Opinion
Case No. 04-11202, Adversary Case No. 04-1142.
June 6, 2005.
ORDER GRANTING MOTION FOR LEAVE TO AMEND COMPLAINT
This matter is before the Court on a motion to amend complaint ("Motion") (Doc. 22) filed by the Plaintiff, The Bank of Kentucky, Inc. ("the Bank"). By its Motion, the Bank seeks to amend its complaint to seek relief under 11 U.S.C. § 523(a)(6). The Defendant, Daniel Joseph Ruhe ("Ruhe"), opposes the Motion.
The Bank commenced this adversary proceeding with a complaint to determine dischargeability. See Doc. 1. The complaint alleges that: (1) Ruhe is a principal stockholder of a dealership known as Mid West Truck Center, Inc. ("MWTC"); (2) MWTC obtained financing from the Bank and secured the same with a blanket security interest in, among other things, all inventory and equipment; (3) MWTC failed to make payment on over $400,000 in federal excise tax from the sale of its inventory; (4) Ruhe thereafter closed MWTC and sold the Bank's collateral "out of trust in violation of the [Bank's] security interest"; and (5) Ruhe used the proceeds to retire personal liabilities, including his personal liability for the federal excise taxes. The complaint alleges that the debt to the Bank is nondischargeable under 11 U.S.C. § 523(a)(4). Ruhe filed a timely answer to the complaint. See Doc. 6.
The Bank now seeks leave to amend its complaint to change the statutory basis for relief from § 523(a)(4) to § 523(a)(6). Ruhe opposes the Motion, arguing that the § 523(a)(6) claim is time barred because it was not asserted within 60 days of the first meeting of creditors. See Fed.R.Bankr.P. 4007(c).
The Bank does not dispute that its Motion was filed more than 60 days after the first meeting of creditors. Nonetheless, the Bank contends that its § 523(a)(6) claim is not time barred because it relates back to the original complaint under Fed.R.Civ.P. 15(c)(2). The Court agrees.
Rule 15(c)(2) provides:
An amendment of a pleading relates back to the date of the original pleading when
. . . .
(2) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading[.]
The Sixth Circuit has expounded upon Rule 15(c)(2) as follows:
"The thrust of Rule 15 is to reinforce the principle that cases `should be tried on their merits rather than the technicalities of pleadings.'" Thus, a court will permit a party to add even a new legal theory in an amended pleading as long as it arises out of the same transaction or occurrence. Likewise, "[a]n amendment that alleges added events leading up to the same injury may relate back."
Miller v. American Heavy Lift Shipping, 231 F.3d 242, 248 (6th Cir. 2000) (citations omitted).
In the instant proceeding, the proposed amendment (see Ex. to Doc. 22) varies little from the original complaint other than the statutory basis for relief. There is absolutely no difference in the factual predicate to the claim. The only difference effectuated by the amended complaint is found in paragraphs 14-18, where the Bank asserts a claim under § 523(a)(6) instead of § 523(a)(4). The amendment does not even contain "added events" permitted by the Sixth Circuit. The § 523(a)(6) claim is based upon the exact same facts alleged in the original complaint. Because the alleged injury remains the same, the § 523(a)(6) amendment relates back to the original complaint under Rule 15(c)(2).
This conclusion is consistent with the only reported decision, to the Court's knowledge, that involves a § 523(a)(6) amendment to a § 523(a)(4) complaint. See Tester v. American Honda Finance Corp., 56 B.R. 208 (W.D. Va. 1985). Although Rule 15(c)(2) decisions are somewhat fact specific, the facts in Tester are remarkably analogous to the facts in this proceeding. In Tester, the creditor filed an adversary complaint under § 523(a)(4) based upon an alleged failure to account for funds received from the sale of inventory under a floor plan financing arrangement. When the creditor moved to amend the complaint to add § 523(a)(6) as an alternative basis for relief, the debtors argued that the amendment was time barred because it was filed more than 60 days after the first meeting of creditors. The district court, reversing the bankruptcy court, held that the amendment related back to the original complaint under Rule 15(c)(2) where the amendment only added an additional basis for relief.
For the foregoing reasons, the Motion is hereby GRANTED.