Leftenant v. Blackmon
| Decision Date | 16 November 2020 |
| Docket Number | Case No. 2:18-cv-01948-EJY |
| Parties | NATHAN LEFTENANT, ARNETT LEFTENANT, JERYL BRIGHT, GREGORY JOHNSON, and THOMAS ("TOMI") JENKINS, Plaintiffs, v. LAWRENCE ("LARRY") BLACKMON, Defendant. LAWRENCE ("LARRY") BLACKMON, Counterclaim Plaintiff, v. NATHAN LEFTENANT, ARNETT LEFTENANT, JERYL BRIGHT, GREGORY JOHNSON, and THOMAS ("TOMI") JENKINS, Counterclaim Defendants. |
| Court | U.S. District Court — District of Nevada |
Before the Court is Plaintiffs' Motion to Further Clarify the Second Amended Complaint (the "Motion to Clarify" at ECF No. 203), Defendant's Opposition to Plaintiffs' Motion to Clarify (ECF No. 224), Plaintiffs' Reply in Support of their Motion to Clarify (ECF No. 227), Defendant's Motion and Memorandum to Strike and/or Dismiss Plaintiffs' Second Amended Complaint (the "Motion to Strike" at ECF No. 223), Plaintiffs' Opposition to Defendant's Motion To Strike (ECF No. 234), Defendant's Reply to Plaintiffs' Opposition to Motion to Strike (ECF No. 240), Plaintiffs' Motion to Stay (ECF No. 220), and the Opposition thereto (ECF No. 231). No reply in support of the Motion to Stay was filed.
This case commenced on October 10, 2018 with Plaintiffs' Complaint (ECF No. 1). On April 22, 2019, Plaintiffs filed a motion to amend their complaint, which was filed a second time on April 30, 2019. ECF Nos. 19 and 22. Plaintiffs withdrew ECF No. 19 on April 30. ECF No. 21. The motion to amend the complaint was granted in part on September 16, 2019 (ECF No. 43), and the First Amended Complaint ("FAC") was filed on October 2, 2019 (ECF No. 46). Defendant filed an answer and counterclaims in response to the FAC on October 16, 2020 (ECF No. 49), to which Plaintiffs responded by filing a motion to dismiss parts of the counterclaims (ECF No. 58). Defendant moved to dismiss parts of Plaintiffs' FAC on October 28, 2019 (ECF No. 52). On February 24, 2020, the Court granted in part and denied in part Defendant's motion to dismiss parts of Plaintiffs' FAC, and granted in part and denied in part Plaintiffs' motion to dismiss parts of Defendant's counterclaims. ECF Nos. 65 and 66.
The discovery period in this case was extended multiple times, with the last extension closing discovery on March 10, 2020. ECF Nos. 16, 31, 42, 51, 62, 64. Thus, the parties had over a year within which to conduct discovery in this matter. After the close of discovery, cross motions for summary judgment were filed by the parties followed by the filing of numerous separate declarations and motions to strike. The Court denied all summary judgment motions without prejudice and directed the parties to refile such motions after motions seeking to amend claims and counterclaims were decided by the Court. ECF No. 214.
On July 14, 2020, the Court held oral argument on Defendant's Motion to Compel Interrogatory Responses (ECF No. 68) and Plaintiffs' Renewed Motion for Reconsideration and Clarification re Order on Motion to Dismiss (ECF Nos. 82 and 181). At that hearing the Court granted Defendant's Motion to Compel, denied Plaintiffs' Motion for Reconsideration (ECF No. 192 at 28-29), but granted Plaintiffs the "opportunity to amend the[ir] fourth cause of action only." Id. at 30.1 The Court's Order made clear that no other changes to the FAC were to be made except to clarify that Plaintiffs' fourth cause of action to state what Plaintiffs claimed was always intended; that is, to state a declaratory relief claim against Defendant Blackmon, not unnamed third parties. Id. at 30-32. The Court stated that no other changes to the FAC were permitted by the Order because such changes would undoubtedly lead to reopening discovery and, therefore, to additional motion practice. Id. at 30.
On July 21, 2020, Plaintiffs filed their Second Amended Complaint twice (ECF Nos. 198 and 199). Plaintiffs then moved to strike these versions of their Second Amended Complaint for various reasons (ECF No. 200 and 201). Plaintiffs then filed a third version of their Second Amended Complaint (ECF No. 202). Finally, Plaintiffs filed the presently pending Motion to Clarify that attaches yet a fourth version of the Second Amended Complaint (the "Clarified Second Amended Complaint"). ECF Nos. 203 and 203-1.
Plaintiffs' Second Amended Complaint (ECF No. 202) and Clarified Second Amended Complaint (ECF No. 203-1) plead beyond what the Court's July 14, 2020 Order allowed Plaintiffs to do. Not only do Plaintiffs add a new exhibit to these proposed amended complaints (compare Schedule A attached to ECF Nos. 1 and 46 and Exhibit A attached to ECF Nos. 202 and 203-1), but both versions of the second amended complaint identify ten new individuals who assigned their alleged claims against Defendant to "Existing Plaintiffs"2 resulting in expanded allegations regarding what Existing Plaintiffs and these new individuals are allegedly due. ECF Nos. 202 and 203-1 ¶¶ 20, 78, 86, 108-123. Further, the Clarified Second Amended Complaint adds a new cause of action for "Breach of Oral Agreement to Pay Royalties." ECF No. 203-1 at 134-146. Plaintiffs contend that approximately twenty-one months after this case started, and contrary to what the Court ordered, Plaintiffs always intended to bring a breach of oral agreement claim despite never previously pleading this claim. See ECF Nos. 1 and 46.
Plaintiffs argue that to deny them the right to file this new claim would be to do so on "a purely procedural technicality."3 ECF No. 227 at 2. Plaintiffs also argue that granting the Motion to Clarify or the Clarified Second Amended Complaint will result in no prejudice to Defendant because there are other amendments to the pleadings pending, and further discovery is unlikely because the Court granted Plaintiffs an opportunity to clarify their Count IV in their Amended Complaint. ECF No. 203 at 4-5.
In Opposition to Plaintiffs' Motion to Clarify, Defendant argues that Plaintiffs exceed the Court's July 14, 2020 Order by adding the Sixth Cause of Action for Breach of Oral Contract. ECFNo. 224 at 2. Defendant states that this new cause of action would require "significant new discovery" that could have been avoided had Plaintiffs been diligent in bringing this claim. Id. Defendant further contends that because the Motion to Clarify was brought after the close of discovery, Plaintiffs must demonstrate excusable neglect for failing to timely file their Motion. Id. at 7, 11-13. Defendant argues that Plaintiffs' Breach of Oral Contract fails to state a claim upon which relief may be granted, but even if the Court disagrees, the Breach of Oral Contract claim is barred by the Statute of Frauds. Id. at 14-16.
In Reply, Plaintiffs argue manifest injustice, that the Court's July 14, 2020 Order allowed for an amended scheduling order, and that Plaintiffs "merely seek to further clarify Count IV" of their Amended Complaint, a declaratory relief claim, by adding their "Breach of Oral Agreement against Defendant Blackmon for payment of UMG CAMEO Artist royalties." ECF No. 227 at 2, 5, and 13-14. Plaintiffs further argue that "Plaintiffs should be allowed leave to further amend/clarify their Second Amended Complaint to clarify all alleged facts for its Breach of Oral Agreement" claim because "Plaintiffs have alleged an oral agreement between the CAMEO members" throughout this litigation. Id. at 9. Finally, Plaintiffs argue that their "part performance" renders Defendant's Statute or Frauds argument meritless. Id. at 12-13.
Federal Rule of Civil Procedure 15(a)(1) states that "[a] party may amend its pleading once as a matter of course" either "before being served with a responsive pleading" or "within 21 days after serving the pleading if a responsive pleading is not allowed and the action is not yet on the trial calendar." If Rule 15(a)(1) does not apply, the party seeking to amend must obtain the opposing party's written consent or the Court's leave to file the amended pleading. Fed. R. Civ. P. 15(a)(2). Well settled law establishes that a motion for leave to amend brought pursuant to Rule 15(a)(2) should be granted freely "when justice so requires." When a party seeks court permission to file an amended pleading, the decision whether to grant leave "lies within the sound discretion of" that court. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185-86 (9th Cir. 1987) (internal citation omitted). The amendment standard is "applied with extreme liberality." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan,Inc., 244 F.3d 708, 712 (9th Cir. 2001)). Despite this liberal policy, leave to amend may be denied because of undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies through previously permitted amendments, undue prejudice or futility. Id. at 1052 (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Absent prejudice, or a strong showing under any of the remaining Foman factors, a presumption exists in favor of granting leave to amend. Id.
Two years into the proceedings, and despite the Court's Order granting Plaintiffs' request to amend their complaint for a second time in limited part, Plaintiffs filed a Second Amended Complaint and a Clarified Second Amended Complaint that exceeded the Court's Order. That is, rather than only clarifying Court IV of Plaintiffs' FAC on behalf of Existing Plaintiffs for the limited purpose of stating a claim against Defendant Blackmon (ECF No. 192 at 28-30), these Plaintiffs also added claims on behalf of Charlie Singleton, Eric Durham, Wayne Cooper, William Reavis, Gary Dow, Damon Mendes, Stephen Moore, Charles Sampson, Thomas "TC" Campbell, and John Kellogg, through assignments. See, for example, ECF Nos. 202 and 203-1 ¶ 108; Exhibit B thereto. It is simply an untenable proposition that adding claims on behalf of...
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