Nicholas v. Lance Camper MFG CORP
3:17-cv-01489
| S.D. Cal. | Mar 27, 2018Background
- Plaintiffs Timothy and Kay Nicholas bought an RV from a San Diego dealer in Feb. 2016 but took delivery in Arizona to avoid California sales tax; they later discovered defects and sued Lance Camper MFG Corp. in California state court.
- Lance Camper removed the action to federal court on July 24, 2017.
- Plaintiffs moved for leave to file a First Amended Complaint (FAC) to add fraud-based causes of action and to add the dealer as a defendant; Lance Camper opposed part of the motion.
- Lance Camper argued amendment should be denied as futile (fraud claims fail and are not pled with Rule 9(b) particularity) and that Plaintiffs unduly delayed, causing prejudice.
- The Court analyzed the motion under Rule 15(a) factors (bad faith, delay, prejudice, futility, prior amendments) and Rule 9(b) for fraud pleading particularity.
- Court granted leave to amend, finding fraud claims were presently deficient under Rule 9(b) but potentially curable and that Lance Camper failed to show prejudice or undue delay; Plaintiffs were ordered to file the FAC by April 10, 2018.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Futility of fraud claims | Fraud claims valid as alternative theories and may show deprivation of Song-Beverly rights | Fraud claims futile because Plaintiffs alleged Song-Beverly applies (no deprivation) | Denied futility: uncertainty about Song-Beverly applicability and pleading alternatives permitted |
| Rule 9(b) particularity | Plaintiffs can amend to plead who, what, when, where, how | Claims lack the required who/what/when/where details now | Current fraud allegations fail Rule 9(b) but amendment allowed because defects appear curable |
| Prejudice/undue delay | Amendment timely; discovery and scheduling leave time to address fraud claims | Undue delay leaves little time to respond and expands discovery burdens | Denied prejudice: motion filed promptly after scheduling order; defendant knew fraud discovery would be pursued; adding dealer (which defendant did not oppose) also affects schedule |
Key Cases Cited
- Pisciotta v. Teledyne Indus., 91 F.3d 1326 (9th Cir. 1996) (granting leave to amend rests in district court’s discretion)
- Jackson v. Bank of Hawaii, 902 F.2d 1385 (9th Cir. 1990) (leave to amend should not be automatic)
- Johnson v. Buckley, 356 F.3d 1067 (9th Cir. 2004) (factors for leave to amend include bad faith, delay, prejudice, futility, prior amendments)
- Lacey v. Maricopa Cty., 693 F.3d 896 (9th Cir. 2012) (plaintiffs may plead alternative theories)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud-based claims must satisfy Rule 9(b): who, what, when, where, how)
- Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016) (leave to amend should be denied only if pleading cannot possibly be cured)
- Doe v. United States, 58 F.3d 494 (9th Cir. 1995) (same standard on curability of pleading defects)
- Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) (prejudice is the most important factor in amendment analysis)
- DCD Programs, Ltd. v. Leighton, 833 F.2d 183 (9th Cir. 1987) (burden on opposing party to show prejudice)
- Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149 (9th Cir. 1989) (undue delay can bar amendment where delay is lengthy and repeated amendments occurred)