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Marion T, LLC v. Formall, Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

November 20, 2014

MARION T, LLC, Plaintiff,
v.
FORMALL, INC., Defendant.

OPINION AND ORDER

ROGER B. COSBEY, Magistrate Judge.

Before the Court is a motion filed by Defendant Formall, Inc., on October 23, 2014, seeking leave to amend its answer to assert a counterclaim for conversion against Plaintiff Marion T, LLC, and a related affirmative defense of setoff. (Docket # 58.) Marion T opposes Formall's motion on the grounds of undue delay, prejudice, and futility. (Docket # 60.)

For the following reasons, Formall's motion to amend will be GRANTED.[1]

A. Background

Marion T filed this suit against Formall in November 2012, alleging that it unlawfully converted certain manufacturing equipment; Formall filed its answer on January 4, 2013, asserting affirmative defenses of accord and satisfaction and estoppel. (Docket # 1, 5, No. 1:13cv-132.) This suit was subsequently consolidated with Marion T v. Thermoforming Machinery & Equipment, Inc., No. 1:12-cv-456. (Docket # 14, 50.)

Most relevant to the instant motion, the deadline for any amendments to the pleadings passed, at the latest, on June 28, 2013.[2] Almost a year later, on July 17, 2014, following a bench trial (Docket # 40), this Court ruled in favor of Defendant Thermoforming Machinery & Equipment ("TME"), and against Marion T, as to the ownership of the manufacturing equipment giving rise to this contractual dispute (Docket # 48).

On September 11, 2014, the Court set a status conference to address Marion T's remaining conversion claim against Formall. (Docket # 50.) At the conference, Formall stated that it anticipated filing a counterclaim against Marion T, and the Court afforded it through October 23, 2014, to do so. (Docket # 53.) Formall filed the instant motion within that time frame. (Docket # 58.)

B. Standard of Review

"[T]he decision to grant or deny a motion to file an amended pleading is a matter purely within the sound discretion of the district court." Soltys v. Costello, 520 F.3d 737, 743 (7th Cir. 2008) (alteration in original) (citation omitted). "The court should freely give leave when justice so requires.'" Id. (quoting Fed.R.Civ.P. 15(a)(2)); see Foman v. Davis, 371 U.S. 178, 182 (1962). "Although the rule reflects a liberal attitude towards the amendment of pleadings, courts in their sound discretion may deny a proposed amendment if the moving party has unduly delayed in filing the motion, if the opposing party would suffer undue prejudice, or if the pleading is futile." Soltys, 520 F.3d at 743; see Foman, 371 U.S. at 182.

Moreover, "a party seeking to amend a pleading after the date specified in a scheduling order must first show good cause' for the amendment under [Federal Rule of Civil Procedure] 16(b); then, if good cause is shown, the party must demonstrate that the amendment is proper under Rule 15." BKCAP, LLC v. Captec Franchise Trust 2000-1, No. 3:07-cv-637, 2010 WL 1222187, at *2 (N.D. Ind. Mar. 23, 2010) (quoting Tschantz v. McCann, 160 F.R.D. 568, 571 (N.D. Ind. 1995)); see Alioto v. Town of Lisbon, No. 651 F.3d 715, 719-20 (7th Cir. 2011) (collecting cases). "A court's evaluation of good cause is not co-extensive with an inquiry into the propriety of the amendment under... Rule 15." Tschantz, 160 F.R.D. at 571 (quoting Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992)). "Rather, the good cause standard focuses on the diligence of the party seeking the amendment." BKCAP, 2010 WL 1222187, at *2 (citing Tschantz, 160 F.R.D. at 571); see Trustmark Ins. Co. v. Gen. & Cologne Life Re of Am., 424 F.3d 542, 553 (7th Cir. 2005).

C. Discussion

1. Formall Has Shown Good Cause for the Amendment Under Rule 16(b)

The deadline for Formall to amend its answer passed on or about June 2013, and thus, it must now show good cause for filing a belated counterclaim of conversion and an affirmative defense of setoff.

In an effort to do so, Formall asserts that its rights and claims to the disputed property were contingent on the determination that TME, as the seller of the property, actually owned the property so that it could convey clear title of the property to Formall. As such, Formall asserts that its counterclaim only became ripe when the Court ruled on July 17, 2014, that TME owned the equipment. According to Formall ...


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