Preferra Insurance Company Risk Retention Group v. National Association of Social Workers, Inc.
Civil Action No. 2024-2689
| D.D.C. | Mar 25, 2025Background
- Preferra Insurance Company, a risk retention group providing insurance to social workers, had a longstanding business relationship with the National Association of Social Workers, Inc. (NASW), and its affiliated entities ASI and NASWIC.
- Tensions arose after NASW hired a new CEO with a criminal record, leading Preferra to remove him from its board, which escalated the adversarial relationship between the parties.
- Subsequently, NASW replaced most of ASI’s board, who then replaced most of NASWIC’s board, resulting in significant leadership changes and the termination of Preferra’s agreements with ASI and NASWIC.
- Preferra claims ASI and NASWIC failed to pay owed severance relating to Mr. Benedetto's salary after his removal from their boards.
- Preferra filed suit alleging breach of contract, breach of good faith and fair dealing, tortious interference, and Lanham Act violations; Defendants moved to dismiss, and Preferra sought to amend its complaint after the 21-day window.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness and Appropriateness of Amendment | No undue delay or prejudice; amendment only clarifies/detailed allegations | Proposed amendment is futile; only adds conclusory language | Amendment allowed; liberal standard for granting leave, no sufficient reason to deny |
| Standard for Leave to Amend Beyond 21 Days | Seeks to correct any pleading defects and detail facts | Amendment futile, will not cure deficiencies | Leave should be granted absent undue delay, bad faith, or futility |
| Sufficiency of Proposed Amendments | Amendments clarify and expand on facts at issue | Still fails to state a claim, is speculative | Amendments relate to potentially proper subject of relief; merits to be tested in further proceedings |
| Futility of Amendment | Amendments respond to dismissal motion and could survive | Futile because based on legal conclusions | Ruling: Not clearly futile; Defendants can challenge on amended pleadings |
Key Cases Cited
- Foman v. Davis, 371 U.S. 178 (1962) (sets standard that leave to amend should be freely given in absence of undue delay, bad faith, or futility)
- Richardson v. United States, 193 F.3d 545 (D.C. Cir. 1999) (leave to amend may be denied if amendment would not survive a motion to dismiss)
- Davis v. Liberty Mut. Ins., 871 F.2d 1134 (D.C. Cir. 1989) (D.C. Circuit favors liberal policy towards allowing amendments)