Taveney v. Int'l Paper Co.

• Decision Date: 28 March 2022
• Docket Number: 4:19-CV-103
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: JOSHUA TAVENEY, Plaintiff, v. INTERNATIONAL PAPER COMPANY, Defendant. INTERNATIONAL PAPER COMPANY, Third-Party Plaintiff, v. THOMAS INDUSTRIAL MECHANICAL CONSTRUCTORS, LLC, Third-Party Defendant.

JOSHUA TAVENEY, Plaintiff,
v.
INTERNATIONAL PAPER COMPANY, Defendant.

INTERNATIONAL PAPER COMPANY, Third-Party Plaintiff,
v.
THOMAS INDUSTRIAL MECHANICAL CONSTRUCTORS, LLC, Third-Party Defendant.

No. 4:19-CV-103

United States District Court, E.D. North Carolina, Eastern Division

March 28, 2022

ORDER

JAMES C. DEVER III UNITED STATES DISTRICT JUDGE

On July 17, 2019, Joshua Taveney ('Taveney" or "plaintiff') filed suit against International Paper Company ("International Paper") alleging claims arising from injuries Taveney sustained during a workplace incident [D.E. 1]. On January 9, 2020, International Paper filed a third-party complaint against Thomas Industrial Mechanical Constructors, Inc. ("Thomas Industrial") alleging claims for express indemnity, implied equitable indemnity, apportionment of fault, and a declaratory judgment [D.E. 11]. On February 10, 2020, Thomas Industrial answered the third-party complaint and asserted as a defense a motion to dismiss for failure to state a claim [D.E. 17]. Discovery concluded on April 30, 2021. See Order [D.E. 34]. On June 1, 2021, Thomas Industrial moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and, in the

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alternative, for summary judgment [D.E. 36]. On June 22, 2021, International Paper responded in opposition [D.E. 39]. On July 6, 2021, Thomas Industrial replied [D.E. 40].

On January 27, 2022, International Paper moved for leave to file an amended third-party complaint [D.E. 41]. On March 10, 2022, Thomas Industrial responded in opposition [D.E. 43]. As explained below, the court denies Industrial Paper's motion to amend, construes Thomas Industrial's motion to dismiss as a motion for judgment on the pleadings, and grants the motion.

I.

International Paper operates a mill in New Bern, North Carolina. See Compl. [D.E. 1] ¶ 3.^[1]International Paper contracts with Thomas Industrial to provide maintenance services at the mill. See Id. ¶ 10. Taveney worked for Thomas Industrial, which was assigned to complete work for International Paper at the mill. See Id. ¶¶ 9, 11. On March 17, 2019, Taveney had to disconnect and remove a valve from a pipeline at the mill. See Id. ¶¶ 12, 14. Before doing so, Taveney twice asked International Paper's pipe operator if the pipe was de-energized and asked whether he needed to obtain a line break permit. See Id. ¶¶ 16, 27. Bom times, the operator assured Taveney the pipe was de-energized and offline. See Id. ¶¶ 19-20, 28. However, a valve upstream of where Taveney was working had sprung a leak. See Id. ¶¶ 21-22. When Taveney removed the downstream valve, high pressure steam and boiling water exited the pipe, severely burning him. See Id. ¶¶ 29-34.

On December 6, 2021, International Paper settled the underlying dispute with Taveney. See [D.E. 41] ¶ 16. In its third-party complaint, International Paper seeks indemnity, contribution, and a declaratory judgment. See Third-Party Compl. ¶¶ 4-23.

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II.

On January 27, 2022, International Paper moved to amend its third-party complaint to allege additional facts and to add an insurance company as a second third-party defendant See [D.E. 41]. Thomas Industrial opposes the motion, arguing International Paper's motion violates this court's scheduling order and does not comply with Federal Rules of Civil Procedure IS and 16. See [D.E. 43].

On November 5, 2019, the court issued a scheduling order. See [D.E. 10]. According to the order, the parties had to complete discovery by July 31, 2020, and file all potentially dispositive motions by August 28, 2020. See Id. at 1. Additionally, the court ordered that "motions to join additional parties and to amend pleadings must be made promptly after the information giving rise to the motion becomes known to the party or counsel. Any such motion filed after January 17, 2020, must meet the standards of Fed.R.Civ.P. 15 and 16." Id. at 2. On June 12 and August 31, 2020, and on February 16, 2021, the court extended the deadlines for expert reports, discovery, and dispositive motions, but the court did not extend the deadline for motions to join additional parties or to amend the pleadings. See [D.E. 22, 26, 34].

On May 17, 2019, International Paper wrote to Thomas Industrial concerning this litigation, seeking indemnity and contribution. See [D.E. 41] ¶ 8. International Paper also asked Thomas Industrial to notify its insurance carriers. See id. On August 28, 2019, American Casualty Company of Reading, Pennsylvania ("ACCO"), one of Thomas Industrial's insurance carriers, informed International Paper of its position that International Paper was not an insured under the policy and that it did not consider Thomas Industrial to be responsible for Taveney's injuries. See Id. ¶¶ 7, 9. On January 9, 2020, International Paper filed its third-party complaint, naming Thomas Industrial, but not ACCO, as a third-party defendant. See [D.E. 11].

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On April 30, 2021, discovery closed. On May 18, 2021, the parties participated in a mediated settlement conference. International Paper asserts that Thomas Industrial and ACCO "refused to participate in good faith." [D.E. 41] ¶11. On June 1, 2021, after the settlement conference resulted in an impasse, Thomas Industrial moved to dismiss International Paper's third-party complaint. See [D.E. 36]. International Paper unsuccessfully attempted to communicate with ACCO on May 20 and June 11, 2021, concerning indemnity and contribution. See [D.E. 41] ¶¶ 12-13. On December 6, 2021, International Paper settled its dispute with Taveney. See Id. ¶ 16. On December 29, 2021, International Paper informed Thomas Industrial of the settlement. See Id. ¶ 17. Nearly a month later, International Paper moved for leave to amend its third-party complaint to allege additional factual allegations and to add ACCO as a third-party defendant. See Id. at 1.

A party's complaint puts its opponent on notice of the claims in the case. If a party wishes to amend those claims, the party must comply with the Federal Rules of Civil Procedure. Under Rule 15, provided certain time requirements are met, a party may amend a pleading once as a matter of course. See Fed.R.Civ.P. 15(a)(1). Rule IS allows additional amendments only with the permission of the opposing party or with leave of court, and such leave should be freely given "when justice so requires." Fed.R.Civ.P. 15(a)(2). However, once a court enters a scheduling order under Rule 16 with a deadline concerning amendments to pleadings, and the deadline expires, the process changes. At that point, to amend a pleading, a party must first establish "good cause" under Rule 16 and then establish the traditional requirements under Rule IS (i.e., the absence of prejudice, futility, and bad faith). See, e.g., Attkisson v. Holder. 925 F.3d 606, 625-26 (4th Cir. 2019); Nourison Rug Corp. v. Parvizian. 535 F.3d 295, 298-99 (4th Cir. 2008). If the party fails to establish "good cause" under Rule 16, a trial court may deny the motion to amend and need not analyze the motion under Rule 15. See Nourison Rug. 535 F.3d at 299;

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see also Gilbert v. Deutsche Rank Tr To. Ams. forces. Accredit Loans. Inc.. No. 4:09-CV-181-D, 2016 WL 7378985, at *l-2 (E.D. N.C. May 25, 2016) (unpublished); Rovce v. Wyeth. No. 2:04-0690, 2011 WL 1397043, at * 1-2 (S.D. W.Va. Apr. 13, 2011) (unpublished); Rodgers v. Hill. No. 5:08-CT-3105-D, 2010 WL 3239104, at *13 (E.D. N.C. Aug. 16, 2010) (unpublished); Halpem v. Wake Forest Univ. Health Scis.. 268 F.R.D. 264, 266 (M.D. N.C. 2010); Remediation Prods.. Inc. v. Adventus Ams., Inc. No. 3:07CV00153-RJC-DCK, 2009 WL 101692, at * 1-2 (W.D. N.C. Jan. 8, 2009) (unpublished).

Rule 16's "good cause" requirement focuses primarily on "the diligence of the moving parly." Montgomery v. Anne Arundel Cnty.. 182 Fed.Appx. 156, 162 (4th Cir. 2006) (per curiam) (unpublished). In considering diligence, the court looks to whether the "evidence supporting the proposed amendment would not have been discovered... until after the amendment deadline had passed." United States v. Godwin. 247 F.R.D. 503, 506 (E.D. N.C. 2007) (quotation omitted). The court also "focuses on the timeliness of the amendment and the reasons for its tardy submission." Montgomery. 182 Fed.Appx. at 162; see Opsitnick v. Crumpler. No. 5:13-CV-835-D, 2015 WL 12860285, at * 1 (E.D. N.C. Oct. 19, 2015) (unpublished).

"Given their heavy case loads, district courts require the effective case management tools provided by Rule 16." Nourison Rug. 535 F.3d at 298. A trial court's scheduling order "is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril." Gestetner Corp. v. Case Equip. Co.. 108 F.R.D. 138, 141 (D. Me. 1985). Where Rule 16(b) applies in addition to Rule 15(a)(2), "the district court's discretion is substantial." Moore v. Equitrans, T.P., 818 Fed.Appx. 212, 218 (4th Cir. 2020) (unpublished); cf. Cahoon v. Edward Orion, It Ceramic. Found.. No. 2:17-CV-63-D, 2020 WL 918753, at *4-5 (E.D. N.C. Feb. 24, 2020) (unpublished).

International Paper has failed to demonstrate good cause under Rule 16. As for adding ACCO as a third-party defendant, according to International Paper's own filings, it knew that ACCO

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insured Thomas Industrial, that ACCO did not consider International Paper an insured, and that ACCO did not believe Thomas Industrial owed International Paper indemnity or contribution at least as early as August 28, 2019, two months before the court issued its scheduling order and more than four months before International Paper filed its third-party complaint against Thomas Industrial. See [D.E. 41] ¶ 9. International Paper has provided no reason why it could not have included ACCO as a third-party defendant in its original third-party complaint, which it timely tiled against Thomas Industrial in accordance with the court's scheduling order.

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