Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CAC Atlantic, LLC v. Hartford Fire Insurance Co.

United States District Court, S.D. New York

July 25, 2017

CAC ATLANTIC, LLC, Plaintiff,
v.
HARTFORD FIRE INSURANCE COMPANY, Defendant. HARTFORD FIRE INSURANCE COMPANY, Third-Party Plaintiff,
v.
HARCO CONSTRUCTION LLC, HARCO CONSULTANTS CORP., and ACHS MANAGEMENT CORP., Third-Party Defendants.

          OPINION AND ORDER

          GREGORY H. WOODS, UNITED STATES DISTRICT JUDGE

         Defendant/Third-Party Plaintiff Hartford Fire Insurance Company seeks leave to amend its answer and third-party complaint-after the close of all discovery―to plead three additional affirmative defenses. Despite counsel's lack of diligence in seeking leave to add those defenses to the case at an earlier stage, the motion is GRANTED.

         I. BACKGROUND

         This insurance dispute arises out of alleged losses incurred at a construction project located at 66 Boerum Place in Brooklyn, New York. Plaintiff CAC Atlantic, LLC holds an ownership interest in the property and was issued a Builder's Risk Insurance Policy (the “Policy”) by Defendant Hartford Fire Insurance Company. The Policy covers “risks of direct physical ‘loss' to Covered Property from any external cause except those causes of ‘loss' listed in the Exclusions.” Decl. of Sanjit Shah in Supp. of Mot. for Leave to Amend (ECF No. 84), Ex. 2, § A.3.

         In June 2016, Plaintiff filed a complaint in the New York State Supreme Court, seeking to recover at least $16, 500, 000 in proceeds under the Policy for losses sustained in relation to the construction project. Defendant timely removed the case to this Court on July 8, 2016. On July 18, 2016, Defendant filed an answer as well as a counterclaim for declaratory judgment. ECF No. 6. In its answer, Defendant pleaded two of the Policy's several exclusions as affirmative defenses: (1) an exclusion for defective, deficient, or flawed workmanship and (2) an exclusion for dishonest or criminal acts. Id. at ¶¶ 13-14. Shortly thereafter, on August 1, 2016, Defendant filed a third-party complaint against ACHS Management Corp., Harco Construction LLC, and Harco Consultants Corp., each of whom are listed as named insureds in the Policy. ECF No. 24. In its third-party complaint, Defendant seeks the same relief it seeks in its counterclaim against Plaintiff, namely, a judgment declaring that is not required to pay out insurance proceeds as a result of the alleged loss. Id. ¶¶ 22-31. Defendant pleads the same two exclusions in its third-party complaint. Id. ¶¶ 10-11.

         On August 1, 2016, the Court entered a case management plan and scheduling order, which provided that any motion to amend the pleadings was to be filed no later than August 31, 2016, that fact discovery in this matter was to be completed by December 16, 2016, and that expert discovery was to be completed by February 17, 2017. ECF No. 25. After several extensions, the period for fact discovery closed on February 15, 2017, and the period for expert discovery closed on March 31, 2017. See ECF No. 67. The Court never granted-nor did any party request-an extension of the deadline to amend the pleadings.

         On April 7, 2017, Defendant filed a letter requesting that the Court hold a pre-motion conference to discuss its proposed motion for summary judgment. ECF No. 76. In that letter, Defendant expressed its intention to move on the ground that the alleged loss fell within certain exclusions that had been pleaded in neither the answer nor the third-party complaint. In a response letter, Plaintiff objected to Defendant filing a motion for summary judgment on those grounds, in large part because those exclusions had not been pleaded in the answer. ECF No. 77.

         During a pre-motion conference held on April 17, 2017, the Court established a briefing schedule for a motion for leave to amend the answer to plead the additional exclusions. Defendant filed its motion on May 17, 2017. ECF No. 82. Defendant seeks leave to amend both the answer and the third-party complaint to plead three additional Policy exclusions as affirmative defenses: (1) an exclusion for loss caused by delay; (2) an exclusion for loss caused by latent defect; and (3) an exclusion for loss caused by acts, errors, or omissions in planning, zoning, and development. Id. Plaintiff filed an opposition to the motion on June 5, 2017, ECF No. 86, and Defendant filed a reply in support of its motion on June 12, 2017, ECF No. 87.

         II. LEGAL STANDARD

         Under the Federal Rules of Civil Procedure, a party may amend a pleading once as a matter of right within 21 days of serving it or, “if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Fed.R.Civ.P. 15(a)(1). After that point, absent written consent from the opposing party, leave to amend must be obtained from the district court. Fed.R.Civ.P. 15(a)(2). Rule 15(a)(2) provides that courts “should freely give leave when justice so requires.” “Reasons for a proper denial of leave to amend include undue delay, bad faith, futility of amendment, and perhaps most important, the resulting prejudice to the opposing party.” AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d 699, 725 (2d Cir. 2010) (citation omitted); see also Id. (“The rule in this Circuit has been to allow a party to amend its pleadings in the absence of a showing by the nonmovant of prejudice or bad faith.”).

         As the parties correctly recognize, however, “where the court has already entered a scheduling order in the case, a party requesting leave to amend must satisfy the ‘good cause' standard set forth in Rule 16(b).” Cummins, Inc. v. New York Life Ins., No. 10-cv-9252 (TPG), 2012 WL 3870308, at *3 (S.D.N.Y. Sept. 6, 2012); see In re Wireless Telephone Servs. Antitrust Litig., No. 02-cv-2637 (DLC), 2004 WL 2244502, at *5 (S.D.N.Y. Oct. 6, 2004) (“Rule 16(b) governs the instant motion for leave to amend.”); see also Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000) (“Several circuits have ruled that the Rule 16(b) ‘good cause' standard, rather than the more liberal standard of Rule 15(a), governs a motion to amend filed after the deadline a district court has set for amending the pleadings. . . . We now join these courts in holding that despite the lenient standard of Rule 15(a), a district court does not abuse its discretion in denying leave to amend the pleadings after the deadline set in the scheduling order where the moving party has failed to establish good cause.”). The purpose of Rule 16(b) is “to offer a measure of certainty in pretrial proceedings, ensuring that at some point both the parties and the pleadings will be fixed.” Id. at 339-40.

         In determining whether good cause exists, “the primary consideration is whether the moving party can demonstrate diligence.” Kassner v. 2nd Ave. Delicatessen Inc., 496 F.2d 229, 244 (2d Cir. 2007). But diligence is not the only consideration. “The district court, in the exercise of its discretion under Rule 16(b), also may consider other relevant factors including, in particular, whether allowing the amendment of the pleading at this stage of the litigation will prejudice [the opposing party].” Id.

         III. DISCUSSION

         As explained below, the Court finds that counsel for Defendant has failed to show that it acted diligently in seeking leave to make its desired amendment. Nevertheless, because the Court cannot discern significant prejudice to Plaintiff and Third-Party Defendants from allowing the amendment, and because the Court is hesitant to saddle Defendant itself with its counsel's failure by precluding Defendant from pursuing the three ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.