Opinion
IP 99-1611-C-B/S.
April 9, 2001.
ENTRY GRANTING PLAINTIFF'S MOTION TO AMEND COMPLAINT
Plaintiff, The Don Webster Company, Inc. ("Webster Co."), alleges that it entered into a Commission Sales Agent Agreement (the "Agreement") with Defendant, Indiana Western Express, Inc. ("IWX"), on April 5, 1995, in which Webster Co. was to sell IWX's transportation services to various customers on a commission basis. Count One of the Complaint alleges that IWX has failed to pay Webster Co. in total or in part for various commissions owed. Compl. 7. Count Two alleges that IWX terminated the Agreement on September 3, 1999, and that pursuant to a termination clause contained therein, IWX owes Webster Co. for full commissions for the six month period following the notice of IWX's termination "on all of [Webster Co.'s] accounts that IWX service[d] during such period." Compl. 11. Count Two also seeks a declaration of Webster Co.'s rights under the Agreement to commissions from September 3, 1999, through March 3, 2000, an accounting of the commissions owed to Webster Co. during that period and judgment in that amount (which is yet undetermined). Compl. at 2-3.
On October 23, 2000, Webster Co. filed a motion to amend its complaint, pursuant to Federal Rule of Civil Procedure 15(a), requesting that it be allowed to assert an additional claim of fraud by IWX and a demand for punitive damages arising from that fraud. See Mot. to Amend Compl. Plaintiff attached to its motion an affidavit by Elizabeth Graham Weber, one of Webster Co.'s attorneys, detailing the reasons it was seeking leave to amend, and tendered a proposed amended complaint.
According to Webster Co., upon commencing discovery in this case, it deposed key IWX witnesses, including IWX's owner (deposed in June of 2000), Webster Co.'s supervisor at IWX (deposed in September of 2000), and the employee responsible for maintaining one of Webster Co.'s accounts with IWX (also deposed in September of 2000). Plaintiff contends that the testimony elicited at these depositions establishes a scheme to fraudulently withhold commissions due under the Agreement and to mislead Webster Co. in assessing its entitlement to commissions owed.
IWX opposes the motion for leave to amend on two grounds. First, it asserts that the Case Management Plan calls for motions to be filed "as parties agree" and Webster Co.'s filing of its motion without consulting IWX is "in contravention to the Case Management Plan." Secondly, IWX cites the proximity of the motion to the close of discovery (then set for December 31, 2000) and the trial date (then set for February 5, 2001) and contends that granting the motion would "unduly prejudice" IWX, in that it would require additional discovery and a re-setting of the trial date. Webster Co. responds that IWX's own dilatory actions in responding to documentary discovery requests caused the delay in deposing the witnesses. Further, Webster Co. informs us that immediately upon receiving the transcribed depositions detailing the relevant facts it filed the instant motion. Moreover, Plaintiff contends that the addition of the fraud claim does not substantially change the theory on which the case has been proceeding, would not require IWX to engage in significant new discovery (up to December of 2000 IWX had conducted only one deposition), and would not complicate or lengthen the trial as the issues raised by the amendment are akin to those already existing in the case. These arguments notwithstanding, Webster Co. informs us that it is willing to make Don Webster, the only party deposed by IWX up to this point, available for further questioning on the issue of fraud and to agree to a continuance to allow IWX adequate time to prepare its defense.
Discussion
Federal Rule of Civil Procedure 15(a) provides, in relevant part, that once a responsive pleading has been served, a plaintiff may amend its pleading "only by leave of the court . . . and leave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Thus, leave to amend is to be allowed in the absence of undue delay, undue prejudice to the party opposing the motion, or futility of the amendment. E. Natural Gas. Corp. v. Aluminum Co. of America, 126 F.3d 996, 999 (7th Cir. 1997).
We share Plaintiff's view that allowing the amendment would not unduly prejudice IWX. First, the new contentions do not substantially change the theory on which the case has proceeded up to this point because the facts alleged in Count Three of the Amended Complaint are not distinctly different from those which make up the breach of contract claim already existing in Count One. Compare E. Natural Gas Corp., 126 F.3d at 1000 (affirming district court's decision to allow the defendant to amend its counter-claim to assert a claim for fraud in a suit which previously contained only cross-claims for breach of contract), with, McCann v. Frank B. Hall Co., 109 F.R.D. 363, 365 (N.D. Ill. 1986) (holding that it would be unduly prejudicial to allow plaintiff to amend complaint asserting breach of contract to include claims based in tort when such motion would require significant increase in discovery and expense to defendants). Moreover, it appears that only minimal discovery should be necessary to defend against the new claim since the allegations contained therein pertain primarily to IWX's own knowledge and intentions as they existed during the course of the contractual relationship. Cf. Phoenix Techs., Inc. v. TRW, Inc., 834 F. Supp. 148, 151 (E.D. Pa. 1993).
Webster Co. could not have included a claim for fraud in the original complaint under the Federal Rules of Civil Procedure because it did not have the particular facts necessary to adequately state such a claim. See Fed.R.Civ.P. 9(b) (requiring claims for fraud to be stated with particularity). Upon completing the relevant depositions, Webster Co. filed its motion to amend within thirty days of learning of the relevant facts. Cf. Fed.R.Civ.P. 6. This does not seem to us to be undue delay on the part of Plaintiff; rather, Webster Co.'s actions appear reasonable, given the events as they have been described to us.
To the extent that IWX needs to undertake additional discovery to defend against this charge, Plaintiff has agreed to make Don Webster available for further questioning and to allow IWX additional time to formulate its defense. Such actions alleviate any potential prejudice which might otherwise flow from our decision to allow Webster Co. to amend its complaint.
Conclusion
For the reasons explicated above, Plaintiff's motion to amend the complaint is GRANTED and the Amended Complaint tendered to the court on October 23, 2000, is deemed filed as of the date of this order. Counsel for the parties are directed to confer and tender to us within fourteen days a proposed schedule of discovery on the newly added claim. Having recently vacated the April 23, 2001, trial date in favor of June 4, 2001, we will not further adjust the trial date at this time. However, should the parties' anticipated discovery schedule require a new setting, the parties are directed to file an appropriate motion for continuance of trial at the appropriate time.
It is so ORDERED this ___ day of April 2001.