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Pinnacle Great Plains Operating Company, LLC v. Wynn Dewsnup Revocable Trust

United States District Court, D. Idaho

February 23, 2015

PINNACLE GREAT PLAINS OPERATING COMPANY, LLC, Plaintiff,
v.
WYNN DEWSNUP REVOCABLE TRUST; WYNN DEWSNUP, as trustee of the Wynn Dewsnup Revocable Trust; and DOES INDIVIDUAL/ENTITIES I through XX, Defendants.

MEMORANDUM DECISION AND ORDER RE: DOCKET NOS. 28, 32

CANDY W. DALE, Magistrate Judge.

Before the Court are two motions filed by Plaintiff Pinnacle Great Plains Operating Company, LLC, both of which request leave to amend Pinnacle's complaint. The first motion, (Dkt. 28), seeks to add a claim for fraudulent inducement against Defendants-the Wynn Dewsnup Revocable Trust and Wynn Dewsnup in his capacity as trustee (collectively, "Dewsnup")-as well as Wynn Dewsnup in his individual capacity. Dewsnup opposes this motion on the ground that it is untimely under the governing Case Management Order ("CMO"). On the other hand, Dewsnup does not oppose Pinnacle's second motion, (Dkt. 32), which seeks to join a new defendant, 1 Stop Realty, Inc. ("One Stop"), and to amend the complaint with claims against One Stop.

District Judge Edward Lodge has referred all matters in this case to the undersigned. (Dkt. 15.) In the interest of avoiding delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, Pinnacle's motions will be decided on the record without oral argument. Dist. Idaho L. Rule 7.1(d). For the reasons more fully explained below, the Court will grant both motions.

BACKGROUND

This action arises out of Dewsnup's October 2011 sale to Pinnacle of a 5, 487-acre parcel of agricultural land near Malta, Idaho, known as Bridge Farm. Pinnacle claims Dewsnup misrepresented the quality of the groundwater supply for Bridge Farm's irrigation system. According to Pinnacle, some of the wells supplying water to the irrigation system contain high levels of sodium, resulting in a "sodium absorption ratio that does not support normal agricultural activities." (Compl. ΒΆ 17, Dkt. 1.)

Pinnacle filed this action on March 5, 2013, alleging Dewsnup breached the parties' Real Estate Purchase and Sale Agreement and breached of the covenants of good faith and fair dealing. In mid-April of 2013, Dewsnup moved to dismiss the complaint, primarily arguing Pinnacle's lawsuit was untimely. In addition, Dewsnup argued (and Pinnacle later conceded) that Wynn Dewsnup was not a party to the Purchase and Sale Agreement in his individual capacity and thus not a proper defendant with respect to Pinnacle's contract claims. After adopting the undersigned's Report and Recommendation on February 6, 2014, Judge Lodge dismissed Pinnacle's individual capacity claims against Wynn Dewsnup but otherwise denied the motion to dismiss. (Dkt. 19.)

Thereafter, the case proceeded under the CMO entered on May 30, 2013. (Dkt. 13.) In early March of 2014, the Court granted Pinnacle's unopposed motion to extend the CMO's deadlines for discovery, dispositive motions, and mediation. However, Pinnacle did not seek to amend the CMO's November 29, 2013 deadline for amendment of pleadings and joinder of parties. Pinnacle filed the instant motions many months after that deadline expired.

LEGAL STANDARDS

A party seeking to amend a pleading after the deadline for amendments must satisfy the "good cause" standard of Rule 16(b) in addition to the more liberal standard for amendment of pleadings under Rule 15(a). Once a court sets a case schedule pursuant to Rule 16, the "schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). The "good cause" inquiry under Rule 16 "is not coextensive with an inquiry into the propriety of the amendment under... Rule 15." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (citation omitted). The focus of the good cause analysis is on "the diligence of the party seeking the extension." Id. Thus, the issue under Rule 16(b) is whether "pretrial schedule... cannot reasonably be met despite the diligence of the party seeking the extension." Id. (quoting Fed.R.Civ.P. advisory committee's notes (1983 amendment)) (internal quotation marks omitted). "If that party was not diligent, the inquiry should end." Id .

But, if there is good cause to modify the case schedule, the "court should freely give leave [to amend pleadings before trial] when justice so requires." Fed.R.Civ.P. 15(a)(2). The United States Supreme Court, in interpreting Rule 15(a), has set forth the standard to be applied by the district courts:

If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claims on the merits. 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 should, as the rules require, be "freely given."

Foman v. Davis, 371 U.S. 178, 182 (1962). According to the Ninth Circuit, the factors identified in Foman are not of equal weight; specifically, "delay alone no matter how lengthy is an insufficient ground for denial of leave to amend." United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). The most important factor is whether amendment would prejudice the opposing party. Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973).

ANALYSIS

1. Motion to Amend Complaint ...


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