Stonecrest Partners, LLC v. Bank of Hampton Roads
2011 U.S. Dist. LEXIS 27210
| E.D.N.C. | 2011Background
- Plaintiff Stonecrest filed breach of contract and negligence claims against Gateway Bank in state court; Gateway merged into Bank of Hampton Roads and removed the case to federal court, invoking diversity and amount in controversy requirements.
- Defendant answered and counterclaimed on the promissory note; third-party defendants were joined by third-party complaint alleging guarantees.
- A scheduling order set a deadline (Sept. 21, 2010) for motions to amend the pleadings under Rule 16(b).
- Plaintiff moved to amend on Sept. 20, 2010 to add fraud, unfair trade practices, constructive fraud, and punitive damages, while maintaining original claims.
- Lead counsel for movants died on Sept. 28, 2010; new counsel thereafter sought extensions and filed a second amendment on Nov. 30, 2010.
- Magistrate judge denied the untimely motion to amend; movants appealed the denial seeking relief under Rule 16(b) and Rule 15(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the denial of leave to amend was proper under Rule 16(b). | Movants argue good cause existed due to new counsel, death of prior counsel, and ongoing discovery. | Movants failed to show diligence and good cause; evidence could have been discovered before the deadline. | denial affirmed; movants failed to show good cause under Rule 16(b) |
| Whether the magistrate judge should apply de novo review to the amendment decision. | Movants seek de novo review of the magistrate's order. | Rule 72(a) affords deferential review for non-dispositive scheduling decisions; de novo review is not warranted. | Deferential review applied; standard was not de novo |
| Whether the timing of the amendment could be excused due to the death of counsel and other circumstances. | Death of Robinson, an attorney who sought leave to amend timely, justifies delay. | Death does not reset deadlines; late amendments require independent good-cause showing. | Death of counsel did not excuse untimely amendment; no good cause shown |
| Whether the court should reconsider reinstating the timely motion by Robinson if the second motion fails. | Reinstatement of Robinson's earlier timely motion should be allowed. | No authority to reset deadlines; motion to amend was untimely regardless of counsel change. | Not addressed; request declined due to lack of authority and procedural posture |
Key Cases Cited
- Nourison Rug Corp. v. Parvizian, 535 F.3d 295 (4th Cir.2008) (good-cact standard for extending scheduling order deadlines)
- Laber v. Harvey, 438 F.3d 404 (4th Cir.2006) (liberal Rule 15(a) amendment policy; amended pleadings favored)
- Hall v. Norfolk S. Ry. Co., 469 F.3d 590 (4th Cir.2006) (read Rule 16(b) and Rule 15(a) together; amendment decisions reviewed for error)
- TFWS, Inc. v. Franchot, 572 F.3d 186 (4th Cir.2009) (deferential review of scheduling decisions; good-cause focus)
- Pagano v. Frank, 983 F.2d 343 (1st Cir.1993) (motion to amend treated as non-dispositive; Rule 72(a))
- In re Outsidewall Tire Litig., 267 F.R.D. 466 (E.D. Va.2010) (extension of deadlines governed by scheduling orders; discovery)
- Montgomery v. Anne Arundel Cnty., Md., 182 Fed.Appx. 156 (4th Cir.2006) (timeliness and diligence in Rule 16(b) analyses)