the copy of the Answer served on plaintiff was a letter stating that Fischbach "reserved the right to move to amend [the Answer to add this claim] should the facts as developed in discovery so warrant." Defendant now seeks to exercise the right that it previously reserved.
Under Rule 13(f), F. R. Civ. P., a court may grant a party's motion to "set up a counterclaim by amendment," if the pleader failed originally to assert the claim "through oversight, inadvertence, or excusable neglect, or when justice so requires." Fed. R. Civ. P. 13(f). Rule 13(f), F. R. Civ. P., should be read together with Rule 15(a), F. R. Civ. P., which provides that leave to amend a pleading "'shall be freely given when justice so requires,'" Bank of New York v. Sasson, 786 F. Supp. 349, 352 (S.D.N.Y. 1992) (Mukasey, J.), but the decision whether to grant leave to amend is "firmly committed" to the discretion of the court. Index Fund, Inc. v. Hagopian, 107 F.R.D. 95, 98 (S.D.N.Y. 1985) (Tenney, J.). When considering a motion to add a counterclaim, a court should consider whether 1) the counterclaim is compulsory, 2) the pleader has acted in good faith and has not unduly delayed filing the counterclaim, 3) undue prejudice would result to the plaintiff and 4) the counterclaim raises meritorious claims. Northwestern Nat. Ins. Co. v. Alberts, 717 F. Supp. 148, 153 (S.D.N.Y. 1989) (Sweet, J.).
Although the action was commenced March 30, 1992, defendant claims that it lacked facts sufficient to assert the counterclaim until Bigda was deposed in January, 1993. Moreover, defendant argues that, even if it erred in waiting until after the deposition to seek to amend, plaintiff would not be unduly prejudiced if the counterclaim were asserted now. Defendant contends that it put plaintiff on notice of the counterclaim both in the meeting of the parties on June 18, 1992, and in the letter accompanying its Amended Answer, dated June 22, 1992. Furthermore, defendant claims that Bigda should be prepared to defend the counterclaim because it is based on facts "central" to one of Fischbach's "key defenses" in the existing action to which Bigda has already responded in this summary judgment motion -- that plaintiff's termination of the Employment Agreement was ineffective because he breached his implied duty of good faith.
Defendant maintains that it will be prejudiced if its motion is denied because the first basis for its counterclaim -- that plaintiff breached its fiduciary duty to Fischbach by failing to give the company notice of his claim for breach -- is compulsory, and would therefore be lost if not asserted in the current action. See Fed. R. Civ. P. 13(a). Further, according to defendant, the other three bases raise issues relevant to plaintiff's breach of contract claim, and so should all be decided in a single action.
Bigda argues that defendant learned no new facts through his deposition, and so has no excuse for failing to assert the counterclaim earlier. He also claims that any "notice" he received of the facts upon which the counterclaim is based -- either through the meeting with defendant, defendant's letter, its motion for summary judgment (which was filed after the close of discovery) or elsewhere -- has been inadequate to enable him to defend against such a claim, and granting leave to amend at this point would prejudice him as a result.
In general, the court believes that the equities in this matter are fairly evenly divided. Defendant has not adequately explained why it failed to assert the counterclaim on the basis of plaintiff's denial alone. It had sufficient opportunity at least to speak with its own employees to form some sense about the bases for the counterclaim. Nor has it convinced the court that it could not have asserted the counterclaim prior to Bigda's deposition and the close of discovery. See Am. Communications Ass'n v. Retirement Plan for Employees of RCA Corp., 488 F. Supp. 479, 484 (S.D.N.Y.) (Weinfeld, J.), aff'd, 646 F.2d 559 (2d Cir. 1980) (discovery rules designed to support properly pleaded cause of action, not to discover whether claim exists). However, the counterclaim does raise meritorious claims. See Northwestern Nat. Ins. Co., 717 F. Supp. at 153. Fischbach's arguments were sufficient to defeat Bigda's various claims for summary judgment, and, if defendant can prove its version of the events, it may well prevail on its counterclaim. Therefore, defendant's motion should be granted.
However, the court cannot agree that Bigda is adequately prepared to defend against the counterclaim without further discovery.
Therefore, the court, grants plaintiff leave to re-open discovery for the limited purpose of deposing, as requested by plaintiff, Robert Kiley, and, if necessary, Charles Steuber, James Walker and Stanley Shaughnessy. Such discovery shall be limited to areas relevant to the counterclaim. Defendant has indicated that it does not require additional discovery, and so none will be granted.
For the foregoing reasons, plaintiff's motion for summary judgment on all causes of action is denied. Defendant's cross-motion is denied on plaintiff's first cause of action, but granted on plaintiff's second, third, fifth and sixth causes of action. Plaintiff's motion to compel discovery in connection with his second cause of action is denied. Finally, defendant's motion to amend its Answer is granted, and plaintiff is permitted to re-open discovery in the manner discussed above.
IT IS SO ORDERED.
Dated: New York, New York
April 19, 1994
Robert L. Carter