Court Opinion

ID: 3037446
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:56:27.603878+00
Date Added: 2024-06-11T11:49:49.855457
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 04-2054
                                   ___________

Moses.com Securities, Inc.,             *
                                        *
              Appellant,                *
                                        *
      v.                                * Appeal from the United States
                                        * District Court for the
Comprehensive Software Systems, Inc.; * Eastern District of Missouri.
William W. Simpson; Southwest           *
Securities, Inc.; David Glatstein;      *
David Zeleniak,                         *
                                        *
              Appellees.                *
                                   ___________

                              Submitted: February 14, 2005
                                  Filed: May 11, 2005
                                   ___________

Before WOLLMAN, McMILLIAN, and BENTON, Circuit Judges.
                         ___________

WOLLMAN, Circuit Judge.

       Moses.com (Moses) appeals from the district court’s1 order denying a new trial
and its judgment in favor of defendant Comprehensive Software Systems, Inc. (CSS),
claiming that it was prejudiced by the exclusion of evidence at trial. Moses also
appeals from the district court’s dismissal of Moses’s claims against defendants

      1
       The Honorable Jean C. Hamilton, United States District Judge for the Eastern
District of Missouri.
Southwest Securities, Inc. (Southwest), and David Glatstein and its refusal to grant
Moses leave to file a third amended complaint. We affirm.

                                          I.
       Moses planned to initiate a new business model as an online stock brokerage
firm that would charge a monthly subscription fee to customers instead of a fee for
each transaction. It began searching for a software company that could provide
software with automated front- and back-office capabilities for stock trades that
would comply with Securities and Exchange Commission and National Association
of Security Dealers regulations. It began to work with CSS in 1999, and hired IMIS,
Mastech, Inc., a technology consulting firm, to test and evaluate the CSS software
system in light of Moses’s needs. Mastech tested the system in May 1999 and
produced for Moses a report—called a “gap analysis”—that highlighted the system’s
strengths and limitations, noting that several aspects of the back-office capabilities
were still under development. After Mastech finished its testing, Moses and CSS
executives met on June 2, 1999, to discuss goals and a potential time frame for the
installation and initiation of the CSS system at Moses’s facilities. The parties
disagree over whether they agreed upon a particular time frame at the June 2 meeting.

       Although Moses and CSS did not sign a formal contract, they negotiated a
letter of intent to work together in establishing an appropriate software system for
Moses’s needs. Moses sought investors and initiated a costly marketing strategy that
included advertising during the 2000 Super Bowl. Moses executives became
dissatisfied with CSS’s work, frustrated by the slow progress in providing the
capabilities and functionality in the system that Moses expected. Moses claimed that
CSS had represented that the system was already complete and functional at the June
2 meeting, and it expected a faster conversion.

     Moses subsequently concluded that the CSS system did not work and asked
CSS to leave its premises in February 2000. It filed suit in Missouri state court,

                                         -2-
raising state tort claims for fraudulent misrepresentation, negligent misrepresentation
and negligence. CSS removed the case to federal court and moved to compel
arbitration. The district court denied CSS’s motion to compel arbitration, a ruling
that we affirmed on appeal. Moses.com v. Comprehensive Software Systems, Inc.,
263 F.3d 783 (8th Cir. 2001). Moses filed an amended complaint, adding several
claims and additional defendants, including Southwest and Glatstein. After the
district court found that Moses’s allegations of conspiracy were too indefinite to
resolve various motions to dismiss that had been raised, D. Ct. Order of Oct. 8, 2002,
Moses filed a second amended complaint. When Southwest and Glatstein again filed
a motion to dismiss, the district court dismissed the claims against them without
prejudice under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.
D. Ct. Order of Feb. 6, 2003. Moses moved to file a third amended complaint, adding
more defendants and repleading the claims against Southwest and Glatstein. The
district court denied leave to file the amended complaint. The remaining parties
continued with discovery, during which the district court consistently denied Moses’s
discovery requests, which were designed to reveal the status and functionality of CSS
software at Southwest and Scottsdale Securities, Inc. (Scottsdale), two companies that
had also hired CSS to provide software for securities transactions.

        The claims against CSS ultimately proceeded to a jury trial. During trial, the
district court prohibited any discussion of Southwest and its relationship with CSS
or its experience with CSS software. The district court submitted all the claims to
the jury except the promissory estoppel claim. The jury returned a verdict for CSS
on each of Moses’s claims and also awarded $33,000 to CSS on its counterclaim
seeking damages for unpaid work in quantum meruit. Moses filed a motion for a new
trial—claiming prejudice in light of all the excluded evidence—which the district
court denied.

                                         -3-
                                             II.
        As stated earlier, Moses appeals from the judgment in favor of CSS and from
the denial of its motion for a new trial, alleging numerous errors that it claims resulted
in prejudice. “A trial court must determine whether an evidentiary ruling was so
prejudicial as to require a new trial which would be likely to produce a different
result.” O’Dell v. Hercules, Inc., 904 F.2d 1194, 1200 (8th Cir. 1990). We review
a district court’s denial of a motion for a new trial for abuse of discretion, giving great
deference to the district court’s ruling. Children’s Broad. Corp. v. Walt Disney Co.,
357 F.3d 860, 867 (8th Cir. 2004).

      A party objecting to evidentiary rulings must specifically identify the alleged
erroneous ruling and the improperly excluded evidence. Watson v. O’Neill, 365 F.3d
609, 614-15 (8th Cir. 2004). We accord substantial deference to the district court’s
evidentiary rulings made at trial, and will reverse only if they amount to “a clear and
prejudicial abuse of discretion.” Lovett ex rel. Lovett v. Union Pac. R.R. Co., 201
F.3d 1074, 1081 (8th Cir. 2000). Offers of proof are important to establish the
purported relevance of the excluded evidence. See Watson, 365 F.3d at 616.

                                              A.
        Moses first argues that the district court improperly excluded during trial much
of its evidence relating to CSS’s misrepresentations. Having granted CSS’s “motion
in limine to exclude reference, argument, and discussion of the installations and/or
conversions that CSS was involved with at or about the similar time frames” at
Southwest and Scottsdale, the district court heard and rejected numerous offers of
proof by Moses as the trial proceeded, finding that such evidence was irrelevant and
would serve only to distract the jury from the key issues. Moses asserts that several
pieces of excluded evidence would have provided substantial support for its claims
of intentional misrepresentation and concealment. In particular, it argues that the
evidence that CSS made statements at the June 2, 1999, meeting and in subsequent
conversations that its system worked at Southwest constituted the heart of the

                                           -4-
misrepresentation claim. Moses also argues that the evidence that Southwest’s and
Scottsdale’s CSS back-office systems were not functioning properly was central to
its ability to prove both that it was CSS’s software and not Moses’s mismanagement
that caused the problems, and that CSS had prior knowledge of the problems within
its system that it failed to communicate to Moses.

       We conclude that the district court did not abuse its discretion by excluding the
proffered evidence. It was reasonable for the district court to conclude that evidence
involving two non-party companies could confuse the jury and was not probative of
the central issues in the case, particularly when Moses had failed to establish an
adequate basis for its assumptions that the other companies’ systems were virtually
identical to Moses’s system. Without a showing that the systems were virtually
identical, that the excluded statements included definitive promises, or that CSS was
intentionally concealing the state of its software from Moses, the status of the CSS
systems of other CSS clients is not clearly relevant.

        The exclusion of the evidence was also not clearly prejudicial because there
was substantial testimony about the communications between CSS and Moses
regarding the particular system that CSS was installing for Moses. We cannot say
that further evidence of statements by CSS referencing its work elsewhere would
likely have produced a different outcome in the case. See O’Dell, 904 F.2d at 1200.
Moses’s chief executive officer, Jim Winkelmann, testified that he informed CSS of
his desired timetables for public launch of his new business model at the June 2
meeting and that CSS told him that that would not be a problem. He testified that he
understood CSS’s assurance as a promise. In an offer of proof, Winkelmann further
testified that he was told that the system worked at Southwest, and that he assumed
based on that representation that the system was fully functioning. The statement
about Southwest’s system was neither clearly a promise nor an intended inducement,
and it would have been unreasonable for Winkelmann to rely on it in light of the gap
analysis report that stated that CSS’s system was not complete and still had modules

                                          -5-
under development, a report that Winkelmann had already received at the time he
made the decision to work with CSS.2 Accordingly, the district court did not abuse
its discretion in excluding the proffered testimony that CSS had described its work
with the system at Southwest as successful. Likewise, we conclude that the offers of
proof by Moses’s remaining witnesses were of similarly limited probative force, and
thus we find that the rulings excluding the proffered testimony did not result in
prejudice sufficient to warrant reversal.

                                         B.
      Moses next asserts that the district court erred in granting CSS’s motion to
quash Moses’s discovery request for information about Southwest and Scottsdale,
contending that it was thereby prevented from discovering relevant evidence.

       We review a district court’s discovery rulings for abuse of discretion. Moran
v. Clarke, 296 F.3d 638, 650 (8th Cir. 2002) (en banc). Our review is “both narrow
and deferential,” and we will grant a new trial “only where the errors ‘amount to a
gross abuse of discretion resulting in fundamental unfairness.’” Id. (quoting Bunting
v. SeaRay, Inc., 99 F.3d 887, 890 (8th Cir. 1996). In general, “[p]arties may obtain
discovery regarding any matter, not privileged, that is relevant to the claim or defense
of any party, including the existence, description, nature, custody, condition, and
location of any books, documents, or other tangible things . . . .” Fed. R. Civ. P.
26(b)(1). The district court may limit discovery if it “is unreasonably cumulative or

      2
        The first page of Mastech’s gap analysis stated that “the CSS system provides
a scalable front- and back-office system, but much of the back-office system is under
development.” Appellant’s App. 518. The report also noted that the back-office
functions may require significant design work and that “there does not appear to be
a firm schedule for completion.” Id. at 519. The report went on to discuss strengths
and weaknesses of the various modules and concluded that the “technology will
probably lead to a successful system,” as long as settlements and margin processing
work properly. Id. at 535. It identified expected completion dates for the various
tested modules ranging from 3 to 18 months.

                                          -6-
duplicative,” the party has already “had ample opportunity by discovery” to obtain
the materials, or the burden outweighs the likely benefit of the discovery. Fed. R.
Civ. P. 26(b)(2).

       Moses listed several items that the district court barred from discovery and
stated that it was prejudiced by the limitation. It did not, however, specify the way
in which the various protective orders and discovery denials resulted in fundamental
unfairness. Most of the discovery requests at issue would have involved depositions
of and document production by Scottsdale executives and employees. Although the
district court did not set forth its reasoning in ruling on the discovery requests, the
record does not support a finding that an abuse of discretion occurred, nor does it
establish that Moses suffered prejudice as a result of the rulings.

                                          C.
       Moses also claims that the district court committed error when it refused
Moses’s proffered jury instructions. In reviewing alleged errors in jury instructions,
we ask “whether the instructions, taken as a whole and viewed in light of the evidence
and applicable law, fairly and adequately submitted the issues in the case to the jury.”
Children’s Broad. Corp., 357 F.3d at 867 (quotation omitted). The district court must
instruct the jury on the plaintiff’s claims and theories if the theories of law are
“legally correct, supported by the evidence, and brought to the court’s attention in a
timely request,” but “is not bound to give the party’s requested instruction.” Board
of Water Works Trustees v. Alvord, Burdick & Howson, 706 F.2d 820, 823 (8th Cir.
1983). In diversity cases such as this one, “state law controls the substantive content
of the instructions that are given.” Hoselton v. Metz Baking Co., 48 F.3d 1056, 1062
n.9 (8th Cir. 1995).

       Moses first asserts that the district court erred when it refused to give an
instruction on Moses’s promissory estoppel claim, resulting in judgment as a matter
of law for CSS on that claim. We will sustain the district court’s decision not to give

                                          -7-
an instruction if the instruction is unsupported by the evidence. Id. at 1063.
Promissory estoppel, a type of equitable estoppel under Missouri law, involves the
following elements: (1) a promise that is inconsistent with later actions by the party
making that promise; (2) detrimental reliance on the promise; (3) the promisor should
have or did foresee the reliance, and (4) injustice can be avoided only by enforcement
of the promise. Resnik v. Blue Cross & Blue Shield, 912 S.W.2d 567, 573 (Mo. Ct.
App. 1995). Promissory estoppel is to be used “only in extreme cases to avoid unjust
results,” Geisinger v. A & B Farms, Inc., 820 S.W.2d 96, 98 (Mo. Ct. App. 1991), but
the jury should be allowed to consider a promissory estoppel claim if the plaintiff
“can point to evidence which, if believed, would permit a judge or jury to find each
of these elements.” Midwest Energy, Inc. v. Orion Food Sys., Inc., 14 S.W.3d 154,
159 (Mo. Ct. App. 2000).

       We agree with the district court that the record contains no evidence that CSS
promised at the June 2, 1999, meeting to have the system completed by a particular
deadline and that no reasonable jury could find that such a promise had been made.
Moses asserts that Winkelmann’s mentioning of dates for a desired launch and the
CSS representatives’ response that there would be no problems amounted to a
promise. Moses also claims that the fact that actions to begin the implementation of
the software were taken immediately following the meeting supports the idea that
there was a mutually understood promise. Even taking everything Moses claims as
true, the evidence does not support a claim for promissory estoppel because Moses
cannot show the existence of a specific promise, the first element of the claim. The
general statement that there would not be a problem is much too general to constitute
a binding promise for either the time frame or the system’s capabilities.

       Moses next asserts that the district court erred in refusing its proffered version
of the instructions with respect to the claims that were submitted to the jury. Moses
argues that, because the instructions it submitted correctly stated the law, they should
have been accepted. The district court has broad discretion, however, to determine

                                          -8-
the form of the jury instructions, and we will reverse “only if the error affected the
substantive rights of the parties.” Gasper v. Wal-Mart Stores, Inc., 270 F.3d 1196,
1200 (8th Cir. 2001). The relevant question is therefore whether the instructions
submitted adequately stated the elements of the tort claims at issue. Moses has failed
to allege any legal errors in the given instructions, simply asserting that the
instructions did not fully describe the alleged misrepresentations of CSS.

       We agree that the proposed instructions E, F, and I, for fraudulent
misrepresentation and negligent misrepresentation, differed from submitted
instructions 6, 7, and 8 in the manner in which they framed the scope of the alleged
misrepresentations. The submitted instructions focused on whether the statement “it
worked”—when spoken in response to Moses’ inquiry about “whether the CSS
system was sufficient for Moses to trade and process CNS eligible securities for cash
and account for the trades on a settlement date basis”—was intended to cause Moses
to “rely upon such representation in deciding to implement the CSS system.”
Appellee CSS’s App. 80-82. In contrast, Moses’s requested instructions focused on
whether CSS “represented to [Winkelmann] that the CSS system had sufficient
functionality for Moses to operate as a self clearing broker dealer trading CNS
eligible securities for cash, intending that Moses rely upon such representation . . .”
Appellant’s App. 1029-30.

       The district court acted within its discretion when it formulated the instructions
in such a way as to tie specific testimony at trial to potential conclusions instead of
using the conclusory statements in Moses’s instructions. The instructions for the
misrepresentation claims correctly stated the tort elements under Missouri law, did
not imply factual conclusions for the jury, and did not prevent the jury from
considering the full context of the facts the instructions mentioned. The court’s
instructions for fraudulent omission and negligent omission also correctly stated the
law, elaborating the factual findings necessary to find for the plaintiff. Accordingly,

                                          -9-
we conclude that the district court did not abuse its broad discretion to frame
appropriate jury instructions.

                                          III.
                                           A.
      Moses additionally appeals from the district court’s grant of defendants
Southwest and Glatstein’s motion to dismiss the claims against them in the second
amended complaint for failure to state a claim. Fed. R. Civ. P. 12(b)(6). Moses
added Southwest and Glatstein as defendants in the second amended complaint and
alleged that they were liable for conspiracy, fraudulent misrepresentation, fraudulent
omission, negligent misrepresentation, negligence, and promissory estoppel.

       We review de novo a district court’s grant of a motion to dismiss for failure to
state a claim. Schaller Tel. Co. v. Golden Sky Sys., 298 F.3d 736, 740 (8th Cir.
2002). In reviewing the adequacy of a complaint’s allegations under Federal Rule of
Civil Procedure 12(b)(6), we accept the allegations in the complaint as true and draw
reasonable inferences in favor of the nonmoving party, dismissing only if “it appears
beyond doubt that the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief.” Crumpley-Patterson v. Trinity Lutheran Hosp., 388 F.3d
588, 590 (8th Cir. 2004) (internal quotation omitted). Because this is a diversity case,
we interpret Missouri law in determining whether the elements of the offenses have
been pled. See Gray v. AT&T Corp., 357 F.3d 763, 765 (8th Cir. 2004). Although
the pleading standard is liberal, the plaintiff must allege facts—not mere legal
conclusions—that, if true, would support the existence of the claimed torts. See
Schaller Tel. Co., 298 F.3d at 740. We agree with the district court that each
allegation against Southwest and Glatstein in the complaint is deficient on its face and
we affirm the dismissal.

     Moses’s second amended complaint made several general allegations about
Southwest and Glatstein, which it claims supported its multiple interrelated tort

                                         -10-
claims. The complaint alleged that Southwest made statements in its January 31,
2000, press release that were false and misleading. The press release stated that
Southwest was converting its clearing business to CSS software, noting that the
conversion was the culmination of a process begun in January 1998 and that it
intended to complete the conversion to solely CSS software by the end of February.3
The complaint urged that the press release misrepresented the capabilities of the CSS
system “because [Southwest] had not completely converted to CSS software,”
Appellant’s App. 98, and because Southwest knew of numerous problems with the
software’s implementation. The complaint further asserted that the statements “were
intended to convince CSS’s current customers that CSS was able to supply the
functional computer system” and that it had already developed and was successfully
using such a system. Id. at 100. The complaint also alleged that Glatstein was an
officer of Southwest and a member of the board of directors of CSS who:

      had direct knowledge of the inability of CSS’s software application to
      account for trades and comply with all state and federal securities
      regulations and/or difficulties in operating as software application to
      provide real time, front-to-back office system for on-line securities
      trading, processing and accounting. He also had actual or constructive
      knowledge of CSS’s tortious conduct alleged in this amended complaint
      and participated in it.

      3
        We may examine the press release in our consideration of the 12(b)(6) motion
to dismiss, even though it was not expressly part of the pleadings, because it was
incorporated into the pleadings by reference—the complaint specifically mentioned
it as a ground for Moses’s claims against Southwest and Glatstein. See Deerbrook
Pavilion, LLC v. Shalala, 235 F.3d 1100, 1101 (8th Cir. 2000) (stating that “[o]n a
motion to dismiss, a court must primarily consider the allegations contained in the
complaint, although matters of public and administrative record referenced in the
complaint may also be taken into account”); Venture Assoc’s Corp. v. Zenith Data
Sys., 987 F.2d 429, 431 (7th Cir. 1993) (indicating that “[d]ocuments that a defendant
attaches to a motion to dismiss are considered part of the pleadings if they are referred
to in the plaintiff’s complaint and are central to [its] claim”).

                                          -11-
Id. at 92. The complaint later repeated that Glatstein “failed to disclose the complete
truth,” and that his statement in the press release “that SSI was successfully utilizing
CSS’s software” was false and misleading. The complaint also stated generally that
defendants “reached a meeting of the minds to mislead CSS’s customers.” Id. at 101.

      The complaint’s conclusory legal accusations, although using language that
arguably stated the elements of the alleged torts, are insufficient to state claims
because they failed to include specific factual allegations.

       Moses was required to allege facts that would satisfy the following elements
in order to state a civil conspiracy claim under Missouri law: “(1) two or more
persons; (2) with an unlawful objective; (3) after a meeting of the minds; (4)
committed at least one act in furtherance of the conspiracy; and (5) the plaintiff was
thereby injured.” Phelps v. Bross, 73 S.W.3d 651, 657 (Mo. Ct. App. 2002); see also
Gibson v. Brewer, 952 S.W.2d 239, 245 (Mo. 1997) (en banc). We agree with the
district court that although Moses alluded to a meeting of the minds in the complaint,
it did not support the assertion with any specific allegations of collusion and thus
cannot withstand the motion to dismiss. The only mention of Southwest and
Glatstein as participants in the conspiracy was the statement that they had
“knowledge” that the software did not have full functionality and that Southwest’s
press release indicated that it utilized the software. Mere knowledge neither
constitutes an act in furtherance of the conspiracy nor supports the inference that
Southwest and Glatstein intended harm to Moses. Accordingly, we agree with the
district court’s conclusion that Moses’s “conclusory allegations and speculation”
without factual grounds are insufficient to support a claim of conspiracy against
Southwest and Glatstein. See D. Ct. Order of Feb. 6, 2002, at 9.

       Moses also failed to adequately allege the elements of fraudulent
misrepresentation: “(1) a false, material representation; (2) the speaker’s knowledge
of its falsity or his ignorance of its truth; (3) the speaker’s intent that it should be

                                         -12-
acted upon by the hearer in the manner reasonably contemplated; (4) the hearer’s
ignorance of the falsity of the statement; (5) the hearer’s reliance on its truth, and the
right to rely thereon; and (6) proximate injury.” Gast v. Ebert, 739 S.W.2d 545, 547
(Mo. 1987) (en banc). To recover for fraudulent misrepresentation, the plaintiff must
establish every element. Artilla Cove Resort, Inc. v. Hartley, 72 S.W.3d 291, 297
(Mo. Ct. App. 2002). A party fails to sufficiently allege fraud “when the facts and
circumstances presented are as consistent with honesty and good faith as they are with
fraud.” Blanke v. Hendrickson, 944 S.W.2d 943, 944 (Mo. Ct. App. 1997). Moses
argues that its allegations about the language of Southwest’s press release were
sufficient to state its claim for fraudulent misrepresentation. Moses failed to allege
any facts, however, that could support an inference that the press release was directed
towards it with the intent that it rely on any particular statement therein. Even if the
press release contained misstatements, it would not amount to fraudulent
misrepresentation without some facts that suggest a specific intent on the part of
Southwest to target Moses.4

      A variation of fraudulent misrepresentation is fraudulent omission. Silence
may amount to a representation, constituting the first element of fraudulent
misrepresentation, if the party sought to be held accountable for fraud (1) conceals
material facts and (2) has a legal duty to disclose such facts. See VanBooven v.
Smull, 938 S.W.2d 324, 328 (Mo. Ct. App. 1997) (per curiam). A legal duty to speak
“may arise from a relationship of trust or confidence, an inequality of condition, or
superior knowledge that is not reasonably available to the other party.” Ziglin v.
Players MH, L.P., 36 S.W.3d 786, 791 (Mo. Ct. App. 2001) (internal citation
omitted). In its complaint, Moses asserts that the defendants were aware of many
problems with the CSS software that they did not disclose to Moses. Moses claims

      4
        The conclusory statement in the complaint that Southwest’s press release “was
intended to induce Moses.com to continue working with CSS,” Appellant’s App. 109,
is insufficient to establish a specific target for a general press release.

                                          -13-
that the defendants had a duty to speak “because they had superior knowledge
regarding the state of their software application” insofar as it was not performing well
at Southwest. The mere assertion that Southwest is connected to CSS as a member
of the joint venture that established CSS and as a CSS client, however, is insufficient
to establish a legal duty to disclose information about its experience as a CSS client
to another client that would likely become a competitor in the securities industry. We
therefore agree with the district court that Moses’s relationship with Southwest and
Glatstein was not “such as would support a claim of fraudulent omission.” D. Ct.
Order of Feb. 6, 2002, at 12.

        To state a claim for negligent misrepresentation, Moses was required to allege
facts that support the following elements: (1) the defendants supplied or omitted
information in the course of business; (2) because they failed to exercise reasonable
care, the information was false; (3) the information was provided by the defendants
to the plaintiff in a particular business transaction; and (4) the plaintiff relied on the
information and thereby suffered pecuniary loss. Ziglin, 36 S.W.3d at 790. A party
is not justified in relying on a speaker’s representation, however, if the representation
concerns a future action of a third party that is outside of the speaker’s control.
Wellcraft Marine v. Lyell, 960 S.W.2d 542, 547 (Mo. Ct. App. 1998). Moses cannot
succeed on its claim because the facts, as alleged, indicate that the press release, by
definition, was issued to the public at large, that Moses never engaged in a business
transaction with Southwest, and that Moses could not have relied on the press release
in initially deciding to hire CSS because the press release was issued months after
CSS and Moses had signed the letter of intent.

                                          -14-
      Moses’s remaining claims of promissory estoppel and negligence implicated
Southwest and Glatstein only as part of the alleged conspiracy and were therefore also
properly dismissed.5

                                          B.
       In light of our conclusion that Moses failed to state a claim against Southwest
and Glatstein in its second amended complaint, we also address Moses’s argument
that the district court should have allowed it to file a third amended complaint re-
pleading its claims against Southwest and Glatstein and adding seven more defendant
companies: the companies that formed the joint venture that initially established CSS.
We review the district court’s decision to deny leave to amend a complaint for abuse
of discretion. Hammer v. City of Osage Beach, 318 F.3d 832, 844 (8th Cir. 2003).

       If a responsive pleading has already been served, “a party may amend the
party’s pleading only by leave of court . . . and leave shall be freely given when
justice so requires.” Fed. R. Civ. P. 15(a). A district court may appropriately deny
leave to amend “where there are compelling reasons ‘such as undue delay, bad faith,
or dilatory motive, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the non-moving party, or futility of the amendment.’”
Hammer, 318 F.3d at 844 (quoting Becker v. Univ. of Nebraska, 191 F.3d 904, 907-
08 (8th Cir. 1999)). In most cases, “[d]elay alone is insufficient justification;
prejudice to the nonmovant must also be shown.” Bell v. Allstate Life Ins. Co., 160

      5
        Moses claims that Glatstein is liable for the acts of CSS, not just based on the
conspiracy, but because he is a member of the board of directors of CSS. This claim
was not expressly pled in the second amended complaint, and therefore did not have
to be considered as part of the motion to dismiss. Even if it had been pled, however,
it would have been properly dismissed because a corporate officer is individually
liable for acts of the corporation only “if he or she had ‘actual or constructive
knowledge of, and participated in, an actionable wrong.’” State ex rel. Doe Run Res.
Corp. v. Neill, 128 S.W.3d 502, 505 (Mo. 2004) (en banc) (citation omitted). Moses
has alleged no such direct and knowing participation by Glatstein.

                                         -15-
F.3d 452, 454 (8th Cir. 1998). Unexcused delay is sufficient to justify the court’s
denial, however, if the party is seeking to amend the pleadings after the district court
has dismissed the claims it seeks to amend, particularly when the plaintiff was put on
notice of the need to change the pleadings before the complaint was dismissed, but
failed to do so. See Carlon v. Thaman (In re NationsMart Corp. Sec. Litig.), 130 F.3d
309, 322 (8th Cir. 1997).

        We conclude that the district court was justified in denying leave to amend.
The district court had already twice granted leave to amend. It denied the third
motion for leave to amend based on undue delay and prejudice to existing defendants,
“as numerous motions to dismiss ha[d] already been briefed and ruled, and discovery
in [the] matter [was] now well underway.” D. Ct. Order of Mar. 20, 2003 at 3-4.
Moses argues that, because the third motion to amend was filed within the time
established by the district court’s order, it should have been granted. Its argument
fails, however, because the scheduling order merely prescribes the date by which all
such motions “shall be filed”; the date on the scheduling order does not confine the
district court’s consideration of the merits of such motions and does not preclude it
from finding that an amendment would result in prejudice.

       The district court reasonably rejected the amended complaint involving
renewed claims against Southwest and Glatstein. Moses already had the opportunity
to amend the complaint and cure its defects when the district court ruled that the
allegations in the first amended complaint were too indefinite to resolve Southwest
and Glatstein’s first motions to dismiss, but failed to resolve the deficiencies in the
second amended complaint. The district court could therefore reasonably conclude
that Moses had “proffered no adequate reason explaining” its failure to cure the
known defect earlier, see St. Louis Fire Fighters Ass’n v. City of St. Louis, 96 F.3d
323, 330 (8th Cir. 1996), and it was not required to allow Moses a further
opportunity. The district court also reasonably rejected the addition of seven new
defendants, finding that prejudice would result against CSS. Moses had been aware

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of the existence of the companies in 1999 before it first initiated the suit, see Tr. vol.
VI at 14-16 (testimony of Winkelmann during offer of proof), and adding seven new
parties three years later would certainly “impose additional discovery requirements,”
Bell, 160 F.3d at 454, and would further delay the conclusion of the case. The district
court therefore did not abuse its discretion in denying leave to amend the complaint.

      The judgment is affirmed.
                     ______________________________

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