United States District Court, D. New Jersey
B. SIMANDLE U.S. District Judge.
matter comes before the Court on Plaintiff Interstate Realty
Management Company's (“IRM”) motion to amend
judgment [Docket Item 12]. This Court previously granted
Plaintiff's motion for default judgment and entered
judgment in favor of Plaintiff and against PF Holdings, LLC
(“PF Holdings”) in the amount of $316, 841.70.
Plaintiff now seeks to amend the judgment pursuant to
Fed.R.Civ.P. 59(e) to add two additional defendants, PF
Roosevelt LLC and Roosevelt GA LLC. For the reasons that
follow, Plaintiff's motion must be denied.
Court finds as follows:
Factual and Procedural Background.
purposes of this motion, it suffices to note the following.
Plaintiff filed a Complaint [Docket Item 1] on July 7, 2016,
alleging that Plaintiff and PF Holdings entered into an
agreement by which IRM would manage an apartment development
for Defendant in Florida, in exchange for a monthly fee, but
that Defendant has not paid the amount owed under the terms
of the agreement. (Compl. ¶¶ 6-15.) Defendant filed
no response to Plaintiff's Complaint, and the Clerk of
Court accordingly entered default against Defendant on
September 9, 2016. Plaintiff's motion for default
judgment followed, which this Court granted on January 4,
2017 [Docket Items 10 & 11]. To date, PF Holdings has not
filed a response to any of Plaintiff's filings.
Plaintiff now seeks to amend the judgment pursuant to
Fed.R.Civ.P. 59(e) to add two additional entity defendants as
necessary parties, information it contends it only learned
when it began post-judgment discovery. Plaintiff asserts that
PF Roosevelt, LLC (“PF Roosevelt”) and Roosevelt
GA, LLC (“Roosevelt GA”) received management
services provided by IRM to PF Holdings for an apartment
development in Florida and are liable for the same amounts as
PF Holdings as set forth in the Complaint.
According to the documents referenced in the affidavit of
Sandy Cipollone (“Cipollone Cert.”) [Docket Item
12-2], PF Holdings was the original purchaser, on August 6,
2013, of the Roosevelt Gardens apartment development in
Florida (“the Property”). The Fourth Amendment to
the Purchase Contract, executed in September 2014, notes the
following: (i) “PF Holdings assigned its rights under
the [Purchase] Agreement to [PF Roosevelt]” and
“PF Holdings or one of PF Holdings' principals is a
member of [PF Roosevelt]”; and (ii) “[PF
Roosevelt] desires to cause Roosevelt GA to purchase the
Improvements” on the Property in order to carry out
tax-exempt bond financing and for PF Roosevelt “to
purchase solely the Land.” (Fourth Amendment to
Purchase and Sale Agreement [Exhibit A to Cipollone Cert.] at
¶¶ B & D.) On December 17, 2014, the seller of
the Property executed a special warranty deed conveying the
improvements on the Property to Roosevelt GA and a special
warranty deed conveying the land at the Property to PF
Roosevelt. (Deeds [Exhibit B to Cipollone Cert.].) As set
forth in the Complaint, in the meantime, on October 1, 2014,
IRM and PF Holdings entered into the management agreement for
the Roosevelt Garden Apartments at the Property. (Compl.
Plaintiff's filings in connection with this motion have
been served by certified and ordinary mail upon Roosevelt GA
at an address in Jacksonville, Florida; upon PF Roosevelt by
means of its registered agent in Flemington, New Jersey and
in Davie, Florida; and upon PF Holdings to addresses in
Newark, New Jersey and Brooklyn, New York. (See
Proof of Service [Docket Item 13] at ¶¶ 4-8 and
Exhibits A, B, C & D.) None of these parties have filed a
response to Plaintiff's motion.
Standard of Review.
there are four basic grounds upon which a Rule 59(e) motion
may be granted: (1) to correct manifest errors of law or fact
upon which the judgment was based; (2) to present
newly-discovered or previously unavailable evidence; (3) to
prevent manifest injustice; and (4) an intervening change in
the prevailing law. See 11 Charles A. Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice and Procedure
§ 2810.1; see also Harsco v. Zlotnicki, 779
F.2d 906, 909 (3d Cir. 1985), cert. denied, 476 U.S. 1171
(1986). A motion to amend judgment must be filed without 28
days after the entry of the judgment. Fed.R.Civ.P.
seeks, under the rubric of a Rule 59(e) motion, to amend the
judgment to impose liability upon two alleged related or
successor entities that have never been named in the
pleadings. The sole named defendant, which was duly served
and as to which default was entered under Rule 55(a), was PF
Holdings. While a Rule 59(e) amendment to a judgment may be
proper to correct a typographical error in the name of the
defendant, see 4 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 2817, there is
not authority under Rule 59(e) to identify new parties and
new allegations of their liability that have not been set
forth in pleadings. Simply mailing a motion to amend under
Rule 59(e) to these parties who are strangers to the
litigation, as Plaintiff has done here, cannot take the place
of naming these new defendants in an amended complaint,
serving the amended complaint as required under Rule 4, Fed.
R. Civ. P., and presenting these parties with what due
process requires: notice and an opportunity to be heard
before a court that has acquired personal jurisdiction over
the new defendants. Until these procedures have been
accomplished, this Court cannot adjudicate the rights of the
absent parties. The Court holds that a Plaintiff may not
utilize a motion to amend a judgment under Rule 59(e) for the
purpose of adding new parties, adding new bases for the
liability of the new parties, and enlarging the existing
judgment to include the new parties. Accordingly,
Plaintiff's motion will be denied.
Court will, however, in the alternative, grant Plaintiff
leave to file an Amended Complaint naming the new defendants
and setting forth the factual grounds on which liability is
sought to be imposed against them. If liability is sought to
be imposed as successors to Defendant PF Holdings, the
Amended Complaint shall set forth the basis for such a claim.
From the documents referenced in the present motion,
supra, it would appear that such a claim would be
plausible and would satisfy the requirements of Rule
15(a)(2), Fed. R. Civ. P., permitting an amendment to a
pleading with leave of court which is to be freely granted
when justice so requires. A court has authority to permit an
amendment to a pleading even after judgment has been entered.
Fletcher-Harlee Corp. v. Pote Concrete Contractors,
Inc., 482 F.3d 247, 252 (3d Cir. 2007). Based upon the
certification submitted by Plaintiff in connection with this
motion, the Court has no difficulty concluding that justice
requires such an amendment here. Plaintiff learned, after
judgment was entered and upon inspecting its own files, that
the two new entities, PF Roosevelt and Roosevelt GA, also
allegedly had interests in the improvements and land,
respectively, at the Roosevelt Gardens apartment complex