United States District Court, D. Colorado
JAH IP HOLDINGS, LLC, and JH INVESTMENTS, LLC, Plaintiffs/Counterclaim Defendants,
DAVID MASCIO, NARDI CAPITALE, LLC, DELLA PAROLA CAPITAL RESEARCH, LLC, and DELLA PAROLA HOLDING COMPANY, LLC, Defendants/Counterclaim Plaintiffs.
KRISTEN L. MIX, Magistrate Judge.
This matter is before the Court on Defendants' Motion for Leave to File an Amended Answer and Counterclaims [#36] (the "Motion"). Plaintiffs filed a Response [#38] in opposition to the Motion, and Defendants filed a Reply [#39]. The Court has reviewed the Motion, the Response, the Reply, the entire docket, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#36] is GRANTED.
In this action, Plaintiffs bring five claims against Defendants: copyright infringement, contributory infringement, breach of fiduciary duty, breach of contract, and misuse of trade secrets. Compl. [#1] ¶¶ 39-65. As a result of those claims, Plaintiffs seek monetary damages, dissolution of Defendant Della Parola Capital Research, LLC ("DP Research") and disbursement of its assets, a permanent injunction, and fees and costs. Id. at 8.
In the Motion, Defendants seek to amend their Answer pursuant to Fed.R.Civ.P. 15(a)(2) to add counterclaims and a counterclaim defendant, Jason Hall ("Hall"), and to add additional facts in support of the existing counterclaims. See proposed Amended Answer to Plaintiffs' Complaint, Counterclaims, and Demand for Jury Trial [#36] at 33-55. Defendants argue that "there are no circumstances that would justify the denial of leave to amend." Motion [#36] at 3. Defendants further argue that amendment "will not delay this litigation or prejudice Plaintiffs' ability to develop their case or defenses." Id. at 4. In addition, Defendants maintain that "there is no undue delay, bad faith or dilatory motive on the part of Defendants." Id.
In their Response, Plaintiffs argue that the Motion should be denied both because Defendants failed to properly confer pursuant to D.C.COLO.LCivR 7.1(a) and because Defendants do not state under which rule they seek to add Mr. Hall. Response [#38] at 1-5. Plaintiffs also argue that "Defendants should not be allowed to refine or to make new arguments in a reply brief in an effort to cure their failure." Id. at 5. At the end of the Response, Plaintiffs include a section titled "Plaintiffs' Motion to Dismiss Counterclaims Should Be Granted." Id. This section asks the Court to grant relief requested in a separate motion [#18] that is pending before the Court. However, this is a response, not a motion. Pursuant to D.C.COLO.LCivR 7.1(d), "[a] motion shall not be included in a response or reply to the original motion." Accordingly, the Court will disregard this portion of the Response as well as the portion of the concluding sentence that asks the Court to strike Defendants' counterclaims. Response [#378] at 6.
In their Reply, Defendants argue that they seek to amend to add Mr. Hall as a counterclaim defendant pursuant to Fed.R.Civ.P. 13(h), 19, and 20. Reply [#39] at 3-4. Regarding D.C.COLO.LCivR 7.1(a)'s conferral requirement, Defendants argue that they filed the Motion "[i]n light of the pending deadline... and Plaintiffs' counsel's clear indication that he was unavailable to discuss the matter before that deadline...." Id. at 6. Defendants also argue that "further discussions would not have resolved this dispute." Id. Finally, Defendants argue that Plaintiffs will suffer no prejudice if the amendment is allowed. Id. at 7.
II. Local Rules
The parties are obligated to read, understand, and comply with all Local Rules of this Court. D.C.COLO.LCivR 7.1(a) provides as follows:
Before filing a motion, counsel for the moving party or an unrepresented party shall confer or make reasonable good faith efforts to confer with any opposing counsel or unrepresented party to resolve any disputed matter. The moving party shall describe in the motion, or in a certificate attached to the motion, the specific efforts to fulfill this duty.
In the Motion, Defendants state:
Pursuant to D.C.COLO.LCivR 7.1, Plaintiffs' counsel was provided with a draft of the Amended Answer and Counterclaims shortly before the close of business on January 22, 2014. On January 23, 2014, Plaintiffs' counsel responded to the draft by stating that he had not had time to analyze the document to determine whether or not Plaintiffs oppose the motion. He further indicated that he would not be able to provide any answer before the end of the day. In light of the January 23, 2014 deadline for filing requests to join a party or amend pleadings set forth in the Civil Scheduling Order (Doc. #32), Defendants have filed this Motion for Leave.
Motion [#36] at 1-2.
Local Rule 7.1(a)'s conferral requirement requires more than contacting opposing counsel at 4:36 p.m. the day before you intend to file a motion. See Declaration of Mary Ann Novak, Ex. A [#39-1] at 4 (January 22, 2014 email). Such action does not indicate that any actual conferral took place. Instead, it merely indicates that one party informed the other party that it planned to file a motion and then filed the motion. "[T]o satisfy the requirements of Rule 7.1[(a)], the parties must hold a conference, possibly through the exchange of correspondence but preferably through person-to-person telephone calls or face-to-face meetings, and must compare views and attempt to reach an agreement, including by compromise if appropriate." Hoelzel v. First Select Corp., 214 F.R.D. 634, 636 (D. Colo. 2003). The point of the conferral requirement is to have the parties exchange ideas regarding the requested relief and, hopefully, eliminate through discussion or compromise any issues they can before filing a motion so as to limit the issues brought before the Court. See Carroll v. Allstate Fire and Casualty Ins. Co., No. 12-cv-00007-WJM-KLM, 2013 WL 5769308, at *4 (D. Colo. Oct. 24, 2013) ("The purpose of Rule 7.1[(a)] is to decrease the number and length of motions filed in each case."). The Motion is subject to denial for ...