UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF NEW HAMPSHIRE

PVP-Salem Associates, L.P.

v. Civil No. 04-cv-386-JD

Parlex Corporation

O R D E R

Parlex Corporation, the defendant in this action for breach

of a commercial lease and related claims, has moved to amend its

answer to assert counterclaims against the plaintiff, PVP-Salem

Associates, L.P. PVP-Salem objects. Parlex has filed a reply to

the objection and PVP-Salem has filed a sur-reply.

PVP-Salem commenced this action against Parlex, its former

tenant, on October 14, 2004, seeking to recover unpaid rent and

other damages for Parlex’s alleged failure to vacate the premises

in accordance with the terms of the parties’ lease. On June 27,

2005, PVP-Salem obtained leave to file an amended complaint,

which Parlex answered on January 12, 2006. This pleading, like

Parlex’s response to the original complaint, asserted four

numbered counterclaims. On February 28, 2006, the court granted

PVP-Salem’s motion for summary judgment on these counterclaims

without objection from Parlex.

On February 8, 2006, however, Parlex had taken the

deposition of David Morin, a real estate broker who PVP-Salem had

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1According to the letter, this figure consisted of 34,000

square feet available at the beginning of the lease term and

another 12,000 square feet Parlex would occupy once the current

tenant vacated.

2

engaged, inter alia, to assist in reletting the premises after

Parlex moved out. Morin testified to his belief that the area of

the premises was smaller than PVP-Salem’s president, Paul V.

Profeta, had previously indicated to him or, as it turns out, to

Parlex during the negotiation of the lease at issue here. In

particular, in a May 2, 1997, letter to Parlex summarizing the

terms of the parties’ agreement, Profeta had written that the

premises measured 46,000 square feet and that “rent will be $5.65

per square foot,” subject to escalation.1 Mot. Amend. Ex. D. 

Parlex says that, as a result of Morin’s testimony, it calculated

the area of the premises for the first time and that they

actually measure some 1,225 square feet less than the number

stated in Profeta’s letter of intent.

Thus, on March 2, 2006, Parlex moved to amend its

counterclaim to recover the difference between the rent it paid

under the lease, and what it would have paid for 38,775 square

feet. Parlex seeks to assert claims of negligent

misrepresentation, breach of the covenant of good faith and fair

dealing, and money had and received. PVP-Salem objects to the

amendment on a number of grounds.

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2By the time Parlex filed its motion to amend, PVP-Salem had

already moved for summary judgment on both its claim for breach

of contract and Parlex’s original counterclaims, though discovery

remained open until March 31, 2006. Neither party has addressed

whether, given this state of affairs, the motion should be

decided according to the heightened “substantial evidence”

standard applicable to amendments sought after the docketing of a

summary judgment motion and the close of discovery, or even

whether this standard applies in the case of a motion to add a

counterclaim. Cf. Hatch v. Dep’t for Children, Youth & Their

Families, 274 F.3d 12, 19 (1st Cir. 2001). In any event, the

court believes that the proposed amendment satisfies this

standard. Furthermore, though the deadline for filing motions to

amend under the scheduling order had passed by the time Parlex

filed its motion, the court believes that extending that deadline

to permit the filing is in accordance with Fed. R. Civ. P. 16(f). 

3

“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.” Fed. R. Civ. P. 13(f). This rule

“is interpreted liberally, and amendment is freely granted in

order to settle all claims in one action.”2 Salomon S.A. v.

Alpina Sports Corp., 737 F. Supp. 720, 721 (D.N.H. 1990); see

also, e.g., Budd Co. v. Travelers Indem. Co., 820 F.2d 787, 791-

92 (6th Cir. 1987); 3 James Wm. Moore et al., Moore’s Federal

Practice § 13.43[1], at 13-57 (3d ed. 1997). As the court

indicated at the final pretrial conference, held April 10, 2006,

this policy supports the allowance of the amendment here, subject

to the resolution of a dispute over the interpretation of the

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3The same is true of PVP-Salem’s suggestion that Parlex

either generated, or at least acquiesced in, the measurement of

part of the premises at 34,000 square feet.

4

lease on which the court has ordered additional briefing.

Though a motion to add a counterclaim may be denied on the

basis of futility, see, e.g., Frank M. McDermott, Ltd. v. Moretz,

898 F.2d 418, 420-21 (4th Cir. 1990), PVP-Salem’s objections to

the amendment raise factual issues going to the probable success

of the proposed counterclaims, rather than whether they are

futile because they fail to state a claim for relief. First, 

PVP-Salem argues that the size of the premises was immaterial to

the rent Parlex agreed to pay because, while the lease states

that the premises measure approximately 46,000 square feet, it

does not express rent as a function of square footage but simply

provides for an “Annual Base Rent” subject to an escalation

formula. In the face of the May 2, 1997, letter of intent

indicating that the parties had figured the rent based on the

square footage, however, this argument does not demonstrate that

the amendment is futile.3

Second, PVP-Salem contends that the premises actually exceed

46,000 square feet when certain “mezzanine space” is included in

the total. Parlex, however, states that it never used this space

and that the parties never contemplated such use when they

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5

negotiated the lease, which also does not mention the mezzanine

space. Whether the “mezzanine space” should be included in the

calculation, then, also amounts to a factual issue that does not

demonstrate the futility of the amendment.

Third, PVP-Salem contends that Parlex should have asserted

the counterclaim as part of its original answer, because it had

by that point created a plan (albeit for a different purpose)

that contained measurements of various portions of the space. 

Parlex rejoins, however, that it had no reason to add up the

figures then–-and in fact did not--because it had taken PVP-Salem

at its word when it provided the square footage figure. Based on

this record, the court concludes that, at worst, Parlex failed to

set up its counterclaim in its original answer through oversight,

inadvertence, or excusable neglect within the meaning of Rule

13(f). See, e.g., Pioneer Inv. Serv. Co. v. Brunswick Assocs.

Ltd. P’ship, 507 U.S. 380, 392 (1993).

In any event, whether a counterclaim can be added through

amendment depends to a considerable degree on prejudice to the

opposing party, id. at 382 n.10, and, as the court noted at the

final pre-trial conference, any unfair prejudice PVP-Salem faces

from the amendment will be mitigated by extending the discovery

deadline and continuing the trial in this matter. To that end,

the court has already ordered the parties to submit a proposed

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scheduling order to allow PVP-Salem to engage in appropriate

discovery and motion practice on the counterclaims. Finally, as

discussed at the conference, the parties shall also agree upon a

schedule to submit additional briefing on whether sections 4(a)

and 4(c) of the lease should be interpreted to bar the assertion

of the counterclaims here. Subject to the court’s resolution of

that issue, and for the foregoing reasons, Parlex’s motion to

amend (document no. 32) is GRANTED.

SO ORDERED.

____________________________

Joseph A. DiClerico, Jr.

United States District Judge

April 11, 2006

cc: Anthony S. Augeri, Esquire

R. David DePuy, Esquire

Edward A. Haffer, Esquire

Edward D. Kutchin, Esquire

Kerry R. Northup, Esquire

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