Hribar Transp. v. Slegers
| Decision Date | 02 September 2022 |
| Docket Number | 20-cv-1255-pp |
| Parties | HRIBAR TRANSPORT LLC, Plaintiff, v. MICHAEL SLEGERS, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
On July 8, 2020, the plaintiff filed a complaint in Racine County Circuit Court accusing the defendant of breaching a noncompetition clause of the contract between the parties. Dkt. No. 1-1. The next month, the defendant timely removed the case from Racine County to the Eastern District of Wisconsin. Dkt. No. 1. The plaintiff filed an amended complaint on September 18, 2020, still alleging only a single claim for breach of contract. Dkt. No. 12.
Nearly twenty-one months after filing the amended complaint and just short of two years after filing the original complaint, the plaintiff filed a motion for leave to amend the pleadings to add plaintiffs. Dkt. No. 31. The court will deny that motion.
The plaintiff's complaint reached federal court on August 14, 2020. Dkt. No. 1. On August 31, 2020, the defendant filed a motion to dismiss for lack of jurisdiction or, in the alternative, to transfer the case to the Northern District of Indiana, dkt. no. 8, after which the plaintiff filed its amended complaint, dkt. no. 12. Shortly thereafter, the defendant filed a motion to dismiss the amended complaint, again asserting lack of jurisdiction and alternatively asked the court to transfer the court to the Northern District of Indiana. Dkt. No. 13. The plaintiff opposed the motion, dkt. no. 16, and the court denied it, dkt. no. 21.
The defendant then filed his answer. Dkt. No. 22. The parties filed a joint Rule 26(f) plan, suggesting a discovery deadline of May 1, 2022 and a dispositive motions deadline of June 3, 2022. Dkt. No. 24. The plan also included an agreement that “[t]he parties reserve[d] the right to amend their pleadings as allowed by the federal rules.” Dkt. No. 24 at ¶2. Subsequently the parties filed a joint motion to modify the scheduling order, extending the discovery deadline to July 22, 2022 and the dispositive motions deadline to September 15, 2022. Dkt. No. 29. The motion did not mention amending the pleadings. The plaintiff filed its motion for leave to file a second amended complaint on June 16, 2022, a month before the scheduled close of discovery. Dkt. No. 31. The defendant opposes the motion. Dkt. No. 34. The plaintiff filed a reply in support of the motion. Dkt. No. 38.
At the outset, the court will address the defendant's argument that the plaintiff filed the motion for leave to amend “after the time permitted by the Court's scheduling order.” Dkt. No. 34 at 1. Operating under this assumption, the defendant asserts that first, the plaintiff must demonstrate good cause, or diligence, as required by Fed.R.Civ.P. 16(b). Id. () He asserts that if the plaintiff can make that showing, the plaintiff then must comply with Rule 15(a) (). Id.
The plaintiff did not file its motion for leave to amend “after the time permitted by the Court's scheduling order.” The original joint Rule 26(f) plan stated only that “[t]he parties reserve the right to amend their pleadings as allowed by the federal rules.” Dkt. No. 23 at ¶2. Because the parties did not specify a deadline by which pleadings must be amended (or a party must seek leave to amend), the court didn't include such a deadline in the scheduling order. See Dkt. No. 25. The joint motion to amend the scheduling order did not discuss a deadline for amending pleadings, dkt. no. 29, so the order granting that motion didn't either, dkt. no. 30. Rule 16(b)(4) does not apply.
Under Rule 15(a)(1), prior to trial a party may amend a pleading one time, as a matter of course and without leave of court, under two circumstances: (A) “21 days after serving [the pleading]”; or (B) “if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Otherwise, the party may amend “only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). The plaintiff seeks leave of court under Rule 15(a)(2). See Dkt. No. 32 at 3.
Under Rule 15(a)(2), “[t]he court should freely give leave when justice so requires.” “The Federal Rules of Civil Procedure grant district courts ‘broad discretion to deny leave to amend where there is undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies, undue prejudice to the defendants, or where the amendment would be futile.” Financial Fiduciaries, LLC v. Gannett Co., Inc., No. 21-2016, 2022 WL 3585003, at *8 (7th Cir. Aug. 22, 2022) (quoting Arreola v. Godinez, 546 F.3d 788, 796 (7th Cir. 2008)).
Rule 15(a) applies to amendments made before trial. Otherwise, it contains no deadlines by which one must file a motion for leave to amend a pleading. The plaintiff did not file its motion after any court-imposed, or federal rule-mandated, deadline.
The proposed second amended complaint seeks to add Hribar Logistics, LLC and Hribar Bros., Inc. as plaintiffs. Dkt. No. 31-1. At paragraphs 2 through 4, the proposed second amended complaint provides jurisdictional information for Hribar Logistics, LLC and Hribar Bros., Inc. Id. at ¶¶2-4. In paragraphs 9 and 10, it explains the connection between the plaintiff, the defendant and two proposed new plaintiffs. Id. at ¶¶9-10. Throughout the proposed second amended complaint, the word “Plaintiff” has been changed to “Plaintiffs” where necessary. Finally, the request for injunctive relief that appeared in the amended complaint has been removed from the proposed second amended complaint. Id. at 7. The proposed second amended complaint, like the complaint and the amended complaint, asserts a single claim for breach of contract. Id. at 6-7.
The plaintiff describes Hribar Logistics and Hribar Bros. as “sister companies, with common ownership” with Hribar Transport (the original plaintiff); it asserts that each of the three companies is a third-party beneficiary under the defendant's employment agreement and has been damaged by the defendant. Dkt. No. 32 at 1. The plaintiff recounts that it sued the defendant “for violating his restrictive covenant and related provisions of his employment agreement.” Id. at 3. It asserts that the defendant “pursued discovery inquiring into the organization of the various affiliated Hribar companies.” Id.
The plaintiff explains that it designated a witness on expert damages; that witness produced a report analyzing the damages that the plaintiff alleges were caused by the defendant's breach of the noncompete “that flowed through to Hribar Transport and Hribar Bros.” Id. The plaintiff explains that the customers it alleges that the defendant successfully solicited “historically generated revenue for both Hribar Transport and Hribar Bros.” Id. The plaintiff says that during the expert's deposition, the defense “focused substantial questioning on how [the expert] could calculate damages for a ‘non-party' to the litigation.” Id. The plaintiff says it is seeking to add Hribar Logistics and Hribar Bros. “[a]s a result of [the defendant's] line of questioning, and to ensure the potential recovery of all alleged damages caused by [the defendant's] violation of his restrictive covenant.” Id. The plaintiff asserts that because Hribar Logistics and Hribar Bros. are third-party beneficiaries of the employment agreement's restrictive covenants, “justice requires that they be added as additional plaintiffs with Transport.” Id. at 4. It says that if the court does not allow these two companies to be added as plaintiffs, it would “emasculate the impact of [the defendant's] restrictive covenant and allow [the defendant] to escape the full consequences of his actions.” Id. at 5.
The plaintiff asserts that the defendant will not be prejudiced by the amendment because it filed its answer to the amended complaint “relatively recent[ly].” Id. It also points out that the second amended complaint does not add any allegations or claims. Id. It asserts that allowing it to file the second amended complaint will not slow the litigation, because at the time it filed the motion, much discovery had been completed and discovery was slated to close in just over a month, with no trial date having been set. Id. at 6. Finally, it indicated that if the defendant requested “a reasonable extension of the discovery deadline or dispositive motion deadline in light of the amendment,” the plaintiff would not object. Id.
The defendant responds that that allowing the plaintiff to file the proposed second amended complaint would cause undue delay, would be prejudicial and is futile. Dkt. No. 34 at 13. He asserts that he executed the first employment agreement in December 2011 and that it didn't mention Hribar Logistics or Hribar Bros. Id. at 4. He says he executed a second agreement in 2013, and again, the agreement did not mention Hribar Logistics or Hribar Bros. Id. The third agreement, effective January 1, 2014, is the one that contained the noncompete; it did not mention Hribar Logistics or Hribar Bros Id. at 5. The defendant claims that all three agreements were drafted by the plaintiff. Id. The defendant explains that after he was told that ...
To continue reading
Request your trial