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Wisneski v. Belmont Management Co., Inc.

United States District Court, D. Kansas

December 30, 2019

TERESA WISNESKI, Plaintiff,
v.
BELMONT MANAGEMENT COMPANY, INC., Defendant.

          MEMORANDUM AND ORDER

          Angel D. Mitchell, U.S. Magistrate Judge.

         This matter comes before the court on plaintiff Teresa Wisneski's response to the court's November 15, 2019 order to show cause and motion for leave to file an amended complaint. (ECF No. 19.) For the reasons discussed below, Ms. Wisneski's motion is granted and her amended complaint shall be deemed filed.

         I. BACKGROUND

         On August 29, 2019, Ms. Wisneski filed a complaint asserting claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. (ECF No. 1.) She alleges she worked at an apartment complex operated by defendant Belmont Management Company, Inc. (“Belmont”) as a non-exempt employee. During her employment, Ms. Wisneski lived on the premises. She contends that Belmont violated the FLSA by failing to include all forms of compensation, including rent discounts or a rent credit, in hourly employees' regular rate of pay when calculating the appropriate overtime rate. Ms. Wisneski brings an individual claim for this alleged FLSA violation, as well as a collective action claim for the same violation.

         On November 13, 2019, Ms. Wisneski filed an amended complaint. (ECF No. 17.) Because Ms. Wisneski's amended complaint did not appear to comply with Fed.R.Civ.P. 15(a)(2), the court ordered her to show cause why the court should not strike her amended complaint by filing a motion for leave to amend. (See ECF No. 18, at 2.) Ms. Wisneski did so, explaining that she sought to leave to amend to add another plaintiff, Mildred Jones. (See ECF No. 19 ¶ 6, at 2.) Ms. Jones' allegations and claims are identical to those of Ms. Wisneski.

         Belmont contends that Ms. Jones was never provided a rent-free apartment, therefore she cannot state the same FLSA claims as Ms. Wisneski. (ECF No. 20 ¶ 8, at 2.) In support of this argument, Belmont relies declarations from two of its employees. Belmont asks the court to deny leave to amend on that basis. (Id. ¶ 9, at 2.)

         II. ANALYSIS

         Because Ms. Wisneski seeks to add a new plaintiff in her amended complaint, the court analyzes both Federal Rules of Civil Procedure 15 and 20, governing amendment and permissive joinder respectively.

         A. Amendment Under Rule 15

         Once a responsive pleading has been filed, a party “may amend its pleading only with the opposing party's written consent or the court's leave, ” which should be freely given when justice requires. Fed.R.Civ.P. 15(a)(2). The rule's purpose “is to provide litigants the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties.” SCO Grp., Inc. v. Int'l Bus. Machines Corp., 879 F.3d 1062, 1085 (10th Cir. 2018) (internal quotation marks omitted). The court may refuse leave to amend “only [upon] a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Wilkerson v. Shinseki, 606 F.3d 1256, 1267 (10th Cir. 2010); see also Foman v. Davis, 371 U.S. 178, 182 (1962) (same).

         Practically speaking, the party opposing a motion to amend generally bears the burden to demonstrate why the amendment should not be permitted. See Wilkerson, 606 F.3d at 1267 (in the absence of such a showing, amendment should be allowed); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (stating the party opposing amendment bears the burden to show undue prejudice and that there is a presumption in favor of amendment absent such a showing “or a strong showing of any of the remaining Foman factors”). Whether to grant a motion to amend is within the court's sound discretion. Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006).

         Here, Belmont makes a single futility argument against allowing Ms. Wisneski to amend her complaint. A court may deny a motion to amend as futile “if the proposed amendment could not have withstood a motion to dismiss or otherwise fail[s] to state a claim.” Schepp v. Fremont Cty., Wyo., 900 F.2d 1448, 1451 (10th Cir. 1990). When analyzing a motion to dismiss, a court must “assume the truth of all well-pleaded facts in the complaint, and draw all reasonable inferences therefrom in the light most favorable to the plaintiffs.” Dias v. City & Cty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009). “[D]isputes over material issues of fact cannot be resolved on a motion to dismiss . . . but must be reserved for resolution at trial by the appropriate trier.” 5 Arthur R. Miller et al., Federal Practice and Procedure § 1277 (3d ed. 2019).

         Belmont's futility argument rests on its contention that Ms. Jones was never provided a rent-free apartment during her employment and therefore she cannot state the claims in the amended complaint. This argument is a dispute over the facts underlying the proposed amendment that relies on two employee declarations. Such materials are not properly considered on a motion to dismiss and therefore the court will not consider them. See Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017) (“When a party presents matters outside of the pleadings for consideration [on a 12(b)(6) motion], as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'”). The court must assume the facts in the proposed amended complaint as true when determining whether the amendment is futile, so the court cannot deny leave to amend on this basis. Belmont will have an opportunity to challenge the factual basis of Ms. Jones' claims and whether she is an appropriate class member at a later procedural juncture.

         B. ...


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