Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-00133/USCOURTS-cand-5_05-cv-00133-4/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1441 Petition for Removal- Property Damage

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28 This disposition is not designated for publication and may not be cited. 1

Case No. C 05-133 JF (HRL)

ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND

(JFLC2) 1

**E-Filed 3/16/07**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SAFECO INSURANCE COMPANY OF

AMERICA,

 Plaintiff,

 v.

EMERSON ELECTRIC CO.,

 Defendant.

Case Number C 05-133 JF (HRL)

ORDER CONDITIONALLY 1

GRANTING PLAINTIFF’S MOTION

FOR LEAVE TO AMEND

[Re: Doc. No. 28]

Plaintiff Safeco Insurance Company of America (“Safeco”) moves for leave to amend its

complaint. Defendant Emerson Electric Company (“Emerson”) opposes the motion. The Court

has considered the briefing as well as the oral arguments presented at the hearing on March 16,

2007. For the reasons discussed below, the motion will be conditionally granted.

I. BACKGROUND

In this subrogation action, Safeco seeks to recover damages suffered by its insureds, Irene

and Norman Sokoloff. The Sokoloffs had an hot water dispenser manufactured by Emerson

installed in their home. In July, 2003, the Sokoloffs discovered significant water and mold

Case 5:05-cv-00133-JF Document 32 Filed 03/16/07 Page 1 of 5
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28 Safeco’s initial disclosures also identified the Sokoloffs’ $1,000 deductible as an item of 2

damages.

Case No. C 05-133 JF (HRL)

ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND

(JFLC2) 2

damage that they attributed to a leak in the hot water dispenser. Safeco paid the Sokoloffs under

their homeowner’s insurance policy and obtained an assignment of rights with respect to the

Sokoloffs’ claims against Emerson.

Safeco filed the instant action against Emerson in the Santa Clara Superior Court on

November 4, 2004, seeking to recover $192,481.45 in payments made to the Sokoloffs under

theories of strict products liability, negligence and breach of warranty. Emerson removed the

action to this Court on January 7, 2005 on the basis of diversity of citizenship. Safeco’s initial

disclosures pursuant to Federal Rule of Civil Procedure 26(a)(1) itemized these damages as

follows: $175,687.16 for the structure, $5,574.05 for the contents and $11,220.24 for loss of

use. 

2

In September 2005, the parties attempted to mediate the action, at which time Safeco

made clear that in addition to the damages claimed in the complaint, Safeco was seeking to

recover the Sokoloffs’ uninsured damages for loss of use of the home in excess of $100,000. 

Safeco proffered documentation to Emerson in support of this additional loss of use claim. Ms.

Sokoloff subsequently was deposed regarding all of the claims for damages, including the

additional loss of use claim. However, Safeco never formally amended its complaint to allege

the additional loss of use claim. Safeco seeks leave to make that amendment now.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 15(a) provides that “leave shall be freely given when

justice so requires.” In deciding whether to grant leave to amend, the Court will consider several

factors, including: (1) undue delay by the party seeking the amendment; (2) prejudice to the

opposing party; (3) bad faith; (4) futility of amendment; and (5) whether the party previously has

amended its pleadings. Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). 

III. DISCUSSION

Safeco clearly delayed in seeking leave to amend its complaint to add a claim for the

Sokoloffs’ uninsured loss of use damages (factor 1). Safeco attributes its failure to include the

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Case No. C 05-133 JF (HRL)

ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND

(JFLC2) 3

claim in the original complaint to the fact that while the Sokoloffs executed assignments

encompassing the claim for uninsured loss of use damages prior to the filing of the complaint,

Safeco did not actually receive the assignments until two months after the complaint had been

filed. It appears that Safeco failed to seek leave to amend thereafter because it was under the

impression that the new claim had been disclosed informally in mediation and discovery, i.e.,

that the parties were on the same page as to what was in play.

Granting the motion would prejudice Emerson to some degree (factor 2). Fact discovery

has closed and trial is set for April 23, 2007. While Safeco asserts that no additional discovery is

required, Emerson argues that it did not focus its discovery efforts on the Sokoloffs’ claim for

loss of use, and that it has not retained an expert to address the new loss of use claim. The new

claim is for the fair market value of the Sokoloff residence for the twelve months it took for the

kitchen repairs. It is undisputed that the Sokoloffs did not actually move out of the home during

this period of time, except for three days while their floors were refinished. Emerson argues that

it is entitled to conduct fact and expert discovery regarding the validity of the new claim, and that

it cannot do so without continuing the trial date. In particular, Emerson asserts that it will need

to redepose Ms. Sokoloff and retain an expert to address the new loss of use claim. The Court

agrees that Emerson is entitled to conduct additional discovery in the event leave to amend is

granted, which would necessitate at least a short continuance of the trial date.

Emerson also argues that the new claim is futile (factor 4) because the assignments upon

which Safeco relies do not actually confer standing upon Safeco to pursue the new claim. This

argument appears at least potentially meritorious. However, the Court is not prepared to

conclude on this record that Safeco lacks standing to pursue the new loss of use claim, and the

issue easily can be presented through an appropriate motion in limine.

There is no evidence that Safeco’s motion is brought in bad faith (factor 3), and Safeco

has not previously amended its complaint (factor 5).

Safeco’s motion presents a close question. However, after considering the record as a

whole, and in light of the liberality of Rule 15(a), the Court will grant the motion on the

condition that Safeco bears the cost of Emerson’s redeposition of Ms. Sokoloff. Emerson was

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Case No. C 05-133 JF (HRL)

ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND

(JFLC2) 4

given notice at least a year ago that Safeco intended to pursue the new claim and as a result

cannot be wholly surprised at Safeco’s motion. However, Safeco did delay in formally amending

its pleading to add the new claim and thus should bear at least part of the costs that Emerson will

have to incur as a result of the delay. The Court will continue the trial date approximately sixty

days, which should give Emerson ample opportunity to redepose Ms. Sokoloff, retain an expert if

necessary and challenge Safeco’s standing to bring the new claim by appropriate motion.

IV. ORDER

(1) Plaintiff’s motion for leave to amend is CONDITIONALLY GRANTED as set

forth above; and

(2) The April 23, 2007 trial date is VACATED; trial is RESET for June 25, 2007.

DATED: 3/16/07

__________________________________

JEREMY FOGEL

United States District Judge 

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Case No. C 05-133 JF (HRL)

ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND

(JFLC2) 5

A copy of this Order was served on the following persons:

Stephen Nelson Cole scole@colenetlaw.com, kbradley@colenetlaw.com

Bita Abdollahi Karabian bak@mjllp.com, calendar@mjllp.com

Patrick Mark Mahoney pmahoney@schiffhardin.com

Jeffrey R. Williams jwilliams@mjllp.com, asl@mjllp.com; calendar@mjllp.com;

kmr@mjllp.com

Michael John Wise mwise@colenetlaw.com, kbradley@colenetlaw.com 

Case 5:05-cv-00133-JF Document 32 Filed 03/16/07 Page 5 of 5