Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_13-cv-00267/USCOURTS-alsd-1_13-cv-00267-1/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-Other Contract

---

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

SE PROPERTY HOLDINGS, LLC, )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 13-0267-WS-N

 )

GEORGE S. BRASWELL, et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on plaintiff’s Motion for Leave to File Second 

Amended Complaint (doc. 66). Defendants have filed an Objection (doc. 70), to which plaintiff 

has submitted a Reply (doc. 72).

I. Background.

Plaintiff, SE Property Holdings, LLC (“SEPH”), brought this fraudulent transfer action 

against defendants, George S. Braswell and Vennie T. Braswell, by filing the Complaint on May 

17, 2013. According to the First Amended Complaint (doc. 22), which has been the operative 

pleading since September 2013, defendant George Braswell (“Mr. Braswell”) is indebted to 

SEPH pursuant to certain defaulted loans as to which Mr. Braswell executed guaranties, then 

refused to fulfill his repayment obligations when demand was made. The First Amended 

Complaint alleges that Mr. Braswell fraudulently transferred certain assets to his wife, defendant

Vennie Braswell (“Ms. Braswell”), in May 2009. The purportedly fraudulently transferred assets 

include the Braswells’ primary residence and a beach condominium unit. Well-pleaded facts 

reflect that, at the time of the subject transfers, Mr. Braswell was indebted to SEPH’s 

predecessor in the principal amount of $1,155,000, and had been sued by SEPH’s predecessor 

for failing to pay pursuant to those guaranties. It is further alleged that Mr. Braswell’s 

indebtedness to SEPH’s predecessor later swelled by an additional $900,000 based on further 

defaults. On that basis, SEPH sued the Braswells on theories of actual fraudulent transfer, in 

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 1 of 6
-2-

violation of Alabama Code § 8-9A-4(a); constructive fraudulent transfer, in violation of Alabama 

Code §§ 8-9A-4(c) and 8-9A-5(a); and conspiracy.

The original Rule 16(b) Scheduling Order (doc. 25) entered by Magistrate Judge Nelson 

on October 2, 2013 fixed pretrial and trial deadlines to govern the conduct of these proceedings. 

Paragraph 5 of the Scheduling Order provided as follows: “AMENDMENTS TO PLEADINGS 

AND JOINDER OF PARTIES. Any motions for leave to join additional parties or amend the 

pleadings are due no later than November 4, 2013.” (Doc. 25, ¶ 5.)1 Although multiple 

revisions to the Scheduling Order were made, at no time before or after November 4, 2013 did 

the Magistrate Judge ever relax or extend that deadline.2 Thus, irrespective of what may have 

transpired later, the court-ordered deadline for amending the pleadings lapsed on November 4, 

2013. 

To be sure, these proceedings departed substantially from the standard litigation track

following expiration of the November 4 deadline. On June 20, 2014, after several months of 

discovery and just weeks before the discovery cutoff date, the parties jointly moved for a stay of 

this case pending disposition of related litigation (the “Sundance Case”). (See doc. 45.) 

Recognizing that resolution of the Sundance Case could narrow or potentially even moot the 

issues joined in this case, the undersigned granted the joint motion to stay via Order (doc. 49) 

entered on July 3, 2014. The case remained in suspended animation until August 12, 2015, at 

which time the stay was lifted because the Sundance Case had been resolved, apparently without

realizing the hoped-for efficiency benefits for this action. (See doc. 51.) The parties submitted 

multiple iterations of a supplemental Rule 26(f) report (docs. 55, 58); however, because of an 

oversight, no Amended Scheduling Order was entered until almost a year later, on July 13, 2016. 

(See doc. 69.)

 1 Although that deadline was barely one month after entry of the Scheduling Order, 

the file confirms that Judge Nelson set it in that manner to effectuate the parties’ stated wishes. 

Indeed, the Report of Parties’ Planning Meeting stated, “The parties request until November 4, 

2013 to join additional parties and amend the pleadings.” (Doc. 20, ¶ 6.)

2 To the contrary, when the Magistrate Judge amended the Rule 16(b) Scheduling 

Order on February 14, 2014, she wrote, “Any motions for leave to join additional parties or 

amend the pleadings were due to be filed no later than November 4, 2013.” (Doc. 30, ¶ 5.)

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 2 of 6
-3-

During the protracted interval in which this case had been reactivated but no new pretrial 

and trial deadlines had been set, the parties apparently resumed discovery. On June 29, 2016, 

during this limbo period in which no new scheduling order was in place, SEPH filed the instant

Motion for Leave to File Second Amended Complaint. In particular, SEPH explained that it 

wishes to amend its pleading for the following purposes: (i) to assert new fraudulent transfer 

claims against the Braswells relating to Mr. Braswell’s transfer of ownership of an annuity to 

Ms. Braswell in December 2010; (ii) to set forth additional facts alleging that Ms. Braswell had 

sold the residence and beach condo unit to third parties after Mr. Braswell fraudulently 

transferred them to her; and (iii) to clarify that SEPH is seeking all relief available under the 

Alabama Uniform Fraudulent Transfer Act. (See doc. 66, Exh. 1.)

II. Analysis.

In briefing the Motion for Leave to Amend, SEPH incorrectly focuses on the liberal 

amendment standard provided by Rule 15(a)(2), Fed.R.Civ.P., which sets forth the general rule

that leave to amend a pleading should be freely given when justice so requires. SEPH’s position 

is that this case is procedurally akin to McKinley v. Kaplan, 177 F.3d 1253 (11th Cir. 1999), in 

which the Eleventh Circuit applied the Rule 15(a) standard because the parties had proposed 

scheduling order deadlines, but the district court had never entered a joint scheduling order or 

otherwise established any binding deadlines in the case, such that the request for leave to amend 

did not contravene any scheduling order deadline. See id. at 1257 (noting that “the alleged joint 

scheduling order apparently never was entered and therefore never became binding,” and 

explaining that “[i]n the absence of a dispositive scheduling order, whether leave to amend 

should be granted is governed by the more liberal standard set forth in Rule 15(a)”). The trouble 

with SEPH’s reliance on McKinley is that the Magistrate Judge did enter a Rule 16(b) 

Scheduling Order in this case, and did establish a deadline for amending pleadings that was 

binding on the parties. That deadline expired by its terms on November 4, 2013, almost 32 

months before SEPH filed its Motion for Leave to File Second Amended Complaint. This case 

is therefore readily distinguishable from McKinley.

3

 3 Nor would it be persuasive for SEPH to contend that the yearlong stay of these 

proceedings pending resolution of the Sundance Case erased the Rule 16(b) Scheduling Order’s 

deadline for amending pleadings (which had, after all, expired eight months before the stay was 

ever imposed) or gave plaintiff a second bite at the apple following the stay in order to modify its 

(Continued)

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 3 of 6
-4-

Where, as here, a party endeavors to amend its pleading after the scheduling order 

deadline for doing so has passed, the movant may not rely on the relaxed standard of Rule 

15(a)(2), but must instead comport with the more stringent standard of Rule 16(b)(4). See, e.g., 

Southern Grouts & Mortars, Inc. v. 3M Co., 575 F.3d 1235, 1241 (11th Cir. 2009) (“A plaintiff 

seeking leave to amend its complaint after the deadline designated in a scheduling order must 

demonstrate ‘good cause’ under Fed.R.Civ.P. 16(b).”); Sosa v. Airprint Systems, Inc., 133 F.3d 

1417, 1419 (11th Cir. 1998) (“[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).”).4 Pursuant to that rule, “[a] schedule may be 

modified only for good cause and with the judge’s consent.” Rule 16(b)(4), Fed.R.Civ.P. The 

“good cause” standard “precludes modification unless the schedule cannot be met despite the 

diligence of the party seeking the extension.” Sosa, 133 F.3d at 1418 (citation and internal 

quotation marks omitted).

5

 The burden of establishing the requisite good cause / diligence rests 

 

pleadings and interpose new claims and causes of action against the Braswells. Recall that the 

stay was entered not to give SEPH time to investigate new theories of liability or to expand the 

universe of facts and issues being litigated, but rather to honor the parties’ suggestion that 

developments in the Sundance Case might narrow or moot the issues in our case. Accordingly, 

any attempt by SEPH to parlay the stay from July 2014 to August 2015 into a new window of 

time to amend the pleadings and thus to be liberated from the preclusive effects of the expired 

November 2013 deadline prescribed in the original Scheduling Order is unavailing. 

4 The rationale for requiring a heightened showing to amend the pleadings after the 

scheduling order deadline lapses is as follows: “[A] scheduling order is not a frivolous piece of 

paper, idly entered, which can be cavalierly disregarded .... Disregard of the order would 

undermine the court’s ability to control its docket, disrupt the agreed-upon course of the 

litigation, and reward the indolent and the cavalier.” Rogers v. Hartford Life and Acc. Ins. Co., 

2012 WL 2395194, *1 n.3 (S.D. Ala. June 22, 2012) (citation omitted); see also Baker v. U.S. 

Marshal Service, 2014 WL 2534927, *2 (D.N.J. June 5, 2014) (“Extensions of time without 

good cause would deprive courts of the ability to effectively manage cases on their overcrowded 

dockets and would severely impair the utility of Scheduling Orders.”).

5 See also Romero v. Drummond Co., 552 F.3d 1303, 1319 (11th Cir. 2008) (“To 

establish good cause, the party seeking the extension must have been diligent.”); King v. Chubb 

& Son, 563 Fed.Appx. 729, 732 (11th Cir. Apr. 22, 2014) (“There can be no good cause where 

the record shows that the late-filing party lacked diligence in pursuing its claim.”) (citation and 

internal quotation marks omitted). 

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 4 of 6
-5-

on SEPH, the party seeking relief from the lapsed deadline in the original Scheduling Order. 

See, e.g., Race Tires America, Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3rd Cir. 2010) 

(“Rule 16(b)(4) focuses on the moving party’s burden to show due diligence.”); Northstar 

Marine, Inc. v. Huffman, 2014 WL 3720537, *3 (S.D. Ala. July 28, 2014) (“The burden of 

establishing good cause / diligence rests squarely on the party seeking relief from the scheduling 

order.”).

SEPH has not even attempted to make a showing of diligence that might satisfy its 

burden under the Rule 16(b)(4) good cause standard. To be sure, SEPH indicates that the 

Braswells concealed the annuity transfer from SEPH at the time of its occurrence in December 

2010; nonetheless, plaintiff acknowledges that it obtained information about the annuity transfer 

by subpoenaing records from nonparty Hartford Investment Management Company early in the 

lifespan of this litigation. (Doc. 66, ¶¶ 3-4, 7-8.) This subpoena was apparently issued on or 

about February 13, 2014. (See doc. 70, Exh. A.) Plaintiff offers no reason why it could not have 

issued the subject subpoena earlier, particularly given its awareness that the parties had agreed 

upon a November 4, 2013 deadline for amending pleadings. The same is true as to SEPH’s 

proposed new factual allegations that Ms. Braswell subsequently sold the residence and beach 

condo unit to third parties. In short, SEPH has made no showing that, even with diligence, it 

could not reasonably have obtained the necessary discovery on which its proposed amendment is 

predicated prior to the agreed-upon Scheduling Order deadline for amending pleadings. 

Accordingly, the Motion for Leave to File Second Amended Complaint is properly denied

pursuant to Rule 16(b)(4).6

 6 Even if the Rule 16(b) “good cause” standard did not apply, denial of SEPH’s 

Motion would remain appropriate under Rule 15(a)(2)’s liberal standard. “Although leave to 

amend shall be freely given when justice so requires, a motion to amend may be denied on 

numerous grounds such as undue delay, undue prejudice to the defendants, and futility of the 

amendment.” Mann v. Palmer, 713 F.3d 1306, 1316 (11th Cir. 2013) (citation omitted). 

“Although generally, the mere passage of time, without more, is an insufficient reason to deny 

leave to amend a complaint, undue delay may clearly support such a denial.” In re Engle Cases, 

767 F.3d 1082, 1109 (11th Cir. 2014) (citation omitted). “A district court may find undue delay 

when the movant knew of facts supporting the new claim long before the movant requested leave 

to amend” where the amendment would cause prejudice, such as where the “amendment involves 

new theories of recovery or would require additional discovery.” Tampa Bay Water v. HDR 

Engineering, Inc., 731 F.3d 1171, 1186 (11th Cir. 2013) (citations omitted). The information 

before the Court is that SEPH received information about the annuity transfer in documents 

(Continued)

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 5 of 6
-6-

III. Conclusion.

For all of the foregoing reasons, SEPH’s Motion for Leave to File Second Amended 

Complaint (doc. 66) is denied.

DONE and ORDERED this 27th day of July, 2016.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

 

produced by a third party in response to a subpoena issued in February 2014. (See doc. 66-2.) 

Yet SEPH did not move to amend its pleading to assert a claim alleging that such annuity 

transfer was fraudulent until June 2016, nearly two and a half years later. Allowing SEPH to 

amend its pleading to assert such a claim now would necessitate discovery into a transaction 

entirely separate and apart from the real estate transfers that have been the subject of this 

litigation ever since the Complaint was filed in May 2013. This constitutes undue delay.

Another circumstance informs the Court’s determination of undue delay, as well. As 

noted, these proceedings were stayed at the parties’ request from July 2014 to August 2015, for 

the stated purpose of waiting to see if events in another civil action might narrow the issues in 

the case. The purpose of the stay was not to afford the parties another bite at the apple for 

drafting their pleadings, to eradicate court deadlines that had long since expired, to expand the 

issues, to launch discovery on brand-new topics, and otherwise to enlarge the scope of these

proceedings. Recall that when the July 2014 stay was entered, the discovery cutoff date loomed 

a mere four weeks away. This case should have been nearly ready for trial then. For SEPH to 

seek to amend its pleadings nearly a year after the stay was lifted, based on information that had 

been available to it long before the stay was imposed, seeking substantive amendments that 

would effectively cause the proliferation of these proceedings, branching out in new directions 

and encompassing new sets of facts, with all of the attendant discovery and litigation obligations 

that accompany such matters, would be antithetical to the principles that warranted entry of the 

stay in the first place. Simply put, now is not an appropriate time for this case to morph into 

something new, and SEPH engaged in undue delay by waiting until now to seek amendment of 

its pleading in this manner.

Case 1:13-cv-00267-WS-N Document 73 Filed 07/27/16 Page 6 of 6