Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-02334/USCOURTS-casd-3_09-cv-02334-2/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TRI-CITY HEALTHCARE DISTRICT, a

California local healthcare district,

Plaintiff,

CASE NO. 09-CV-2334 JLS (KSC)

ORDER DENYING LEAVE TO

FILE AN AMENDED ANSWER

AND COUNTERCLAIM

(ECF No. 62)

vs.

HC TRI-CITY I, LLC, a Wisconsin limited

liability company, and DOES 1 through 10,

inclusive,

Defendants.

Presently before the Court is Defendant and Counter-Claimant HC Tri-City I, LLC (HC)

and Counter-Claimant Hammes Company Healthcare, LLC’s (Hammes) Ex Parte Application to

Seek Leave to File an Amended Answer and Counterclaim, or in the alternative, for Clarification. 

(ECF No. 62.) Also before the Court are the parties’ responsive pleadings.1

 (ECF Nos. 76-77.) 

For the reasons stated below, Defendant’s motion for leave to file an amended answer and

counterclaim is DENIED.

1

On May 11, 2012, the Court ordered the parties to show cause why their declaratory relief

claims should not be dismissed. (ECF No. 75.) In their briefs, the parties addressed whether HC

should be granted leave to amend its answer in this case. (Id.)

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BACKGROUND

This action arises from the failed development of an outpatient surgery center and medical

office building adjacent to the Tri-City Medical Center and Hospital in Oceanside, California. In

the lead case, Hammes Co. Healthcare, LLC and HC Tri-City I, LLC v. Tri-City Healthcare

District, et al., Case No. 09-CV-2324 (“lead case” or “2324”), only Hammes’ claim for breach of

the letter of intent and the claim for declaratory relief remain.2 In this related case, Tri-City

Healthcare District v. HC Tri-City I, LLC, Case No. 09-CV-2334 (“related case” or “2334”), the

only claim asserted in the operative Second Amended Complaint is Tri-City’s claim for

declaratory relief against HC. (See SAC, ECF No. 52.) 

As the parties are well aware of the relevant background of these cases, set forth in many

of the Court’s prior Orders, the Court recites those facts here only where necessary to explain its

reasoning. On December 22, 2011, Plaintiff Tri-City Healthcare District (“Tri-City”) filed the

operative Second Amended Complaint (ECF No. 52) pursuant to the Court’s December 13, 2011

Order. (Order, ECF No. 50.) In that Order, the Court granted Tri-City leave to amend its

complaint for the sole purpose of deleting the second cause of action against Defendants. (Order

at 19.) On January 10, 2012, Defendants filed an amended answer. (ECF No. 57.) Finding no

basis for further adding or changing pleadings or discovery related to Tri-City’s first claim, which

remained unchanged, the Court granted Tri-City’s ex parte motion to strike Defendants’ amended

answer. (ECF No. 61.) On January 25, 2012, Defendants then filed this ex parte motion for leave

to file an amended answer. (Motion, ECF No. 62.) 

ANALYSIS

HC and Hammes (collectively “Defendants”) wish to assert three new affirmative defenses:

(1) excuse, waiver, and/or ratification; (2) anticipatory breach; and (3) offset/restitution. 

(Proposed Answer, ECF No. 62-3.) Defendants also wish to assert a counter-claim for breach of

contract, quasi-contract, restitution, quantum meruit, breach of the implied covenant, declaratory

2

 Claim seven, as one for declaratory relief, does not by itself state a claim. Thus, because only

Hammes’ claim survives summary judgment, for simplicity the Court refers to the party asserting a

claim for declaratory relief in the lead case as “Hammes.”

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relief, and interference with contract. (Id.) In the alternative, Defendants seek clarification that

they can assert affirmative defenses and a counterclaim based on excuse, restitution, and quasicontract recovery at the time of trial. (Id.)

Leave to amend should be freely given “when justice so requires.” Fed R. Civ. P. 15(a)(2). 

But while the rule should be interpreted extremely liberally, leave should not be granted

automatically. Jackson v. Bank of Haw., 902 F.3d 1385, 1387 (9th Cir. 1990). A trial court may

deny a motion for leave to amend based on various factors, including bad faith, undue delay,

prejudice to the opposing party, futility of amendment, and whether the party has previously

amended. Foman v. Davis, 371 U.S. 178 (1962). “These factors, however, are not of equal weight

in that delay, by itself, is insufficient to justify denial of leave to amend.” DCD Programs, Ltd. v.

Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (citations omitted). Further, “prejudice to opposing

party” is “the touchstone of the inquiry” and “carries the greatest weight.” Eminence Capital, LLC

v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citations and internal quotation marks

omitted).

The Court finds that amendment would be futile to the extent that Defendants attempt to reopen several issues that have already been adjudicated in Tri-City’s favor. This Court has

previously granted Tri-City’s motion for partial summary judgment in the lead case as to

Defendants’ claims for: (1) breach of the ground lease and space lease, (2) breach of the implied

covenant of good faith and fair dealing, (4) fraud, (5) tortious interference with the space lease,

and (6) promissory estoppel. (2324 ECF No. 85.) Therefore, leave to amend would be futile as to

Defendants’ proposed counterclaims for breach of contract, breach of implied covenant, and

interference with contract.

As to the other proposed amendments, Tri-City asserts that granting Defendants leave to

amend will unduly delay the trial because the amendments would add Hammes as a new party to

the related case and introduce a new theory of damages based on the unjust benefit obtained by

Tri-City from Hammes’ expenditures. (See ECF No. 76.) Specifically, Tri-City contends that it

will be required to conduct further discovery on the degree of reliance by third-parties on

Hammes’ prior work as well as retain an expert witness to evaluate the costs incurred and any cost

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savings that occurred. (Id. at 4.) Moreover, Tri-City contends that Hammes could have asserted

these non-contract theories following the grant of summary judgment in July 2011 of all contractbased theories, but has instead waited until after the pre-trial meeting of counsel and substantial

completion of the pre-trial order. (Id.) Although the Court is sympathetic to Tri-City’s arguments,

“delay, by itself, is insufficient to justify denial of leave to amend.” Leighton, 833 F.2d at 186. 

However, leave should still be denied here because Defendants only seek leave to amend

their answer in order to incorporate their declaratory relief claim from the lead case. “Federal

Courts do not have a duty to grant declaratory judgment; therefore, it is within a district court’s

discretion to dismiss an action for declaratory judgment.” Leadsinger, Inc. v. BMG Music Publ’g,

512 F.3d 522, 533 (9th Cir. 2008). Further, courts “have used that discretion to dismiss

counterclaims under Fed. Rule Civ. Pro. 12(f) where they are the ‘mirror image’ of claims in the

complaint or redundant of affirmative defenses.” Stickrath v. Globalstar, Inc., 2008 U.S. Dist.

LEXIS 95127, 2008 WL 2050990, at *8 (N.D. Cal). 

Here, Defendants state that, “[b]y filing its answer, HC and Hammes merely seek to

confirm their ability to assert affirmative defenses and a counterclaim based on excuse, restitution

and quasi-contract recovery which are believed to be encompassed in the Declaratory Relief Claim

pending in the Lead Case.” (ECF No. 62 at 3.) Defendants also state that the amended answer is

“done again to emphasis [sic] the substantive claims that underpin the existing Declaratory Relief

Claims.” (ECF No. 77 at 4.) Given that Defendants admit the redundancy of their claims, and that

FRCP 12(f) allows a court to sua sponte order stricken any redundant matter from any pleading,

the Court finds that Defendants’ proposed amendments would be futile.

Furthermore, the Court finds no need for Defendants to alter their answer when they admit

there are no new witnesses, exhibits, changes in damages, defenses, or counterclaims. Tri-City has

complied with the Court’s order to amend its complaint to merely delete anything related to the

second claim without any additions. (ECF No. 52.) As Defendants admit there are no new

witnesses, exhibits, changes in damages, defenses, or counterclaims, (ECF No. 60.), Defendants

will suffer no prejudice from adhering to the same rules the Court applied to Tri-City: amendment

of the answer solely to delete anything related to the second claim without any additions. (Order,

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ECF No. 50.)

Given that this case has long been poised for trial, and that Tri-City was only granted leave

to amend its complaint for the sole purpose of deleting the second cause of action against

Defendants, (Order at 19), the Court DENIES Defendants’ motion for leave to file an amended

answer.

IT IS SO ORDERED.

DATED: September 18, 2012

Honorable Janis L. Sammartino

United States District Judge

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