United States District Court, D. New Jersey
OPINION AND ORDER
HONORABLE JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE.
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.
Factual Background and Procedural History
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.
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.
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
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,
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. At the parties' request, the Court
amended deadlines in the Pretrial Scheduling Order on four
occasions. See ECF Nos. 26, 28, 30,
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.
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].
The Parties' Arguments
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.
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.