Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-01707/USCOURTS-azd-2_07-cv-01707-0/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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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

First Franklin Financial Corporation, 

Plaintiff, 

vs.

Dreamscape Mortgage, L.L.C., 

Defendant. 

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No. CV 07-1707-PHX-MHM

ORDER

Now pending is Defendant’s Motion to Amend its Answer (Doc. 15). Plaintiff has

filed a Response (Doc. 17) and Defendant has filed a Reply (Doc. 23). The Court has

considered the papers submitted and issues the following Order. 

BACKGROUND

Plaintiff initiated this action by filing its Complaint on September 6, 2007. Defendant

filed its Answer on October 8, 2007. On March 6, 2007, Defendant filed the instant Motion

to Amend its Answer, in which it seeks to add affirmative defenses and to clarify some of its

original responses. Plaintiff opposes allowing such an amendment, claiming it would be

prejudiced if Defendant is allowed to amend its Answer. 

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1

 Plaintiff does not argue that Defendant seeks to amend in bad faith, nor that

amendment would be futile. See Rule 15, Fed.R.Civ.P. Plaintiff only argues “undue delay”

in the context of how Plaintiff would be prejudiced by a delay of five months between when

the Defendant filed its original Answer and when it filed its request to amend (see discussion

infra). See id.

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LEGAL STANDARD

Federal Rule of Civil Procedure 15(a) governs amending party pleadings before trial.

Under Rule 15(a)(2), “a party may amend its pleading only with the opposing party’s written

consent or the court’s leave.” “Rule 15(a) is very liberal and leave to amend ‘shall be freely

given when justice so requires.’” AmerisourceBergen Corp. v. Dialysis West, Inc., 665 F.3d

946, 951 (9th Cir. 2006) (quoting Fed.R.Civ.P. 15(a)). However, courts “need not grant leave

to amend where the amendment: (1) prejudices the opposing party; (2) is sought in bad faith;

(3) produces an undue delay in the litigation; or (4) is futile.” Id. Prejudice to the opposing

party is accorded the most weight, and absent prejudice, “there exists a presumption under

Rule 15(a) in favor of granting leave to amend” unless a strong showing is made on one of

the other factors. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.

2003) (emphasis in original). 

DISCUSSION

Defendant has moved for leave to amend its answer. Defendant seeks to add

affirmative defenses and to “clarify a few of its original denials.” Defendant points out that

in its original Answer, it reserved the right to add affirmative defenses. In opposition,

Plaintiff argues that it would be prejudiced by allowing such an amendment.1

 

Plaintiff asserts a number of arguments as to why it would be prejudiced by allowing

Defendant to amend. First, Plaintiff contends that Defendant’s proposed amended answer

contains material alterations from the original Answer. However, Plaintiff has not cited

authority to support its argument that an amendment should not be allowed if it materially

alters the original pleading. In fact, it seems that if the changes were not material, it would

not be necessary to seek leave to amend. 

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Next, Plaintiff argues that Defendant’s Motion should be denied because Defendant

has provided no reason for seeking to amend. Generally, Rule 15 of the Federal Rules of

Civil Procedure does not require a party to give a reason for the amendment it seeks.

However, in support of its argument, Plaintiff cites Amerisourcebergen Corp. v. Dialysist

West, Inc., 465 F.3d 946, 953 (9th Cir. 2006), where the court held that leave to amend should

be denied where a party has failed to provide adequate reason for a proposed amendment.

However, Amerisourcebergen is distinguishable from the instant case. In

Amerisourcebergen the Ninth Circuit upheld the district court’s denial of the request to

amend because it had been nearly fifteen months since the party had learned of the new

evidence upon which it sought to amend its pleading and, only three months earlier, the party

had admitted that which it sought to deny. Id. at 951-52. The court in that case found that

allowing a party to “advance different legal theories and require proof of different facts” at

a late stage in the litigation would have prejudiced the opposing party by forcing it to

undertake burdensome discovery and it would unnecessarily delayed final judgment. Id.

Here, Defendant claims a need to amend because initial discovery has revealed changes in

its case theory. Though Plaintiff claims that Defendant knew the facts upon which the

proposed amendment are based at the time it filed its original Answer, Plaintiff has presented

no evidence to support this claim. Moreover, since discovery only recently began, the instant

case is in a different posture than was Amerisourcebergen when the party there sought to

amend. Therefore, Amerisourcebergen does not dictate a similar outcome here. 

Plaintiff also argues that allowing Defendant to amend its answer would force Plaintiff

to conduct additional discovery to address Defendant’s additional defenses. However, the

Court is not persuaded by Plaintiff’s argument that additional discovery would be prejudicial.

Discovery had just begun at the time Defendant filed its Motion to Amend. Plus, discovery

is scheduled to remain open until September 19, 2008. Therefore, Plaintiff has over four

months to seek discovery in relation to the Defendant’s Amended Answer. Moreover,

Plaintiff had notice of the possibility of Defendant adding defenses because Defendant

reserved the right to do so in its Answer. 

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2

 As stated above, Plaintiff does not argue that Defendant seeks to amend in bad faith,

nor that amendment would be futile. See Rule 15, Fed.R.Civ.P. Plaintiff only argues “undue

delay” in the context of how Plaintiff would be prejudice by the delay of five months

between when the Defendant filed its original Answer and when it filed its request to amend,

which the Court does not find compelling. See id.

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Finally, Plaintiff argues that the delay of five months between the filing of Defendant

original Answer and Defendant’s request to amend would further prejudice Plaintiff.

“‘Undue delay by itself ... is insufficient to justify denying a motion to amend.’” Owens v.

Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712, 13 (9th Cir. 2001) (quoting Bowles

v. Reade, 198 F.3d 752, 757-58 (9th Cir. 1999)). In evaluating undue delay, the Ninth Circuit

has advised courts to consider “whether the moving party knew or should have known the

facts and theories raised by the amendment in the original pleading.” Jackson v. Bank of

Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990). Here, there is no evidence that the Defendant

knew or should have known the facts and theories raised by the amendment at the time it

filed its original Answer. Nor is there evidence to show that Defendant delayed moving to

amend once it discovered such facts and theories. Plaintiff does not argue otherwise. Again,

discovery had just begun when Defendant moved to amend its Answer and discovery

continues to be ongoing. Therefore, there does not appear to be any undue delay. 

In sum, the Plaintiff will not be prejudiced by the amendment.2

 Again, Rule 15 of the

Federal Rules of Civil Procedure is very liberal regarding allowing leave to amend pleadings.

The Court does not find compelling Plaintiff’s arguments as to why it would be prejudiced

by allowing Defendant to amend its answer. Accordingly, the Court grants Defendant’s

Motion to Amend.

CONCLUSIONS 

For the foregoing reasons, 

IT IS ORDERED, granting Defendant’s Motion to Amend it Answer (Doc. 15). 

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IT IS FURTHER ORDERED directing the Clerk’s Office to file the Lodged Proposed

First Amended Answer (Doc. 16).

DATED this 29th day of May, 2008.

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