UNITED STATES DISTRICT COURT
DISTRICT OF NEW YORK
CORPORATION, et al.
BOROUGH COFFEE, INC.,
No. 01 Civ. 5981 (LTS) (THK)
have filed a motion seeking leave to file a first amended complaint and a motion
seeking leave to modify the Court's Pre-Trial Scheduling Order dated November 2,
2001, in order to permit Plaintiff to file a motion to amend the complaint. In
the proposed amended complaint. Plaintiffs seek to eliminate any claim for
damages against Defendant and do not seek to add new parties, claims, or assert
new factual matters. Defendant opposes the Plaintiffs' motions, asserting that
such an amendment will cause undue prejudice to Defendants because the amend
will result in the elimination of Defendant's insurance coverage paying the cost
15(a) of the Federal Rule of Civil Procedure states that leave to amend
"shall be freely given when justice so requires," and the Supreme
Court has declared that "this mandate is to be heeded." Foman v.
Davis. 371 U.S. 178, 182 (1962). "Reasons
for a proper denial of leave to amend include undue delay, bad faith, futility
of the amendment, and perhaps most important, the resulting prejudice to the
opposing party." State Teachers Retirement Board v. Fluor Corp.. 654
F.2d 843, 856 (2d Cir. 1981). In deciding whether or not to permit the amendment, "the
trial court [is] required to take into account any prejudice that [the
non-moving party] would ... suffer as a result." Zenith Radio Corp. v.
Hazeltine Research. 401 U.S. 321, 331(1971).
scheduling order referred to in Plaintiffs' motion set December 31,2001 as the
deadline for the filing of any applications to amend pleadings. This date was
some seven months after the action was commenced. The scheduling order further
set April 5, 2002 as the deadline for completion of fact discovery and provided:
The deadlines set forth in this
Pre-Trial Scheduling Order will not be adjourned except in the Court's
discretion upon good cause as shown in a written application signed by both counsel and counsel's client and served upon all parties.
'Good cause,' as used in this paragraph, does not include circumstances within
the control of counsel or the client.
Scheduling Order, November 2,2001, ¶ 10. Leaving aside Plaintiffs' failure to
comply with the requirement of a client signature on their application, there is
nothing in their application to show that their failure to apply for leave to
amend the complaint until April 1,2002, a mere four days before the fact
discovery deadline initially set by the Court, was due to circumstances beyond
the control of Plaintiffs or their counsel, nor could they. Litigation clearly
had already progressed by that point. It is also clear from Plaintiffs' papers
that Defendant's perception that the proposed amendment is designed to affect
settlement negotiation leverage is accurate: Plaintiff complains that the only
reason that Defendant opposes the application to amend is Defendant's desire to
"force [Defendant's] insurer to continue paying defense costs." See
Mem. of Law in Supp. of Pi's Mot. for Leave to File Amd. Compl. at 4; see
also Rawls Decl. ¶ 9, Ex. E (letter from Defendant's insurer
representing that it will withdraw from defense upon filing of proposed amended
expressing any opinion as to the obligation, if any, of Defendant's insurer to
defend this action, the Court finds that denial of Plaintiffs' motions to amend
and to modify the Pre-Trial Scheduling Order is appropriate on grounds of undue
delay, lack of prejudice to Plaintiffs, and prejudice to Defendant. Plaintiffs
have proffered no good cause for their belated realization that pursuing a
damages claim might not be in their best economic interests, and nothing
precludes Plaintiffs from making a strategic decision to come short of their
burden of proof on any damages claim. Furthermore, now that the case has been
pending for a substantial period of time and Plaintiffs' motion for summary
judgment is sub judice, grant of an amendment that could eliminate
or complicate Defendant's ability to appear in proper defense of this litigation
would be prejudicial to Defendant.
motions for leave to file a first amended complaint and to modify the Pre-Trial
Scheduling Order dated November 2, 2001 are, accordingly, denied.
IT IS SO
Dated: New York, New York
LAURA TAYLOR SWAIN
States District Judge