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Birch Rea Partners, Inc. v. Regent Bank

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

August 13, 2019

BIRCH|REA PARTNERS, INC., Plaintiff,
v.
REGENT BANK, STONEGATE BANK, and HOME BANCSHARES, INC., Defendants. REGENT BANK, STONEGATE BANK, and HOME BANCSHARES, INC., Defendants/Counterclaim Plaintiffs,
v.
BIRCH|REA PARTNERS, INC., Plaintiff/Counterclaim Defendant.

          OPINION AND ORDER

          HOLLY A. BRADY JUDGE

         The Plaintiff in this litigation, Birch|Rea Partners, Inc., commenced this action by filing a Complaint on February 13, 2018. The Complaint alleges that Defendant, Regent Bank, and its successors Stonegate Bank and Home BancShares, Inc., committed the tort of malicious prosecution when Regent Bank initiated and pursued litigation against Birch|Rea in federal court (the Underlying Litigation). Plaintiff later sought leave to amend its Complaint to add as defendants the banks' attorneys who, it alleges, also engaged in the wrongful use of civil proceedings along with their clients.

         On June 4, 2019, Magistrate Judge Susan Collins denied Plaintiff's request to amend its Complaint. This matter is now before the Court on Plaintiff's Objections to the June 4, 2019 Order of Magistrate Judge Susan Collins [ECF No. 74]. For the reasons stated in this Opinion and Order, the Objections are overruled.

         STANDARD OF REVIEW

         A. Federal Rule of Civil Procedure 15 and 16

         Under Federal Rule of Civil Procedure 15, a party may amend his pleading once as a matter of course within twenty-one days after serving it, or if the pleading is one to which a responsive pleading is required, twenty-one days after service of a responsive pleading or twenty-one days after service of a motion under Federal Rule of Civil Procedure 12(b), (e), or (f), whichever is earlier. Fed.R.Civ.P. 15(a)(1). Otherwise, a plaintiff may amend only by leave of the court or by written consent of the adverse party. Fed.R.Civ.P. 15(a)(2). Leave to amend is freely given when justice so requires. Fed.R.Civ.P. 15(a)(2). However, this right is not absolute, Brunt v. Serv. Employees Int'l Union, 284 F.3d 715, 720 (7th Cir. 2002), and can be denied for undue delay, bad faith, dilatory motive, prejudice, or futility. Ind. Funeral Dirs. Ins. Trust v. Trustmark Ins. Corp., 347 F.3d 652, 655 (7th Cir. 2003).

         Moreover, the requirements of Rule 15 must be read in conjunction with the requirements of Federal Rule of Civil Procedure 16 because once the district court has filed a pretrial scheduling order pursuant to Rule 16 establishing a time table for amending pleadings, that rule's standards control. Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011); BKCAP, LLC v. Captec Franchise Trust 2000-1, 3:07-cv-637, 2010 WL 1222187, at *2 (N.D. Ind. Mar. 23, 2010) (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992)). Rule 16(b)(3)(A) requires that the scheduling order “limit the time to join other parties, amend the pleadings, complete discovery, and file motions.”

         Thus, “a party seeking to amend a pleading after the date specified in a scheduling order must first show ‘good cause' for the amendment under Rule 16(b); then, if good cause is shown, the party must demonstrate that the amendment is proper under Rule 15.” BKCAP, 2010 WL 1222187, at *2 (quoting Tschantz v. McCann, 160 F.R.D. 568, 571 (N.D. Ind. 1995)); see also Alioto, 651 F.3d at 719-20 (collecting cases). “A court's evaluation of good cause is not coextensive with an inquiry into the propriety of the amendment under . . . Rule 15.” Tschantz, 160 F.R.D. at 571 (quoting Johnson, 975 F.2d at 609). “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). It is the “primary consideration.” Alioto, 651 at 720 (citing Trustmark Ins. Co. v. Gen. & Cologne Life Re of Am., 424 F.3d 542, 553 (7th Cir. 2005)). “In other words, to demonstrate good cause, a party must show that despite its diligence, the time table could not reasonably have been met.” BKCAP, 2010 WL 1222187, at *2 (citing Tschantz, 160 F.R.D. at 571).

         B. Federal Rule of Civil Procedure 72

         Pursuant to Federal Rule of Civil Procedure 72(a), a party may serve and file objections to a magistrate judge's order pertaining to a non-dispositive pretrial matter within 14 days after being served with a copy of the order. Fed.R.Civ.P. 72(a). “The district judge in the case must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Id.; see also 28 U.S.C. § 636(b)(1)(A) (providing for reconsideration by district court judge of any pretrial matter designated to a magistrate “where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law”).

         Rule 72(a) grants great latitude to magistrate judges to resolve non-dispositive matters, like the one at issue here. See Hall v. Norfolk S. Ry. Co., 469 F.3d 590, 595 (7th Cir. 2006) (holding that a motion to amend the complaint was a non-dispositive motion even when its denial prevented plaintiff from adding a defendant). “The clear error standard means that the district court can overturn the magistrate judge's ruling only if the district court is left with the definite and firm conviction that a mistake has been made.” Weeks v. Samsung Heavy Indus. Co., 126 F.3d 926, 943 (7th Cir. 1997); see also Pinkston v. Madry, 440 F.3d 879, 888 (7th Cir. 2006) (referring to the clear error standard as “extremely deferential”).

         “Under the ‘contrary to law' standard, the district court conducts a plenary review of the magistrate judge's purely legal determinations, setting aside the magistrate judge's order only if it applied an incorrect legal standard, ” Jensen v. Solvay Chems., Inc., 520 F.Supp.2d 1349, 1351 (D. Wyo. 2007), or if it “fails to apply or misapplies relevant statutes, case law, or rules of procedure, ” Pain Ctr. of SE Ind., LLC v. Origin Healthcare Sols., LLC, No. 1:13-CV-00133-RLY, 2014 WL 6674757, at *2 (S.D. Ind. Nov. 25, 2014) (first quoting Henry v. Centeno, No. 10 C 6364, 2011 WL 3796749, at *1 (N.D. Ill. Aug.23, 2011); then quoting Tompkins v. R.J. Reynolds Tobacco Co., 92 F.Supp.2d 70, 74 (N.D.N.Y. 2000)).

         ANALYSIS

         A. ...


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