Opinion
Case No. 8:04-cv-2783-T-23TBM.
January 26, 2006
REPORT AND RECOMMENDATION
THIS MATTER is before the court on referral by the Honorable Steven D. Merryday for a Report and Recommendation on U.S. Fire's Motion for Leave to Amend Complaint (Doc. 106). By its motion, U.S. Fire seeks leave to amend its Complaint in order to assert additional facts and defenses to coverage in light of the settlement reached on or about December 16, 2005, in the underlying state court tort action against the insured/Defendants herein. In light of that settlement, it also seeks to add James R. Mikes and Suncoast Country Clubs, Inc., (hereinafter "Intervenors") as party Defendants. U.S. Fire represents that the Defendants consent to its proposed amendment. Intervenors have filed a response to U.S. Fire's motion and object that the motion is "inexcusably late." Nonetheless, Intervenors consent to the filing of an amended complaint although they dispute certain of the allegations in the proposed complaint. (Doc. 108).
By its Complaint, U.S. Fire seeks a declaration that it is not obligated to provide coverage under certain umbrella liability policies for claims that have been asserted against its insured in a tort action pending in state court. (Doc. 1).
Rule 15 provides that leave to amend a pleading "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). The district court has the discretion to grant or deny a motion to amend a pleading pursuant to Rule 15(a). See Foman v. Davis, 371 U.S. 178, 182 (1962); McKinley v. Kaplan, 177 F.3d 1253, 1255 (11th Cir. 1999). There must be a "justifying reason" for a court to deny leave to amend. See Foman, 371 U.S. at 182. Leave to amend may be denied when (1) amendment would be futile, (2) amendment would be prejudicial to the opposing party, or (3) there has been bad faith, undue delay, dilatory motive, or repeated failures to cure deficiencies by amendments on behalf of the moving party. See id.; McKinley, 177 F.3d at 1257;Campbell v. Emory Clinic, 166 F.3d 1157, 1162 (11th Cir. 1999);Technical Res. Servs., Inc. v. Dornier Med. Sys., Inc., 134 F.3d 1458, 1463-64 (11th Cir. 1998). The liberal policy of allowing amendments under Rule 15(a) circumscribes the exercise of the district court's discretion. See Motorcity of Jacksonville, Ltd. v. Se. Bank N.A., 83 F.3d 1317, 1323 (11th Cir. 1996) (quoting Shipner v. E. Air Lines, Inc., 868 F.2d 401, 407 (11th Cir. 1989)), vacated and remanded by Hess v. FDIC, 519 U.S. 1087 (1997), reinstated by Motorcity of Jacksonville, Ltd. v. Se. Bank N.A., 120 F.3d 1140 (11th Cir. 1997).
As grounds for the motion, U.S. Fire asserts that by entering the December 2005 settlement without its consent, the insured/Defendants violated one or more conditions of its policies and such settlement bars coverage that otherwise may have existed under the policies for the claims in the state tort action. Anticipating the timeliness argument, U.S. Fire indicates that although the settlement had been forecast, it did not receive copies of the settlement until December 19, 2005, and it argues that the additional factual allegations and defense(s) were unavailable to it prior to the execution of the settlement agreement. It also asserts that the proposed amendment is not being sought in bad faith or for the purposes of delay, this is the first amendment sought, and while the amendment may necessitate some additional discovery, doing so should not substantially delay the trial of this action. Finally, U.S. Fire asserts that the proposed amendment does not come as surprise to the Defendants or Intervenors and will not unduly prejudice them. Intervenors respond that the motion is late and the proposed complaint contains objectionable allegations, but they do not oppose the filing of an amended complaint.
Intervenors contend that a more particular pleading is required, citing specifically ¶¶ 54-57. As for ¶ 63 of the proposed amendment, they indicate that under the December 2005 settlement, Intervenors were assigned the right to enforce the coverage duties on behalf of the insured/Defendants and not the policy rights themselves as alleged. They also urge the court to disallow any lengthy delays in the trial of this cause as a result of any amendment.
Upon consideration of the pleadings and the discussions had at the hearing, the court finds that the factors outlined in Foman are not present in this case and amendment is therefore appropriate. Notably, neither the Defendants nor the Intervenors contend that it would be appropriate for the court to deny U.S. Fire's motion. Although the Intervenors challenge specific factual allegations set forth in the proposed amended complaint, they do not challenge the amendment itself. Nor do they allege that they would be prejudiced if U.S. Fire was permitted to file an amended complaint. While the Intervenors identify certain perceived deficiencies in the proposed amended complaint and urge the court to direct U.S. Fire to correct the same, to do so would be inappropriate as the proposed amendment has not yet been filed. To the extent that the Intervenors urge that the motion is untimely, the court disagrees. As U.S. Fire points out, until the settlement documents were executed, its proposed amendment was not ripe.
For the reasons set forth above, it is RECOMMENDED that U.S. Fire's Motion for Leave to Amend Complaint (Doc. 106) be GRANTED and that U.S. Fire be directed to file its Amended Complaint along with true copies of the original policies at issue within ten (10) days of such order. Because the filing of an amended complaint necessarily would require that the scheduling order in this cause be amended to accommodate limited additional discovery before the submission of dispositive motions, its further RECOMMENDED that the parties be directed to confer and file an amended case management report.