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Lasermaster International Inc. v. Netherlands Insurance Co.

United States District Court, D. New Jersey

April 20, 2018

LASERMASTER INTERNATIONAL INC., Plaintiff,
v.
THE NETHERLANDS INSURANCE COMPANY, Defendants.

          OPINION AND ORDER

          HONORABLE JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on a motion by Plaintiff Lasermaster International Inc. (“Plaintiff” or “Lasermaster”) for leave to file an Amended Complaint asserting an additional cause of action alleging bad faith denial of insurance payment on the part of Defendant Netherlands Insurance Company (“Defendant” or “Netherlands”) [ECF No. 36]. Defendant opposes Plaintiff's motion [ECF No. 37]. The Court fully reviewed the parties' written submissions and considers Plaintiff's motion without oral argument pursuant to L. Civ. R. 78.1(b). For the reasons set forth below, Plaintiff's Motion to Amend is DENIED.

         I. BACKGROUND

         A. Factual Background and Procedural History

         This matter arises from a contract dispute between Plaintiff, a New Jersey corporation, and Defendant, a New Hampshire corporation, for alleged losses that occurred during and as a result of Superstorm Sandy. See Compl., ECF No. 1 ¶¶ 10-13. Lasermaster is a manufacturer of paper products and maintains sample products at its office in New Jersey. Prior to Superstorm Sandy, Lasermaster obtained an insurance policy (the “Policy”) from Defendant to cover, inter alia, losses of business income and losses to the business's personal property. See Id. ¶¶ 14, 17. The Policy was effective from August 1, 2012 through and including August 1, 2013. See Id. ¶ 15. At all relevant times, Defendant was authorized by the New Jersey Department of Banking and Insurance to issue policies of insurance, including the policy at issue herein, in the State of New Jersey. See Id. ¶ 13.

         On October 28, 2012, Superstorm Sandy caused damage to Lasermaster's property, located at 1000 South First Street, Harrison, New Jersey (the “Premises”). See Id. ¶¶ 10, 20. As a result of the winds and rains associated with Superstorm Sandy, Lasermaster alleges that it sustained damage to its personal property and business income. See Pl.'s Br. in Supp. of Mot. to Am. the Compl., ECF No. 36-8 at 3 (“Plaintiff's Brief”). Specifically, Lasermaster alleges that a hole was created in the roof of the Premises, which allowed water to enter and damage its sample products. See Id.

         On November 10, 2012, Lasermaster submitted Claim Number 704994620 (the “Claim”) to Defendant detailing the losses it suffered during Superstorm Sandy. See Compl. ¶ 21. Thereafter, Defendant began investigating the Claim. In March of 2013, the parties reached an agreement as to the stock portion of Lasermaster's business loss claim. See Def.'s Br. in Opp'n, ECF No. 37 at 3. However, the remaining claims would prove to be much more complicated.

         According to Defendant, Plaintiff's claim for loss of business income was complicated by the “difficulty in measuring the alleged loss of designs and sample products that formed the basis of the claim.” Id. at 3-4. Defendant further alleged that:

these complications were only compounded by the fact that on October 24, 2014, over a year and a half after the loss of business income claim was first raised, and over a year and a half after the initial claim submission for the alleged loss of business income and samples, Lasermaster's public adjuster informed Netherlands that it was switching accountants and re-submitting its business personal property and loss of business claim.

Id. at 4-5. By November 2014, Lasermaster switched accountants and submitted a revised and substantially increased claim. Id. at 5. To evaluate Lasermaster's revised claim, Defendant engaged consultant Quintin Schwartz of Document Reprocessors to evaluate whether the samples Lasermaster alleged it lost could be repaired. See Id. While Mr. Schwartz was conducting his evaluation of the samples, on October 20, 2015, Lasermaster filed its Complaint in this matter alleging, inter alia, that Defendant had constructively denied its insurance claim. See Compl. ¶ 25. In its Complaint, Lasermaster alleges breach of contract for business income loss (Count I), and breach of contract for business personal property (Count II). See generally Compl. After multiple extensions [ECF Nos. 5, 11], Defendant filed its answer on December 18, 2015. ECF No. 13. The Court then convened a case management conference on February 25, 2016.

         In its original Pretrial Scheduling Order (“Scheduling Order”), the Court ordered that “[a]ny motion to amend the pleadings must be filed [no] later than 5/13/2016.” ECF No. 16 ¶ 15 (emphasis in original). After the case management conference, and before the present motion was filed, the Court conducted six (6) telephone status conferences with the parties.[1] At the parties' request, the Court amended deadlines in the Pretrial Scheduling Order on four occasions. See ECF Nos. 26, 28, 30, 34.[2] While certain dates were amended based on the Court's Order, the Court did not modify the deadline for filing motions to amend pleadings and no request for such a modification was ever submitted by the parties.

         On September 12, 2017, Lasermaster filed the instant motion to amend. Pl.'s Mot. to Amend, ECF No. 36. Defendant filed its response to the instant motion on October 2, 2017 [ECF No. 37], and Lasermaster filed its reply on October 10, 2017 [ECF No. 38].

         B. The Parties' Arguments

         Lasermaster seeks leave to file an Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a)(2), to add a “Bad Faith Delay and Denial of Insurance Payment” cause of action. See Pl.'s. Br., ECF No. 36-8; see also Proposed Am. Compl., ECF No. 36-2 (Third Claim). Lasermaster argues that leave to file an Amended Complaint should be granted because the facts supporting the amendment have only recently been uncovered in discovery. See Pl.'s Br., ECF No. 36-8 at 2. Lasermaster asserts that “[i]t would be unjust to deny Plaintiff the right to pursue a claim where the facts supporting the claim were completely within the control of the Defendant and unavailable to the Plaintiff until more than a year after the deadline to amend the Complaint.” Id. at 14. Lasermaster also asserts that the proposed amendment is not futile, and that Defendant will not suffer any prejudice or undue delay if leave to amend is granted. See Id. at 8, 10.

         In response to Lasermaster's motion, Defendant argues that leave to amend should be denied for four reasons. First, Defendant argues that Lasermaster's motion should be denied because Lasermaster failed to establish good cause to amend its Complaint as required under Rule 16(b). See Def.'s Br. in Opp'n, ECF No. 37 at 9. Defendant notes that the mere existence of prior extensions of fact discovery do not relieve Lasermaster of its burden to establish good cause. See Id. Second, Defendant argues that Lasermaster's motion should be denied because there is no satisfactory explanation for Lasermaster's undue delay in seeking to amend. See Id. at 12. To this point, Defendant argues that all of the information allegedly supporting Lasermaster's bad faith claim was available to Lasermaster in October of 2015. See Id. Defendant contends that even if new information were discovered during the depositions as alleged by Lasermaster, Plaintiff made a conscious decision to do nothing with that information for months prior to the instant motion. Therefore, Defendant contends that Lasermaster's motion should be denied. See Id. Third, Defendant argues that Lasermaster's motion should be denied because an amendment at this late stage in discovery will “severely cripple” Defendant's ability to conduct any discovery on the bad faith claim. Id. at 18. Lastly, Defendant argues that Lasermaster's Amended Complaint should be denied on the grounds of futility, since it would not survive a motion to dismiss for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). See Id. at 20.

         II. ...


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