Court Opinion

ID: 69021
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:40:22+00
Date Added: 2024-06-11T12:36:08.681953
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                      ________________________                   FILED
                                                       U.S. COURT OF APPEALS
                             No. 09-11929                ELEVENTH CIRCUIT
                                                             Sept. 15, 2009
                         Non-Argument Calendar
                                                          THOMAS K. KAHN
                       ________________________
                                                                CLERK

                 D.C. Docket No. 08-00594-CV-T-26MSS

VALPAK DIRECT MARKETING SYSTEMS, INC.,
a Delaware corporation,

                                                     Plaintiff-Appellee,

                                  versus

ROBERT MASCHINO, an individual,

                                                     Defendant-Appellant.

                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                       _______________________

                           (September 15, 2009)

Before CARNES, WILSON and COX, Circuit Judges.

PER CURIAM:
                                I. BACKGROUND

      Valpak Direct Marketing Systems, Inc. (“Valpak”) is a franchisor of direct-mail

advertising. Robert Maschino and his wife Josephine Maschino were Valpak

franchisees. In February 2008, Valpak sent the Maschinos a notice of default and

formal demand for payments past due under the franchise agreement between Valpak

and the Maschinos. When the Maschinos failed to pay the demanded monies, Valpak

terminated the franchise agreement. Then, when the Maschinos still did not pay,

Valpak sued them for breach of contract. The complaint was filed in the United

States District Court, Middle District of Florida, and invoked the federal court’s

diversity jurisdiction. The Maschinos answered the complaint and pleaded as an

affirmative defense that, prior to receiving the notice of termination from Valpak,

they had made payments in excess of the amount necessary to cure the default. (R.1-

13 at 1-4.) The Maschinos also pleaded a counterclaim for damages that they alleged

Valpak caused by improperly terminating their franchise and, therefore, wrongfully

preventing a previously-negotiated sale of their business. (Id. at 4-5.)

      In May 2008, the district court entered a Case Management and Scheduling

Order that fixed the last date for amendment of the pleadings as July 11, 2008. At the

end of June 2008, Valpak brought a motion to dismiss the Maschinos’ counterclaim

pursuant to Federal Rule of Civil Procedure 12(b)(6). The Maschinos opposed the

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motion. On July 17, 2008, the district court granted Valpak’s motion to dismiss the

Maschinos’ counterclaim. In its order granting the motion to dismiss, the district

court found that, according to the facts alleged in the pleadings, the Maschinos had

not cured their default in a timely manner and, therefore, Valpak had not improperly

terminated the franchise agreement. (R.1-22.)

       In the third week of July 2008, the Maschinos were involved in a car accident.

Mrs. Maschino died as a result of her injuries from that accident. Mr. Maschino filed

a Suggestion of Death, and no party was substituted for Mrs. Maschino. The district

court terminated Mrs. Maschino’s participation as a party in the lawsuit.1

       On February 25, 2009, two days before the discovery period was set to expire,

Mr. Maschino filed a motion for permission to file an amended answer, affirmative

defenses, and counterclaim. (R.1-34; R.E. 4.) The proposed amended pleading set

forth the affirmative defenses of satisfaction of the debt and waiver and another

affirmative defense/counterclaim for breach of the implied covenant of good faith and

fair dealing. The factual basis for the breach of the covenant of good faith and fair

dealing counterclaim was the same as the factual basis alleged in the counterclaim in

the Maschinos’ original answer (the same counterclaim that was dismissed by the

       1
         Federal Rule of Civil Procedure 25(a)(1) requires dismissal of claims against deceased
parties for whom no substitution is made.

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district court in July 2008). On February 26, 2009, district court denied the motion

to amend, finding that Federal Rule of Civil Procedure 16(b) required that Mr.

Maschino make a showing of good cause for the tardy amendment and that he had not

made that showing and could not make it because “[a]ll of the facts alleged in the

motion could have been ascertained with the exercise of due diligence prior to the

deadline for amending pleadings.” (R.1-35 at 2; R.E. 6 at 2 (citing Romero v.

Drummond Co., 552 F.3d 1303, 1318-19 (11th Cir. 2008).)

      Valpak immediately moved for summary judgment on its breach of contract

claim. Mr. Maschino opposed the motion on the grounds that: (1) Valpak had

breached the covenant of good faith and fair dealing by terminating the Maschinos’

franchise in order to prevent them from selling their business, and (2) he was entitled

to an offset of $80,000 in profit that Valpak misappropriated when it received monies

from a mailing the Maschinos prepared just before termination of their franchise.

(R.1-45 at 2.) The district court granted Valpak summary judgment, stating in its

order that Mr. Maschino’s opposition was an attempted repackaging of the claims he

had unsuccessfully sought to bring in an amended response to Valpak’s complaint.

(R.1-46 at 3.) With respect to the $80,000 offset to which Mr. Maschino claimed to

be entitled, the court noted that Mr. Maschino asserted that affirmative defense for

the first time in his opposition to Valpak’s motion for summary judgment. The court

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did not apply an $80,000 offset when it calculated damages due Valpak on its breach

of contract claim. (Id. at 3, 6.)

                              II. ISSUES ON APPEAL

      Mr. Maschino appeals the denial of his motion to amend and the grant of

summary judgment to Valpak. He argues that he should have been granted leave to

amend his pleadings so as to assert his waiver defense, his claim for breach of the

implied covenant of good faith and fair dealing, and his claim to an $80,000 offset.

And, he argues that improper denial of his motion to amend made the grant of

summary judgment inappropriate.

                         III. STANDARDS OF REVIEW

      We review a district court’s decision to disallow amendment of a complaint

after the deadline established in its pretrial order for abuse of discretion. Sosa v.

Airprint Sys., Inc., 133 F.3d 1417, 1418 (11th Cir. 1998) (quoting Santiago v. Lykes

Bros. Steamship Co., 986 F.2d 423, 427 (11th Cir. 1993)). “[W]hen a motion to

amend is filed after a scheduling order deadline, Rule 16 is the proper guide for

determining whether a party’s delay may be excused.” Sosa, 133 F.3d at 1418 n.2.

(citations omitted). That rule requires a showing of good cause for modification of

the deadlines in the scheduling order. See Fed. R. Civ. P. 16(b)(4) (“A schedule may

be modified only for good cause and with the judge’s consent.”)

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       This court reviews a district court’s grant of summary judgment by applying

the same legal standards used by the district court. See, e.g., Hilburn v. Murata Elecs.

N. Am., Inc., 181 F.3d 1220, 1225 (11th Cir. 1999).                      Summary judgment is

appropriate where “‘there is no genuine issue as to any material fact and the moving

party is entitled to a judgment as a matter of law.’” Wooden v. Bd. of Regents of the

Univ. Sys. of Ga., 247 F.3d 1262, 1271 (11th Cir. 2001) (quoting Fed. R. Civ. P.

56(c)).

                                      IV. DISCUSSION

       We find no abuse of discretion in the court’s denial of Mr. Maschino’s motion

to amend. Our review of the record reveals that Mr. Maschino failed to demonstrate

good cause for moving to amend his complaint more than seven months after

amendment would have been allowed under the court’s scheduling order. In the

district court, Mr. Maschino blamed the delay on the tragedy of his wife’s death and

his resulting inability to communicate with his attorney about this case.2 However,

without discounting the profound effect that sad event must have had on Mr.

Maschino, we find that it does not satisfy the good cause standard because the car

accident that led to Mrs. Maschino’s death occurred after the amendment deadline

       2
        On appeal, Mr. Maschino also attributes the delay to two surgeries submitted to by his
attorney. He did not present evidence of these surgeries to the district court. Therefore, we will not
consider this argument.

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had passed. The facts underlying the proposed amendment were actually known or

could have been discovered with the exercise of due diligence in advance of the

amendment deadline. Mr. Maschino presented no evidence of good cause why an

amended pleading could not have been filed before that deadline passed.

      And, on the pleadings as they existed at the time summary judgment was

granted, there was no genuine issue of material fact in dispute. There was no dispute

as to the existence of a valid contract or the Maschinos’ failure to pay the monies

owed to Valpak pursuant to that contract. In his opposition to the motion for

summary judgment, Mr. Maschino did argue about the amount of damages due

Valpak. But, as the district court recognized, he did so in an untimely attempt to

assert an affirmative defense of offset based on a claim of misappropriation. See

BUC Int’l Corp. v. Int’l Yacht Council Ltd., 517 F.3d 1271, 1276-77 n.5 (11th Cir.

2008) (“According to Black’s Law Dictionary, a setoff is a ‘counterdemand against

the plaintiff, arising out of a transaction independent of the plaintiff’s claim.’”)

(quoting Black's Law Dictionary 1404 (8th ed. 2004)). As stated above, we find no

error in the district court’s decision to disallow the belated assertion of new claims

in this lawsuit. For that reason, no issue of material fact was properly before the court

at the summary judgment stage. Summary judgment for Valpak was proper.

      AFFIRMED.

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