Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-00355/USCOURTS-casd-3_08-cv-00355-0/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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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

HOYT A. FLEMING,

Plaintiff,

CASE NO. 08cv355 WQH (NLS)

ORDER

vs.

TOM COVERSTONE,

Defendant.

HAYES, Judge:

The matters before the Court are the (1) Motion to Strike Plaintiff’s First Amended

Complaint (Doc. # 11) filed by Defendant Tom Coverstone, (2) Motion to Dismiss Plaintiff’s

First Amended Complaint (Doc. # 12) filed by Defendant Tom Coverstone, and (3) Motion to

Amend Complaint (Doc. # 13) filed by Plaintiff Hoyt A. Fleming.

Background

On February 22, 2008, Plaintiff initiated this action by filing a complaint (Doc. # 1). 

On March 12, 2008, Plaintiff filed a first amended complaint (“FAC”) (Doc. # 3). The parties’

dispute involves an alleged agreement between Plaintiff and Defendant whereby Plaintiff

agreed to sell and Defendant agreed to purchase a patent. The FAC alleges causes of action

for breach of contract, defamation, and civil extortion. 

On June 18, 2008, Defendant filed a Motion to Strike the FAC and a Motion to Dismiss

the FAC. In the Motion to Strike, Defendant contends that the FAC’s causes of action for

defamation and civil extortion should be dismissed pursuant to section 426.16 of the California

Case 3:08-cv-00355-WQH-NLS Document 28 Filed 10/17/08 Page 1 of 3
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Code of Civil Procedure (the “anti-SLAPP” statute) on grounds that there “can be no dispute

that the representations and negotiations in question cannot form the basis for liability based

upon the litigation privilege.” Mot. to Strike, p. 1. In the Motion to Dismiss, Defendant

contends that the cause of action for breach of contract fails because there was no enforceable

contract; the cause of action for defamation fails because it is barred by the litigation privilege

and the FAC does not allege facts necessary to state a claim for defamation; and the cause of

action for civil extortion fails because it is barred by the litigation privilege and fails to allege

facts necessary to state a claim for civil extortion. On July 7, 2008, Plaintiff filed Responses

in Opposition to the Motion to Dismiss and Motion to Strike (Docs. # 15, 16). On July 14,

2008, Defendant filed Replies (Docs. # 17, 19). 

On June 30, 2008, Plaintiff filed the Motion to Amend Complaint. Plaintiff contends

that the proposed second amended complaint (“SAC”) “clarifies Plaintiffs’ [sic] causes of

action and adds facts learned subsequent to the filing of the First Amended Complaint.” Mot.

to Amend, p. 1. Plaintiff moves to amend on grounds that, subsequent to the filing of the FAC,

“Plaintiff learned additional detail relating to Defendant’s actions, including his defamatory

statements,” and that there can be no prejudice to Defendant because Defendant was served

with the summons and complaint on May 29, 2008, just over a month before the Motion to

Amend was filed, and “no discovery has taken place and no deadline for amendment has been

set.” Id. at 2. On July 14, 2008, Defendant filed a Response in Opposition to the Motion to

Amend (Doc. # 18). Defendant contends that the additional allegations in the SAC do not

resolve the deficiencies in the FAC, and Plaintiff cannot remove allegations from the FAC that

demonstrate that there was no enforceable contract. 

Applicable Law

Rule 15 of the Federal Rules of Civil Procedure mandates that leave to amend “be freely

given when justice so requires.” Fed. R. Civ. P. 15(a). This policy is applied with

“extraordinary liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079

(9th Cir. 1990). Once an answer to the complaint has been filed, as is the case here, courts

may deny leave to amend where the proposed amendment would be futile, where it is sought

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in bad faith, where it will create undue delay, or where “undue prejudice to the opposing party

will result.” Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973); see also Johnson

v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992); Saul v. United States, 928

F.2d 829, 843 (9th Cir. 1991). 

Ruling of the Court

Having reviewed the Motion to Amend and supporting documents, the Court concludes

that amendment is not sought in bad faith, will not create undue delay, and will not prejudice

Defendant. The Court grants the Motion to Amend. The Court has reviewed the FAC and the

proposed SAC. The SAC contains significant additions and changes to the factual allegations

in the FAC. In light of the significant changes in the SAC, the Court denies the Motion to

Strike and Motion to Dismiss the FAC as moot.

IT IS HEREBY ORDERED that the (1) Motion to Strike Plaintiff’s First Amended

Complaint (Doc. # 11) is DISMISSED as moot, (2) Motion to Dismiss Plaintiff’s First

Amended Complaint (Doc. # 12) is DISMISSED as moot, and (3) Motion to Amend

Complaint (Doc. # 13) is GRANTED. Plaintiff shall file a Second Amended Complaint no

later than November 3, 2008. 

DATED: October 17, 2008

WILLIAM Q. HAYES

United States District Judge

Case 3:08-cv-00355-WQH-NLS Document 28 Filed 10/17/08 Page 3 of 3