Gilbert v. Doctor's Choice Modesto LLC ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DARREN GILBERT, Case No. 1:21-cv-00690-AWI-SAB 12 Plaintiff, ORDER VACATING NOVEMBER 16, 2022 HEARING AND GRANTING PLAINTIFF’S 13 v. MOTION FOR LEAVE TO AMEND 14 DOCTOR’S CHOICE MODESTO LLC, et (ECF No. 91) al., 15 FIVE DAY DEADLINE Defendants. 16 17 I. 18 INTRODUCTION 19 Currently before the Court is Plaintiff’s motion to file a third amended complaint, 20 currently set for hearing on November 16, 2022. (ECF Nos. 91, 93.) Having considered the 21 moving papers, the lack of proper opposition, the filed status reports, and the Court’s file, the 22 Court finds this matter suitable for decision without oral argument. See Local Rule 230(g). 23 Accordingly, the hearing set for November 16, 2022, will be vacated and the parties will not be 24 required to appear at that time. For the reasons explained herein, Plaintiff’s motion to amend 25 shall be granted. 26 / / / 27 / / / / / / 1 II. 2 BACKGROUND 3 This case presents a somewhat difficult posture of pleadings, consolidation, answers, and 4 representation of corporate defendants. Plaintiff Darren Gilbert filed this action on April 23, 5 2021. (ECF No. 1.) On August 13, 2021, Defendant Amar Kumar (“Kumar”) filed an answer to 6 the initial complaint in this action, and on February 22, 2022, Defendant Kumar filed an answer 7 to the first amended complaint. (ECF No. 13.) The initially filed complaint and first amended 8 complaint only named Kumar and Doctor’s Choice as defendants. (ECF Nos. 1, 36.) 9 On June 23, 2022, this action became the lead action when consolidated with case 10 number 1:21-cv-01304-AWI-SAB. (ECF No. 57.) In that action, Defendant Nindiseventeen 11 LTD Liability Co., filed an answer on February 28, 2022. (Case No. 21-cv-01304-AWI-SAB, 12 ECF No. 19). 13 On June 28, 2022, in this action, Plaintiff filed a second amended complaint, naming 14 Nindi2039 LLC, and Nindiseventeen LTD Liability Co., as additional Defendants. (ECF No. 15 70.) On July 11, 2022, a waiver of service for Nindi2039 was returned executed, proffering an 16 answer was due September 6, 2022. (ECF No. 72.) On July 25, 2022, the Court entered a 17 stipulation extending the deadline for Defendants Nindiseventeen Ltd. Liability Co., and Amar 18 Kumar, to file an answer until September 5, 2022. (ECF No. 78.) No answers to the second 19 amended complaint have been filed by any Defendants. Defaults have been entered against 20 Doctor’s Choice, and Arif Faisal. (ECF Nos. 75, 83.) 21 On September 7 and 9, 2022, the Court granted attorney Rachelle Taylor Golden’s 22 motion to withdraw as counsel of record for Defendants Amar Kumar, Nindiseventeen LTD 23 Liability Co., and Nindi2039 LLC, and ordered Defendants Nindiseventeen LTD Liability Co., 24 and Nindi2039 LLC, to secure substitute counsel within thirty days. (ECF Nos. 84, 85.) Thus, 25 Defendants Nindiseventeen LTD Liability Co.’s, and Nindi2039 LLC’s, notices of appearance of 26 counsel should have been filed by October 10, 2022. As of October 12, 2022, however, nothing 27 had been filed on the docket. 1 complaint that is currently set for hearing on November 16, 2022, and the subject of this order. 2 (ECF Nos. 91, 93.) The motion seeks to add additional alleged barriers at the Defendants’ 3 facilities. (ECF No. 91.) 4 In light of the above procedural posture, on October 12, 2022, the Court ordered the 5 parties to submit a joint status report. (ECF No. 94.) The Court’s order specified as follows: 6 “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is 7 shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). It is not clear whether, if the third 8 amended complaint is allowed to be filed, whether previously answering Defendants would be required to file a new answer, nor 9 it is clear even if Defendants Amar Kumar and Nindiseventeen LTD Liability Co. were required to file an answer to the second 10 amended complaint. See KST Data, Inc. v. DXC Tech. Co., 980 F.3d 709, 714–16 (9th Cir. 2020) (“A defendant is not required to 11 file a new answer to an amended complaint when the allegations in the amended complaint do not change the theory or scope of the 12 case.”) The Court notes Rule 55 requires default to be entered not only when a defendant fails to plead, but default must be entered 13 when a party has “failed to . . . otherwise defend,” and that failure is shown by affidavit. Fed. R. Civ. P. 55(a). Thus, it is further not 14 clear if the current unrepresented status of the corporate defendants has an impact on the ability to otherwise defendant for purposes of 15 entry of default. 16 Given the status of the pleadings including the pending motion for leave to amend, the previously filed answers, the entries of default 17 only as to certain non-answering parties, and the non-represented status of now-named Defendants Nindiseventeen LTD Liability 18 Co., and Nindi2039 LLC, the Court shall order the parties to file a joint status report as to the status of counsel, the status of defaults, 19 and indicating how the Court should proceed in light of all these issues. If Plaintiff is unable to effectively communicate with all 20 Defendants, Plaintiff shall file a status report describing the efforts, and describing, as the party responsible for prosecuting this case, 21 how the Court shall proceed as to the representation of the corporate defendants, the impact of the answers already filed in 22 this case and the related case as to the need to request entry of default against the now non-answering Defendants, and what the 23 impact of the proposed third amended complaint would be on the status of these parties. 24 25 (ECF No. 94 at 2-3.) 26 On October 21, 2022, Plaintiff filed a status report, and on October 27, 2022, Defendant 27 Kumar filed a status report. (ECF Nos. 95, 96.) 1 III. 2 LEGAL STANDARD 3 Twenty-one days after a responsive pleading or a motion to dismiss is filed, a party may 4 amend only by leave of the court or by written consent of the adverse party. Fed. R. Civ. P. 5 15(a)(1)-(2). “Rule 15(a) is very liberal and leave to amend ‘shall be freely given when justice 6 so requires.’ ” Amerisource Bergen Corp. v. Dialysis West, Inc., 465 F.3d 946, 951 (9th Cir. 7 2006) (quoting Fed. R. Civ. P. 15(a)); see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 8 1048, 1052 (9th Cir. 2003) (noting leave should be granted with “extreme liberality”) (quoting 9 Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir.2001)). Leave to amend 10 under Rule 15 is “within the sound discretion of the trial court,” and “[i]n exercising this 11 discretion, a court must be guided by the underlying purpose of Rule 15 to facilitate decision on 12 the merits, rather than on the pleadings or technicalities.” United States v. Webb, 655 F.2d 977, 13 979 (9th Cir. 1981). 14 In determining whether to grant leave to amend, a court is to consider five factors: “(1) 15 bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5) 16 whether the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805, 17 808 (9th Cir. 2004). The factors are not weighed equally. Bonin v. Calderon, 59 F.3d 815, 845 18 (9th Cir. 1995). “Futility of amendment can, by itself, justify the denial of a motion for leave to 19 amend.” Id. Undue delay, “by itself . . . is insufficient to justify denying a motion to amend.” 20 Owens, 244 F.3d at 712 (quotation marks omitted) (quoting Bowles v. Reade, 198 F.3d 752, 21 757-58 (9th Cir. 1999)). “[I]t is the consideration of prejudice to the opposing party that carries 22 the greatest weight.” Eminence Capital, 316 F.3d at 1052. The burden to demonstrate prejudice 23 falls upon the party opposing the amendment. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 24 187 (9th Cir. 1987). “Absent prejudice, or a strong showing of any of the remaining [ ] factors, 25 there exists a presumption under Rule 15(a) in favor of granting leave to amend.” Id. 26 IV. 27 DISCUSSION 1 was thereafter consolidated with another action involving the landlord and tenant of a nearby 2 business, J’s Smoke Shop at 2019 Yosemite Boulevard in Modesto, California (the “J’s Smoke 3 Shop Facility”), as Plaintiff proffers the landlord in that action was a company owned by Kumar. 4 (Mem. Supp. Mot. Amend (“Mem.”) at 2, ECF No. 91-1.) Plaintiff proffers he had not yet 5 conducted discovery yet in the other action to determine whether additional barriers existed at J’s 6 Smoke Shop. (Id.; Decl. Tanya E. Moore (“Moore Decl”) ¶ 2, ECF No. 91-3 at 1-2.) 7 At the time the actions were consolidated, Plaintiff was granted leave to file a Second 8 Amended Complaint, which: (1) combined the allegations from both lawsuits, (2) named the 9 current owner of the real property housing the Doctor’s Choice Facility, Nindi2039, LLC, also 10 owned by Kumar, as ownership had been transferred during the pendency of the action, and (3) 11 alleged claims relating to a third business on the same property, Global Smoke Shop at 2037 12 Yosemite Boulevard in Modesto. (Mem. 2.) The second amended complaint filed on June 28, 13 2022, is currently the operative pleading. (ECF No. 70.) 14 Plaintiff proffers that on September 2, 2022, Plaintiff conducted an inspection of the J’s 15 Smoke Shop and Global Smoke Shop Facilities, and identified additional barriers to his access 16 there. (Moore Decl. ¶ 3.) Plaintiff argues he seeks leave to file a third amended complaint in 17 order to allege these additional barriers to Plaintiff’s access, and Plaintiff has attached a redline 18 of the proposed third amended complaint. (Ex. A, ECF No. 91-2 at 1-15.) 19 Turning to the Court ordered status reports, Plaintiff’s status report’s most relevant 20 information to the present motion is as follows: 21 Plaintiff’s position is that unless the Corporate Landlords retain counsel, they cannot appear in the action and their default should 22 be entered. Default judgment is an appropriate remedy where a corporate defendant fails to retain counsel to represent it as 23 required in federal court, even if the corporation had filed a responsive pleading prior to withdrawal of its counsel. United 24 States v. High Country Broad. Co., 3 F.3d 1244, 1245 (9th Cir. 1993). However, if Plaintiff’s motion for leave to file a third 25 amended complaint is granted, and the defendants file a responsive pleading, this issue may become moot. 26 27 (ECF No. 95 at 2.) 1 motion to amend is properly considered to be unopposed. The status report filed by Kumar 2 contains substantive defenses to this action as a whole, such as a proffer that Kumar has taken 3 action to find and fix any violations that exist at the facility and has removed readily achievable 4 barriers. (ECF No. 96 at 2.) The Court does not consider such argument as relevant to opposing 5 amendment, at least not as sufficiently demonstrating bad faith or undue delay. Kumar’s status 6 report also contains the following statement as to the merits of the motion for leave to amend: 7 “[t]he allegations in Plaintiff’s amended complaint do not change the theory or scope of the case. 8 The court must deny Plaintiff’s motion for leave to file his TAC and enter a judgment of 9 default.” (ECF No. 96 at 2-3.)1 10 Based on the filings and the Court’s record, while Kumar argues that the amendment 11 does not change the theory or scope of the case, the Court accepts Plaintiff’s proffer concerning 12 discovery completed after consolidation of this action that revealed additional barriers. 13 Therefore, the Court finds there is no reason to believe that the proposed amendment is futile nor 14 that it would prejudice Defendants; and there is no indication the motion was brought in bad faith 15 or that it produces undue delay in the litigation. See Lockheed Martin Corp. v. Network 16 Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999) (explaining that where a motion to amend was 17 made more than four months after the cutoff date, “[a] need to reopen discovery and therefore 18 delay the proceedings supports a district court’s finding of prejudice.”); SAES Getters S.p.A. v. 19 Aeronex, Inc., 219 F. Supp. 2d 1081, 1086 (S.D. Cal. 2002) (illustrating that an amendment is 20 futile “only if it would clearly be subject to dismissal.”). 21 Consequently, finding that none of the foregoing factors weigh against granting Plaintiff 22 leave to amend, and given the motion was not properly opposed through any opposition briefs 23 filed by the deadline to file an opposition, the Court finds leave to amend appropriate. See Fed. 24 25 11 Defendant Kumar’s argument that the proposed amended complaint does not change the theory of theory or scope of the case appears to borrow that language from the Court’s order requiring a status report, that touched upon the standards regarding whether a defendant must answer an amended complaint. (See ECF No. 93 at 2 (“It is not 26 clear whether, if the third amended complaint is allowed to be filed, whether previously answering Defendants would be required to file a new answer, nor it is clear even if Defendants Amar Kumar and Nindiseventeen LTD 27 Liability Co. were required to file an answer to the second amended complaint. See KST Data, Inc. v. DXC Tech. Co., 980 F.3d 709, 714–16 (9th Cir. 2020) (“A defendant is not required to file a new answer to an amended eee ent nn nen nn nn nn nn nn een □□ SN 1 | R. Civ. P. 15(a); Eminence Capital, 465 F.3d at 951; DCD Programs, 833 F.2d at 187 (“Absent 2 | prejudice, or a strong showing of any of the remaining [ | factors, there exists a presumption 3 | under Rule 15(a) in favor of granting leave to amend.”). 4 Accordingly, IT IS HEREBY ORDERED that: 5 1. The hearing on Plaintiff’s motion to amend set for November 16, 2022, at 10:00 6 a.m. in Courtroom 9 is VACATED; 7 2. Plaintiff's motion for leave to file a third amended complaint is GRANTED; and 8 3. Plaintiff shall file a third amended complaint within five (5) days of the date of 9 entry of this order.” 10 Wl IT IS SO ORDERED. DAM Le 12 | Dated: _November 8, 2022 _ EE UNITED STATES MAGISTRATE JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 2 While Plaintiff’s proposed orders submits that the Court should order Defendants to file a responsive pleading within fourteen days of filing of the amended complaint, as indicated in the Court’s order requiring a status report, it 25 is not clear on one hand, “whether previously answering Defendants would be required to file a new answer, nor [is it] clear even if Defendants Amar Kumar and Nindiseventeen LTD Liability Co. were required to file an answer to 26 the second amended complaint,” and on the other hand, given “Rule 55 requires default to be entered not only when a defendant fails to plead, but default must be entered when a party has ‘failed to . . . otherwise defend,’ [whether] . . . the current unrepresented status of the corporate defendants has an impact on the ability to otherwise defendant for 27 purposes of entry of default.” (ECF No. 94 at 2-3.) The Court declines to blanketly order the Defendants to file a responsive pleading, and the Court will address such issues at the appropriate time after Plaintiff makes requests for 28 entry of default and/or files a motion for default judgment.