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Ford Motor Company, et al v. Edgewood Properties

April 27, 2011

FORD MOTOR COMPANY, ET AL.,
PLAINTIFFS/COUNTERCLAIM
DEFENDANTS,
v.
EDGEWOOD PROPERTIES, INC., DEFENDANT/COUNTERCLAIMANT/ THIRD-PARTY
PLAINTIFF.



The opinion of the court was delivered by: Hon. William J. Martini

NOT FOR PUBLICATION

OPINION

WILLIAM J. MARTINI, U.S.D.J.:

This matter comes before the Court on Defendant-Counterclaimant/Third-Party Plaintiff Edgewood Properties, Inc.'s ("Edgewood") appeal of Magistrate Judge Salas' September 17, 2010 ruling on the bench ("September 17 Ruling") denying Edgewood's motion for leave to file an amended complaint asserting claims on behalf of the "Other Entities" as additional third-party plaintiffs. A hearing was held on the motion on April 7, 2011, and the Court reserved its decision. For the reasons that follow, Edgewood's appeal is DENIED, and Judge Salas' September 17, 2010 ruling denying Edgewood's motion for leave to file an amended complaint asserting claims on behalf of the "Other Entities" is AFFIRMED.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of the distribution of contaminated concrete from the demolition of a Ford Motor Company ("Ford") assembly plant in Edison, New Jersey in 2004. Ford contracted with MIG/Alberici, LLC ("MIG/Alberici") to conduct the demolition and properly dispose of the concrete. Ford then entered into an agreement with Edgewood Properties, Inc. ("Edgewood"), whereby Ford agreed to provide 50,000 cubic yards of concrete to Edgewood in exchange for Edgewood hauling it off the site. Edgewood then used the concrete as backfill on seven commercial property sites that they were developing (the "Seven Properties"). The parties later determined that the concrete was contaminated. As such, Ford filed a complaint against Edgewood on March 17, 2006, bringing claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. ("CERCLA"), and Section 58:10-23, 11f (a)(2) of the New Jersey Spill Act for contribution and indemnification for all costs as provided under the contract. Edgewood, in turn, asserted cross-claims, counterclaims and a third-party complaint against Ford and other involved parties on December 7, 2006, which include claims for breach of contract, contribution, negligent misrepresentation, and civil conspiracy.

On March 12, 2010, Edgewood filed a motion for leave to file its First Consolidated Amended Counterclaims, Cross-claims, Third-Party Complaint and First Amended Complaint (Docket Entry No. 299.) Among other amendments requested, Edgewood moved to add claims on behalf of the "Other Entities," which own the Seven Properties that received the concrete at issue in this litigation.*fn1 Judge Salas heard oral argument on September 17, 2010 on the motion to amend, and from the bench denied Edgewood's motion to amend to add the "Other Entities." On October 1, 2010, Edgewood filed the instant appeal (Docket Entry No. 362), challenging Judge Salas' decision denying the motion to add claims on behalf of the Other Entities.

II. DISCUSSION

Judge Salas denied Edgewood's motion to add claims on behalf of the Other Entities based on findings that (1) the addition of the Other Entities as third-party plaintiffs would cause undue prejudice to the opposing parties, and (2) the motion was unduly delayed. (Hr'g Tr., Docket Entry No. 359, at 80.) As to undue delay, Judge Salas found that Edgewood failed to provide any detail regarding what "new information" was discovered to warrant adding these parties at this late stage. (Id.) As to undue prejudice, Judge Salas found that the opposing parties sufficiently demonstrated that significant additional discovery would be necessary. (Hr'g Tr. at 80-81.)

On appeal, Edgewood argues that: (1) Judge Salas failed to consider whether the Other Entities are currently parties to this litigation, which was a necessary step in evaluating the motion to amend; (2) Edgewood did not unduly delay in adding the Other Entities as the amendment was timely filed under the Scheduling Order and 11 months remained before the scheduled close of fact discovery; and (3) the opposing parties did not sufficiently show undue prejudice.*fn2

A. Standard of Review

A district court may reverse a Magistrate Judge's order only if it finds the ruling to be clearly erroneous or contrary to law.*fn3 See 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); L. Civ. R. 72.1(c)(1)(A). As such, "the magistrate judge is accorded wide discretion." Miller v. Beneficial Mgmt. Corp., 844 F. Supp. 990, 997 (D.N.J. 1993) (citing NLRB v. Frazier, 966 F.2d 812, 815 (3d Cir. 1992)). The district court is bound by the clearly erroneous rule as to findings of fact, while the phrase "contrary to law" indicates plenary review as to matters of law. Haines v. Liggett Group Inc., 975 F.2d 81, 91 (3d Cir. 1992). A finding is considered "clearly erroneous" when, "although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). A decision is considered contrary to law if the magistrate judge has "misinterpreted or misapplied applicable law." Doe v. Hartford Life Acc. Ins. Co., 237 F.R.D. 545, 548 (D.N.J. 2006). The burden is on the appealing party to demonstrate clear error. United States v. Sensient Colors, Inc., 649 F. Supp. 2d 309, 315 (D.N.J. 2009).

B. Rule 15(a) Standard for Amending a Pleading

Under Federal Rule of Civil Procedure 15(a)(2), a party may amend its pleadings by leave of court, which should be freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). The decision to grant leave to amend rests within the discretion of the court, but should only be denied on the basis of: (1) undue delay; (2) bad faith or dilatory motive; (3) undue prejudice to the opposing party; or (4) futility of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). "Only when these factors suggest that amendment would be 'unjust' should the court deny leave." Arthur v. Maersk, Inc., 434 F.3d 196, 203 (3d Cir. 2006) (internal citations omitted). Judge Salas' ...


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