Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_08-cv-02561/USCOURTS-cand-4_08-cv-02561-10/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:9601 CERCLA

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UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

WELLS FARGO BANK, N.A., as

TRUSTEE FOR THE CLARA POPPIC 

TRUST, 

 Plaintiff, 

 vs. 

KENNETH G. RENZ, et al., 

 Defendants. 

Case No: C 08-02561-SBA

ORDER DENYING MOTION FOR 

LEAVE TO FILE THIRD AMENDED 

THIRD PARTY COMPLAINT

[Docket No. 250] 

AND RELATED ACTIONS. 

The parties are presently before the Court on Defendant and Third Party Plaintiff 

Kazuko Umstead's Motion for Leave to File a Third Amended Third Party Complaint. 

(Docket No. 250.) Having read and considered the papers filed in connection with this matter 

and being fully informed, the Court hereby DENIES the motion for the reasons set forth below. 

The Court, in its discretion, finds this matter suitable for resolution without oral argument. See

Fed. R. Civ. P. 78(b). 

I. BACKGROUND 

A. Procedural Background 

 This action arises primarily under the federal Comprehensive Environmental Response, 

Compensation, and Liability Act (CERCLA). Plaintiff Wells Fargo commenced this action on 

May 21, 2008. Plaintiff, as trustee, represents the owner of real property in Berkeley, 

California (the Property). With respect to Defendant Umstead (Defendant), Plaintiff alleges 

that Defendant operated a dry cleaning business on the Property from 1983 until 1986, and 

during his occupancy of the Property, caused or permitted the release of tetrachlorethylene and 

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other dry-cleaning chemicals into the environment. 

 On December 9, 2008, Defendant filed a Third Party Complaint against VIC 

Manufacturing because of its status as a dry-cleaning operator on the Property. On January 28, 

2009, Defendant filed an Amended Third Party Complaint adding as a defendant Bowe 

Permac, Inc., both individually and as successor in interest to VIC Manufacturing. 

 This Court entered an Order for Pretrial Preparation on June 22, 2009, setting trial in 

this matter for January 10, 2010. (Docket 174.) On October 14, 2009, following the deposition 

of co-defendant Kenneth Renz, Defendant moved to file a Second Amended Third Party 

Complaint because Renz revealed the existence of several parties that should be joined as third 

party defendants. Defendant also moved for modification of the Court's June 22, 2009 Order 

for Pretrial Preparation. 

 On November 16, 2009, the Court granted Defendant leave to file a Second Amended 

Third Party Complaint to add Perc-Serv. Inc., Steam Equipment Sales Company, and Values, 

Inc. as third party defendants, who all were identified during Renz’s deposition. The Court 

denied, however, Defendant's motion to modify the Order for Pretrial Preparation because it 

was premature for the Court, without the input of any parties that may be added, to determine 

how much time, if any, additional parties may require to meet the Court’s deadlines. The Court 

therefore set a Case Management Conference for January 14, 2010, which was subsequently 

removed from the calendar. 

 On April 27, 2010, the Court granted the parties' stipulated request to continue pretrial 

deadlines, which continued the trial date to June 20, 2011. (Docket No. 251.) Other deadlines 

of note include the August 13, 2010 deadline to complete mediation, the October 15, 2010 

initial expert designation deadline, the December 30, 2010 discovery deadline, and the March 

15, 2011 motion hearing cut-off. Id. 

B. Defendant’s Current Motion 

Now, Defendant moves to amend his Third Party Complaint once more. Defendant 

asserts that during subsequent research conducted at the Alameda County Recorders and 

Assessors Offices, he discovered grant deeds showing that Berkeley Leasing & Realty was also 

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a previous owner of the Property. As such, Defendant now seeks leave to file a Third 

Amended Third Party Complaint to add Berkeley Leasing & Realty as a third party defendant. 

However, Defendant does not indicate when he conducted the record search, why he 

could not have conducted the search earlier, the dates of ownership of the Property by Berkeley 

Leasing & Realty, or more generally why he could not have discovered this new party 

previously in the over two years that this case has been pending. Moreover, while Defendant 

summarily asserts that allowing amendment would "not harm any other party in this case," 

Defendant does not suggest if or how the Order for Pretrial Preparation should be modified in 

order to accommodate this entirely new party. 

II. LEGAL STANDARD 

 The Federal Rules of Civil Procedure provide that leave to amend a complaint should be 

“freely given when justice so requires.” Fed. R. Civ. P. 15(a)(2). “In deciding whether justice 

requires granting leave to amend, factors to be considered include the presence or absence of 

undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous 

amendments, undue prejudice to the opposing party and futility of the proposed amendment.” 

Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). “[A] district court’s 

discretion over amendments is especially broad where the court has already given a [party] one 

or more opportunities to amend his complaint.” DCD Programs, Ltd. v. Leighton, 833 F.2d 

183, 186 at n.3 (9th Cir. 1987). 

III. DISCUSSION 

A. Granting Leave to Amend Would Result in Undue Delay 

 The Ninth Circuit has explained that the “undue delay” factor considers whether 

“permitting an amendment would ... produce an undue delay in the litigation.” Jackson v. 

Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). Here, Defendant seeks leave to amend 

his Second Amended Third Party Complaint to add yet another party after he previously 

amended twice to accommodate new parties. Another delay in the trial would likely be 

necessary to allow Berkeley Leasing & Realty to respond to pleadings, perform discovery, and 

sufficiently prepare for trial. See Irise v. Axure Software Solutions, Inc., 2009 WL 3615973, at 

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6-7 (C.D. Cal. 2009) (“[T]he Court finds that a delay of the trial may be necessary in order to 

allow [Plaintiff] to sufficiently prepare for [Defendant’s] new arguments without unfairly 

prejudicing [Plaintiff],” thus finding the undue delay factor present). Here, undue delay to the 

proceedings would result from Defendant's amendment, which militates against granting the 

motion. 

 Additionally, any delay caused by granting the instant motion, coupled with the delay 

that already resulted from Defendant's Second Amended Third Party Complaint, would likely 

be substantial. After Defendant made his second amendment to his complaint, this Court 

delayed the pre-trial schedule by roughly six months to account for the newly added parties. 

Adding yet an additional party will likely necessitate a minimum six-month delay of the pretrial schedule. Considering the delays together, the proceedings would potentially be delayed 

by roughly one year due to Defendant's apparently dilatory actions. The additional time 

needed for discovery and to submit responsive pleadings would amount to a substantial delay 

in the proceedings, which would invariably increase the costs of litigation. See Kaplan v. 

Rose, 49 F.3d 1363, 1370 (9th Cir. 1995) (indicating that the issue is whether the amendment 

will cause “[e]xpense, delay, and wear and tear on individuals and companies.”). This weighs 

in favor of denying Defendant's motion. 

 An additional consideration in the “undue delay” analysis includes whether the party 

moving to amend “unduly delayed in filing [its] motion.” Jackson, 902 F.2d at 1388. 

“Relevant to evaluating the delay issue is whether the moving party knew or should have 

known the facts and theories raised by the amendment in the original pleading.” Id. Here, 

Defendant unduly delayed filing the instant motion. Defendant should have known that 

Berkeley Leasing & Realty was a previous owner of the Property. Renz’s deposition alerted 

Defendant to some of the Property’s previous owners. The Alameda County Recorders and 

Assessors Offices store the grant deeds to the Property, which are readily available to the 

public. There is nothing in the record before this Court that suggests these records have not 

been available to the public since the date Berkeley Leasing & Realty owned the Property. 

Being aware that there were previous owners to the Property not party to the litigation, 

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Defendant should have known of the potential for additional owners not discussed during 

Renz’s deposition. Defendant should have conducted research to uncover if there were 

additional potential third party defendants, rather than proceeding in an ad hoc fashion 

amending his pleadings every few months. This fact alone warrants denial of the instant 

motion. See Chodos v. West Publishing Co., 292 F.3d 992, 1003 (9th Cir. 2002) ("The district 

court denied the motion [to amend], finding that those 'new' facts had been available to 

[plaintiff] even before the first amendment to his complaint. Given this finding, the district 

court's conclusion that the motion to amend was made after undue delay did not constitute an 

abuse of its discretion.”); De Saracho v. Custom Food Machinery, Inc., 206 F.3d 874, 878 (9th 

Cir. 2000) (“Where the party seeking amendment knows or should know of the facts upon 

which the proposed amendment is based but fails to include them in the original complaint, the 

motion to amend may be denied.”) (internal quotations omitted). 

 Although delay may not be dispositive, it is relevant and especially so when, as here, 

the moving party has offered no reason for the delay. See Lockheed Martin Corp. v. Network 

Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999) ("Although delay is not a dispositive factor 

in the amendment analysis, it is relevant, . . . especially when no reason is given for the 

delay."). Defendant provides no explanation for the five month delay between filing the 

Second Amended Third Party Complaint and the instant motion. See Lockheed, 194 F.3d at 

986 (finding that a motion to amend filed after several months with no reason given for the 

delay supported the district court’s denial of leave). Defendant's lack of explanation for his 

delay necessitates the conclusion that he was not diligent, which warrants denial of his motion. 

B. Granting Leave to Amend Would Result in Undue Prejudice 

There are several indicators of undue prejudice to all other parties, as well as Berkeley 

Leasing & Realty, if this Court were to grant Defendant's motion. The act of simply adding a 

party is an indicator of prejudice. See In re Fritz Companies Securities Litigation, 282 

F.Supp.2d 1105, 1109 (N.D. Cal. 2003) (“Indicators of prejudice include a need to reopen 

discovery or the addition of complaints or parties.”). “Amending a complaint to add a party 

poses an especially acute threat of prejudice to the entering party.” DCD Programs, 833 F.2d 

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at 187. “Avoiding prejudice to the party to be added thus becomes [a] major objective.” Korn 

v. Royal Caribbean Cruise Line, Inc., 724 F.2d 1397, 1400 (9th Cir. 1984). 

At this point in the suit, it would be prejudicial to add Berkeley Leasing & Realty due to 

the unjust delay in naming it as a third party defendant. While the instant case is still in the 

discovery stage, the discovery deadline is December 30, 2010. Berkeley Leasing & Realty 

would be substantially prejudiced in comparison to the other parties that have been engaged in 

discovery for at least a year. To avoid this prejudice, this Court would likely be required to 

modify the pre-trial schedule, which would result in prejudice in the form of delay to other 

parties. See Harris v. Vector Marketing Corp., 2009 WL 3710696, at 2 (N.D. Cal. 2009) 

(“Although there is no precise definition for prejudice under Rule 15, prejudice is generally 

found where the amendment would cause substantial delay in the proceedings.”). As a case 

lengthens, the costs and expenses necessarily increase. See Kaplan, 49 F.3d at 1370 (agreeing 

with the district court that expense counts towards a finding of prejudice). 

 While this Court did grant leave for Defendant to file his Second Amended Third Party 

Complaint five months prior to the instant motion, it did so concluding that Defendant had only 

become aware of the additional parties through Renz’s deposition. No such legitimate reason 

applies to the request. Defendant was aware at the time of the deposition that other potential 

third party defendants had not yet been added to the suit. Yet, Defendant did nothing to ensure 

that all appropriate entities were named in the Second Amended Third Party Complaint. 

Defendant contends that granting his motion will not result in prejudice because the 

proceedings are still in the early stages. Defendant is incorrect. This action was filed over two 

years ago. The pre-trial schedule was entered in June 2009. Depositions have already been 

taken. The August 13, 2010 deadline to complete mediation is fast approaching. The resulting 

prejudice from adding a new party at this stage is undue because Defendant should have added 

this party previously. See IXYS Corp. v. Advanced Power Tech., Inc., 2004 WL 135861, at 3 

(N.D. Cal. 2004) (“[T]he need for a party to conduct supplemental discovery or to consider a 

new line of legal argument are classic sources of prejudice that have regularly proven sufficient 

to defeat a motion for leave to amend.”). 

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IV. CONCLUSION 

For the reasons stated above, 

 IT IS HEREBY ORDERED THAT Defendant’s Motion for Leave to File a Third 

Amended Third Party Complaint is DENIED. This order terminates Docket No. 250. 

 IT IS SO ORDERED. 

Dated: July 19, 2010 ______________________________ 

SAUNDRA BROWN ARMSTRONG 

United States District Judge 

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UNITED STATES DISTRICT COURT 

FOR THE 

NORTHERN DISTRICT OF CALIFORNIA 

WELLS FARGO BANK N.A. et al, 

 Plaintiff, 

 v. 

RENZ et al, 

 Defendant. 

 / 

Case Number: CV08-02561 SBA 

CERTIFICATE OF SERVICE 

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District 

Court, Northern District of California. 

That on July 20, 2010, I SERVED a true and correct copy(ies) of the attached, by placing said 

copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing 

said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle 

located in the Clerk's office. 

Guan Huang 

2683 22nd Street 

San Francisco, CA 94110 

Nan Y. Park 

8306 Wilshire Boulevard 

Suite 560 

Beverly Hills, CA 90211 

Won Jae Yi 

2565 Telegraph Avenue 

Berkeley, CA 94704 

Dated: July 20, 2010 

 Richard W. Wieking, Clerk 

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 By: LISA R CLARK, Deputy Clerk

Case 4:08-cv-02561-SBA Document 258 Filed 07/20/10 Page 9 of 9