Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-01271/USCOURTS-caed-1_05-cv-01271-4/pdf.json

Parties Involved:
Ameritanx, Inc.
Counter Claimant
James Arnott
Counter Claimant
Duward M. Langford
Counter Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DUWARD M. LANGFORD, )

)

)

)

Plaintiff, )

)

v. )

)

AMERITANX, INC., ET AL., )

)

)

Defendants. )

 )

1:05cv1271 AWI DLB

ORDER GRANTING DEFENDANT’S

MOTION TO AMEND ANSWER

(Document 22)

On August 22, 2006, Defendants Ameritanx, Inc. and James Arnott (“Defendants”) filed

the instant motion to amend the answer to add a counterclaim. On September 15, 2006, the

matter was heard before the Honorable Dennis L. Beck, United States Magistrate Judge. 

Shannon M. Treynor appeared on behalf of Defendants. James C. Holland appeared on behalf of

Plaintiff Duward M. Langford (“Plaintiff”).

BACKGROUND

Plaintiff initially filed this action in the Tulare County Superior Court on August 18,

2005. The complaint alleges breach of contract and other state law violations stemming from the

alleged agreements between Plaintiff and Defendant Arnott concerning the refurbishment and

resale of surplus military compress gas cylinders (“cylinders”). Plaintiff alleges (1) breach of

contract based on the parties’ alleged agreement that Plaintiff would withdraw a bid to purchase

cylinders from the government if Defendants would sell Plaintiff some of the cylinders; (2)

breach of contract for work performed and common counts for money owed based on the parties’

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alleged agreement that Plaintiff would arrange for the shipment of the cylinders; (3) intentional

interference with a contract and conversation based on Defendants’ delivery of unusable

cylinders to Plaintiff’s customer, Fire King; and (4) breach of contract, deceit, conversion,

interference with contract and interference with prospective business advantage based on

Defendants’ selling of cylinders to Plaintiff’s customers without paying Plaintiff the agreed

commission. 

On October 6, 2005, Defendants removed the action to this Court based on diversity

jurisdiction. At the same time, Defendants filed their answer. 

On February 10, 2006, Defendants filed a motion to transfer venue. The motion was

denied on May 13, 2006.

On August 22, 2006, Defendants moved to amend their answer to include a counterclaim

against Plaintiff. Plaintiff filed his opposition on September 1, 2006. 

DISCUSSION

A. Legal Standard

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

given when justice so requires.” The United States Supreme Court has stated:

[i]n the absence of any apparent or declared reason – such as undue delay, bad

faith or dilatory motive on the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice to the opposing

party by virtue of allowance of the amendment, futility of amendment, etc. – the

leave sought should, as the rules require, be “freely given.”

Foman v. Davis, 371 U.S. 178, 182 (1962). The Ninth Circuit has summarized these factors to

include the following: (1) undue delay; (2) bad faith; (3) prejudice to the opponent; and (4)

futility of amendment. Loehr v. Ventura County Cmty. Coll. Dist., 743 F.2d 1310, 1319 (9th Cir.

1984). Granting or denial of leave to amend rests in the sound discretion of the trial court. 

Swanson v. United States Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996). Despite the policy

favoring amendment under Rule 15, leave to amend may be denied if the proposed amendment is

futile or would be subject to dismissal. Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991).

B. Analysis

Defendants seek leave to amend the answer pursuant to Rule 15 to add a counterclaim

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against Plaintiff seeking to recover an $18,400.48 balance remaining on an invoice for cylinder

purchases between September 13, 2004, and October 19, 2004. As support for the request,

Defendants explain that they did not want to bring the counterclaim against Plaintiff until the

Court ruled on the motion to transfer venue.

Plaintiff opposes the motion based on Rule 13(f), which governs the procedure for

amending omitted counterclaims and provides as follows:

(f) Omitted Counterclaim. When a pleader fails to set up a counterclaim through

oversight, inadvertence, or excusable neglect, or when justice requires, the pleader may

by leave of court set up the counterclaim by amendment.

The parties agree that Defendants’ counterclaim is compulsory. At the hearing, Plaintiff

indicated that he would not oppose the amendment if the Court allowed additional time for the

parties to make new disclosures based on the counterclaim. The Court will provide for such

time, as described below, and Defendants’ motion is therefore GRANTED.

Defendants are ordered to file an amended answer within ten (10) days of the date of

service of this order. Plaintiff will have twenty (20) days from the date of filing within which to

respond. Both parties shall make initial disclosures twenty (20) days after Plaintiff answers the

counterclaim. The parties shall then decide, based on the contents of the initial disclosures, if

further amendments to the February 8, 2006, Scheduling Conference Order are necessary. 

IT IS SO ORDERED. 

Dated: September 15, 2006 /s/ Dennis L. Beck 

3b142a UNITED STATES MAGISTRATE JUDGE

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