Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00101/USCOURTS-caed-2_07-cv-00101-5/pdf.json

Parties Involved:
Lawrence Caso
Plaintiff
Caso Trust
Plaintiff
Hartford Casualty Insurance Company
Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

LAWRENCE CASO; CASO TRUST,

CASE NO. S-07-101 FCD/DAD

Plaintiffs,

v. MEMORANDUM AND ORDER

HARTFORD CASUALTY INSURANCE

COMPANY, and DOES 1 to 10,

Defendants.

----oo0oo----

This matter comes before the court on plaintiffs Lawrence

Caso and Caso Trust’s (“plaintiffs”) motion to modify the

pretrial scheduling order to permit amendment of their 

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1 At times in their motion papers, plaintiffs improperly

move for relief pursuant to Fed. R. Civ. P. 15(a). As a

scheduling order is in place in this case, the court construes

plaintiffs’ motion as a request for relief pursuant to Fed. R.

Civ. P. 16(b). Once the court has entered a pretrial scheduling

order pursuant to Rule 16, the standards of Rule 16 rather than

Rule 15 govern amendment of the pleadings in the first instance. 

See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08

(9th Cir. 1992); Eckert Cold Storage, Inc. v. Behl, 943 F. Supp.

1230, 1232-33 (E.D. Cal. 1996).

2 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

E.D. Cal. L.R. 78-230(h).

2

complaint.1 Fed. R. Civ. P. 16(b). For the reasons set forth

below,2 plaintiffs’ motion is DENIED.

By a first amended complaint, plaintiffs seek to add a

seventh cause of action against defendant Hartford Casualty

Company (“Hartford”) for reformation of the subject insurance

policy to add Lawrence Caso as a named insured. (Proposed First

Amended Compl., filed Jan. 7, 2008, (“PFAC”), ¶ 29). Hartford

contends in January 2005, Lawrence Caso requested to change the

named insured on Hartford’s policies from Lawrence A. Caso and

Caso Trust to “Caso Family Trust UA Dated 9-20-90.” (Johnston

Dec., ¶ 3 & Ex. A, filed Jan. 18, 2008). Plaintiffs assert

Lawrence Caso never intended to remove himself as a named insured

and only requested that the word “Family” be added to the

insurance policy. (PFAC, ¶ 28). 

Plaintiffs admit Hartford produced the policy change

endorsement, evidencing Lawrence Caso’s removal as a named

insured, to plaintiffs on March 30, 2007, as part of Hartford’s

mandated initial disclosures, pursuant to Fed. R. Civ. P. 26. 

(Reply, filed Feb. 8, 2008, at 1). However, plaintiffs assert

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the “importance” of this document was “unknown and unappreciated”

until the deposition of Stephen Shortes on September 25, 2007,

nearly six months later, and thus, they have acted diligently in

only now moving to amend their complaint. (Reply at 1:27-2:1). 

On April 17, 2007, this court entered a pretrial scheduling

order which expressly included citation to Rule 16 and the

requirement to show good cause to justify amendment of the

pleadings. Fed. R. Civ. P. 16(b) (providing that pretrial orders

entered before the final pretrial conference may be modified only

“upon a showing of good cause”). The good cause requirement of

Rule 16 primarily considers the diligence of the party seeking

the amendment. The pretrial scheduling order can only be

modified “if it cannot reasonably be met despite the diligence of

the party seeking the extension.” Mammoth Recreations, 975 F.2d

at 609. When evaluating whether a party was diligent, the Ninth

Circuit has determined that “the focus of the inquiry is upon the

moving party’s reasons for modification. If that party was not

diligent, the inquiry should end.” Id. at 610; see also

Gestetner, 108 F.R.D. at 141. 

When the proposed modification is an amendment to the

pleadings, the moving party may establish good cause by showing

“(1) that [he or she] was diligent in assisting the court in

creating a workable Rule 16 order; (2) that [his or her]

noncompliance with a rule 16 deadline occurred or will occur,

notwithstanding [his or her] diligent efforts to comply, because

of the development of matters which could not have been

reasonably foreseen or anticipated at the time of the Rule 16

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scheduling conference; and (3) that [he or she] was diligent in

seeking amendment of the Rule 16 order, once it became apparent

that [he or she] could not comply with the order.” Jackson v.

Laureate, Inc., 186 F.R.D. 605, 608 (E.D. Cal. 1999)(citations

omitted). 

Only after the moving party has demonstrated diligence under

Rule 16 does the court apply the standard under Rule 15 to

determine whether the amendment was proper. See Mammoth

Recreations, 975 F.2d at 608; Eckert Cold Storage, 943 F. Supp.

at 1232 n.3.

Here, plaintiffs have not demonstrated good cause under Rule

16 to permit amendment of their complaint to add a reformation

cause of action against Hartford. Plaintiffs have failed to

demonstrate they were diligent in reviewing the documents

Hartford produced, on March 30, 2007, as part of its initial

disclosures. Plaintiffs concede those initial disclosures

provided notice that Lawrence Caso was removed as a named insured

on the subject policy. Yet, plaintiffs maintain their counsel

did not become aware of the “importance” of the policy change

until the deposition of Stephen Shortes, on September 25, 2007,

during which he produced documents again reflecting that Lawrence

Caso had been removed as a named insured on the policy and he was

questioned by plaintiffs’ counsel regarding the same. (Supp.

Woll Decl., filed Jan. 30, 2008). Mr. Shortes is the Hartford

representative who sold Lawrence Caso the relevant policy. 

Plaintiffs’ counsel states that only upon review of these

documents produced by Mr. Shortes and as a result of Mr. Shortes’

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deposition testimony did he become “fully” aware of the policy

change endorsement, removing Lawrence Caso. 

Counsel’s conduct and explanation therefor is insufficient

to demonstrate good cause to permit amendment of the pleadings at

this late stage in the litigation, where discovery has long since

closed and the dispositive motion deadline is set for March 21,

2008. (Mem. & Order, filed Dec. 12, 2007). Apparently,

plaintiffs’ counsel simply failed to review, with the requisite

degree of detail, Hartford’s initial document production. 

Counsel’s “carelessness is not compatible with a finding of

diligence and offers no reason for a grant of relief.” See

Mammoth Recreations, 975 F.2d at 609. What was later discussed

at Mr. Shortes’ deposition was not new information; indeed,

plaintiffs do not dispute the relevant information was provided

by Hartford on March 30, 2007. There is simply no justifiable

reason for plaintiffs delay in failing to seek leave to amend

until January 2008. Moreover, even were the court to accept

counsel’s explanation and assume plaintiffs’ had no basis to act

until September 25, 2007, plaintiffs have wholly failed to

explain why they did not move to amend for three months. During

this time, the court considered a motion by Hartford to modify

the pretrial scheduling order to extend the discovery and

dispositive motion deadlines. (Mem. & Order, filed Dec. 12,

2007). Plaintiffs opposed the motion but did not mention any

desire to amend their complaint. Only on January 7, 2008 did

they move the court to permit an amendment. 

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3 On the issue of futility, Hartford filed a request for

oral argument, following the court’s submission of the matter on

the briefs. (Docket #50, filed Feb. 4, 2008; Minute Order, filed

Feb. 4, 2008). The court denied Hartford’s request but accepted,

over plaintiffs’ objection, Hartford’s filing (Docket #50) as a

sur-reply on the motion. (Minute Order, filed Feb. 5, 2008). 

Ultimately, the court did not reach the issues discussed in the

sur-reply.

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Under these circumstances, plaintiffs have failed to satisfy

the threshold “diligence” requirement of Rule 16, and thus, their

motion must be DENIED. As a result, the court need not reach

whether the substantive amendment is proper or futile, as argued

by Hartford, under Rule 15.3

IT IS SO ORDERED.

DATED: February 15, 2008

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