Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_07-cv-00035/USCOURTS-alsd-1_07-cv-00035-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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1

This deadline was more generous by six weeks than the August 15, 2007 deadline

jointly proposed by the plaintiff and defendants, (Doc. 33 at 9, ¶ 6), and so cannot be

faulted as unrealistic.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

AMERICAN RESOURCES INSURANCE)

COMPANY, INC., )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 07-0035-WS-M

 )

THE EVOLENO COMPANY, LLC, et al.,)

 )

Defendants. )

ORDER

This matter is before the Court on the plaintiff’s motion for leave to file a third

amended complaint. (Doc. 67). The proposed third amended complaint would

accomplish the following: (1) add Sandra Marino as a defendant; (2) identify Sandra

Marino and Susan Marino as members of the board of directors of defendant The Evoleno

Company (“Evoleno”) and allege that they negligently failed to perform their duties as

members and allowed or ratified other misconduct of which the plaintiff complains; and

(3) add allegations as to elements of damage that have recently accrued due to the

misconduct alleged in the second amended complaint. The defendants have filed a

response and the plaintiff a reply, (Docs. 71, 72), and the motion is ripe for resolution.

The Magistrate Judge, pursuant to Rule 16(b), established a deadline of September

28, 2007 by which to file motions for leave to amend the pleadings or to join other

parties. (Doc. 49 at 2, ¶ 5).1

 Such “[a] schedule shall not be modified except upon a

showing of good cause.” Id.; accord Sosa v. Airprint Systems, Inc., 133 F.3d 1417, 1418

(11th Cir. 1998). The instant motion was filed on November 28, 2007, a full two months

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after that deadline passed. Accordingly, the plaintiff must first show good cause for its

failure to comply with the scheduling order. Id. at 1419 (“[B]ecause Sosa’s motion to

amend was filed after the scheduling order’s deadline, she must first demonstrate good

cause under Rule 16(b) before we will consider whether amendment is proper under Rule

15(a).”). 

 “This good cause standard precludes modification unless the schedule could not

‘be met despite the diligence of the party seeking the extension.’” Sosa, 133 F.3d at 1418

(quoting Fed. R. Civ. P. 16 advisory committee’s note). The plaintiff’s own filings

demonstrate that it cannot meet this standard. The plaintiff was long aware of Susan

Marino (since she was an original defendant), and the plaintiff does not suggest it was

unaware that she was a member of Evoleno’s board. With respect to Sandra Marino, the

plaintiff asserts that it was until recently unaware that she was a member of the board, but

it acknowledges that it could easily have discovered this fact at any time simply by

consulting the Texas Secretary of State’s records (as it recently did). (Doc. 72 at 2-3). 

Indeed, the plaintiff concedes that its failure to do so earlier “could be viewed as lack of

diligence.” (Id. at 3).

The plaintiff’s argument comes down to this: the “potential liability of the ...

members ... was not contemplated until after” September 28, 2007, because there were

extensive transactions and communications to review and “[i]t has taken a good deal of

time to thoroughly analyze the case.” (Doc. 72 at 3). There is no assertion in this

statement that the information on which the new claims against the Marino sisters are

based has only recently come into the plaintiff’s actual or constructive possession; rather,

the suggestion is that, while the information necessary to support the new claims was

there, the plaintiff had not recognized the availability of the claims. Especially given that

the complaint and its subsequent iterations reflect the plaintiff’s dawning awareness of the

defendants’ alleged misconduct by May 2006, the plaintiff’s argument does not reflect the

exercise of the diligence required by Rule 16(b). Cf. Smith v. School Board of Orange

Case 1:07-cv-00035-WS-M Document 73 Filed 12/18/07 Page 2 of 3
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County, 487 F.3d 1361, 1367 (11th Cir. 2007) (simply asserting that new violations of law

have been discovered, without indicating what they are, what facts support them, and why

they were undiscoverable earlier, does not support a showing of good cause). 

The plaintiff argues that amendment should nevertheless be allowed because the

defendants will not be prejudiced by the amendment and because it would serve the

interests of judicial economy for it to sue Sandra Marino in the same lawsuit as the other

defendants. The plaintiff has not cited, and the Court has not located, any Eleventh

Circuit case hinging the “good cause” determination on the presence or absence of

prejudice or judicial economy, and the definition embraced in Sosa would appear to rule

out such a coupling.

The defendants concede that, to the extent the plaintiff has a claim for newly

accruing damages, it may pursue them under the second amended complaint without the

need for a third. (Doc. 71 at 5). In light of this concession — to which the defendants

will be bound in this litigation — the plaintiff correctly describes as moot its motion for

leave to amend as to such damages. (Doc. 72 at 4).

For the reasons set forth above, the plaintiff’s motion for leave to file a third

amended complaint is denied.

 

DONE and ORDERED this 18th day of December, 2007.

s/ WILLIAM H. STEELE

UNITED STATES DISTRICT JUDGE

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