Joel Douglas, Steven Fowler, and James Lewis v. Scott Lalumiere, et al.

Summary

The court denied Plaintiffs’ motion to amend the scheduling order and pleadings to add third-party property owners and pursue rescission-related claims. The court found the proposed amendment and supplementation excessively tardy and likely to cause undue delay, prejudice, and additional discovery, and reserved the default-judgment motion in part while excluding the rescission remedy.

Holdings

1. Plaintiffs failed to establish good cause for the untimely amendment because the relevant third-party interests existed before the amendment deadline, plaintiffs waited for years to seek joinder, and the proposed amendment would require additional discovery, hearings, and potentially a trial.
2. Plaintiffs were not entitled to supplement their pleadings because the proposed supplementation would introduce a new dimension to the case after substantial delay and would cause undue delay, trial inconvenience, and prejudice.
3. The proposed amendment did not warrant reopening the case to pursue rescission against third-party property owners because plaintiffs had not plausibly shown that rescission could be imposed without prejudicing intervening rights of innocent third parties, and the proposed theory was too novel to justify the delay and burden.

Questions Presented

1. Whether plaintiffs established good cause under Federal Rule of Civil Procedure 16 to amend the scheduling order and pleadings years after the amendment deadline.
2. Whether plaintiffs should be permitted under Federal Rule of Civil Procedure 15(d) to file a supplemental complaint concerning later transfers of the properties.
3. Whether the proposed amendment or supplementation should be denied because it would cause undue delay, prejudice, trial inconvenience, or potentially futile litigation concerning rescission against third-party property owners.

Disposition

other