Chen v. Mayflower Transit, Inc.

• Decision Date: 25 May 2001
• Docket Number: No. 99 C 6261.,99 C 6261.
• Citation: Chen v. Mayflower Transit, Inc., 159 F.Supp.2d 1103 (N.D. Ill. 2001)
• Parties: Angie CHEN, Plaintiff/Counter Defendant, v. MAYFLOWER TRANSIT, INC., Defendant/Counter Plaintiff.
• Court: U.S. District Court — Northern District of Illinois

159 F.Supp.2d 1103

Angie CHEN, Plaintiff/Counter Defendant, v. MAYFLOWER TRANSIT, INC., Defendant/Counter Plaintiff.

No. 99 C 6261.

United States District Court, N.D. Illinois, Eastern Division.

May 25, 2001.

COPYRIGHT MATERIAL OMITTED

Jose Antonio Isasi, II, Carey L. Bartell, Sachnoff & Weaver, Ltd., Chicago, IL, for plaintiff.

Thomas F. Ging, Marcos Reilly, James Constantine Vlahakis, Hinshaw & Culbertson, Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

BROWN, United States Magistrate Judge.

This cause is before the Court on the Plaintiff's Motion for Leave to file Instanter Plaintiff's Second Amended Complaint. [Dkt # 42.] The defendant filed its Response to Plaintiff's Motion to Amend [Dkt # 38], the plaintiff filed a Reply in Support of her Motion [Dkt # 40], and the Court heard oral argument. For the reasons set out below, the Plaintiff's Motion is GRANTED.

PROCEDURAL BACKGROUND AND JURISDICTION

This case arises from a 1999 contract between Plaintiff Angie Chen ("Chen") and Defendant Mayflower Transit, Inc. ("Mayflower") for the movement of Chen's furniture and household goods from Atlanta, Georgia to Chicago, Illinois. Chen alleges, inter alia, as follows: Mayflower, through Admiral Moving and Storage, Inc. ("Admiral"), its agent in Georgia, gave Chen a "not to exceed" estimate of $1,741.89 for the move. Chen's property did not arrive in Chicago as scheduled, causing Chen to incur expenses. When the property did arrive, Mayflower, again through a local agent Century Moving and Storage, Inc. ("Century"), would not release Chen's goods unless she paid $2,641.19 in cash or certified check. Because Century would not accept a credit card, Century placed Chen's goods in storage and threatened to auction them to pay both the moving costs and storage costs, totaling $5,122.83. Chen's property remained in storage for three months. (Proposed 2nd Am. Compl. at ¶¶ 6-57.) Chen alleges three other similar occurrences in which Mayflower and its local agents issued cost estimates to individuals-Craig Pietrowiak, Kate Rice, and Gerald and Minna Aronoff—and subsequently refused to release the individual's property unless the individual agreed to pay more than the original estimate. (Id. at ¶¶ 86-113.)

Jurisdiction exist pursuant to 28 U.S.C. § 1331. Chen's breach of contract and conversion claims are brought pursuant to the Carmack Amendment (49 U.S.C. § 14706), and thus, there is jurisdiction under 28 U.S.C. § 1331 for those claims and the proposed RICO claim. There is supplemental jurisdiction under 28 U.S.C. § 1367 for plaintiff's state law claims of negligent and intentional infliction of emotional distress.¹

Chen initially filed her Complaint on September 23, 1999, alleging breach of contract, conversion, and both intentional and negligent infliction of emotional distress. [Dkt # 1.] She filed an Amended Complaint on November 23, 1999. [Dkt # 10.] On January 13, 2000, Mayflower filed its Answer and Counterclaim for $5,573.38 allegedly due and owing from Chen. [Dkt # 15.] When this case was reassigned to this Court in June 2000, expert discovery was underway and a trial date had been set. [Dkt # 22.] In September 2000, Mayflower was given leave to file an Amended Answer and Counterclaim [Dkt # 31,32], which it filed on November 13, 2000. [Dkt # 35.]

On December 8, 2000, Chen filed the present motion for leave to file a Second Amended Complaint, in order to add proposed Count V, a claim under the Racketeer Influenced Corrupt Organizations Act (18 U.S.C. § 1961, et seq. (RICO)). Mayflower objected to Chen's proposed amendment, and filed Defendant's Response to Plaintiff's Motion to Amend Complaint.

ANALYSIS

Federal Rule of Civil Procedure 15(a) requires that, once a responsive pleading has been filed, a party may amend its pleading only by consent of the adverse party or by leave of court, and "leave shall be freely given when justice so requires." On the other hand, leave to amend may be denied if there is "undue delay, bad faith or dilatory motive on the part of the movant, ... undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

"Futility" means that the complaint, as amended, would fail to state a claim upon which relief could be granted. In reviewing for "futility," the district court applies the same standard of legal sufficiency as applies to a Rule 12(b)(6) motion.

Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir.1996) (citations omitted.) A complaint may not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

Chen's proposed amendment was not dilatory and will not result in undue delay.

Mayflower first argues that Chen should not be permitted to amend because Chen's motion was filed after fact discovery had closed. However, viewed in light of the history of this case set out above, that argument does not overcome Rule 15's directive that leave to amend should be "freely given." Chen's present motion to amend was filed a little over a year after her initial complaint, and less than a month after Mayflower filed its Amended Answer and Counterclaim. Chen argues that her counsel first learned of the facts that might give rise to a RICO claim in late October 2000 when he learned of the case Pietrowiak v. Century Moving & Storage, Inc., 99 C 7419, 1999 WL 1295133 (N.D.Ill., Dec.20, 1999). In that case, Judge James Moran of this Court dismissed an action brought against Century because the proper defendant was Mayflower. According to Chen, the similarity between Pietrowiak's allegations and Chen's claims prompted counsel to investigate the possibility of a RICO claim. (Pl.'s Mot. at 3-4.) Plaintiff's present motion was filed promptly after counsel completed his investigation. (Id. at 4.) Mayflower argues that Chen should have learned of Pietrowiak earlier (Def.'s Resp. at 4), but the facts do not demonstrate Chen was dilatory in the sense of failing to plead a claim based on facts known to her.

Mayflower has not claimed that it will be prejudiced by the delay in resolution of its counterclaim if Chen's motion is granted and the trial of this case delayed. As Mayflower admits, its counterclaim is "nominal" and the amount claimed was actually reduced in its latest amendment. (Def.'s Resp. at 4.) The gravamen of Mayflower's argument is that Chen's proposed amendment may transform a relatively simple lawsuit in which Mayflower contemplated a motion for summary judgment into a more complex litigation that will require additional discovery. (Def.'s Resp. at 4-5.) However, Mayflower does not argue that Chen's RICO claim is time-barred. Thus, if Chen is not permitted to file her RICO claim in this litigation, she presumably could bring it as a separate action, which would result in more duplication of effort and expense than if the claim is brought in this proceeding. This case is distinguishable from Sanders v. Venture Stores, Inc., 56 F.3d 771 (7th Cir.1995), cited by Mayflower, where the plaintiff filed her motion to amend after the defendant filed an ultimately-successful motion for summary judgment, and the plaintiff sought in its amendment to assert federal claims that would be time-barred but for the relation-back doctrine. 56 F.3d at 775, n. 2. The Federal Rules of Civil Procedure favor resolving all of the disputes between the same parties that arise out of the same transaction in a single action where possible to bring about the "just, speedy and inexpensive determination of every action." Fed.R.Civ.P. 1. Thus, there is no reason to deny Chen's motion on the basis of undue prejudice or delay.

Chen's Proposed Amendment is not Futile.

Mayflower's second argument is that Chen has failed to plead the necessary elements of a RICO claim. The statute under which Chen seeks to bring Count V, 18 U.S.C. § 1962(c), makes it unlawful for "any person employed by or associated with [an] enterprise ... to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." Mayflower argues that Chen's proposed Count V does not allege "an enterprise," a "pattern" or "racketeering activity."

1. The enterprise requirement.

With respect to the enterprise requirement, Chen's proposed Count V alleges, in essence, the following: Mayflower contracts with regional shipping companies that act as local disclosed agents of Mayflower and provide marketing, sales, pickup, hauling, storage and delivery services pursuant to Mayflower's authority. (Proposed 2nd Am. Compl. ¶ 59.) Mayflower itself does not provide any packing, unpacking, or hauling services directly to customers. (Id. at ¶ 60.) Mayflower requires that its local agents comply with written guidelines regarding line haul charges, discounts and other standards. (Id. at 59.) Mayflower's local agents, in turn, contract with individual shippers to transport household goods across interstate lines. (Id. at ¶ 61.) The communications between and among Mayflower, the local agents and individual shippers take place through Mayflower's central database and computer system using interstate wires. (Id. at ¶ 61.) Chen defines the "Enterprise" as Mayflower and the local disclosed agents associated together on an ongoing basis and joined in the common goal of marketing, booking, packing, hauling, storing and delivering interstate shipments of household goods. (Id. at ¶ 62.) Mayflower participates in the Enterprise by issuing guidelines, providing a means of centralized communication, maintaining a customer service line for the Enterprise's shipping customers, approving credit transactions, overseeing operations, taking in and distributing all...