United States District Court, D. Colorado
DERS GROUP SVC LLC, a Georgia Limited Liability Company, Plaintiff/Counterclaim Defendant,
WESTERN SKYWAYS, INC. a Colorado Corporation, ROCKY MOUNTAIN TURBINE SERVICES, INC., a Colorado Corporation, d/b/a ROCKY MOUNTAIN TURBINE SERVICES, f/k/a WESTERN SKYWAYS TURBINE, INC., and ALLEN J. HEAD, an Individual, Defendants/Counterclaim Plaintiffs and DERS GROUP SVC LLC, an Indiana Limited Liability Company, Counterclaim Defendant..
RECOMMENDATION ON PLAINTIFF'S MOTION TO AMEND
COMPLAINT (DOCKET NO. 68)
Michael J. Watanabe United States Magistrate Judge.
by Magistrate Judge Michael J. Watanabe This case is before
this Court pursuant to an Order Referring Case entered by
Judge Wiley Y. Daniel on March 20, 2017 (Docket No. 7). Now
before the Court is the Motion to Amend Complaint (Docket No.
68). Defendants filed a response (Docket No. 70) and
Plaintiff filed a reply (Docket No. 71). Judge Daniel
referred the subject motion to the undersigned magistrate
judge (Docket No. 69). The Court has reviewed the
parties' filings (Docket Nos. 68, 70, & 71), taken
judicial notice of the Court's entire file in this case,
and considered the applicable Federal Rules of Civil
Procedure, statutes, and case law. Now being fully informed,
the Court makes the following report and
deadline for amendment of pleadings was August 15, 2017
(Docket No. 27 at 10). The instant motion was filed on
December 22, 2017 (Docket No. 68). As a result, the Court
considers the motion pursuant to a two-step inquiry. First,
the Court reviews whether the moving party demonstrates good
cause pursuant to Rule 16(b) of the Federal Rules of Civil
Procedure. See Gorsuch, Ltd., B.C. v. Wells Fargo
Nat'l Bank Assoc., 771 F.3d 1230, 1242 (10th Cir.
2014); SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507,
1518 (10th Cir. 1990). Next, the Court weighs whether the
amendment should be allowed pursuant to Rule 15(a).
Gorsuch, 771 F.3d at 1242.
16(b) provides that a scheduling order “may be modified
only for good cause and with the judge's consent.”
Fed.R.Civ.P. 16(b)(4). “In practice, this standard
requires the movant to show the ‘scheduling deadlines
cannot be met despite [the movant's] diligent
efforts.'” Gorsuch, 771 F.3d at 1240
(citing Pumpco, Inc. v. Schenker Int'l, Inc.,
204 F.R.D. 667, 668 (D. Colo. 2001)). This burden is
satisfied, for example, when a party learns of new
information in a deposition, or that the governing law has
subsequently changed. Id. “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.” Colo. Visionary Acad. v.
Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000).
The party seeking an extension is normally expected to show
at least good faith on its part and some reasonable basis for
not meeting the deadline. Deghand v. Wal-Mart Stores,
Inc., 904 F.Supp. 1218, 1221 (D. Kan. 1995).
contrast, Rule 15(a) provides that leave to amend
“shall be freely given when justice so requires.”
Fed.R.Civ.P. 15(a). The Court may refuse leave to amend upon
a showing of undue delay, undue prejudice to the opposing
party, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or futility of
amendment. Frank v. U.S. West, Inc., 3 F.3d 1357,
1365 (10th Cir. 1993). A general presumption exists in favor
of allowing a party to amend its pleadings, see Foman v.
Davis, 371 U.S. 178, 182 (1962), and the non-moving
party bears the burden of showing that the proposed amendment
is improper. Jefferson County Sch. Dist. No. R-1 v.
Moody's Investor's Services, Inc., 175 F.3d 848,
859 (10th Cir. 1999). Whether to allow amendment is within
the trial court's discretion. Burks v. Oklahoma
Publ'g Co., 81 F.3d 975, 978-79 (10th Cir. 1996).
noted above, the analysis under Rule 16 focuses on the
diligence of the moving party, in this case, Plaintiff. Here,
the allegedly new information is a confidentiality agreement
that Plaintiff argues it only “recalled entering
into” in preparation for the hearing on the motion
seeking a temporary restraining order and preliminary
injunction (Docket No. 68 at 3) and information relating to
Defendant Western Skyways, Inc.'s applications to the
Federal Aviation Administration (“FAA”)
(id. at 4). Defendant offers evidence that it
produced the confidentiality agreement to Plaintiff on July
21, 2017 as part of the exchange of written discovery.
(Docket No. 70-1). Defendant argues that Plaintiff was aware
of the facts underlying the breach of contract claim since
the filing of the original Complaint and at a minimum, the
information and documents relating to the applications to the
FAA were disclosed by Defendant Western Skyways, Inc. in July
2017 as part of the discovery process (see Docket
Nos. 70-2 & 70-3). In its reply, Plaintiff changes its
argument from stating that it only recalled the
confidentiality agreement in preparation for the motion
hearing to stating that it was the testimony of witnesses at
the motion hearing that created the new claims that Plaintiff
wants to assert (compare Docket No. 68 at 3
with Docket No. 71 at 5-6).
problem here is that Plaintiff's motion and reply make
different arguments about the basis for its request to amend
its pleading to add claims. While the motion does note that
“[a]t the hearing it became apparent that Defendant has
used the confidential information in the exact manner
prohibited by the Agreement” (Docket No. 68 at 6), it
also states that “at no time during discovery in this
case did any Defendant produce a copy of the document”
(id. at 6-7) and that “[i]n preparation for
the hearing on the Motion, Plaintiff recalled entering
into” the confidentiality agreement (id. at
3). Plaintiff's allegation that no Defendant produced the
confidentiality agreement is demonstrably false. Further,
Plaintiff's admission that it simply forgot about the
confidentiality agreement undercuts its later arguments made
in the reply.
the Court agrees with Plaintiff's assertion that a party
should not take a scattershot approach to pleading in fear of
not being allowed to amend to add claims that its only learns
of at a later date, that does not seem to be the case here.
Instead, Plaintiff had the relevant information available to
it during the summer of 2017 and did not seek leave to amend
prior to the August 15, 2017 deadline for amendment of
pleadings (Docket No. 27 at 10). Accordingly, in this
circumstance the Court concludes that Plaintiff was not
diligent and, therefore, has not met the requirements under
Rule 16. As a result, the Court need not engage in an
analysis under Rule 15.
for the foregoing reasons, it is hereby
that Plaintiff's Motion to Amend Complaint (Docket No.
68) be DENIED.
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed.R.Civ.P.
72(b)(2), the parties have fourteen (14) days after service
of this recommendation to serve and file specific written
objections to the above recommendation with the District
Judge assigned to the case. A party may respond to another
party's objections within fourteen (14) days after being
served with a copy. The District Judge need not consider
frivolous, conclusive, or general objections. A party's
failure to file and serve such written, specific objections
waives de novo review of the recommendation by the District
Judge, Thomas v. Arn, 474 U.S. 140, 148-53 (1985),
and also waives ...