Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-02361/USCOURTS-cand-3_07-cv-02361-3/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

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CLARKE AND REBECCA WIXON AND

NORMAN AND BARBARA WIXON, ON

BEHALF OF THEMSELVES AND ALL

OTHERS SIMILARLY SITUATED,

Plaintiffs,

 v.

WYNDHAM RESORT DEVELOPMENT

CORP. (F/K/A TRENDWEST RESORTS,

INC.),

Defendant. /

No. C07-02361 JSW

ORDER GRANTING

PLAINTIFFS’ MOTION FOR

LEAVE TO FILE AMENDED

COMPLAINT

Now before the Court is Plaintiffs’ motion for leave to amend the complaint. The Court

finds this matter suitable for disposition on the papers and HEREBY VACATES the October

26, 2007 hearing date. See Civ. L.R. 7-1(b). Having carefully considered the parties’

arguments and relevant legal authority, the Court hereby GRANTS Plaintiffs’ motion to amend

the complaint and ORDERS Plaintiffs to file their amended complaint by October 26, 2007. In

addition, the Court CONTINUES the initial case management conference from October 26,

2007 to December 14, 2007 at 1:30 p.m. Further, discovery shall be stayed as to any of the new

defendants and new allegations until the case management conference is held. 

BACKGROUND

On April 2, 2007, Plaintiffs filed a class action complaint in the current lawsuit. The

original complaint named Defendant Wyndham Resort Development Corp. (“WRDC”) and 

Does 1-50. WRDC answered the complaint and removed the case to this Court on May 1, 2007. 

Case 3:07-cv-02361-JSW Document 39 Filed 10/22/07 Page 1 of 5
United States District Court

For the Northern District of California

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 Futility is not an issue in this case.

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On May 16, 2007, the initial case management conference was scheduled for August 10, 2007. 

On July 11, 2007 the parties met to conduct their Rule 26(f) conference. At that time, Plaintiffs

informed Defendant that, based on the outcome of their investigation, they were likely to amend

the complaint to add additional defendants and facts giving rise to liability. 

Plaintiffs served their initial discovery on July 20, 2007. On July 26, 2007, due to the

Court's unavailability, the initial case management conference was reset to October 12, 2007.

Then, on August 13, 2007 WRDC produced 1,655 pages of documents. On September 10,

2007, Plaintiffs sent a draft of their amended complaint to Defendant, requesting that Defendant

stipulate to their amended complaint. Defendant refused to stipulate to Plaintiffs’ request. 

On October 26, 2007, Plaintiffs filed a motion for leave to amend the complaint. In their

amended complaint, Plaintiffs seek to change the class definition, to include additional factual

allegations in support of their existing causes of action, and to add five new defendants against

whom they bring new related claims. 

ANALYSIS

A. Legal Standard Applicable to Motions to Amend.

Federal Rule of Civil Procedure 15(a) allows a plaintiff to amend their complaint, after a

responsive pleading has been served, by leave of court or by consent of the adverse party. Rule

15(a) provides that leave to amend “shall be freely given.” See Fed. R. Civ. Proc. 15(a). The

Ninth Circuit has stated that “[r]ule 15’s policy of favoring amendments to pleadings should be

applied with ‘extreme liberality.’” United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). 

Four factors are considered to determine whether a motion for leave to file an amended

complaint should be granted. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir.

1987). These factors are: bad faith, undue delay, prejudice to the opposing party, and futility of

amendment.1

 Id. While these “factors are usually used as criteria to determine the propriety of

a motion for leave to amend ... the crucial factor is the resulting prejudice to the opposing

party.” Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). 

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United States District Court

For the Northern District of California

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B. Plaintiffs Shall Be Given Leave to Amend.

WRDC argues that Plaintiffs have brought their amendment in bad faith. (Opp. at 5.) 

In order for a court to find that a moving party filed for leave to amend in bad faith, the adverse

party must offer evidence that shows “wrongful motive” on the part of the moving party. See

DCD Programs, 833 F.2d at 187. Nothing in the record supports a finding of bad faith. 

Accordingly, this factor weighs in favor of granting the motion. 

Next, WRDC argues that Plaintiffs have failed to explain the delay in bringing their

motion for leave to amend. (Opp. at 5.) While undue delay is a factor for denying leave to

amend, “[u]ndue delay by itself is insufficient to justify denying a motion to amend.” Bowles v.

Reade, 198 F.3d 752, 757-58 (9th Cir. 1999). A moving party may be precluded from asserting

an amendment on the basis of undue delay where the matters asserted in the amendment were

known to them from the beginning of the suit. See Komie v. Buehler Corp., 449 F.2d 644, 648

(9th Cir. 1971) (finding that where the moving party filed a motion to amend the pleadings 31

months after the answer was filed, the trial court did not abuse its discretion in denying leave to

amend). The Court concludes that Plaintiffs’ did not unduly delay in filing this motion. This

suit is in an early stage. Moreover, Plaintiffs explained to WRDC that they waited until their

investigation provided them with sufficient evidence of conduct upon which they could amend

the complaint. (See Declaration of Jonathan Levine ¶ 6.) The Court finds that to be a

satisfactory explanation. Therefore, Plaintiffs did not file their motion for leave to amend the

complaint with undue delay. Accordingly, this factor weighs in favor of granting the motion.

Finally, WRDC argues that Plaintiffs’ unexplained delay prejudices WRDC because

new claims of liability are asserted in the amended complaint, which are inconsistent with the

original complaint and which will result in duplicative discovery. (Opp. at 3, 6.) The Ninth

Circuit has held that undue delay may result in prejudice when a motion for leave to amend is

made on the eve of the discovery deadline, which would have required reopening discovery, or

when an amendment is asserted at a late stage of the action and would inevitably lead to a delay

in the trial and further expense to the opposing party. See Solomon v. North Am. Life & Cas.

Ins. Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (citations omitted); see also McGlinchy v. Shell

Case 3:07-cv-02361-JSW Document 39 Filed 10/22/07 Page 3 of 5
United States District Court

For the Northern District of California

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Chemical Co., 845 F.2d 802 (9th Cir. 1998) (where plaintiffs waited more than 6 months after

the original complaint was filed and until after the original trial date had been vacated to

attempt to amend the complaint, delay was undue, and leave to amend was properly denied). In

this case, as mentioned above, Plaintiffs’ motion for leave to amend was filed at a very early

stage in the litigation in which little discovery has been taken by both parties. Indeed the

parties here have not yet appeared for an initial case management conference. An adverse party

may also suffer prejudice by undue delay when the moving party asserts a totally new and

unrelated claim, which is filed at a late stage of the proceeding. See Morongo Band of Mission

Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (undue delay was prejudicial where new

claims set forth in the amended complaint would have greatly altered the nature of the litigation

and would have required defendants to have undertaken, at a late hour, an entirely new course

of defense). Here, WRDC concedes that any new claims brought against the new defendants

are intertwined with those asserted against WRDC. (Opp. at 7.) Accordingly, WRDC will

suffer no prejudice if the Court grants Plaintiffs leave to amend, and this factor weighs in favor

of granting the motion. 

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for leave to file an

amended complaint. The Court ORDERS Plaintiffs to file their amended complaint by October

26, 2007. Defendants’ responsive paper or motion shall be filed 20 days after they are served

with the amended complaint. The Court also CONTINUES the initial case management 

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United States District Court

For the Northern District of California

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 The Court has received the joint case management statement. Pursuant to the Standing Order

for All Judges of the Northern District of California, a joint case management statement filed

under Civil Local Rule 16-9, except in unusually complex cases, should not exceed ten pages. 

Although this case may be more complex than others, 23 pages is excessive. 

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conference from October 26, 2007 to December 14, 2007 at 1:30 p.m.2

IT IS SO ORDERED.

Dated: October 22, 2007 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-02361-JSW Document 39 Filed 10/22/07 Page 5 of 5