Opinion
2:18-CV-01615-MJH
12-02-2020
LINDA BOBAK, Plaintiff, v. LM GENERAL INSURANCE COMPANY, Defendant
OPINION AND ORDER
Plaintiff, Linda Bobak, initiated this action by bringing an underinsured motorists (UIM) coverage claim against Defendant, LM General Insurance Company. (ECF No. 1). Ms. Bobak has filed a Motion for Leave to Amend to add a count for bad faith pursuant to 42 Pa.C.S. § 8371. (ECF No. 39). The matter is now ripe for decision.
Upon consideration of Ms. Bobak's Motion for Leave to Amend (ECF No. 39), the parties' respective briefs (ECF Nos. 42 and 43), and for the following reasons, Ms. Bobak's Motion for Leave to Amend will be denied.
I. Relevant Background
On December 3, 2018, Ms. Bobak filed the instant action against LM for UIM coverage. (ECF No. 1). On March 4, 2019, the Court held an Initial Case Management Conference, wherein it entered a Case Management Order permitting the parties to amend any pleadings until April 1, 2019. (ECF No. 16). At the request of the parties, the Court amended the Case Management Order to extend fact discovery until December 2, 2019 and expert discovery until March 3, 2020. (ECF No. 27). On March 13, 2020, the parties participated in a mediation session wherein the case did not resolve. (ECF No. 31). On May 20, 2020, the Court held a post discovery status conference, where the Court reopened fact discovery for an additional sixty (60) days for the limited purpose of re-deposing Ms. Bobak regarding the impact of her cognitive functions on her wage loss claim as relayed by her cognitive expert. (ECF No. 35).
On September 11, 2020, the Court directed the parties to file pre-trial statements and scheduled a Preliminary Pretrial Conference for October 27, 2020. (ECF No. 36). On October 2, 2020, Ms. Bobak filed her pretrial statement with no indication that she would seek leave to amend her complaint or seek damages for bad faith. (ECF No. 37). On October 26, 2020, the day before the preliminary pretrial conference, Ms. Bobak filed the instant Motion to Amend to add a count for bad faith pursuant to 42 Pa.C.S. § 8371. (ECF No. 39).
II. Discussion
Ms. Bobak's proposed bad faith claim is based upon LM's failure to initiate an offer to settle her UIM claims until the court ordered March 13, 2020 mediation. (ECF No. 39 at ¶ 5). She also argues that LM should have increased its offer following Ms. Bobak's second deposition on July 26, 2020. Ms. Bobak contends that LM would suffer no prejudice if she amends her complaint and that the only additional discovery would be "interrogatories, requests for production of documents and the deposition of LM General Insurance's claims adjuster." (ECF No. 42). LM argues that the proposed amendment does not satisfy the requirements of Fed. R. Civ. P. 16(b)(4) or 15(a). Further, LM maintains that Ms. Bobak had sufficient notice that the parties maintained different positions concerning the value of this case.
Ms. Bobak's request for leave to amend her complaint comes after the Court's case management deadlines have past, after the close of discovery, after the filing of pretrial statements, and at a time when this case was in a posture for trial. (ECF Nos. 16, 27, 35, 36, and 37).
Evaluating Ms. Bobak's motion to amend involves consideration of both Federal Rules of Civil Procedure 15 and 16. Federal Rule of Civil Procedure 15 governs the amendment of pleadings. See Fed. R. Civ. P. 15. However, where a party seeks leave to amend after a court's scheduling order, that party must satisfy Fed. R. Civ. P. 16(b)(4)'s requirements for modifying a scheduling order. Hadeed v. Advanced Vascular Res. of Johnstown, LLC, 2017 U.S. Dist. LEXIS 157290 *8 (W.D. Pa. 2017) (citing Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d Cir. 2010)). Rule 16(b)(4) provides that a scheduling order "may be modified only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). In the Rule 16(b)(4) context, "good cause" looks to the diligence of the party seeking modification of the scheduling order. Graham v. Progressive Direct Ins. Co., 271 F.R.D. 112, 119 (W.D. Pa. 2010). The moving party has the burden to demonstrate "good cause" under Rule 16(b)(4) before a court will consider amending under Rule 15. Id. As regards "good cause," in Greygor v. Wexford Health Sources, Inc., 2016 U.S. Dist. LEXIS 25392 (W.D. Pa. 2016), Judge Fischer stated: "Good cause [for a Rule 16 analysis] requires a demonstration of due diligence. 'Many courts have recognized that '[w]here . . . the party knows or is in possession of information that forms the basis of the later motion to amend at the outset of the litigation, the party is presumptively not diligent.'" Id. at *6.
Here, Ms. Bobak has not demonstrated "good cause" under Rule 16(b)(4) because she has not demonstrated any due diligence that would justify amending her complaint nineteen (19) months beyond this Court's deadline to amend pleadings, ten (10) months beyond the initial close of the discovery, seven (7) months following the mediation where LM made an initial offer, and three (3) months after Ms. Bobak was re-deposed.
In her motion to amend, Ms. Bobak does not aver any facts or reasons to establish that LM's delay in initiating an offer was an unexpected development. Indeed, the sole basis for Ms. Bobak's bad faith claim, LM's delay in making any settlement offer, had existed since the institution of litigation in December 2018. This information was available to Ms. Bobak well before the amendment deadline and likely before the institution of this ligation. Therefore, under a Rule 16(a)(4) analysis, Ms. Bobak was not diligent, and she has no "good cause" to amend well beyond the Court's deadline to amend pleadings. Accordingly, Ms. Bobak's motion to amend will be denied.
Even if Ms. Bobak had "good cause" under a Rule 16(a)(4) analysis, a Rule 15 analysis would produce the same result. Under Federal Rule of Civil Procedure 15(a)(2), a party may amend its pleadings by leave of court, which should be freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). The decision to grant leave to amend rests within the discretion of the court but should only be denied on the basis of: (1) undue delay; (2) bad faith or dilatory motive; (3) undue prejudice to the opposing party; or (4) futility of amendment. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); see also Geness v. Cox, 902 F.3d 344, 359-60 (3d Cir. 2018). "It is well-settled that prejudice to the non-moving party is the touchstone for the denial of [leave to file] an amendment." Cornell & Co. v. Occupational Safety and Health Review Com'n, 573 F.2d 820, 823 (3d Cir. 1978) (citations omitted). "As to prejudice, the Court of Appeals has 'considered whether allowing an amendment would result in additional discovery, cost, and preparation to defend against new facts or new theories." Graham v. Progressive Direct Ins. Co., 271 F.R.D. 112, 122 (W.D.Pa. 2010) (quoting Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001)).
Here, the Court has a basis to deny leave to a amend on any of the four enumerated grounds in Foman . As discussed in the Rule 16 analysis above, Ms. Bobak's motion to amend has been filed with undue delay and is dilatory. Next, with regards to prejudice, if the Court permitted Ms. Bobak to amend her complaint, it would necessitate the reopening of discovery and increased costs to the parties, as LM would need to participate in further discovery. Further, as Ms. Bobak's allegations address in-litigation conduct, LM would potentially need to hire additional counsel to address the bad faith claim. As noted by Graham, supra, the need to conduct additional discovery and bear additional costs is prejudicial to LM. As such, Ms. Bobak's requested amendment would unduly require reopening and extension of discovery and increased expense, which would prejudice LM. Even setting discovery and its expenses aside, the bad faith amendment would reopen the pleadings and likely necessitate the preparation and expense of dispositive motions.
Finally, as regards the futility of the amendment, case law does not support that Ms. Bobak's amended allegations constitute a bad faith claim. As noted above, Ms. Bobak's bad faith claim is derived primarily from LM's failure to make a timely offer to settle. "Futility" means that the complaint, as amended, would fail to state a claim upon which relief could be granted. Holst v. Oxman, 290 F. App'x 508, 510 (3d Cir. 2008). The futility analysis in a motion to amend is essentially the same as in a Rule 12(b)(6) motion. Holst, 290 F. App'x at 510; see also Massarsky v. Gen. Motors Corp., 706 F.2d 111, 125 (3d Cir. 1983). "[B]ad faith is not present merely because an insurer makes a low but reasonable estimate of an insured's damages." Johnson v. Progressive Ins. Co., 2009 PA Super 255, ¶ 12, 987 A.2d 781, 784 (2009). Johnson noted "the underlying facts involve nothing more than a normal dispute between an insured and insurer over the value of a UIM claim. The scenario under consideration occurs routinely in the processing of an insurance claim." Id. at 785. A UIM claim is "inherently and unavoidably, adversarial." Zappile v. Amex Assurance Company, 928 A.2d 251, 256 (Pa. Super. Ct. 2007), citing Condio v. Erie Insurance Exchange, 899 A.2d 1136, 1143, 1144 (Pa. Super. Ct. 2006). The facts set forth in Ms. Bobak's amended complaint do not support a bad faith claim. The UIM claim is adversarial in nature and differences over valuation are expected. Further, Ms. Bobak's averments contain legal conclusions without adequate factual support. Thus, amendment of her complaint with the proposed bad faith claim would be futile.
Therefore, under a Rule 15 analysis, Ms. Bobak's motion to amend was unduly delayed, dilatory, prejudicial, and futile.
Accordingly, under either the Rule 15 or Rule 16 analysis, the Ms. Bobak's Motion to Amend will be denied.
ORDER
And Now this 2nd day of December 2020, upon consideration of Ms. Bobak's Motion for Leave to Amend (ECF No. 39), the respective briefs (ECF Nos. 42 and 43), and for the foregoing reasons, Ms. Bobak's Motion for Leave to Amend is denied.
BY THE COURT:
/s/_________
MARILYN J. HORAN
United States District Judge