This matter comes before the Court upon a motion by Defendant, Trine Rolled Moulding Corp. ("Trine") seeking leave to file a Second Amended Counterclaim to include additional claims for malicious abuse of process and malicious prosecution, as well as to amend and expand its existing claims of breach of contract, breach of fiduciary duty, interference with prospective economic advantage, unjust enrichment, and fraud. Trine filed a Brief ("Moving Brief") and Certification ("Cert. of Brendan Judge") in Support of its Motion [Docket Entry No. 109]. On June 4, 2007, Plaintiff Component Hardware Group, Inc. ("Component") filed opposition to Trine's Motion ("Opposition Brief") [Docket Entry No. 111]. Trine then filed a Reply Brief in Further Support of its Motion ("Reply Brief") [Docket Entry No. 113]. Having considered the submissions of the parties without oral argument pursuant to FED.R.CIV.P. 78, and for good cause shown, Trine's Motion for leave to Amend its Counterclaims is GRANTED IN PART and DENIED IN PART.
The parties and Court are familiar with the lengthy background of this matter, which therefore shall not be repeated here at length. Trine is a corporation which manufactures and designs steel products for several industries, including the foodservice industry. (Cert. of Brendan Judge at Ex. B). Component is a corporation that distributes foodservice hardware. (Id.) In or about 1982, Component approached Trine to design, develop and manufacture a baffle-type grease filter for use in kitchen exhaust fan systems. (Id.) Trine designed the filter and received the required approval to sell the design. (Id.) Shortly thereafter, Trine and Component entered into an agreement which stipulated that Trine would manufacture filters and sell them to Component, who would in turn sell them to customers. (Id.) Trine asserts that an oral agreement existed between the parties stipulating that Trine would be the exclusive manufacturer of filters sold by Component until 2004. (Id.)
On January 25, 2005, Component filed a Complaint and an application for a preliminary injunction in state court. (Moving Brief at 1). Trine removed the action to federal court and filed a counterclaim, alleging ownership of the grease filters at issue in the Complaint, an exclusive sales relationship between the parties, and a breach by Component of its contractual and fiduciary duties to Trine. (Opposition Brief at 2). On January 6, 2005, the District Court denied Component's preliminary injunction application. (Cert. of Brendan Judge at Ex. B). Eventually, Component dismissed all claims asserted against Trine. (See Docket Entry No. 107).
Trine alleges that prior to filing the Complaint, Component had knowledge that Trine had "every right to sell its filters and would do so to compete against Component once Component brought to market its new Chinese-manufactured filter, the Grease Guard," and that Component sought to "use this Court to improperly destroy competition...with full knowledge that its entire position was based upon a lie." (Moving Brief at 1) (emphasis in original). Trine further asserts that it only discovered this information after filing its Amended Counterclaim. Therefore, Trine seeks to amend its Counterclaims to include new claims and expand its existing counterclaims. Trine further asserts that Thomas Carr acknowledged receipt of a description of the parties' relationship as maintained by Component's own records, prior to filing the Complaint, "that confirmed what Trine has been saying from the inception of this lawsuit." (Moving Brief at 4). These records list Component as Trine's "exclusive sales representative to whom Trine pays a sales commission," instead of a "job shop," as stated in the Complaint. (Id.)
Trine also alleges that documents recently produced reveal that during the time period when Component was allegedly acting as Trine's exclusive sales agent on grease filters, Component was also purchasing and selling filters made by Rutzler Filter Corporation ("Rutzler"), another grease filter manufacturer. (Moving Brief at 7). Diane Baumeister, Rutzler's President, revealed in her deposition that Component purchased Rutzler filters consistently from 1981 to 1995. (Cert. of Brendan Judge at Ex. O). Trine was unaware of these purchases at the time because, according to Trine, Component "actively concealed its Rutzler purchases from Trine." (Reply Brief at 2). Trine notes that it did not receive these documents until "the very last day of discovery, April 20, 2007." (Moving Brief at 5). Moreover, Steve Bohacik also testified that Component was Trine's exclusive commission sales agent for the grease filters since 1984. (Cert. of Brendan Judge at Ex. L).
Trine presently seeks leave to Amend its Counterclaims to include claims for malicious abuse of process and malicious prosecution, due to Component's knowledge of the parties' relationship and of Trine's right to manufacture and distribute its grease filters. (Moving Brief at 5). Additionally, Trine also seeks leave to incorporate the facts related to Component's purchase of Rutzler filters into its Counterclaim. (Moving Brief at 7-8). Trine also seeks leave to amend its counts to include claims extraneous to grease filters requirements contracts. (Id.)
Component objects to all of Trine's proposed Amendments on the grounds that they are "legally unsupportable and would unnecessarily expand the scope of the litigation, delay the resolution of this matter and increase litigation costs." (Opposition Brief at 1). Component further asserts that Mr. Carr did not actually read the records which described the parties' relationship, and therefore did not have malicious intent when he certified the Complaint against Trine. (Opposition Brief at 5). Component also asserts that, even if Mr. Carr had acted maliciously, Trine's proposed claims of malicious abuse of process and malicious prosecution will be futile because elements of each claim are missing from Trine's argument. (Opposition Brief at 3-4). Component also asserts that Ms. Baumeister's testimony about Rutzler selling grease filters to Component does not demonstrate that Component breached any contract with Trine, but that when "these sales occurred, the parties considered their relationship to be non-exclusive." (Opposition Brief at 4). Component also claims that the amendments to the claims that Trine moves to change in order to reflect Component's business with Rutzler are futile as time-barred by the applicable statutes of limitations. (Opposition Brief at 11).
Leave to amend pleadings "shall be freely given when justice so requires." FED.R.CIV.P. 15(a). Although this standard is liberal, courts will deny a motion to amend on grounds of dilatoriness or undue delay, prejudice, bad faith or futility. See Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000); Hill v. City of Scranton, 411 F.3d 118, 134 (3d Cir. 2005). The Supreme Court has held that leave should be granted "in the absence of...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 party by virtue of allowance of the amendment, [or] futility of amendment." Foman v. Davis, 371 U.S. 178, 182 (1962).
A. There Exists no Undue Delay or Prejudice to Component
The Third Circuit has held that a motion for leave to amend should be denied when the delay in amending the pleading is undue. Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001). However, the mere passage of time does not require that the motion be denied. Id.
Moreover, "delay alone does not preclude amendment. It must be coupled with a resultant burden on the court or prejudice to the other party." Amquip Corp. v. Admiral Ins. Co., 231 F.R.D. 197, 199 (E.D. Pa. 2005) (citing Cureton at 273). When determining whether the delay is undue, the Court must focus on the moving party's reasons for not amending the pleading sooner. USX Corp. v. Barnhart, 395 F.3d 161, 168 (3d Cir. 2004).
"[P]rejudice to the non-moving party is the touchstone for the denial of an amendment." Bechtel v. Robinson, 886 F.2d 644, 652 (3d Cir. 1989) (citing Cornell & Co., Inc. v. Occupational Health and Safety Review Comm'n, 573 F.2d 820, 823 (3d Cir. 1978)). To establish prejudice, the non-moving party must show that allowing the amended pleading would (1) require the non-moving party to expend significant additional resources to conduct discovery and prepare for trial, (2) significantly delay the resolution of the dispute, or (3) prevent a party from bringing a timely action in another jurisdiction. Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004). The non-moving party must also ...