United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR
LEAVE TO AMEND TO ASSERT COUNTERCLAIM (DKT. 17)
TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE
G & M Fashions is suing Defendant Nationwide Insurance
Company for not paying the entirety of Plaintiff's
insurance claim for fire loss to its inventory and
structures. Defendant initially paid part of Plaintiff's
claim, but refused to pay more, so Plaintiff brought this
lawsuit for breach of the insurance contract. After engaging
in discovery, Defendant believes that the initial partial
payment should not have been made and now seeks to amend its
answer to add a counterclaim to recover that payment. For the
reasons outlined below, Defendant's motion for leave to
amend in order to assert its counterclaim is GRANTED.
Standard of Review
who can no longer amend its pleadings as a matter of course
“may amend its pleading only with the opposing
party's written consent or the court's leave. The
court should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a).
a motion for leave to amend pleadings is a matter within the
discretion of the District Court. See Prater v. Ohio
Educ. Ass'n, 505 F.3d 437, 445 (6th Cir. 2007).
Though a discretionary matter, the leave sought should be
“freely given” unless the amendment sought would
result in undue prejudice to the opposing party - such as the
amendment being sought with undue delay, bad faith, or
futility. Crestwood Farm Bloodstock v. Everest Stables,
Inc., 751 F.3d 434, 444 (6th Cir. 2014); citing
Foman v. Davis, 371 U.S. 178, 182 (1962).
Sixth Circuit has emphasized that “case law in this
Circuit manifests liberality in allowing amendments.”
Newberry v. Silver-man, 789 F.3d 636, 645 (6th Cir.
2015); citing Janikowski v. Bendex Corp., 823 F.2d
945, 951 (6th Cir. 1987). This policy reflects the desire to
try cases on their merits, not on the technicalities of the
pleadings. Janikowski, 823 F.2d at 951.
for leave to amend should be granted unless the Court finds
undue delay, significant prejudice, bad faith, or futility.
See Crestwood Farm Bloodstock v. Everest
Stables, Inc., 751 F.3d 434 (6th Cir. 2014); Foman
v. Davis, 371 U.S. 178, 182 (1962). Plaintiff opposes
Defendant's motion for leave to amend for all four
reasons. The Court will address each of Plaintiff's
responses in turn.
argues that there has not been undue delay because Defendant
recently confirmed misrepresentations in Plaintiff's
insurance claim. Dkt. 17. Pg. ID 679. Defendant stated in its
Joint Discovery Plan that “Nationwide will seek to
amend its pleadings after discovery to seek to recoup its
payments mistakenly made.” Dkt. 17-2, Pg. IDs 484-85.
Furthermore, Defendant repeated that it will seek to file
amended pleadings if it discovers that it mistakenly paid a
claim in the answer to the complaint and the affirmative
defenses. Dkt. 17-3, Pg. ID 698.
responds that Defendant should have filed a counterclaim at
the beginning of the lawsuit if Defendant had always intended
to do so. Dkt. 19, Pg. ID 726. Plaintiff cites a recent Sixth
Circuit case to support the premise that Defendant should
have an increased burden to justify why it did not move
earlier. Dkt. 19, Pg. ID 726; see also Newburg/Six Mile
Ltd. P'ship II v. Adlabs Films USA, Inc., 483 Fed.
App'x 85 (6th Cir. 2012). Plaintiff also argues that
Defendant has made no explanation as to why it could not have
obtained the information earlier that led to Defendant filing
this motion. Dkt. 19, Pg. ID 727. Finally, Plaintiff argues
that Defendant has been in possession of the information that
led to this motion for some time, making the delay undue.
Dkt. 19, Pg. IDs 727-28.
replies that it warned Plaintiff from the start of the case
that this counterclaim may be filed. Dkt. 21, Pg. ID 881.
Further, Defendant points to recent events in the discovery
process, such as the deposition of the contractor who did an
independent inventory on March 9, 2017, that led to Defendant
filing this motion. Dkt. 21, Pg. ID 882. Finally, Defendant
points to disputes the parties had in discovery which
affected Defendant's ability to file the motion at an
earlier time. Dkt. 21, Pg. IDs 882-83.
reliance on Newburgh is misplaced. In that case, the
moving party attempted to file its motion to amend over a
month after the close of discovery and passage of the
dispositive motion cutoff date. Newburgh, 483 F.
App'x at 93. Discovery does not end for this case until
September 29, 2017 ...