Nwachukwu v. Liberty Bank

• Decision Date: 05 July 2017
• Docket Number: Case No. 3:16-cv-00704 (CSH).
• Citation: 257 F.Supp.3d 280
• Court: U.S. District Court — District of Connecticut
• Parties: Anthony NWACHUKWU, Plaintiff, v. LIBERTY BANK, Defendant

257 F.Supp.3d 280

Anthony NWACHUKWU, Plaintiff,

v.LIBERTY BANK, Defendant

Case No. 3:16-cv-00704 (CSH).

United States District Court, D. Connecticut.

Signed July 5, 2017

John A. Sodipo, Jacobs & Sodipo, LLC, Hartford, CT, for Plaintiff.

Joseph V. Meaney, Jr., Kathleen M. Coss, Cranmore, Fitzgerald & Meaney, Hartford, CT, for Defendant.

RULING ON PLAINTIFF'S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

HAIGHT, Senior District Judge:

This case is before the Court on Plaintiff's motion (Doc. 31) for an order of the Court granting Plaintiff leave to file a Second Amended Complaint against Defendant in the form attached to the motion papers. Plaintiff's motion to amend is made under Rule 15(a) of the Federal Rules of Civil Procedure. Defendant resists this motion to amend and reiterates an earlier contention that Plaintiff's initial complaint should be dismissed. See Docs. 20, 32. This Ruling resolves Plaintiff's motion to amend his complaint.

I. INTRODUCTION

In January and June, 2013, Plaintiff Anthony Nwachukwu opened three personal deposit and checking accounts with Defendant Liberty Bank ("Liberty" or "the Bank"). In April 2016, an officer of the Bank advised Plaintiff that the Bank was closing his accounts. Plaintiff objected to the closing, but could not prevent it, and on May 6, 2016 instructed Liberty to wire his funds to the Bank of New York Mullen, which was done.

On May 9, 2016, Plaintiff filed his initial complaint (Doc. 4) in this Court against Liberty. The case is based on the premise that the Bank's conduct in closing Plaintiff's accounts violated his legal rights. Plaintiff coupled his complaint with a motion for a temporary restraining order and preliminary injunction (Doc. 1). The Court denied all preliminary relief in an oral ruling from the bench after a hearing on May 16. See Minute Entry, Doc. 16; Transcript, Doc. 17.

There ensued some occasionally disjointed activities addressed to the filings, which need not be recounted in detail. It is sufficient for present purposes to say that Plaintiff, having previously availed himself of the ability to amend his complaint once as of right, is now required, by Defendant's forcefully expressed refusal of consent, to apply to the Court for leave to file a second amended complaint. That application forms the subject matter of the present motion, which this Ruling decides.

The proposed Second Amended Complaint ("SAC") contains nine counts. They all arise out of the same nexus of fact: The closing by the Bank, in April 2016, of Plaintiff's accounts, against Plaintiff's will and in disregard of his protest. The nine counts may be summarized as follows:

* First Count: breach of contract.

* Second Count: breach of implied duty of good faith and fair dealing

* Third Count: negligent infliction of emotional distress.

* Fourth Count: intentional infliction of emotional distress.

* Fifth Count: violation of Connecticut Unfair Trade Practices Act.

* Sixth Count: violation of 42 U.S.C. § 1981.

* Seventh Count: violation of 42 U.S.C. § 1982.

* Eighth Count: violation of 42 U.S.C. § 1983.

* Tenth Count: violation of the OCC of the U.S. Department of the Treasury.¹

The Second Amended Complaint groups the First through Fifth Counts under the caption "State Claims." The remaining Counts are grouped under the caption "Federal Claims—Civil Rights Violations." Plaintiff's present motion, opposed by Defendant in its entirety, seeks a Court order granting Plaintiff leave to file an amended complaint asserting those claims in that order.

II. STANDARD FOR GRANTING LEAVE TO AMEND THE COMPLAINT

In cases like the one at bar, where a party is not entitled to amend its pleading as of right, Rule 15(a)(2) 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 leading case on the propriety of amendment of pleadings by leave of court is Foman v. Davis , 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). The Supreme Court stated generally that "the purpose of pleading is to facilitate a proper decision on the merits." 371 U.S. at 182, 83 S.Ct. 227 (citing and quoting Conley v. Gibson , 355 U.S. 41, 48, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). Foman then voices this oft-quoted guidance:

In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought [to amend] should, as the rules require, be "freely given."

371 U.S. at 182, 83 S.Ct. 227.

Instructed by Foman , federal trial courts are lenient in allowing amendments to pleadings, but they are not supine. If the party opposing amendment demonstrates the presence of one or more of the negative factors listed in Foman , the amendment will not be allowed, for in that circumstance the cause of justice would not be served.

In the following Parts of this Ruling, I will consider whether any of the "apparent or declared reasons" for refusing amendment articulated in Foman are present in this case. The final and most extended discussion relates to the last preclusive circumstance Foman enumerates: the "futility of amendment." The other Foman factors require less analysis.

III. FACTORS RELEVANT TO REFUSING LEAVE TO AMEND

A. Undue Delay, Undue Prejudice

While undue delay in bringing a motion to amend is one of the factors, as enumerated by Foman , to consider in determining whether leave to amend will be extended, "[m]ere delay, ... absent a showing of bad faith or undue prejudice, does not provide a basis for a district court to deny the right to amend." State Teachers Ret. Bd. v. Fluor Corp. , 654 F.2d 843, 856 (2d Cir. 1981). See also Middle Atl. Utils. Co. v. S. M. W. Dev. Corp. , 392 F.2d 380, 384 (2d Cir. 1968) ("The three-year delay ... is an inadequate basis for denying a motion to amend. It may be a factor to be considered but unless the motion either was made in bad faith or will prejudice defendant, delay by itself is not enough to deny the requisite relief"). The party opposing amendment must show it has been prejudiced by its adversary's delay in seeking leave. In this Circuit,

In determining what constitutes "prejudice," we consider whether the assertion of the new claim would: (i) require the opponent to expend significant additional resources to conduct discovery and prepare for trial; (ii) significantly delay the resolution of the dispute; or (iii) prevent the plaintiff from bringing a timely action in another jurisdiction.

Block v. First Blood Assocs. , 988 F.2d 344, 350 (2d Cir. 1993).

In the case at bar, Plaintiff's present motion to amend his complaint is not preceded by significant delay. The first motion to amend (Doc. 19) was filed on May 27, 2016. After some procedural uncertainties, the present motion to amend was filed on July 29, 2016. That is not an inordinate interval of time. The timing of this motion for leave to file a Second Amended Complaint does not present any of the significant measures of prejudice to Defendant enumerated by Block as reasons to disallow amendment. There has been no showing by Defendant that the new complaint will require it to expend significant additional resources, nor that the amendment will cause significant delay. (Indeed, the proposed Second Amended Complaint has only nine counts to the First Amended Complaint's ten.) Accordingly, the Court is satisfied that neither undue delay nor undue prejudice to the opposing party provides a viable ground upon which to deny this motion for leave to amend.

B. Bad Faith, Dilatory Motive, Repeated Failure to Cure

Plaintiff has made two prior inadequate attempts to put forward this amendment, and the Court's denial of the first attempt gave Plaintiff's counsel ample notice of the Rule 15(a) standard to be met. See Doc. 25, at 2. Plaintiff's counsel, nonetheless, made a second, more egregious error in the second effort to amend, by misstating and mis-characterizing Rule 15(a). See Memorandum of Law in Support of Plaintiff's Second Amended Complaint, Doc. 29–2 at 2; Doc. 30. However, the Court takes Plaintiff's counsel at his word when he says, on the second page of his latest memorandum of law, that regarding his mistake of law, "there was no intent at ‘slight-of-hand’ or any attempt to disregard the rule." Doc. 31–1 at 2 n.1.

This is not a case like Denny v. Barber , 576 F.2d 465 (2d Cir. 1978), where the district judge, in dismissing the initial complaint, put plaintiff on notice as to the defects of his complaint, and plaintiff sought leave to file a second amended complaint after a first amended complaint that had likewise been dismissed. In the case at bar, Plaintiff does, as discussed infra , state claims meeting the federal pleading standard, and has made prompt attempts to cure the defects in his motions. Accordingly, the Court fails to find any bad faith or dilatory motive on the part of this Plaintiff in proffering this second amended complaint, and regards Plaintiff's isolated prior curative failure an insufficient ground on which to deny the instant motion for leave to amend.

C. Futility

1. Preliminary Considerations

Although, under ordinary circumstances, leave to amend must be freely given, denial is proper where the proposed amendment would be "futile." Foman , 371 U.S. at 182, 83 S.Ct. 227. An amendment is considered "futile" if the amended pleading fails to state a claim, or would be subject to a successful motion to dismiss on some other basis. See, e.g. , Lucente v. Int'l Bus. Machs. Corp. , 310 F.3d 243, 258 (2d Cir. 2002) ("An amendment to a pleading is futile if the proposed claim could not withstand a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)"); Donovan v. Am. Skandia Life Assur. Corp. , 217 F.R.D. 325, 325 (S.D.N.Y. 2003) ("Where a proposed...