United States District Court, D. New Mexico
ORDER GRANTING PLAINTIFF'S MOTION TO AMEND
GREGORY B. WORMUTH UNITED STATES MAGISTRATE JUDGE
matter comes before the Court on Plaintiff's Motion to
Amend Complaint (doc. 30). For the reasons that
follow, the Motion will be granted.
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.
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.
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.
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.
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.
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.
Standard of Review
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
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)