N.Y. Life Ins. Co. v. Grant

• Decision Date: 28 October 2014
• Docket Number: Civil Action No. 5:14–CV–101 MTT.
• Citation: 57 F.Supp.3d 1401
• Parties: NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Dean GRANT, Defendant.
• Court: U.S. District Court — Middle District of Georgia

57 F.Supp.3d 1401

NEW YORK LIFE INSURANCE COMPANY, Plaintiff

v.Dean GRANT, Defendant.

Civil Action No. 5:14–CV–101 MTT.

United States District Court, M.D. Georgia, Macon Division.

Signed Oct. 28, 2014.

Sanders Carter, Jr., Andrea K. Cataland, Smith Moore Leatherwood LLP, Atlanta, GA, for Plaintiff.

Hays Baumhauer McQueen, Sharon H. Reeves, Macon, GA, for Defendant.

ORDER

MARC T. TREADWELL, District Judge.

Before the Court is Plaintiff New York Life Insurance Company's motion to dismiss (Doc. 12) Defendant Dean Grant's counterclaim (Doc. 7) and New York Life's motion to strike (Doc. 17) Grant's amended counterclaim (Doc. 15). For the following reasons, the motion to dismiss is GRANTED in part and DENIED in part, and the motion to strike is DENIED.

I. BACKGROUND

New York Life sells insurance products. (Doc. 1 at ¶ 19). Grant began working for New York Life as an Agent on October 7, 1988, and as a District Agent on March 6, 2000. (Doc. 15 at ¶¶ 1–4). As an Agent, Grant received commissions based on his own sales of New York Life products, and as a District Agent, he received override commissions (“Overrides”) based on sales by other agents within his District Agency. (Docs. 1 at ¶ 10; 15 at ¶ 8). The relationship between New York Life and Grant, including the amount of commissions he earned, was governed by an Agency Contract and a District Agency Agreement. (Doc. 15 at ¶¶ 8–10). Under certain circumstances, such as if an insurance product was rescinded, declined or cancelled, Grant was obligated to reimburse New York Life. (Doc. 1 at ¶ 19). Grant terminated his Agency Contract on December 31, 2013, and his District Agency Agreement on July 31, 2013, “pursuant to his retirement from New York Life.” (Doc. 15 at ¶¶ 1–5). On March 13, 2014, New York Life filed this lawsuit against Grant, seeking to recover $287,819.01 that Grant allegedly failed to reimburse New York Life. (Doc. 1 at ¶ 3).

On April 14, 2014, Grant filed a counterclaim along with his answer and defenses to New York Life's complaint. (Doc. 7). New York Life timely moved to dismiss Grant's counterclaim for failure to state a claim upon which relief can be granted. (Doc. 12). Grant filed a consent motion for a four-week extension of time to file his response to New York Life's motion to dismiss, which the Court granted. (Doc. 14). Grant's response to New York Life's motion to dismiss was due on June 17, 2014. That day, Grant filed a brief in response to New York Life's motion to dismiss, as well as an amended counterclaim. (Doc. 15; 16). New York Life then filed a motion to strike Grant's amended counterclaim, arguing that the amended pleading was (1) untimely because it was filed without its consent or the leave of Court and after the deadlines set forth by Fed.R.Civ.P. 15 ; and (2) futile because, even as amended, it fails to state a claim upon which relief can be granted. (Doc. 17 at 2). Grant filed a response to New York Life's motion to strike, arguing the amended counterclaim was timely filed and addressing New York Life's futility arguments. (Doc. 19).

In his amended counterclaim, Grant alleges New York Life, as early as 2010, began interfering with the successful performance of Grant's Agency Contract and District Agency Agreement.¹ Grant makes four allegations against New York Life. First, Grant alleges New York Life made substantial changes to the District Agency Agreement, including terms related to his compensation, without providing the required written notice. (Doc. 15 at ¶¶ 19–20). In Grant's view, this impacts how much, if any, he owes New York Life. Second, Grant alleges New York Life failed to officially transfer an agent to his District Agency, despite representations that it would do so. (Doc. 15 at ¶ 21). New York Life has not covered the numerous expenses incurred by Grant for “training and grooming” the agent from 2008 to 2013. (Doc. 15 at ¶ 21). Third, Grant alleges New York Life interfered with clients of his limited liability company, Grant Financial Group, through unauthorized contact, unauthorized letters, and the production of erroneous information. (Doc. 15 at ¶¶ 13–18). Finally, Grant alleges New York Life arbitrarily refused to honor a successor agreement Grant signed with a current New York Life agent, which would have allowed Grant's clients to be taken care of by an experienced agent. (Doc. 15 at ¶ 22). Instead, Grant's book of clients was transferred to inexperienced agents, resulting in damages to Grant's business reputation in the local community. (Doc. 15 at ¶ 22).

Based on these allegations, Grant asserts the following claims against New York Life: 1) breach of contract; 2) breach of implied covenant of good faith and fair dealing; 3) negligent misrepresentation; 4) breach of implied contract; 5) quantum meruit; 6) promissory estoppel; 7) tortious interference with business relations; 8) negligent and intentional infliction of emotional distress; and 9) attorney's fees.

II. DISCUSSION

A. New York Life's Motion to Strike Grant's Amended Counterclaim

Federal Rule of Civil Procedure 15(a) governs the amendment of pleadings before trial:

(1) Amending as a Matter of Course. A party may amend its pleading once as a matter of course within:

a. 21 days after serving it, 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.

(2) Other Amendments. In all other cases, 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.

Under Rule 15(a)(2), the Court “need not, however, allow an amendment (1) where there has been undue delay, bad faith, dilatory motive, or repeated failure to cure deficiencies by amendments previously allowed; (2) where allowing amendment would cause undue prejudice to the opposing party; or (3) where amendment would be futile.” Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir.2001) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) ).

New York Life argues the amended counterclaim is untimely because it did not consent to the amended counterclaim. New York Life also argues the amended counterclaim is futile because, even as amended, it fails to state a claim upon which relief can be granted. (Doc. 18 at 4–10). Finally, New York Life argues it will be prejudiced if the Court allows the amending pleading because it incurred expenses in moving to dismiss the counterclaim as originally pled. (Doc. 18 at 2). For this reason, New York Life requests the amended counterclaim be allowed only on the condition that Grant pay New York Life's reasonable attorney's fees.

Grant acknowledges the amended counterclaim was filed outside of the 21 days allowed by Rule 15(a)(1). Nevertheless, Grant “believes that his amended pleading is still timely as a matter of course” and “appreciates that he has exercised this right to amend as a matter of course and without leave of court pursuant to Rule 15(a) of the Federal Rules of Civil Procedure.” (Doc. 16 at 3–4). Specifically, Grant cites to the consent motion that was agreed upon and filed by the Parties. Grant argues that he “has not attempted to use this extension of time in which to file this Response in order to circumvent the specific time periods established under Rule 15(a).” (Doc. 16 at 4). Grant also argues the filing of the amended counterclaim does not thwart the purpose of Rule 15. (Doc. 16 at 4).

On May 16, 2014, Grant filed a consent motion “to extend the time in which Defendant–Counterclaimant might file his response to Plaintiff's Motion to Dismiss Defendant's Counterclaims.” (Doc. 14). The Court granted the motion on May 19. One response to a motion to dismiss is to file an amended pleading. See Fed.R.Civ.P. 15, Advisory Committee's Note (2009 Amendments) (“A responsive amendment may avoid the need to decide the motion or reduce the number of issues to be decided, and will expedite determination of issues that otherwise might be raised seriatim.”).

The Court's Order, then, extended the time period for filing an amended counterclaim as a matter of course under Rule 15(a). Fed.R.Civ.P. 6(b) (“When an act may or must be done within a specified time, the court may, for good cause, extend the time....”). That is precisely what Grant did.² Because Grant timely amended his counterclaim pursuant to the Court's extension of time, New York Life's motion to strike is DENIED.

“Under the Federal Rules, an amended complaint supersedes the original complaint.” Fritz v. Standard Sec. Life Ins. Co. of N.Y., 676 F.2d 1356, 1358 (11th Cir.1982). “As a result, motions directed at the superseded pleading generally are to be denied as moot.” Mize v. Blue Ridge Bank, No. 8:12–CV–2763, 2013 WL 1766659, at *1 (D.S.C.). Nevertheless, the Court may consider New York Life's motion to dismiss the original counterclaim as being directed towards the amended counterclaim. See 6 Charles Alan Wright et al., Federal Practice and Procedure § 1476 (3d ed. 2011) (“[D]efendants should not be required to file a new motion to dismiss simply because an amended pleading was introduced while their motion was pending. If some of the defects raised in the original motion remain in the new pleading, the court simply may consider the motion as being addressed to the amended pleading.”); Chavez v. Credit Nation Auto Sales, Inc., 966 F.Supp.2d 1335, 1345 n. 2 (N.D.Ga.2013). “To hold otherwise would be to exalt form over substance.” 6 Charles Alan Wright et al., Federal Practice and Procedure § 1476 (3d ed.2011).

New York Life filed a consolidated reply brief in response to Grant's amended counterclaim, arguing that the counterclaim, even as amended, fails to state a claim upon which relief can be granted. (Doc. 18 at 2). Because New York Life has responded to the merits of the amended counterclaim and continues to allege that Grant's counterclaim...