United States District Court, D. Colorado
KATHY WORNICKI and EDWARD LANE, on behalf of themselves and all others similarly situated, Plaintiffs,
BROKERPRICEOPINION.COM, INC., FIRST VALUATION, LLC, FIRST VALUATION SERVICES, LLC, and FIRST VALUATION TECHNOLOGY, LLC, Defendants.
KATHLEEN M. TAFOYA, Magistrate Judge.
This matter is before the court on "Plaintiffs' Motion for Leave to Amend Second Amended Complaint to Add a Party and to Conduct Additional Discovery" (Doc. No. 81 ["Mot."], filed October 15, 2015.) Plaintiffs seek to amend their Second Amended Complaint in order to add two parties, Walter Coats, Defendants' founder and CEO, and ValuTech, Inc., as well as two claims based on fraud and misrepresentation. (Mot. at 1.) Defendants filed a Response objecting to Plaintiffs' Motion (Doc. No. 92 ["Resp."], filed November 13, 2015) and Plaintiffs replied (Doc. No. 95 ["Reply"], filed December 1, 2015.)
Plaintiffs initially filed this action on December 2, 2013 as a class action on behalf of licensed real estate professionals ("brokers") who performed real estate evaluations on behalf of Defendant Brokerpriceopinion.com ("BPO"). ( See generally Doc. No. 1.) Plaintiffs assert breach of contract and unjust enrichment claims, as well as a claim under the Colorado Consumer Protection Act and a claim for declaratory judgment. ( Id. ) In support of these claims, Plaintiffs allege that pursuant to work agreements with brokers, BPO is supposed to pay each of them within 60 days of performing real estate evaluations on BPO's behalf. ( Id. ) However, the brokers are consistently not receiving payment. ( Id. ) They also allege that BPO and the other three named Defendants are alter egos of each other that share a unity of interest and ownership. ( Id. )
Plaintiffs previously amended their Complaint on February 18, 2014 and filed a Second Amended Complaint on May 29, 2014. (Doc. Nos. 23, 45.) Defendants filed a Motion to Dismiss on June 29, 2014 challenging the jurisdiction of the court and Plaintiffs' request for class action certification. (Doc. No. 49.) The pending Motion to Dismiss notwithstanding, the parties were permitted to perform Phase 1 of discovery beginning June 25, 2014 and the deadline to amend pleadings was set for 45 days after a ruling on the Motion to Dismiss. (Doc. No. 42, 43.) At a Scheduling Conference held on December 2, 2014, Plaintiffs' counsel acknowledged a misunderstanding on his part regarding the parameters of the Phase 1 discovery, misconstruing the court's previous Order as permitting discovery only as to those issues related to the Motion to Dismiss. The court denied Defendants' Motion to Dismiss on March 23, 2015, thereby setting the deadline to amend pleadings as May 7, 2015. (Doc. No. 42, 43, 58.) The court subsequently set the new discovery deadline for October 3, 2015. (Doc. No. 70).
Plaintiffs filed their Motion to Amend on October 15, 2015, well after the deadline to amend pleadings expired. They contend that they first became aware of various evidence supporting their request to add Walter Coats under an alter ego theory of liability, as well as evidence supporting the two proposed new claims of fraud and misrepresentation, during the parties' Rule 30(b)(6) depositions held on September 22 and 24, 2015. (Mot. at 2, 4-5, 7.) Additionally, Plaintiffs assert they were not aware of ValuTech, Inc.'s existence as an additional alter ego of Defendants prior to October 5, 2015, two days after the close of discovery, when Defendants supplemented previous discovery responses. (Mot. at 5, 7.)
Plaintiffs' motion implicates both Fed.R.Civ.P. 15(a)(2) and 16(b)(4), as well as their interplay, and Plaintiffs' failure to comply with basic legal conventions.
A. Failure to Attach Proposed Amended Complaint
Because Plaintiffs have already filed a Second Amended Complaint, to which Defendants have filed an Answer, Plaintiffs may amend their "pleading only by leave of court...." Fed.R.Civ.P. 15(a). Obviously, the court must be able to review a proposed amendment to a complaint in order to determine its viability under the applicable law. However, Plaintiffs have failed to submit a copy of their proposed Third Amended Complaint with their Motion to Amend.
The court may deny a motion to amend a complaint for failure to submit the proposed amendment. See Lambertson v. Utah Dep't of Corrs., 79 F.3d 1024, 1029 (10th Cir. 1996) (district court did not abuse its discretion in denying plaintiff's motion to amend for failure to provide adequate explanation for delay in seeking amendment and failure to provide copy of the proposed amended pleading). See also Fleming v. Molloy, Case No. 07-cv-00118-MSK-CBS, 2007 WL 3254389, at *1 (D. Colo. Oct. 31, 2007) (motion to amend complaint denied for failure to attach proposed amended complaint.); Bownes v. City of Gary, Indiana, 112 F.R.D. 424, 425 (N.D. Ind. 1986) ("common sense" dictates that a party seeking leave to amend should accompany his motion with a copy of the proposed amended complaint); Williams v. Wilkerson, 90 F.R.D. 168, 170 (E.D. Va. 1981) (where plaintiff sought leave to amend, a copy of the proposed amended pleading must be attached to the motion). While Plaintiffs have generally described the two new parties they propose to add to the case, as well as the two new claims, they have not attached a copy of a proposed Third Amended Complaint.
While this failure on the part of Plaintiffs could, and should, be grounds to summarily deny the motion at this juncture, this court declines to take that route because: (1) this failure can easily be corrected by re-submitting the motion and correctly attaching the proposed Amended Complaint; (2) a new submission would require the parties to re-submit and perhaps revise their briefing on the issue; and, (3) it is already late in the prosecution of this litigation and delay occasioned by this administrative failure would be detrimental to the interests of justice. Therefore, the court will address the merits of the motion to amend.
B. Fed.R.Civ.P. 16
Because Plaintiffs filed their motion after the May 7, 2015 deadline for amending the pleadings, supra, the court employs a two-step analysis, first determining whether Plaintiffs have shown good cause to modify the scheduling order under Federal Rule of Civil Procedure 16(b), and then evaluating whether Plaintiff has satisfied the standard for amendment of pleadings under Federal Rule of Civil Procedure 15(a). This court has stated:
Rule 16(b)'s "good cause" standard is much different than the more lenient standard contained in Rule 15(a). Rule 16(b) does not focus on the bad faith of the movant, or the prejudice to the opposing party. Rather, it focuses on the diligence of the party seeking leave to modify the scheduling order to permit the proposed amendment. Properly construed, "good cause" means that the scheduling deadlines cannot be met despite a party's diligent efforts. In other words, this court may modify the schedule on a showing of good cause if [the deadline] cannot be met despite the diligence of the party seeking the extension.
Pumpco, Inc. v. Schenker Int'l, Inc.,
204 F.R.D. 667, 668 (D. Colo. 2001) (citations and ...