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Tuoni v. Metropolitan Property and Casualty Insurance Co.

United States District Court, D. New Mexico

August 22, 2017




         This matter comes before the Court on Plaintiff's Motion to Amend Complaint (doc. 30). For the reasons that follow, the Motion will be granted.

         I. Background

         Plaintiff brought suit against Defendant in the Second Judicial District Court in the County of Bernalillo and State of New Mexico on October 13, 2016, and filed an Amended Complaint in the same court on October 17, 2016. Doc. 1-2 at 2-8, 33-40. Defendant removed the action to this Court on November 23, 2016 on the basis of diversity jurisdiction. Doc. 1.

         This lawsuit stems from Plaintiff's auto accident on September 13, 2005. See doc. 1-2 at 34. Following the accident, Plaintiff obtained the approval of Defendant, her insurance carrier, to accept a policy-limits settlement from the insurance carrier of the at-fault driver. Id. After accepting that settlement, Plaintiff sought further insurance coverage from Defendant pursuant to the underinsured motorist provisions of her insurance policy. Id. To date, Defendant has not provided any underinsured motorist insurance proceeds to Plaintiff under her policy. Id. at 34-36.

         Plaintiff's Amended Complaint asserts claims against Defendant for breach of contract, bad faith, and unfair insurance claims practices pursuant to the New Mexico Unfair Claims Practices Act. Id. at 37-39. Additionally, the Amended Complaint seeks a declaratory judgment under the New Mexico Declaratory Judgment Act as to when the six-year statute of limitations for bringing a contract action in New Mexico began to or did accrue, and asks the Court to declare the rights and obligations of the respective parties under the terms of Plaintiff's insurance policy. Id. at 34-37; see also N.M.S.A. §§ 44-6-1 et seq. Plaintiff now moves to amend her Complaint a second time in order to remove the declaratory judgment claim. See doc. 30 at 1.

         II. Parties' Positions

         Plaintiff asserts that the declaratory judgment claim is “unnecessary, ” and that its deletion would make resolution of the case more efficient because that claim is equitable in nature while the remaining claims raise only questions of law. Doc. 30 at 3. Plaintiff argues that the claim is now unnecessary in light of Defendant's admissions in its Answer as to the existence and terms of the insurance contract between Plaintiff and Defendant. Id. at 2; see also doc. 38 at 2. Therefore, Plaintiff argues that the action should proceed as a breach of contract and bad faith action, sounding in law, rather than a declaratory judgment action, sounding in equity. Id.

         Defendant opposes Plaintiff's Motion on the basis that allowing Plaintiff to delete her declaratory judgment claim would be prejudicial. Doc. 33 at 2. Defendant notes that Plaintiff sought a declaration regarding whether the statute of limitations to bring this action has passed, and Defendant argues that it relied on that aspect of the declaratory judgment claim in deciding not to include a counterclaim for declaratory judgment on the same question. Id. at 2-4. Defendant states that if the Court rules in Defendant's favor on Plaintiff's declaratory judgment claim by finding that Plaintiff's contract claims were brought after the limitations period had passed, Defendant would be entitled to dismissal of the Complaint with prejudice. Id. at 4. Therefore, Defendant argues that allowing Plaintiff to remove her declaratory judgment claim would result in prejudice to Defendant. Id.

         In her reply, Plaintiff argues that no such prejudice would result because (1) Defendant has raised the statute of limitations argument as an affirmative defense to all of Plaintiff's legal claims; (2) Defendant asserted its statute of limitations argument as the basis of its 12(b)(6) Motion to Dismiss (doc. 4), which the Court already denied; and (3) Defendant retains the right to file a Motion for Summary Judgment on the basis of its statute of limitations argument, and has indicated that it intends to do so. See doc. 38 at 1-2.

         III. Standard of Review

         Plaintiff is beyond the 21-day time period during which she may file an amended pleading as a matter of course. Fed.R.Civ.P. 15(a)(1). Therefore, Plaintiff must obtain either Defendant's consent or the Court's leave in order to amend. Fed.R.Civ.P. 15(a)(2). The Court should “freely give” such leave “when justice so requires.” Id. The decision to grant leave to amend a complaint is within the Court's discretion. Pallottino v. City of Rio Rancho, 31 F.3d 1023, 1027 (10th Cir. 1994). “Refusing leave to amend is generally only justified upon a showing of undue delay, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or undue prejudice to the opposing party, or futility of amendment, etc.” Castleglen, Inc. v. Resolution Trust Corp., 984 F.2d 1571, 1585 (10th Cir. 1993) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).[1]

         Whether prejudice would result to the nonmoving party has been treated by the Tenth Circuit as the “most important[] factor in deciding a motion to amend the pleadings[.]” Minter v. Prime Equipment Co., 451 F.3d 1196, 1207-08 (10th Cir. 2006). “Typically, courts will find prejudice only when an amendment unfairly affects non- movants in terms of preparing their response to the amendment.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (internal quotations and alteration omitted). Courts most often make such a finding “when the amended claims arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues.” Minter, 451 F.3d at 1208. Thus, an amendment may be found to be prejudicial “if its timing prevents the defendant from pursuing a potentially promising line of defense[.]” Id. at 1209. “Undue prejudice” can include “undue difficulty in prosecuting or defending a lawsuit as a result of a change of tactics or theories on the part of the movant.” Deakyne v. Comm'rs of Lewes, 416 F.2d 290, 300 (3d Cir. 1969); see Anderson v. PAR Electrical Contractors, Inc., 318 F.R.D. 640, 645 (D. Kan. 2017); Corp. Stock Transfer, Inc. v. AE Biofuels, Inc., 663 F.Supp.2d 1056, 1061 (D. Colo. 2009). Finally, it is the non- movant's burden to establish that undue prejudice will result from granting leave to amend. See Corp. Stock Transfer, 663 F.Supp.2d 1056; see also Schmitt v. Beverly Health and Rehabilitation Servs., Inc., 993 F.Supp. 1354, 1365 (D. Kan. 1998) (citing Beeck v. Aquaslide ‘N' Dive Corp., 562 F.2d 537, 540 (8th Cir. 1997)); Carefusion 213, LLC v. Professional Disposables, Inc., 2010 WL 4004874, at *4 n.19 (D. Kan. Oct. 12, 2010) (unpublished) (collecting cases from the District of Kansas for this proposition); Lauer v. Credit Collection Servs., 2015 WL 1623031, at *1 (D. Utah Apr. 13, 2015) (unpublished).

         IV. ...

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