United States District Court, D. Nebraska
APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC., an Iowa Corporation; Plaintiff,
RAMESH PITAMBER & KUSUM PITAMBER, a California Partnership; 11269 POINT EAST INVESTMENTS, LLC, a California Limited Liability Company; AMBA INVESTMENTS, LLC, a California Limited Liability Company; AP HERITAGE LAKE FOREST, LLC, a California Limited Liability Company; ATHARWA INVESTMENTS, LLC, a California Limited Liability Company; EMERALD INVESTMENTS, INC., a California Corporation; GOLD COUNTRY INVESTMENTS, INC., a California Corporation; HERITAGE INN EXPRESS ROSEVILLE, LLC, a California Limited Liability Company; HERITAGE LA MESA INVESTMENTS, LLC, a California Limited Liability Company; HERITAGE TRADING, INC., a California Corporation; IMPERIAL HERITAGE, LLC, a California Limited Liability Company; KRIPALU INVESTMENTS, LLC, a California Limited Liability Company; PITAMBER IRREVOCABLE FAMILY TRUST, a Trust; RAMESH PITAMBER, KUSUM PITAMBER, JAYA RATANJEE AND SARDA RATANJEE, a California Partnership; R & P PROPERTIES, INC., a California Corporation; RANCHO INVESTMENTS, INC., a California Corporation; SIDDHI VINAYAK INVESTMENTS, LLC, a California Limited Liability Company; and SPORTS ARENA INVESTMENTS, LLC, a California Limited Liability Company; Defendants.
M. BAZIS, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Defendants/Third-Party
Plaintiffs' (“Defendants”) Motion for Leave
to File Third Amended Answer, Counterclaim, and Cross-Claim
(Filing No. 98). The motion will be granted.
action was filed in the District Court of Douglas County,
Nebraska on January 20, 2017 and removed to this Court on
February 27, 2017. (Filing No. 1.) This case generally
involves allegations of breach of a Reinsurance Participation
Agreement (“RPA”) executed between the parties.
Under the RPA, Plaintiff provided workers' compensation
insurance coverage for Defendants. The RPA contains a choice
of law provision providing that the contract is governed by
filed an Answer and Counterclaim on March 6, 2017 (Filing No.
21). The Court entered an initial progression order on April
6, 2017, which provided that motions to amend pleadings shall
be filed no later than July 7, 2017. (Filing No. 45.)
Defendants filed an amended answer and counterclaim on July
6, 2017. (Filing No. 53.)
motion by Defendants, the Court entered an amended
progression order on October 18, 2017, setting the matter for
a non-jury trial to commence October 15, 2018. (Filing No.
62.) On April 25, 2018, upon motion by Defendants, the Court
entered a second amended progression order moving the trial
date to March 11, 2019. (Filing No. 72.) Defendants filed an
unopposed motion to continue deadlines on July 17, 2018,
which was granted. Accordingly, the Court entered a
third-amended progression order on July 24, 2018, setting
trial for June 3, 2019. (Filing No. 78.)
filed an unopposed motion for leave to add parties and file a
second amended answer on August 14, 2018, which was granted.
(Filing No. 82.) On August 15, 2018, Defendants filed their
Second Amended Answer, Counterclaim, and Cross-Claim, adding
California Insurance Company and Applied Underwriters, Inc.
as Third-Party Defendants. (Filing No. 83.)
unopposed motion to stay the case pending mediation was filed
on November 1, 2018. (Filing No. 86). All progression
deadlines were stayed at that time, and the pretrial
conference and trial were canceled. Mediation was
unsuccessful and the Court entered a fourth amended
progression order on December 14, 2018, setting the trial for
October 28, 2019. (Filing No. 88.)
filed the instant Motion for Leave to File Third Amended
Answer, Counterclaim, and Cross-Claim on April 3, 2019.
(Filing No. 98.)
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 omitted). Also, “[i]f a
party files for leave to amend outside of the court's
scheduling order, the party must show cause to modify the
schedule.” Popoalii v. Corr. Med. Servs, 512
F.3d 488, 497 (8th Cir. 2008). Whether to grant a motion for
leave to amend is within the sound discretion of the district
seek to file a Third Amended Answer, Counterclaim, and
Cross-Claim to raise causes of action and remedies that arise
under California law. Defendants contend that amendment is
necessary due to the Nebraska Court of Appeals' recent
decision in Applied Underwriters v. E.M. Pizza, 26
Neb.App. 906, 923 N.W.2d 789 (2019). Defendants contend
that the decision in E.M. Pizza indicates that
California's workers' compensation laws apply in this
action. Id. at 916, 923 N.W.2d at 798 (“It has
been held by courts in both Nebraska and California that the
RPA is inextricably intertwined with the underlying insurance
contract; thus, California's workers' compensation
laws will likely govern the RPA”).
argues, however, that Defendants unduly delayed in bringing
their motion.Plaintiff contends that the Nebraska Court
of Appeals' decision in E.M. Pizza has not
changed Nebraska law because prior to E.M. Pizza,
there were cases in existence supporting Defendants'
position that California law would govern. Plaintiff points
to Applied Underwriters, Inc. v. Dinyari, Inc., No.
A-07-058, 2008 WL 2231114 (Neb. Ct. App. 2008), in which the
Nebraska Court of Appeals indicated in a non-published
opinion that California law would apply. However, because
Dinyari is a non-published opinion of the Nebraska
Court of Appeals, it does not have precedential value.
See Neb. Ct. R. § 2-102(E)(4)-(5).
See also U.S.Ct. of App. 8th Cir. Rule
32.1A (“Unpublished opinions are decisions a court
designates for unpublished status. They are not
precedent”). Plaintiff also notes that E.M.
Pizza was decided on February 12, 2019, but Defendants
waited until April 3, 2019 to seek leave to amend. As further
evidence of Defendants' purported lack of diligence,
Plaintiff notes the numerous deadline extensions that have
previously been granted in this case.
considered the matter, the Court finds Defendants have shown
good cause to file an amended pleading out of time. The
E.M. Pizza decision arguably provides the strongest
support for Defendants' position regarding applicable
state law. Although the Nebraska Court of Appeals issued the
E.M. Pizza decision in February, the Nebraska
Supreme Court only denied the petition for further review on
April 10, 2019. Thus, the timing of Defendants' motion
does not show any lack of diligence. ...