United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. Mitchell U.S. Magistrate Judge.
matter comes before the court on defendant Cargill Meat
Solutions Corp.'s (“Cargill”) Motion to Amend
Cargill's Answer and for Leave to File Counterclaim (ECF
No. 94). For the reasons discussed below, the court grants
case arises out of a payment dispute for construction work
that Plaintiff Brahma Group, Inc. (“Brahma”)
performed in 2016 at a Cargill beef-processing plant located
in Dodge City, Kansas. Brahma filed its complaint on April 4,
2017, and an amended complaint on September 14, 2017. Brahma
asserts claims for breach of contract, unjust enrichment,
account stated, and violation of the Kansas Fairness in
Private Construction Contract Act (“KFPCCA”).
(Am. Compl. (ECF No. 14).) Brahma also seeks to foreclose on
a mechanic's lien. (Id.)
scheduling order required the parties to file any motions for
leave to amend the pleadings by April 6, 2018. (Sched. Order
(ECF No. 29) ¶ 3(b).) Brahma timely filed an unopposed
motion for leave to file a second amended complaint to
clarify that it sought attorneys' fees under the KFPCCA.
The court granted Brahma's motion, and Brahma filed its
second amended complaint-the operative complaint in this
action-on April 11, 2018. (See Second Am. Compl.
(ECF No. 34).)
over a year after the deadline for filing a motion for leave
to amend the pleadings, Cargill now seeks leave to file an
amended answer that adds two affirmative defenses and asserts
three counterclaims against Brahma. Cargill contends that it
discovered in April 2019 forged signatures of Cargill
employee Fred Wines on two Brahma invoices from 2016. Cargill
had paid these invoices but disputed others for Brahma's
work at the plant. Cargill alleges that, during negotiations
between the parties to resolve payment disputes prior to
litigation, a Brahma employee digitally copied Mr. Wines'
signature onto the invoices. Brahma then allegedly presented
the invoices with forged signatures to Cargill along with
other documents, all in an effort to induce Cargill to make
additional payments to Brahma. In light of these allegations,
Cargill seeks to amend its answer to add the affirmative
defenses of unclean hands and setoff, as well as to assert
three counterclaims for (1) breach of the covenant of good
faith and fair dealing, (2) fraud, and (3) negligent
misrepresentation. Cargill believes these proposed
counterclaims are compulsory.
the scheduling order deadline to file a motion to amend the
pleadings has passed, the party seeking leave to amend must
(1) demonstrate good cause for modifying the scheduling order
under Federal Rule of Civil Procedure 16(b)(4), and (2)
satisfy the standards for amendment under Rule 15(a).
Gorsuch, Ltd., B.C. v. Wells Fargo Nat. Bank
Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014). Whether
to grant a motion to amend is within the court's sound
discretion. See id.
scheduling order “may be modified only for good cause
and with the judge's consent.” Fed.R.Civ.P.
16(b)(4). To establish good cause, the moving party must show
that it could not have met the motion to amend deadline
despite “diligent efforts.” Husky Ventures,
Inc. v. B55 Invs., Ltd., 911 F.3d 1000, 1020
(10th Cir. 2018). Because Rule 16 requires diligence, if a
party knows of “the underlying conduct but simply
failed to raise [its] claims, . . . the claims are
barred.” Gorsuch, 771 F.3d at 1240. On the
other hand, “Rule 16's good cause requirement may
be satisfied . . . if a [party] learns new information
through discovery or if the underlying law has
changed.” The parties do not address the April 6, 2018,
scheduling order deadline for filing any motions for leave to
amend the pleadings. Nor do they address the Rule 16 good
cause standard for seeking leave to amend after that
deadline. Nevertheless, the court finds that Cargill has
satisfied the Rule 16 good cause standard. Cargill states
that it did not learn until it retained a handwriting expert
in April 2019 that Mr. Wines' signature was forged on the
two invoices at issue. (Def.'s Mot. to Amend (ECF No. 94)
¶ 3.) Cargill promptly disclosed the forgery theory to
Brahma when it timely served an expert report directed to
that issue on May 8, 2019.
Cargill demonstrated a reasonable explanation for its further
delay in filing the instant motion. The parties' rebuttal
expert disclosure deadline was June 3, 2019. (Third Am.
Sched. Order (ECF No. 29) ¶ (b).) Cargill states that it
expected Brahma to either rebut the Cargill's handwriting
expert's conclusion or otherwise provide a plausible
explanation for the alleged forgeries. (See
Def.'s Mot. to Amend (ECF No. 94) ¶ 3.) When Brahma
did neither, Cargill proceeded to file the instant motion.
did not discover the alleged forgeries until approximately a
year after the motion to amend deadline, and then it waited a
short period of time to confirm that Brahma had no other
explanation for the alleged forgeries prior seeking leave to
amend. Brahma does not dispute the date of Cargill's
discovery. As Cargill could not have met the April 6, 2018
motion to amend deadline because it was unaware of the
alleged forgeries at that time, the court finds good cause
for Cargill's failure to timely seek amendment.
Cargill has satisfied the Rule 16 good cause standard, the
court now analyzes whether its proposed amendment should be
allowed under Rule 15(a). When a party can no longer amend its
pleading as a matter of course under Rule 15(a)(1), amendment
is allowed “only with the opposing party's written
consent or the court's leave.” Fed.R.Civ.P.
15(a)(2). “The court should freely give leave [to amend
pleadings] when justice so requires.” Id. In
freely allowing leave to amend, the court provides litigants
“the maximum opportunity for each claim to be decided
on its merits rather than on procedural niceties.”
Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449,
456 (10th Cir. 1982). A court may only withhold leave to
amend for reasons such as “undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing ...