Opinion ID: 779792
Heading Depth: 3
Heading Rank: 5

Heading: The Amended Complaint and Subsequent Proceedings

Text: 36 Taking the district court up on its offer, Lucente filed an Amended Complaint. After incorporating by reference his Original Complaint in its entirety, Lucente's Amended Complaint simply added the factual history of Lucente's attempt to exercise the January 2001 options. In conclusion, the Complaint noted that Lucente hereby elects as his remedy with regard to such wrongfully dishonored options the highest inherent value of such options within a reasonable time after IBM rejected Lucente's attempted exercise of such options. Amended Complaint at 3 (R. at 785-86). 37 IBM requested a court conference to seek clarification of several issues arising out of Lucente's Amended Complaint. At this conference, counsel for Lucente clarified that Lucente had indeed elected to treat IBM's cancellation letter as an anticipatory repudiation, which he had chosen to ignore. (R. at 805). Notwithstanding that Lucente had made this election while realleging all the allegations in his Original Complaint — including that IBM breached the contract in 1993 — the district court accepted his new election as a choice of remedies for IBM's breach. When IBM then sought permission to file an Answer to Lucente's Amended Complaint, the district court informed IBM that it was not entitled to submit an Answer or assert affirmative defenses to Lucente's new allegations. (R. at 806.) Further, the district court refused IBM's requests to take additional discovery on the factual allegations in Lucente's Amended Complaint, or to challenge the Amended Complaint's allegations in a motion to dismiss or for summary judgment. Id. Through these actions, the district court effectively granted a second summary judgment to Lucente on the claims in his Amended Complaint. Finally, the district court asked the parties to stipulate to damages respecting Lucente's stock options. 38 The parties were unable to hammer out a joint stipulation as to Lucente's stock option damages. Instead, they submitted to the court duelling stipulations regarding the damages Lucente was entitled to for his January 2001 stock options. IBM's proposed stipulation, which was expressly conditioned on Fed.R.Evid. 408 (statements made in compromise negotiations not admissible in evidence), detailed the various methods of exercising stock options through a broker. IBM concluded that Lucente would have executed a market sell order 2 and would have received a payment of approximately $3,746,820.62, had his tender been accepted. Not surprisingly, Lucente argued in his proposed stipulation that Lucente was attempting to execute an exercise and hold 3 transaction which would have resulted in stock option profits of $4,824,067.62. 39