The opinion of the court was delivered by: John F. Keenan, United States District Judge
Before the Court is the motion of Plaintiffs Alfred Ratcliffe, Nancy Ratcliffe, and the Estate of Courtney Ratcliffe (collectively, "Plaintiffs") to amend their complaint, pursuant to Rules 15(a) and 16(b) of the Federal Rules of Civil Procedure, to include a claim for exemplary damages based on evidence newly obtained during the course of discovery. For the following reasons, Plaintiffs' motion to amend their complaint is granted.
Plaintiffs' claims arise from the tragic accidental death of Courtney Ratcliffe ("Ms. Ratcliffe"), a 23-year old college student, who in the early morning of November 1, 2003, sustained fatal head injuries after falling in the common stairway of the Manhattan apartment building in which she lived. Plaintiffs brought suit against the owners of Ms. Ratcliffe's apartment building (collectively, the "Pradera Defendants") and against 287 10th Glass Restaurant, Inc., Timothy Sherry, and Fernando Henao,(collectively, the "Glass Defendants"), the owners and operators of the Glass restaurant and lounge ("Glass"), an establishment located approximately two blocks from Ms. Ratcliffe's residence, where the decedent allegedly consumed alcohol in the hours prior to her death. In their Second Amended Complaint ("SAC"), Plaintiffs asserted causes of action, on behalf of Ms. Ratcliffe's estate, against the Pradera Defendants for negligence, on the ground that the handrail of the common stairway down which Ms. Ratcliffe fell was defective; and against the Glass Defendants, for negligently serving alcohol to Ms. Ratcliffe while she was visibly intoxicated in the hours prior to her death. The SAC also included a claim of negligence against both the Pradera and Glass Defendants on behalf of Alfred and Nancy Ratcliffe, Ms. Ratcliffe's parents. Plaintiffs now seek to file a Proposed Third Amended Complaint (the "TAC") that includes new allegations of conduct and a claim for exemplary damages that relate solely to the Glass Defendants.*fn1
Plaintiffs originally moved to amend their complaint on May 12, 2007. In that motion, Plaintiffs argued that leave to amend should be granted because Plaintiffs satisfied the requirements of Rule 15(a). Defendants opposed the motion on Rule 15(a) grounds. By Order dated July 16, 2007, the Court dismissed Plaintiffs' Rule 15(a) motion without prejudice to allow Plaintiffs to re-file a motion, and the defendants to refile an opposition brief, that addressed the standard for amendment set forth in Rule 16(b), which governs the amendment of pleadings in cases where a scheduling order has been entered and the motion for amendment occurs after the expiration of the deadline for amendment to pleadings. See Estate of Ratcliffe v. Pradera Realty Co., No. 05 Civ. 10272 (JFK), 2007 U.S. Dist. LEXIS 51800 (S.D.N.Y. July 16, 2007). As the Court observed in its Order of July 16, 2007, a scheduling order was entered in this case which set January 11, 2007 as the deadline for amendments to pleadings. See First Amended Discovery Plan, Nov. 13, 2006 (Doc # 28.) Here, therefore, "the lenient standard [for amendment of pleadings] under Rule 15(a), which provides leave to amend 'shall be freely given,' must be balanced against the requirement under Rule 16(b) that the Court's scheduling order 'shall not be modified except upon a showing of good cause.'" Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003) (quoting Fed. R. Civ. P 15(a) and 16(b)). Whether good cause exists within the meaning of Rule 16(b) turns upon the diligence of the party seeking to amend. Id. In addition, "while the absence of prejudice to a nonmoving party may be relevant to leave to amend under Rule 15(a), it does not fulfill the good cause requirement of Rule 16(b)." Nairobi Holdings Ltd. v. Brown Bros. Harriman & Co., No. 02 Civ. 1230 (LMM) (THK), 2006 U.S. Dist. LEXIS 9931, at *20 (S.D.N.Y. Mar. 10, 2006). Where the moving party demonstrates that it could not have met the deadline of a scheduling order despite the exercise of diligence, the court may extend the deadline and thus grant the movant leave to amend the complaint. See Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000).
In the TAC, Plaintiffs seek to add a claim for exemplary damages. The TAC contains the allegation that the Glass Defendants' negligent conduct included their "fail[ure] to monitor the TIPS training certification of its bartenders," (Pl. Mem., Ex. A ¶ 33), and states that the Glass Defendants' conduct, in serving Ms. Ratcliffe while she was visibly intoxicated, was "wanton, willful and reckless" and constituted "gross negligence." (Id.) The TAC also expressly cites to New York's Dram Shop Act, N.Y. G.O.L. § 11-101, as authority for the relief sought.
Plaintiffs contend that good cause for the proposed amendment exists because Plaintiffs only recently obtained, and could not have obtained earlier with due diligence, the evidence upon which their claim for exemplary damages is based. The evidence at issue consists, first, of the deposition testimony of Vanessa Vega ("Vega") and, second, of records that Plaintiffs subsequently obtained as a result of facts revealed in Vega's deposition.
Vega, the general manager of Glass who worked at Glass on the night of October 31, 2003 and the early morning hours of November 1, 2003, was deposed on May 2, 2007, while fact discovery was ongoing.*fn2 Vega testified that she was certified as a trainer in Training in Intervention Procedures ("TIPS"), a program which provides training related to the responsible sale and service of alcohol. Although TIPS instruction for employees of bars and restaurants is not mandatory under New York law, Glass required all of its employees to participate in the TIPS training. Vega testified that she administered the TIPS training course to the entire Glass staff on a Sunday afternoon in late October, 2003. After the training, Vega distributed a 40-question multiple choice test to the employees. The test forms were later mailed to Health Communications, Inc., the company that owns TIPS. Among the employees who attended the TIPS training and who took the test was Homberto Guzman ("Guzman"), a cocktail server and bartender at Glass, who worked as a bartender at Glass on the night of October 31, 2003. Vega testified that Guzman failed the TIPS test that was administered to Glass's employees in October, 2003.
As a result of the information gleaned from Vega's deposition testimony, Plaintiffs subpoenaed from Health Communications, Inc. records of the Glass employees' TIPS test results as well as email correspondence between Vega and Health Communications, Inc. Those records were received by Plaintiffs on June 7, 2007. The record of the results of the TIPS test that Vega administered to the Glass employees indicated that the test was administered on October 26, 2003, and that "Homberto Gozman" failed the test. (See Pl. Mem., Ex. D.) The subpoenaed documents also included an email, dated October 30, 2003, that Vega sent to a Health Communications' processing manager, in which Vega stated that she was aware that Guzman had failed the test and expressed an interest in having Guzman re-take the test.
Plaintiffs contend that the above-mentioned evidence establishes that Vega permitted Guzman to work as a bartender on the night of Ms. Ratcliffe's death, despite her prior knowledge that Guzman had failed the TIPS test, and that this conduct constitutes "an element of fault and/or intent on the part of the bar that supports a claim of wanton and reckless misconduct and blatant disregard for a known hazard, and thus supports a claim for punitive damages." (Pl. Mem. at 7.)
The Glass Defendants argue that no good cause exists for Plaintiffs' amendment, because Plaintiffs could have amended their complaint at an earlier date to include the allegation of gross negligence and a claim for exemplary damages. While they do not concede Plaintiffs' entitlement to pursue exemplary damages, the defendants argue that Plaintiffs plausibly could have asserted a claim for gross negligence on the basis of the New York City Medical Examiner's Report of Autopsy (the "ME Report"), which included findings regarding Ms. Ratcliffe's high blood alcohol content and which Plaintiffs possessed as of December 29, 2006. In support of their argument that Plaintiffs could have sought to allege gross negligence at an earlier date, the defendants point to various statements made by Plaintiffs' counsel, David DeToffol, Esq. ("DeToffol"). First, the defendants point to DeTeffol's statement, in his affirmation in support of Plaintiffs' previous motion to amend, that "findings of gross negligence could be garnered from" the ME's Report. (Decl. of Thomas Catalano, Ex. K ¶ 6.) Second, the defendants cite to DeTeffol's statement, in the same affirmation, that the January 2007 deposition testimonies of Ms. Ratcliffe's apartment-mates also revealed evidence of the defendants' gross negligence. (Id. ¶ 8.) Finally, the defendants cite DeToffol's statement, made at a status conference held before the Court on April 23, 2007, that Plaintiffs intended to pursue claims of gross negligence. Thus, the Glass Defendants contend that, as early as January 2007, Plaintiffs believed that the defendants had been grossly negligent and therefore were in a position to seek leave to amend the SAC to add a claim for exemplary damages. Plaintiffs have no good cause, the defendants insist, for waiting until May 2007 to amend their complaint when the amendment could have been made in five months earlier.
Although Plaintiffs may have contemplated at an earlier date asserting a claim for exemplary damages on the basis of the findings contained in the ME Report and the deposition testimony of Ms. Ratcliffe's apartment-mates, the fact remains that Plaintiffs did not actually decide to allege that the Glass defendants were culpable of gross negligence until Plaintiffs had deposed Vega and acquired the TIPS records. As the defendants themselves point out, under New York law, it would have been insufficient for Plaintiffs to seek compensatory, let alone exemplary, damages solely on the basis of the allegation that the ME Report revealed that Ms. Ratcliffe had a high blood alcohol content. (See Pl. Mem. at 14, citing, inter alia, Romano v. Stanley, 90 N.Y.2d 444, 661 (1997), for the proposition that "evidence of a high blood alcohol content . . . alone cannot establish, as a matter of law, the 'visible intoxication'" requirement set forth in New York's Dram Shop statute). It is evident that, regardless of DeTeffol's conclusory statements in his earlier affirmation, Plaintiffs believed they were able to assert a claim for exemplary damages only after the new evidence came to light.
The Glass Defendants do not, and cannot, argue, that evidence arising from Vega's deposition or the TIPS records could have been discovered earlier through Plaintiffs' exercise of due diligence. It was not until May 2007 that Plaintiffs deposed Vega and not until June 2007 that Plaintiffs obtained the TIPS records. Plaintiffs sought to amend their complaint on May 12, 2007, a mere ten days after Vega was deposed. Thus, Plaintiffs have shown that they could not have obtained the new facts earlier and that they exercised diligence in seeking to amend ...