Seacore Marine, LLC v. C&G Boat Works, Inc.
Decision Date | 03 March 2016 |
Docket Number | CIVIL ACTION NO. 14-0596-CG-C |
Parties | SEACORE MARINE, LLC, et aL, Plaintiffs, v. C & G BOAT WORKS, INC., et aL, Defendants. |
Court | U.S. District Court — Southern District of Alabama |
This matter is before the Court on Plaintiffs' motion for leave to file amended complaint (Doc. 86), Defendants' objections thereto (Docs. 89 & 91), and Plaintiffs' reply (Doc. 92). For the reason explained below, the Court finds that Defendants have not shown that substantial reason exists to deny leave to amend. Accordingly, Plaintiffs' motion will be granted.
Federal Rule of Civil Procedure 15(a) provides that leave to amend pleadings "shall be freely given when justice so requires." See FED. R. CIV. P. 15(a). "The thrust of Rule 15(a) is to allow parties to have their claims heard on the merits, and accordingly, district courts should liberally grant leave to amend when 'the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief.'" In re Engle Cases, 767 F.3d 1082, 1123 (11th Cir. 2014)(citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962)). The Eleventh Circuit recognized that Rule 15(a) "severely restricts" a district court's discretion to deny leave to amend. Sibley v. Lando, 437 F.3d 1067, 1073 (11th Cir. 2005). "Unless a substantial reason exists to deny leave to amend, the discretion of the District Court is not broad enough to permit denial." Fla. Evergreen Foliage v. E.I. DuPont De Nemours and Co., 470 F.3d 1036, 1041 (11th Cir. 2006) (citation omitted). Though the Court's discretion to grant motions for leave to amend is "liberal," the standard is "...not an unqualified license to fix every new defect as the court uncovers them." In re Engle Cases, 767 F.3d at 1123. Leave to amend can be properly denied under circumstances of "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." Equity Lifestyle Properties, Inc. v. Fla. Mowing and Landscape Service, Inc., 556 F.3d 1232, 1241 (11th Cir. 2009) (citation omitted).
Defendants in this case oppose the proposed amendment because Plaintiff is attempting to reassert claims similar to those that were previously dismissed by this Court. Defendants argue that allowing the amendment would waste time and be futile, because Defendants would respond with a second motion to dismiss, which they contend should be granted. "When a district court denies the plaintiff leave to amend a complaint due to futility, the court is making the legal conclusion that the complaint, as amended, would necessarily fail." St. Charles Foods, Inc. v. Am.'s Favorite Chicken Co., 198 F.3d 815, 822-23 (11th Cir. 1999). The futility threshold is akin to that for a motion to dismiss; thus, if the amended complaint could not survive Rule 12(b)(6) scrutiny, then the amendment is futile and leave to amend isproperly denied. See, e.g., Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir. 1999) ( ); Florida Power & Light Co. v. Allis Chalmers Corp., 85 F.3d 1514, 1520 (11th Cir. 1996) ( ); Amick v. BM & KM, Inc., 275 F. Supp.2d 1378, 1381 (N.D. Ga. 2003) (). It follows that the burden is upon the defendants to demonstrate that the allegations of the proposed amended complaint would be unable to withstand a motion to dismiss. When considering whether a claim has been stated, "the pleadings are construed broadly," and "the allegations in the complaint are viewed in the light most favorable to the plaintiff." Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (citations omitted).
Plaintiffs seek to amend their complaint to assert facts to support claims dependent on piercing the corporate veil against some of the corporate defendants in this action. This Court previously found that Plaintiffs had not alleged facts in their original complaint that would support piercing the corporate veil. (Doc. 67). In ruling on Defendants' motion to dismiss (Doc. 34), this Court dismissed all claims that were dependent on piercing the corporate veil (Doc. 67). Specifically, this Court found that Plaintiffs had not alleged facts in their original complaint to support their conclusion that the other corporate defendants had misused their control over the contracting corporation. When instrumentality or alto ego is thebasis for piercing the corporate veil, three elements are essential:
Messick v. Moring, 514 So. 2d 892, 894-895 (Ala. 1987) (citation omitted). This Court, noting that heightened pleading is not necessary to support piercing the corporate veil claims, but that conclusory allegations must be supported by factual allegations, reasoned that the claims should be dismissed for the following reasons:
(Doc. 67, pp. 9-11) (footnote 11 omitted). This Court also found that allegations that the entities converted and/or sold property that belonged to Plaintiffs, cannot be used to support their piercing of the corporate veil claims as their "remedy is self-evident in Plaintiffs' claims for conversion and unjust enrichment", claims which are not premised on piercing the corporate veil, but on individual liability for their own actions. (Doc. 67, pp. 11, 14-15).
Plaintiffs' proposed amended complaint is 16 pages longer than the original complaint and includes many more factual allegations regarding the transferring and use of funds and property between the defendant corporate entities and Janson Graham. (Doc. 86-1). Under a section labeled "Inter-Defendant Transactions and Activities," the amended complaint lists numerous payments or transfers of moneybetween the entities and points out differences in amounts paid by C&G for rent as compared to the amounts paid by Graham Gulf for rent. (Doc. 86-1, pp. 23-33). Plaintiffs allege that the "unjustified and unsupported fluctuation in the monthly rent Davenport charged C&G was unfair, fraudulent or otherwise not legitimate." (Doc. 86-1, ¶ 84). Plaintiffs also allege that the management fees charged to C&G "were far in excess of the market value for the services provided" and were unfair, fraudulent or otherwise not legitimate." (Doc. 86-1, ¶¶ 85, 86). Plaintiffs allege that C&G constructed vessels for Graham...
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