Opinion
Civil Action 20-cv-03445-CMA-MEH
07-08-2021
ARACELI GRANILLO-ESTRADA, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Michael E. Hegarty, United States Magistrate Judge
Before the Court is Plaintiff's “Motion for Leave to Amend Complaint to Add Additional Defendant” (“Motion”). ECF 21. Through her (rather brief) Motion, Plaintiff seeks to amend her Amended Complaint to add Lori Sathre as a new defendant. Mot. at 2. Specifically, Plaintiff moves pursuant to Fed.R.Civ.P. 15(a)(2) and 20(a) to add Ms. Sathre. Id. Defendant opposes Plaintiff's Motion on several grounds, including undue delay, maintaining diversity jurisdiction, and the fact that Ms. Sathre is not an indispensable party. Resp. at 3-8. The Motion has been referred by District Judge Christine M. Arguello, and the Court finds that oral argument would not materially assist it in adjudicating the Motion. For the reasons that follow, the Court respectfully recommends that Judge Arguello deny Plaintiff's Motion.
I. Factual Background
As alleged in the Complaint, Plaintiff was involved in an automobile accident with Angelina M. Velasquez on November 25, 2018. ECF 1 ¶ 4. Plaintiff suffered injuries from the accident, resulting in medical expenses of approximately $48,478.78. Id. ¶ 6. Ms. Velasquez had a bodily injury insurance policy with a policy limit of $25,000. Id. ¶ 5. At the time of the collision, Plaintiff had an uninsured/underinsured motorist policy with Defendant with a policy limit of $100,000. Id. ¶¶ 8, 10. On April 27, 2020, Plaintiff sent Defendant a demand for Defendant to tender the $100,000 policy limits. Id. ¶ 11. As of October 20, 2020 (the date of the filing of the Complaint), Plaintiff received no response from Defendant. Id. ¶ 12. Plaintiff brings this lawsuit asserting only one claim for breach of contract against Defendant. Id. ¶¶ 18-26.
In Plaintiff's proposed Amended Complaint, she further alleges that she was involved in a second automobile accident on March 2, 2020. ECF 23 ¶ 19. Plaintiff drove her vehicle eastbound on West Bowles Avenue when Ms. Sathre proceeded northbound on South Jay Court, failed to stop at a stop sign, and struck Plaintiff's vehicle. Id. Ms. Sathre operated her vehicle “in a reckless, careless, and negligent manner.” Id. As a result, Plaintiff attempts to bring claims for negligence and negligence per se against Ms. Sathre for the injuries Plaintiff sustained in the accident. Id. ¶¶ 29-44.
II. Legal Standards
The parties' briefing focuses exclusively on whether Plaintiff has satisfied Fed.R.Civ.P. 15 in seeking leave to amend. However, the Scheduling Order in this case set the deadline for joinder of parties and amendment of pleadings as January 18, 2021. ECF 20 at 8. Plaintiff filed her motion after the expiration of that deadline. Therefore, a modification of the Scheduling Order will be necessary to grant Plaintiff's Motion. Accordingly, Plaintiff's Motion also implicates Fed.R.Civ.P. 16.
Rule 16 dictates that “[a] schedule may be modified only for good cause and with the judge's consent.” Fed.R.Civ.P. 16(b)(4). “After a scheduling order deadline, a party seeking leave to amend must demonstrate (1) good cause for seeking modification under Fed.R.Civ.P. 16(b)(4) and (2) satisfaction of the Rule 15(a) standard.” Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th Cir. 2015) (quoting Gorsuch, Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014)). “To demonstrate good cause pursuant to Rule 16, the moving party must . . . ‘provide an adequate explanation for any delay.'” Lehman Bros. Holdings Inc. v. Universal Am. Mortg. Co., LLC, 300 F.R.D. 678, 681 (D. Colo. 2014) (quoting Strope v. Collins, 315 Fed.Appx. 57, 61 (10th Cir. 2009)).
Rule 15 states that after the deadline for amending a pleading as a matter of course, “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “Refusing leave to amend is generally only justified 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.” Maloney v. City of Pueblo, 323 F.R.D. 358, 360 (D. Colo. 2018) (quoting Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993)).
III. Analysis
Defendant raises five arguments in opposition to Plaintiff's Motion. First, Plaintiff failed to comply with D.C.Colo.LCivR 15.1. Resp. at 3 n.1. Second, Plaintiff has failed to account for her undue delay. Id. at 3-5. Third, the addition of Ms. Sathre would destroy this Court's subject matter jurisdiction. Id. at 5-6. Fourth, Ms. Sathre is not an indispensable party. Id. at 6-8. Fifth, Plaintiff will not be prejudiced if the Motion is denied. Id. at 8-9. Before considering these arguments, the Court must first decide if there is good cause the modify the Scheduling Order.
A. Rule 16
As mentioned earlier, Rule 16(b) requires a showing of “good cause” to amend the Scheduling Order:
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 scheduling deadlines cannot be met despite a party's diligent efforts.Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000) (quoting Dilmar Oil Co., v. Federated Mutl. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997)). “Rule 16's good cause requirement may be satisfied, for example, if a plaintiff learns new information through discovery or if the underlying law has changed.” Gorsuch, 771 F.3d at 1240. However, “[a] litigant's failure to assert a claim as soon as he could have is properly a factor to be considered in deciding whether to grant leave to amend.” Perez v. Denver Fire Dep't, 243 F.Supp.3d 1186, 1200 (D. Colo. 2017) (emphasis added). “In the Tenth Circuit, untimeliness alone is an adequate reason to refuse leave to amend.” Duncan v. Manager, Dep't of Safety, 397 F.3d 1300, 1315 (10th Cir.2005).
In this case, Plaintiff asserts no adequate explanation for the delay in seeking to amend. The accident with Ms. Sathre occurred in March 2020. ECF 23 ¶ 19. That accident occurred roughly seven months prior to the filing of this lawsuit. Thus, all the facts alleged in the proposed Amended Complaint were known or should have been known to Plaintiff at the time of filing. “Delay is undue ‘when the party filing the motion has no adequate explanation for the delay,' Frank v. U.S. West, Inc., 3 F.3d 1357, 1365-66 (10th Cir. 1993), or when ‘the party seeking amendment knows or should have known of the facts upon which the proposed amendment is based but fails to include them in the original complaint.'” Nesjan v. Allstate Fire and Casualty Ins. Co., 2020 WL 2494616, at *3 (D. Colo. May 14, 2020) (quoting Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185 (10th Cir. 1990)). Not only did Plaintiff know of the underlying facts concerning Ms. Sathre when she filed the lawsuit, but she has known of them in the roughly eight months that have passed since the filing. Because Plaintiff could have amended much sooner, the Court finds that Plaintiff has acted with undue delay in attempting to amend now. Thus, the Court does not find good cause to amend the Scheduling Order pursuant to Rule 16(b).
B. Local Rules
Even if the Court had found good cause, Plaintiff's Motion should still be denied because Plaintiff failed to comply with the Local Rules. Pursuant to D.C.Colo.LCivR 15.1(b), “[a] party who files an opposed motion for leave to amend or supplement a pleading shall attach as an exhibit a copy of the proposed amended or supplemental pleading which strikes through (e.g., strikes through) the text to be deleted and underlines (e.g., underlines) the text to be added.” Initially, Plaintiff did not attach, even though she stated so in her Motion, a copy of the proposed Amended Complaint. Only after subsequently catching this error did Plaintiff file the proposed pleading fifteen days later. ECF 2 3. Regardless, at no point has Plaintiff filed the appropriate notice and copy of the proposed pleading with the necessary redlines. Because Plaintiff has failed to comply with this Local Rule, her Motion should be denied.
C. Rule 15
Irrespective of the failure to comply with the Local Rules, Plaintiff's Motion should also be denied under Rule 15. Defendant argues that Plaintiff acted with undue delay in seeking to amend. Because the analyses regarding “good cause” under Rule 16 and undue delay under Rule 15 are similar, see Minter v. Prime Equipment Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006), the Court already addressed this point and agreed. Since “untimeliness alone is an adequate reason to refuse leave to amend., ” Duncan, 397 F.3d at 1315, Plaintiff's Motion could be denied on just this ground.
But the problems with Plaintiff's Motion do not end there. Plaintiff seeks to join Ms. Sathre pursuant to Fed.R.Civ.P. 20(a). For defendants to be properly joined in one action, “the plaintiff must allege facts that show: (1) that the right to relief asserted against the defendants arises out of the same transaction, occurrence, or series of transactions or occurrences, and (2) that a question of law or fact in common to both defendants will arise in the action.” Beaulieu v. Concord Group Ins. Co., 208 F.R.D. 478, 479 (D.N.H. 2002). While courts should entertain broad requests for joinder of parties, Stone Creek Bus. Ctr., LLLP v. Stone Creek-Colo., LLC, No. 20-cv-01413-PAB-GPG, 2021 WL 877716, at *3 (D. Colo. Mar. 9, 2021), the party seeking joinder must still satisfy the requirements of Rule 20.
Beaulieu is instructive here. In similar facts to this case, the plaintiff in that case brought a suit against both an insurance company for breach of contract in relation to benefits owed from a motor vehicle accident and a driver for negligence (from an accident after the one arising from the breach of contract claim). 208 F.R.D at 478. The driver filed a motion to sever, asserting improper joinder. Id. at 479. The court agreed that joinder of the two defendants was improper because the claims did not arise from the same transaction or occurrence. Id. In granting the motion to sever, the court reasoned that “Plaintiff's claims against [the insurer] and [the driver] seek remedies for deprivations of two separate legal interests-contractual coverage for accidents caused by underinsured motorists, and a remedy for alleged negligent driving.” Id. at 480.
The same reasoning supports a similar outcome in this case. Plaintiff's claim against Defendant stems from the alleged breach of a contractual obligation to pay benefits. Plaintiff's proposed claim against Ms. Sathre is for negligent driving. The interests to be remedied are distinct. Further, Defendant's alleged breach of contract does not arise out of the accident with Ms. Sathre; in other words, the events that spurred each claim are separate and not part of the same series of transactions or occurrences. Accordingly, the Court finds that the preconditions for permissive joinder would not be met, and Plaintiff's Motion should be denied.
Finally, Plaintiff's Motion should be denied because the addition of Ms. Sathre would destroy this Court's subject matter jurisdiction. An amendment to join non-diverse parties that is otherwise permitted under Rule 15 is subject to 28 U.S.C. § 1447(e). Parkside at Mountain Shadows Owners Ass'n, Inc. v. Travelers Casualty and Surety Co. of Am., No. 15-cv-00120-WJM-KMT, 2015 WL 3903020, at *2 (D. Colo. June 24, 2015). When the joinder is permissive and not required (as is the case here), the Court has discretion in applying 28 U.S.C. § 1447(e). Id. Section 1447(e) states that “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” Here, because Ms. Sathre is likely domiciled in Colorado, ECF 23 ¶ 3, her addition would destroy complete diversity and this Court's subject matter jurisdiction. To avoid that unnecessary outcome, the Court should exercise its discretion and deny joinder (and therefore deny Plaintiff's Motion) rather than permit it and remand the case. Whatever prejudice Plaintiff may face from this, the Court notes that Plaintiff can simply file a separate lawsuit against Ms. Sathre.
IV. Conclusion
For the reasons explained, the Court respectfully recommends that Plaintiff's Motion [filed June 7, 2021; ECF 21] be denied.
Be advised that all parties shall have fourteen (14) days after service hereof to serve and file any written objections in order to obtain reconsideration by the District Judge to whom this case is assigned. Fed.R.Civ.P. 72. The party filing objections must specifically identify those findings or recommendations to which the objections are being made. The District Court need not consider frivolous, conclusive or general objections. A party's failure to file such written objections to proposed findings and recommendations contained in this report may bar the party from a de novo determination by the District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676-83 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the proposed findings and recommendations within fourteen (14) days after being served with a copy may bar the aggrieved party from appealing the factual findings and legal conclusions of the Magistrate Judge that are accepted or adopted by the District Court. Duffield v. Jackson, 545 F.3d 1234, 1237 (10th Cir. 2008) (quoting Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991)).