 000. Record Doc. No. 117-1 at p. 8. The motion papers suggest that the Property was titled in National Marine's name at the time of the transfer. Record Doc. No. 117-1 at pp. 7-8; see also Record Doc. No. 112-1 at pp. 1-2. The proposed amended complaint alleges that National Marine is the alter ago of Nguyen, and that Nguyen is the sole shareholder of the company. Record Doc. No. 117-1 at p. 8. Plaintiff alleges that this transfer was an absolute simulation[1] because the Trust never paid the $600, 000 purchase price and Nguyen has retained corporeal possession of the Property by continuing to live there. Id. at p. 8, 18. Plaintiff further alleges that Nguyen engaged in the simulation for the purpose of "putting the [P]roperty beyond the reach of his creditors" and that Nguyen's failure to demand return of the title of the Property to his name "has caused or increased his current insolvency." Id. at pp. 11-12.

         Elsewhere in the record, plaintiff stated that he first learned that the 2002 Property transfer may have been a simulation on May 18, 2016, during an informal conversation with Nguyen following a judgment debtor examination. Record Doc. No. 112-1 at p. 2; Record Doc. No. 112-2 at p. 2. According to plaintiff, "[Nguyen's] statements were the first time that Mr. Najor learned that it was possible that the [Property] had been transferred without consideration and/or without cause as stated in the Act of Sale." Record Doc. No. 112-1 at p. 2 n. 1. Plaintiff's complaint in C.A. No. 16-15412, filed on October 11, 2016, less than five months later, asserted a claim against Nguyen and the Trust to declare the 2002 Property transfer a simulation and absolute nullity, such that plaintiff could execute his rights against as a judgment creditor of Nguyen against the Property.[2] Najor v. Nguyen et al., C.A. 16-15412, Record Doc. No. 1 at p. 15. Plaintiff also asserted a revocatory action[3] against the Trust to have the Property transfer set aside and returned to Nguyen's estate to satisfy plaintiff's judgment.[4] Id. at p. 10.

         The present motion seeks to add an oblique action claim as an alternative legal theory of recovery arising from the same underlying facts alleged in plaintiff's original complaint surrounding the alleged simulated sale of the Property.


         The policy of the Federal Rules of Civil Procedure is liberal in favor of permitting amendment of pleadings, and Rule 15(a) evinces a bias in favor of granting leave to amend. Unless there is a substantial reason to deny leave to amend, the discretion of the district court is not broad enough to permit denial. Stripling v. Jordan Prod. Co., 234 F.3d 863, 872 (5th Cir. 2000) (citing Foman v. Davis, 371 U.S. 178, 182 (1962); Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir. 1994); Martin's Herend Imports, Inc. v. Diamond & Gem Trading U.S. Am. Co., 195 F.3d 765, 770 (5th Cir. 1999); Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597-98 (5th Cir. 1981)). Thus, “[t]he court should freely give leave when justice so requires, ” Fed.R.Civ.P. 15(a)(2), but such leave “is by no means automatic.” Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993) (quotation omitted). Relevant factors to consider include “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, and futility of amendment.” Id.

         “It is within the district court's discretion to deny a motion to amend if it is futile.” Stripling, 234 F.3d at 872-73 (citation omitted). Futility in this context means “that the amended complaint would fail to state a claim upon which relief could be granted. . . . [Thus, ] to determine futility, we will apply the same standard of legal sufficiency as applies under Rule 12(b)(6).” Id. at 873 (quotations and citations omitted); accord Fenghui Fan v. Brewer, 377 Fed.Appx. 366, 367 (5th Cir. 2010). “To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state a claim to relief that is plausible on its face.' ‘Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).'” In Re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007)) (footnote omitted).

         An amendment is futile "when leave is sought to add a claim upon which the statute of limitations has run." F.D.I.C. v. Conner, 20 F.3d 1376, 1385 (5th Cir. 1994). Nonetheless, an amendment to a complaint will relate back to the filing date of the original complaint if the claim asserted in the amended complaint arises "out of the conduct, transaction, or occurrence set out - or attempted to be set out in the original pleading." Fed.R.Civ.P. 15(c)(1)(B). "If a claim asserted in an amended pleading relates back to the date of the original complaint and is thus not barred by limitations, then leave to amend should ordinarily be granted." Conner, 20 F.3d at 1385 The theory behind relation back of amendments is that "once litigation involving particular conduct or a given transaction or occurrence has been instituted, the parties are not entitled to the protection of the statute of limitations against the later assertion by amendment of defenses or claims that arise out of the same conduct, transaction, or occurrence as set forth in the original pleading." 6A Fed. Prac. & Proc. Civ. § 1496 (3d ed.). Allowing for augmentation of claims that were asserted before the limitations period has run "does not offend the purpose of a statute of limitations, which is simply to prevent the assertion of stale claims." Conner, 20 F.3d at 1385.

         "If a plaintiff attempts to interject entirely different conduct or different transactions or occurrences into a case, then relation back is not allowed." Id. However, "if a plaintiff seeks to correct a technical difficulty, state a new legal theory of relief, or amplify the facts alleged in the prior complaint, then relation back is allowed." Id. at 1386 (emphasis added). If the alteration of claims contained in an amended complaint is “so substantial that it cannot be said that the defendant was given adequate notice of the conduct, transaction, or occurrence that forms the basis of the claim or defense, then the amendment will not relate back.” Id. (quoting 6A Fed. Prac. & Proc. Civ. ยง 1496 (3d ed.). Conversely, "[a]s long as the amended complaint refers to the same transaction or occurrence that formed the basis for the original complaint and the defendant was put on notice of the claim by the first complaint, there will be no bar to ...

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