United States District Court, D. Nebraska
M. Bazis United States Magistrate Judge
matter is before the Court on Evanston Insurance
Company's (“Evanston”) Motion for Leave to
File Amended Answer and Cross-Claim (Filing No. 80),
Prime Time Healthcare LLC's (“Prime Time”)
Motion for Leave to File Cross-Claim Against Risk Placement
Services, Inc. (“RPSI”) (Filing No. 83), and
Robert Rensing Agency, Inc.'s and Jeffrey Brown's
(collectively, the “Rensing Defendants”) Motion
to Extend Deadline to Amend Pleadings and for Leave to File
Cross-Claim Against Evanston (Filing No. 97). For the reasons
set forth below, Evanston's Motion for Leave to File
Amended Answer and Cross-Claim will be granted. The Rensing
Defendants' Motion to Extend Deadline to Amend Pleadings
and For Leave to File Cross-Claim will be granted. Prime
Time's Motion for Leave will be denied as moot.
suit arises out of an insurance coverage dispute. Evanston
brought suit against Prime Time on April 12, 2016 (Filing No.
1), seeking a declaration that an insurance policy furnished
by Evanston to Prime Time does not provide coverage for a car
accident involving a Prime Time employee. Prime Time
thereafter filed a Third-Party Complaint (Filing No. 15)
against the Rensing Defendants-Prime Time's insurance
agents. The Third-Party Complaint alleges that if the
Evanston policy is deemed not to provide coverage, then the
Rensing Defendants were negligent by failing to procure
coverage. The Rensing Defendants filed their Answer to Prime
Time's Third-Party Complaint on July 26, 2016 (Filing No.
22), and then filed a Third-Party Complaint against RPSI on
March 30, 2017. (Filing No. 60.) RPSI is the wholesale
insurance broker the Rensing Defendants used to procure
coverage from Evanston. RSPI filed its Answer on June 5,
2017. (Filing No. 68.) Prime Time filed a
Cross-Claim against RPSI on November 21, 2017. (Filing No.
Court issued its Order Setting Final Schedule for Progression
of Case (Filing No. 73) on June 27, 2017. The Order set
November 1, 2017 as the deadline for the parties to file
motions to amend pleadings or add parties. Evanston filed its
Motion for Leave to File Amended Answer and Cross-Claim on
November 1, 2017. The Rensing Defendants filed their Motion
to Extend Deadline to Amend Pleadings and for Leave to File
Cross-Claim Against Evanston on December 1, 2017.
Prime Time's Motion for Leave to File Cross-Claim Against
did not oppose Prime Time's Motion for Leave to File
Cross-Claim. (Filing No. 90.) Accordingly, Prime
Time filed its Cross-Claim against RPSI on November 21, 2017
(Filing No. 92). RPSI filed its Answer to Prime
Time's Cross-Claim on December 4, 2017 (Filing No.
99). In light of these filings, Prime Time's Motion
for Leave will be denied as moot.
Evanston's Motion for Leave to File Amended Answer and
requests that it be permitted to amend its Answer to
Counterclaim (Filing No. 20) to include a cross-clam
against the Rensing Defendants for fraudulent concealment,
fraudulent and negligent misrepresentation, indemnification,
contribution and equitable subrogation. (Filing No.
80.) Evanston maintains that its proposed amended
pleading is based on facts similar to those alleged in the
original complaint and counterclaim filed by Prime Time
against Evanston and, thus, will involve the same witnesses
and facts. Evanston's proposed cross-claim generally
alleges that the Rensing Defendants made misrepresentations
or concealed information when they notified Evanston that
Prime Time had purchased a commercial automobile policy
through Travelers Casualty Insurance Company of America (the
Rensing Defendants oppose the motion, arguing that adding
these claims would be futile. The Rensing Defendants deny
that they made any misrepresentations or concealed
information. Further, they contend that Evanston has no
viable claims because they did not owe Evanston a duty
regarding any information about the Traveler's policy.
The Rensing Defendants argue that in order for a relationship
between insurance agents and insurance companies to result in
the imposition of a duty, an agency relationship must exist.
The Rensing Defendants maintain that no duty existed because
in order to obtain bids and quotes for the Evanston policy,
they were not permitted to communicate directly with
Evanston. Instead, they had to communicate with Evanston
through RPSI, a company that acts as an intermediary between
insurance agents and insurance providers. The Rensing
Defendants maintain that they never held themselves out as
being an agent of Evanston and had no authority to bind
coverage on behalf of Evanston.
Federal Rule of Civil Procedure 15, the Court should
“freely give leave” to amend a pleading
“when justice so requires.” Fed.R.Civ.P. 15.
Nevertheless, a party does not have an absolute right to
amend and “denial of leave to amend may be justified by
undue delay, bad faith on the part of the moving party,
futility of the amendment or unfair prejudice to the opposing
party.” Amrine v. Brooks, 522 F.3d 823, 833
(8th Cir. 2008) (quotation and citation omitted). Whether to
grant a motion for leave to amend is within the sound
discretion of the district court. Popoalii v. Corr. Med.
Servs, 512 F.3d 488, 497 (8th Cir. 2008).
leave to amend may be denied based on futility, a motion to
amend should be dismissed on the merits “only if it
asserts clearly frivolous claims or defenses.”
Gamma-10 Plastics, Inc. v. Am. President Lines, 32
F.3d 1244, 1255 (8th Cir. 1994) (quotation omitted). See
also Becker v. University of Nebraska, 191 F.3d 904, 908
(8th Cir. 1999) (“Likelihood of success on the new
claim or defenses is not a consideration for denying leave to
amend unless the claim is clearly frivolous”).
Court is unable to conclude that the proposed new claims are
clearly frivolous. Although the Rensing Defendants argue that
an agency relationship between and insurer and insurance
agents must exist before a duty is imposed, they have not
supplied any direct authority for this proposition. Also, the
question of whether Evanston has viable causes of action
“should be determined on the merits rather than as part
of a motion to amend.” Doyle v. Eli Lilly &
Co., No. 8:06CV412, 2008 WL 215802 (D. Neb. ...