United States District Court, E.D. Louisiana
ORDER AND REASONS ON MOTION
C. WILKINSON, JR. UNITED STATES MAGISTRATE JUDGE.
a civil action for declaratory relief and money damages filed
by plaintiff McDonnel Group, LCC ("McDonnel")
arising out of defendants Starr Surplus Lines Insurance
Company ("Starr") and Lexington Insurance
Company's ("Lexington") (collectively,
"Insurers") alleged breach of their contractual
obligations to provide insurance coverage and/or payment for
all losses suffered by McDonnel under two builder's risk
insurance policies ("the Policies").
Jung, LLC's ("Jung") Motion for Leave to File
First Supplemental and Amending Complaint of Intervention,
Record Doc. No. 148, is before me. Jung seeks to amend its
complaint of intervention to assert claims under Louisiana
Revised Statutes §§ 22:1892 and 22:1793 that it is
entitled to recover as an additional insured under the
Policies for all damages arising of Insurers' alleged bad
faith, arbitrary and capricious refusal to pay McDonnel's
claims in full. Record Doc. No. 148-1 at p. 3. Defendants
filed a timely opposition memorandum. Record Doc. No. 160.
Jung was permitted to file a reply brief. Record Doc. Nos.
filed this action against Starr on February 9, 2018, and
added Lexington as a defendant on April 4, 2018, via its
second amended complaint. Record Doc. Nos. 1, 15. The
district judge issued a Rule 16 scheduling order on May 22,
2018, setting June 22, 2018, as the deadline for amendment of
pleadings. Record Doc. No. 29 at p. 1. The amendment deadline
expired without being extended. On November 7, 2018, Jung was
granted leave to intervene in this matter and filed its
complaint of intervention. Record Doc. Nos. 50, 51.
parties held a status conference on December 6, 2018, to
discuss extension of scheduling order deadlines. Record Doc.
No. 91. The scheduling order was subsequently modified on
December 7, 2018, without extension of the
previously expired amendment deadline. Record Doc. No. 92. On
February 11, 2019, defendants filed their first motion for
summary judgment against Jung, requesting that the court
dismiss Jung's claims. Record Doc. No. 110. On February
20, 2019, defendants filed their second motion for summary
judgment, arguing that Jung's claims are not covered
under the Policies. Record Doc. No. 114. Both summary
judgment motions are fully briefed and were submitted to the
court on February 27, 2019, and March 13, 2019, respectively.
On March 15, 2019, the parties filed a joint motion to
further extend certain pre-trial deadlines, which was granted
by the district judge on March 18, 2019. Record Doc. Nos.
138, 140. The previously expired amendment deadline was
not extended. Having considered all of the submitted
materials, the motion is DENIED for the following reasons.
the court has entered a scheduling order setting a deadline
for the amendment of pleadings, 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). “In determining good cause, we
consider four factors: ‘(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).
16(b) good cause is established, Rule 15(a) is liberal in
favor of permitting amendment of pleadings. 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.
detailed above, the scheduling order deadline for amendment
of pleadings expired on June 22, 2018, and has not been
extended. Thus, Rule 16(b) governs amendment of pleadings in
this matter, and Jung must establish "good cause"
for its untimely amendment before the liberal Rule
15(a) standard might apply. As an initial matter, Jung's
original memorandum in support of this motion failed to
address its proposed amendment under the Rule 16(b) factors,
but rather limited its briefing to the Rule 15(a) standard.
Not until its reply brief was permitted did Jung argue that
its proposed amendment met the Rule 16(b) "good
cause" requirement. Record Doc. 165-1.
explanations for its failure timely to move for leave to
amend are that it seeks "to revise the nature of its
claim against the Insurers" in light of the pending
motions for summary judgment and that the "interests of
justice" favor allowing amendment. Record Doc. No. 148-1
at p. 9. Jung cites facts regarding Insurers' alleged bad
faith in delaying payment to McDonnel following issues of
water damage and broken elevators in the Jung Hotel in March
2017. Record Doc. No. 148-1 at pp. 6-8. In explaining why its
proposed revised claims were not included in its original
complaint of intervention, Jung states that it acquired
documents to support its bad faith claims after its
intervention on November 7, 2018, during the discovery
process. Record Doc. No. 165-1 at p. 3. The discovery Jung
cites in support of its proposed amendment consists of
document attachments to its opposition memorandum to a
pending motion for summary judgment filed on March 4, 2019. I
am unpersuaded by the nature and content of these materials
that Jung lacked sufficient evidentiary and legal support for
the new claims it now seeks to assert to include them in its
original complaint of intervention at the time it was filed.
also argues that its amendment is timely by pointing to this
court's recent conclusion that a proposed intervention of
a separate party in this matter was timely. Id.
However, the standards for timeliness of intervention under
Fed.R.Civ.P. 24 and for good cause under Fed.R.Civ.P. 16(b)
are different and distinct. This is a proposed
amendment of a pleading, not the ...