United States District Court, E.D. Louisiana
ORDER AND REASONS ON MOTION
C. WILKINSON, JR. UNITED STATES MAGISTRATE JUDGE.
Motion for Leave to File Third Party Demand and Add Related
Party Defendant, Record Doc. No. 67, is pending before me.
Plaintiff filed a timely opposition memorandum. Record Doc.
No. 68. Defendants were permitted to file supplemental
memoranda. Record Doc. Nos. 75, 77. Defendants seek leave to
file a third-party demand to assert claims against their own
homeowners' insurer, Privilege Underwriters, Inc.
("PURE"), pursuant to an insurance policy
("the Policy") issued by PURE to defendants.
Defendants argue that the Policy provides coverage for the
claims asserted by plaintiff in this lawsuit. Record Doc. No.
67-4 at p. 2 ¶ V. Defendants previously filed a claim
with PURE based on plaintiff's allegations in this
lawsuit, which was denied almost eight months ago on August
3, 2018, based on lack of coverage under the Policy. Record
Doc. No. 67-2.
the court has entered a scheduling order setting a deadline
for filing third-party actions, the schedule “may be
modified only for good cause and with the
judge's consent.” Fed.R.Civ.P. 16(b)(4) (emphasis
added). “Rule 16(b) governs amendment of pleadings
after a scheduling order deadline has expired. Only upon
the movant's demonstration of good cause to modify the
scheduling order will the more liberal standard of Rule
15(a) apply to the district court's decision to grant or
deny leave.” S&W Enters., L.L.C. v. SouthTrust
Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003)
(emphasis added). Four factors are relevant to good cause:
“‘(1) the explanation for the failure to timely
move for leave to amend; (2) the importance of the amendment;
(3) potential prejudice in allowing the amendment; and (4)
the availability of a continuance to cure such
prejudice.'” Sw. Bell Tel. Co. v. City of El
Paso, 346 F.3d 541, 546 (5th Cir. 2003) (citing
Fed.R.Civ.P. 16(b)) (quoting S & W Enters., 315
F.3d at 535); accord Fahim v. Marriott Hotel Servs.,
Inc., 551 F.3d 344, 348 (5th Cir. 2008); Nunez v.
U.S. Postal Serv., 298 Fed.Appx. 316, 319 (5th Cir.
2008); In re Int'l Marine, LLC, 2009 WL 498372,
at *1-2 (E.D. La. Feb. 26, 2009). The scheduling order
deadline for filing third-party actions expired on November
13, 2018. Record Doc. No. 9 at p. 1. Thus, Rule 16(b)(4)
governs this matter, and defendants must establish "good
cause" for their untimely filing before the
liberal Rule 15(a) standard might apply.
explain that they failed timely to request leave to file a
third-party demand because information giving rise to
PURE's alleged coverage was not known to defendants until
they reviewed PURE's claims file - only after
plaintiff subpoenaed the file - and until defendants
provided facts at their own depositions that
"alter[ed] PURE's denial of the claim" under
the Policy. Record Doc. No. 67-1 at p. 2. This explanation is
unpersuasive. Defendants fail to identify the newly
discovered facts that were clearly within their own
knowledge and that supposedly justify their late filing. They
neglect to explain why they waited almost two months
after their depositions to file this motion. Defendants and
their counsel have been aware of plaintiff's allegations
and have had access to their own homeowners'
insurance policy since plaintiff filed this lawsuit on July
19, 2018. PURE denied coverage under the Policy on August 3,
2018, well before expiration of the scheduling order deadline
for filing third-party actions. Defendants and their counsel
had several months to review the Policy against
plaintiff's allegations. Moreover, defendants themselves
could have requested PURE's claims file immediately after
their claim was denied, rather than waiting for plaintiff to
subpoena these documents several months later. Instead of
diligently pursuing this information, defendants waited until
months after the scheduling order deadline lapsed to file
this motion. This factor weighs heavily against allowing
defendants to file the third-party demand.
a third-party demand against PURE is unimportant because
defendants are free to file their own lawsuit against PURE if
and after judgment is rendered in this matter. Alternatively,
the August 3, 2018 denial of defendants' claim under the
Policy indicates that defendants "may have the matter
reviewed by the Louisiana Department of Insurance" if
they believe their claim was wrongfully denied. Record Doc.
No. 67-2 at p. 2. This factor disfavors allowing defendants
to file the third-party demand.
to plaintiff is substantial because adding PURE as a new
party will cause significant delay in that it threatens both
the discovery deadline, currently set on April 9, 2019, and
the trial date. As stated above, defendants are not
prejudiced because they may seek recourse against PURE by
filing a separate lawsuit and/or seeking administrative
review of their claim denial by the Louisiana Department of
Insurance. A continuance may cure plaintiffs prejudice.
However, availability of a continuance is a matter
exclusively for the district judge to address. These factors
disfavor a finding of good cause allowing defendants to file
this late third-party demand.
foregoing reasons, the Rule 16(b)(4) factors weigh heavily
against allowing defendants to file a third-party demand