Davis v. Wing Enters.

• Decision Date: 30 September 2021
• Docket Number: 2:19-cv-780-SPC-NPM
• Parties: CRAIG L DAVIS and YVONNE M DAVIS, Plaintiffs, v. WING ENTERPRISES, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

CRAIG L DAVIS and YVONNE M DAVIS, Plaintiffs,
v.
WING ENTERPRISES, INC., Defendant.

No. 2:19-cv-780-SPC-NPM

United States District Court, M.D. Florida, Fort Myers Division

September 30, 2021

ORDER

NICHOLAS P. MIZELL, UNITED STATES MAGISTRATE JUDGE.

The parties in this products liability action have filed multiple motions related to the pleadings and some discovery disputes. In the interim, the Court held a status conference in an effort to resolve or narrow the issues presented.

This action arises from an allegedly defective Little Giant Velocity Model 22 Ladder (the “ladder” or “subject ladder”) manufactured by Defendant Wing Enterprises, Inc. Plaintiffs Craig and Yvonne Davis seek damages^[1] for injuries resulting from a fall from the ladder (Doc. 68). On or about December 11, 2018, Craig Davis used the ladder in an extension position at his home to decorate his

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garage with Christmas lights. (Doc. 68, ¶ 20). The ladder was almost new, and this was the first time Davis used it in an extension position under load. (Doc. 68, ¶¶ 6, 9, 20). Allegedly, the ladder failed and caused serious life-changing injuries. (Doc. 68, ¶¶ 20, 22).

I. Plaintiffs' Opposed Motion for Leave to Amend Complaint (Doc. 82)

Plaintiffs seek to amend their complaint to add successor corporations as defendants in this case. Plaintiffs also seek to add new factual contentions and claims to conform to the evidence-particularly in light of the opinions of Plaintiffs' experts. (Doc. 82).

As an initial matter, the deadline to amend pleadings was October 3, 2020 (Doc. 53), but the motion for leave to amend was filed on February 26, 2021 (Doc. 82). When a deadline appears in a scheduling order and a motion for more time is filed after the deadline, “Rule 16 is the proper guide for determining whether a party's delay may be excused.” Destra v. Demings, 725 Fed.Appx. 855, 859 (11th Cir. 2018). Under Rule 16(b)(4), “a schedule may be modified only for good cause and with the judge's consent.” Fed.R.Civ.P. 16(b)(4). Under this standard, the party requesting the extension demonstrates good cause only if, despite its diligence, the party cannot meet the deadline. See Fed. R. Civ. P. 16, 1983 Advisory Committee Notes; S. Grouts & Mortars, Inc. v. 3M Co., 575 F.3d 1235, 1241 (11th Cir. 2009) (citing Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1418 (11th Cir. 1998)). This means

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Plaintiffs must show that, despite due diligence, they could not move to amend by the October 3, 2020 deadline.

Here, Plaintiffs state their deposition of Arthur Wing-the CEO and Chairman of Defendant Wing-on February 2, 2021 prompted this motion. Arthur Wing testified that on or about December 24, 2020, Defendant sold its assets and liabilities, including any liability for the claim in this lawsuit, to other corporate entities. (Doc. 82, p. 2). However, Defendant did not apprise Plaintiffs of this reorganization by filing an amended corporate disclosure statement. It was only during Mr. Wing's February 2, 2021 deposition that Plaintiffs first learned of the reorganization. (Doc. 99, pp. 7-8).

Throughout discovery, including testing of the subject and exemplar ladders, Plaintiffs' experts have identified the deficit in the ladder with more specificity. (Doc. 82, pp. 3-4). Pursuant to the Court's order granting Defendant's motion to compel functional testing of the ladder, the parties inspected and tested the subject ladder on January 29, 2021. (Doc. 79; Doc. 84, p. 8). Plaintiffs also had difficulty obtaining exemplar ladders with the Rock Locks 2.1^[2] mechanism. This was because Rock Locks 2.1 are a redesigned version of Rock Locks 2.0, which were allegedly recalled in March 2017 because of disengagement problems. The Rock Locks 2.1

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redesign occurred in January 2017. Specifically, Defendant redesigned the shoulder above the pin and lengthened the barrel pin. Then, in June 2017, Defendant completely redesigned the system to Rock Locks 3.0, which does not have the same defect as the 2.0 or 2.1 versions and was not an adequate exemplar to test. Given the limited stock of Rock Locks 2.1, Defendant was only able to produce Rock Lock 2.0 as an exemplar ladder for testing, which was produced to Plaintiffs on or after December 16, 2020. (Doc. 99, pp. 5-6 n.5, p. 8 n.12.).

While Defendant claims no good cause exists because this discovery was sought after the amendment deadline (Doc. 111, pp. 6-7), discovery need not have been fully conducted by the amendment deadline (See Doc. 67) (discovery deadline was April 9, 2021). These events occurred well beyond the October 3, 2020 deadline, and Plaintiffs' motion for leave to amend was filed shortly thereafter. Given these developments that occurred after October 3, 2020, the Court will not deny the motion based on untimeliness.

To amend a pleading, Plaintiffs must satisfy Rule 15, which provides that “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). The decision whether to permit an amendment is within the sound discretion of the court, however, the Supreme Court has held that the words “leave shall be freely given” must be heeded. See Foman v. Davis, 371 U.S. 178, 182

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(1962). Consequently, the Court must find a justifiable reason in denying a request for leave to amend. Id. “[T]he Supreme Court indicated that a court should deny leave to amend a pleading only when: (1) the amendment would be prejudicial to the opposing party, (2) there has been bad faith or undue delay on the part of the moving party, or (3) the amendment would be futile.” Taylor v. Fla. State Fair Auth., 875 F.Supp. 812, 814 (M.D. Fla. 1995) (citing Foman, 371 U.S. at 182).

A. Successor corporate entities

First, Plaintiffs seek to add three entities as defendants: (1) Little Giant Ladder Systems, LLC (“LGLS”); (2) Ladder Holdings, Inc.; and (3) Industrial Opportunity Partners, LLC (“IOP”). To get clarity on whether successor corporations needed to be added as parties to this suit, the Court held a status conference on April 8, 2021. (Doc. 113). Pursuant to the Court's direction, Defendant Wing filed an updated corporate disclosure statement to clarify the corporate hierarchy. (Doc. 123).

The parties filed a joint stipulation regarding the reorganization on February 20, 2021. (Doc. 80). But on March 12, 2021, Defendant filed a unilateral stipulation correcting certain information about the corporate reorganization. (Doc. 83; Doc. 111, p. 3). The joint stipulation is the subject of a separate motion to withdraw (Doc. 94), addressed in more depth later in this Order. For purposes of the motion for leave to amend, the Court will reference the updated unilateral stipulation (Doc. 83) and second amended corporate disclosure statement (Doc. 123).

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Defendant Wing converted to become LGLS in December 2020. LGLS holds the same federal employer identification number that Wing Enterprises, Inc. held, and Defendant admits that “for all purposes, Wing and LGLS are one-in-the-same.” (Doc. 83; Doc. 111, p. 3). And LGLS stipulated the following:

1) the liability of Wing Enterprises for this claim shall survive the sale of membership interests and shall remain a claim against LGLS;

2) any liability of Wing Enterprises as a result of the allegations of the operative Complaint shall also be the liability of LGLS;

3) any judgment entered against Wing Enterprises in favor of Plaintiffs shall also be collectable from LGLS; and

4) LGLS consents to be bound by the terms of the stipulation.

(Doc. 111, p. 3) (citing Doc. 83). Given this sale and stipulation, Defendant's name will be corrected to Little Giant Ladder Systems, LLC f/k/a Wing Enterprises, Inc.^[3]

Plaintiffs also argue the other two proposed defendants-Ladder Holdings, Inc. and IOP-are necessary parties. (Doc. 99, pp. 2, 12). Rule 19(a) governing compulsory joinder provides:

(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:

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(i) as a practical matter impair or impede the person's ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

Fed. R. Civ. P. 19(a). To determine whether a party is indispensable, “the court must ascertain under the standards of Rule 19(a) whether the person [or entity] in question is one who should be joined if feasible.” Focus on the Fam. v. Pinellas Suncoat Transit Auth., 344 F.3d 1263, 1279-1280 (11th Cir. 2003) (quoting Challenge Homes, Inc. v. Greater Naples Care Ctr., Inc., 669 F.2d 667, 669 (11th Cir. 1982)). To make this determination, pragmatic considerations control, such as the effect on the parties and on the litigation. Id. at 1280.

Ladder Holdings, Inc. is the sole member of LGLS. (Doc. 111, p. 3; Doc. 123). While Ladder Holdings purchased the membership interest in LGLS, it did not assume the liabilities of LGLS. (Doc. 111, p. 4). The other proposed defendant, IOP, is not a shareholder of Ladder Holdings-it is one level removed from Ladder Holdings. Industrial Opportunity Partners III, LP links the two proposed defendants to each other. Industrial Opportunity Partners III, LP is a majority shareholder of Ladder Holdings. While not obvious from the second amended corporate disclosure statement (Doc. 123) or sur-reply (Doc. 111, p. 4), defense counsel clarified during the April 8, 2021 status conference that IOP is...