United States District Court, D. Nebraska
APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC., An Iowa Corporation, Plaintiff and counter defendant,
RAMESH PITAMBER & KUSUM PITAMBER, A California Partnership, et al., Defendants, counterclaimants, and third-party plaintiffs,
CALIFORNIA INSURANCE COMPANY, a California Corporation, and APPLIED UNDERWRITERS, INC., a Nebraska Corporation, Third-party defendants.
M. Gerrard Chief United States District Judge.
the Court are the plaintiff's motion (filing 137) to
dismiss several of the defendants' counterclaims pursuant
to Fed.R.Civ.P. 12(b)(6), and the defendants' motion
(filing 153) for leave to file an amended answer pursuant to
Fed.R.Civ.P. 15(a)(2). The Court will grant the motion for
leave to file an amended answer, and deny the motion to
dismiss as moot.
defendants initially asserted two counterclaims against the
plaintiff. See filing 21. But in their third amended
answer (filed over objection) they asserted several more.
Seefiling 109. So, the plaintiff moved to dismiss
all but one of them. Filing 137; seefiling 138.
Among other things, the plaintiff argues that the
defendants' counterclaims are conclusory, aren't
legally recognized claims, and fail to include the specific
allegations necessary to provide notice consistent with
Fed.R.Civ.P. 8. Seefiling 138.
response, the defendants filed their motion for leave to file
a fourth amended answer (filing 151). The reason for another
amended answer, the defendants say, is that because the
plaintiff argues the counterclaims were insufficiently
detailed, the defendants should be allowed to amend their
counterclaims to incorporate all the information they
currently have. Filing 153. The Court agrees.
problem the Court faces is inefficiency. The standards for
the plaintiff's Rule 12(b)(6) motion are well-understood:
To survive a motion to dismiss under Rule 12(b)(6), a
pleading must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
claim has facial plausibility when it contains factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. While the Court must accept as true all
facts pleaded by the non-moving party and grant all
reasonable inferences from the pleadings in favor of the
non-moving party, Gallagher v. City of Clayton, 699
F.3d 1013, 1016 (8th Cir. 2012), a pleading that offers
labels and conclusions or a formulaic recitation of the
elements of a cause of action will not do. Iqbal,
556 U.S. at 678.
standards for allowing an amended pleading are also familiar:
The Court should freely give leave to amend a pleading when
justice so requires. Rule 15(a)(2); see Kozlov v.
Associated Wholesale Grocers, Inc., 818 F.3d 380, 394
(8th Cir. 2016). But parties do not have an absolute right to
amend their pleadings, even under this liberal standard.
Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 715
(8th Cir. 2008); see Sorace v. United States, 788
F.3d 758, 767 (8th Cir. 2015). And futility is a valid basis
for denying leave to amend. Munro v. Lucy Activewear,
Inc., 899 F.3d 585, 589 (8th Cir. 2018), cert.
denied, 139 S.Ct. 941 (2019). Specifically, futility
means the Court has reached the legal conclusion that the
amended pleading could not withstand a motion to dismiss
under Rule 12(b)(6). Id. at 589.
other words, both motions before the Court ask essentially
the same questions, but about different pleadings. Now,
it's not uncommon for a court to face both a motion to
dismiss and a motion for leave to amend-but usually, the
Court rules on the motion to dismiss and, upon dismissing
some claims, is asked to decide whether a proposed amended
pleading remedies the deficiencies that led to the dismissal.
It doesn't make a lot of sense to do both at the same
also recognized by the Federal Rules of Civil Procedure that
a common and appropriate response to a motion to dismiss is
for the pleader to amend the pleading to (hopefully) fix the
problem. See Rule 15(a)(1)(B). Here, the defendants
can't amend their pleading as of right, because
they've already used their one amendment "as a
matter of course." See Rule 15(a). But the same
principle applies. The defendants asserted several new
counterclaims in their third amended complaint.
Compare filing 109, with filing 83. The
plaintiff did argue that the defendants had unduly delayed in
asserting them-but the Magistrate Judge decided otherwise,
see filing 106, and the plaintiff did not object to
that ruling. The Court concludes that "justice so
requires" the defendants, as the pleading parties, to
have at least one opportunity to plead over the arguments
raised by the plaintiff's motion to dismiss.
more importantly, the Court finds that judicial efficiency is
served by doing so. Rather than decide whether the defendants
did state a claim, and then decide separately
whether the defendants could state a claim, it makes
far more sense to skip to the end by permitting the
defendants' amended pleading and then determining whether
it is sufficient. This case is already growing whiskers, and
while restarting with an amended pleading and a responsive
pleading or motion might set case progression back a few days
in the short term, it will be more efficient in the long
term. Accordingly, 1. The defendants' amended motion for
leave to file a fourth amended answer (filing 153) is
defendants' superseded motion for leave to amend (filing
151) is denied as moot.
plaintiff's motion to dismiss (filing 137) is denied as
defendants' fourth amended answer shall be filed on or
before July 12, 2019.
plaintiffs responsive pleading or motion shall be filed on ...