Rajaraman v. GEICO Indem. Co.
| Docket Number | 23-CV-425-JPS |
| Decision Date | 07 August 2023 |
| Parties | BALMURALI RAJARAMAN, JACQUELINE HILL, and ANRI INSURANCE AGENCY, INC., Plaintiffs, v. GEICO INDEMNITY COMPANY, GOVERNMENT EMPLOYEES INSURANCE COMPANY a/k/a GEICO, GEICO GENERAL INSURANCE COMPANY, GEICO CASUALTY COMPANY, GEICO ADVANTAGE INSURANCE COMPANY, GEICO CHOICE INSURANCE COMPANY, GEICO SECURE INSURANCE COMPANY, BERKSHIRE HATHAWAY INC., and GEICO INSURANCE AGENCY, LLC f/k/a GEICO INSURANCE AGENCY, INC., Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Plaintiffs Balmurali Rajaraman, Jacqueline Hill, and ANRI Insurance Agency, Inc. (together, “Plaintiffs”) filed this action on March 31, 2023, naming the above-captioned Defendants, in addition to former defendants GEICO Corporation, GEICO County Mutual Insurance Company, and GEICO Marine Insurance Company. ECF No. 1. On May 17, 2023 Plaintiffs filed an amended complaint, which, among other things, removed GEICO Corporation, GEICO County Mutual Insurance Company, and GEICO Marine Insurance Company as defendants. ECF No. 8. The amendment was based on a meet-and-confer between the parties. ECF No. 12 at 2. At the meet-and-confer, the parties agreed to an amendment that entailed removal of a cause of action, identification of the defendants associated with each cause of action, and to “sparse out the defendants in the Parties section of the complaint.” Id.
On May 30, 2023, the Court held a status conference in part due to its confusion regarding which defendants had appeared in the case and which defendants were properly named. ECF No. 9. According to the parties, the Court's status conference led Plaintiffs to realize they had “inadvertently left” Defendant GEICO Corporation out of the first amended complaint. ECF No. 11 at 3.
The parties met and conferred, and the above-captioned Defendants GEICO Indemnity Company, Government Employees Insurance Company a/k/a GEICO, GEICO General Insurance Company, GEICO Casualty Company, GEICO Advantage Insurance Company, GEICO Choice Insurance Company, GEICO Secure Insurance Company, Berkshire Hathaway Inc., and GEICO Insurance Agency, LLC f/k/a GEICO Insurance Agency, Inc. (together, “Defendants”) informed Plaintiffs that they opposed allowing Plaintiffs leave to amend to correct the omission because they had previously contemplated filing a jurisdictional motion to dismiss that is “somewhat dependent on whether GEICO Corporation was added back in.” Id. The Court suspended Defendants' time to respond to the first amended complaint until the dispute was resolved, see May 30, 2023 text order, and the instant motion for leave to file a second amended complaint followed. ECF Nos. 12, 14, 15.
For the reasons set forth herein, the motion will be granted in part and denied in part. Plaintiffs will be afforded leave to file a second amended complaint, but their civil conspiracy claim will be dismissed with prejudice against GEICO Corporation, as well as against Defendants.
Federal Rule of Civil Procedure 15(a)(2) provides that “[t]he court should freely give leave when justice so requires.” The Seventh Circuit Court of Appeals has stressed that Rule 15(a)(2) announces a “liberal amendment policy.” Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw. Ind., 786 F.3d 510, 521 (7th Cir. 2015). Nevertheless, courts may deny leave for a variety of reasons, including “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, [or] futility of amendment ....” Foman v. Davis, 371 U.S. 178, 182 (1962).
With respect to futility, “[d]istrict courts may refuse to entertain a proposed amendment on futility grounds when the new pleading would not survive a motion to dismiss.” McCoy v. Iberdrola Renewables, Inc., 760 F.3d 674, 685 (7th Cir. 2014) (quoting Gandhi v. Sitara Cap. Mgmt., LLC, 721 F.3d 865, 869 (7th Cir. 2013)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Plaintiffs move for leave to file a second amended complaint primarily to add GEICO Corporation back as a defendant. ECF No. 12 at 4. However, Plaintiffs also seek to “take th[e] opportunity to add more detail” as to “how this court has personal jurisdiction over defendants,” though they ultimately believe the first amended complaint “speak[s] sufficiently as to jurisdiction.” Id. at 4-5.[1]
While Plaintiffs neglected to attach a proposed second amended complaint to their moving brief in accordance with the Local Rules, they do so on reply. ECF No. 15-1; see also Civ. L.R. 15(b) (); Arlin-Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818, 823 (7th Cir. 2011) () (quoting Otto v. Variable Annuity Life Ins. Co., 814 F.2d 1127, 1139 (7th Cir. 1986)).
Thus, from Plaintiffs' reply and proposed second amended complaint, the Court understands the additional “detail” as to the Court's personal jurisdiction is a citation to Wis.Stat. § 801.11. ECF No. 15 at 6; ECF No. 15-1 at 5. Plaintiffs also add to their proposed second amended complaint the date that they claim they learned the cause of their injury for purposes of their fraud in the inducement claim. ECF No. 15 at 6; ECF No. 15-1 at 17 (). These appear to be the only changes between the second amended complaint and the first amended complaint.[2] Defendants oppose the motion for leave on several bases. First, Defendants argue that the motion should be denied for failure to attach a proposed second amended complaint. ECF No. 14 at 2, 4. Second, and along the same lines, they contend that the motion should be denied for failure to state with specificity what changes Plaintiffs seek by the proposed amendment. Id. at 5. Third, they argue that the proposed second amended complaint does not cure jurisdictional deficiencies because, in Plaintiffs' own words, they ultimately believe the first amended complaint “speak[s] sufficiently to jurisdiction.” Id. at 8; ECF No. 12 at 4-5. Finally, they assert that adding GEICO Corporation back as a defendant should not be permitted because Plaintiffs' claims against GEICO Corporation are futile. ECF No. 14 at 9.
Defendants' first two arguments are non-starters. While it certainly would have been preferable for the proposed second amended complaint to have been attached to the motion, the error was cured on reply. Moreover, the meet-and-confer between the parties did not contemplate the removal of GEICO Corporation as a defendant, so the desired change in this case is largely obvious, and the omission is not an attempt to obfuscate.
In at least one case that Defendants cite to support their plea for denial on this basis, the court afforded the plaintiff an opportunity to cure by submitting the proposed amended complaint. See Gonzalez-Koeneke v. West, 791 F.3d 801, 804 (7th Cir. 2015). Others involve amendment on Rule 59(e) motions for reconsideration and are procedurally inapposite or involve violations of local rules on summary judgment-not local rules on amendment, which the Seventh Circuit instructs carries with it a “liberal amendment policy.” Runnion, 786 F.3d at 521; see also Hecker v. Deere & Co., 556 F.3d 575, 590 (7th Cir. 2009) (analyzing proposed amendment on Rule 59(e) motion); McCurry v. Kenco Logistics Servs., LLC, 942 F.3d 783, 787 n.2 (7th Cir. 2019) (). The same holds true as to Defendants' second argument; the reply makes clear what new detail, to the extent not already obvious, is proposed to be added to the second amended complaint. If Defendants wished to raise additional arguments in response to the proposed second amended complaint submitted on reply, they could have moved for leave to file a sur-reply.
Next, to the extent Defendants argue that Plaintiffs' amendment is unnecessary because Plaintiffs do not explain how adding the detail regarding Wis.Stat. § 801.11 cures any jurisdictional deficiencies, this argument fails for several reasons.
First, other than stating their intent to file a motion to dismiss based on jurisdiction and that the motion is “somewhat dependent on whether GEICO Corporation [i]s added back in,” Defendants have not represented the basis of their anticipated motion to dismiss based on jurisdiction. ECF No. 11 at 3; ECF No. 15 at 5-6 ( ).
As the Court understands it, then, Defendants argue that Plaintiffs should not be entitled to add more detail as to jurisdiction at all, while simultaneously flaunting an amorphous jurisdictional defense. Defendants may not have their cake and eat it too. Courts that deny leave to amend for failure to identify how the amendment resolves deficiencies examine “whether the plaintiffs knew of faults with their complaint.” Pension Tr. Fund for Operating Eng'rs...
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