The opinion of the court was delivered by: Honorable Tonianne J. Bongiovanni United States Magistrate Judge
Currently pending before the Court is Plaintiff Dawn Restaurant, Inc.'s ("Plaintiff") Motion to Amend the Complaint in order to include a cause of action for a claim of bad faith [Docket Entry No. 11]. Defendant Penn Millers Insurance Company ("Defendant") has filed an opposition to Plaintiff's Motion [Docket Entry No. 21]. After considering the submissions and arguments of the parties, and for good cause shown, Plaintiff's Motion for leave to Amend the Complaint is GRANTED.
Plaintiff, a restaurant, purchased an insurance policy from Defendant in December of 2007.
This policy contained a Business Owners Coverage section that covered the property of the restaurant. On August 14, 2008, Plaintiff noticed that the ceiling above the kitchen had warped and the structure was severely warped. Plaintiff then called a roofing company to begin repairs and perform the work in a way that allowed Plaintiff to continue to use the kitchen and keep the business open. In November of 2008, Plaintiff notified Defendant about the state of the roof and the work being conducted on it. Defendant then hired an engineer, Mr. Andrew Sharick, principle of Sharick Associates, Inc. ("Sharick"), to inspect the premises and determine the cause of the warping. On December 12, 2008, Sharick conducted his inspection of the roof. In his report Sharick concluded that the damage could not be positively identified to a single cause. He cited a variety of factors in his report including damage caused by excessive humidity in the attic, long-term load on the rooftop, HVAC equipment, and repeated instances of normal rainfall and snowfall during the life span of the building. When Defendant denied Plaintiff's cost of repairs, Defendant cited all of the factors listed in Sharick's report except for the damage caused by rainfall and snowfall. Plaintiff argues that this omission was done purposely. Plaintiff further argues that the insurance policy would have automatically triggered if Defendant acknowledged precipitation played a part in the deterioration of the roof. Defendant denies that the rainfall and snowfall were purposely omitted in its denial letter. Defendant suggests that, at worst, the failure to mention the precipitation factor was negligent on their part.
The initial complaint was filed in this case on April 6, 2010 [Docket Entry No. 1]. Plaintiff asserted a right to recovery based under breach of contract theory. During the Initial Rule 16 Conference on June 22, 2010, the Court ordered that all motions to amend the pleadings must be filed no later than August 27, 2010. Another conference was held on November 22, 2010 without either party expressing a wish for leave to amend the pleadings. Plaintiff filed the instant motion on April 18, 2011. Defendant argues that the Plaintiff's Motion should be denied on the basis of futility and further argues that allowing the claim this late in the discovery process would be prejudicial to Defendant. Defendant further argues that the instant motion was filed unduly late because Plaintiff has had the document it is basing the proposed amended claim on since the beginning of discovery.
A. Motion to Amend Standard
Leave to amend the pleadings is generally given freely. Foman v. Davis, 371 U.S. 178, 182 (1962). Notwithstanding this liberal standard, the Court will deny a motion to amend where there is a showing of 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) . If there is an absence of undue delay, bad faith, prejudice or futility, a motion for leave to amend a pleading should be liberally granted. Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004).
In order to establish prejudice, the burden is on the non-moving party who must make a showing that permitting 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, 393 F.3d 390, 400 (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)). In addition, the non-moving party must demonstrate "that it was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered had the amendments been timely." Id.
The Third Circuit has held that a motion for leave to amend should be denied when the delay in amending the pleading is unduly late. Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001). A delay becomes unduly when it places an unfair burden on the non-moving party or the court. Id. However, the mere passage of time does not require that the motion be denied. Id. Moreover, delay alone is an insufficient ground to deny leave to amend. Id. When determining whether there is undue delay, 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). The Court is also obliged to conduct an inquiry into the movant's reasons for not amending sooner. Cureton, 252 F.3d 267, 273 (3d Cir. 2001). The burden of showing undue prejudice [from delay] is a "heavier burden than claiming prejudice. Air Products and Chemicals, Inc. v. Eaton Metal Products Co., F. Supp. 2d 329 (P.A.E.D. 2003) (internal citations omitted).
An amendment is futile if it "is frivolous or advances a claim or defense that is legally insufficient on its face." Harrison Beverage Co. v. Dribeck Imp., Inc., 133 F.R.D. 463, 468 (D.N.J. 1990) (internal quotation marks and citations omitted). In determining whether an amendment is "insufficient on its face," the Court employs the Rule 12(b)(6) motion to dismiss standard (see Alvin, 227 F.3d at 121) and considers only the pleading, exhibits attached to the pleading, matters of public record and undisputedly authentic documents if the party's claims are based upon same. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). This is a logical standard to apply because an amended complaint is a new pleading and needs to satisfy the same standard. When considering whether a pleading would survive a Rule 12(b)(6) motion, the Court must accept all facts alleged in the pleading as true and draw all reasonable inferences in favor of the party asserting them. Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir. 2004). "[D]ismissal is appropriate only if, accepting all of the facts alleged in the [pleading] as true, the p[arty] has failed to plead 'enough facts to state a claim to relief that is plausible on its face[.]'" Duran v. Equifirst Corp., Civil Action No. 2:09-cv-03856, 2010 WL 918444, *2 (D.N.J. March 12, 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In essence, the facts alleged must be sufficient to "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
While a pleading does not need to contain "detailed factual allegations," a party's "obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not" suffice. Twombly, 550 U.S. at 555 (citation omitted). Thus, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. Moreover, although the Court must, in assessing a motion to dismiss, view the factual allegations contained in the pleading at issue as true, the Court is "not compelled to accept ...