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Lee v. A to Z Trading LLC

United States District Court, D. New Jersey

June 13, 2018

GLORIA LEE, Plaintiff,




         This matter comes before the Court on Plaintiff Gloria Lee's (“Lee”) motion to amend her Complaint to add a fraud-in-the-inducement claim against Defendant Abderrazak Zakaria (“Zakaria”). D.E. 58. Zakaria has opposed the motion. D.E. 60. The Court has considered the motion, opposition and applicable law. For the reasons set forth herein, Lee's motion to amend the Amended Complaint is granted.


         On July 24, 2012, Lee filed a Complaint against Zakaria and his company, A to Z Trading, LLC (“A to Z”), alleging claims sounding in both breach of contract and fraud. Complaint, July 24, 2012, D.E. 1. On May 27, 2016, Plaintiff filed an Amended Complaint, alleging the following counts: (1) breach of contract; (2) implied contract; (3) book account; (4) account stated; and (5) fraud. Am. Compl., D.E. 28, ¶¶ 6-40. Counts One to Four were brought against A to Z only, but Count Five was brought against both A to Z and Zakaria, jointly and severally. Id. Lee alleged the following facts.

         In August 2011, Lee met Zakaria at a trade show in Las Vegas, and pursuant to Zakaria's authorization, sold to A to Z 432 jackets for $84, 240. Am. Complaint, D.E. 28, ¶¶ 6, 18, 19. Subsequently, A to Z amended its jacket order, which included an additional 60 jackets for $11, 700, for a total number of 492 jackets at a total purchase price of $95, 940. Id. ¶¶ 7, 8, 22, 26. The jackets were delivered to Zakaria's warehouse on October 27, 2011. Id. ¶¶ 7-8, 25-26. Lee alleges that Defendants failed to remit any of the $95, 940 owed to Lee. Id. ¶¶ 8, 25.

         Zakaria filed a motion to dismiss Count Five of the Amended Complaint on June 10, 2016. D.E. 29. On October 11, 2016, Judge Salas granted the motion, without prejudice, based on the economic-loss doctrine. Opinion, Oct. 11, 2016, D.E. 38. On November 30, 2016, Lee filed a motion to amend her Amended Complaint in an effort to bring a fraud claim against Zakaria that was not barred by the economic-loss doctrine. D.E. 40. This motion was dismissed for procedural reasons and Lee was granted until December 9, 2016 to file a proper motion to amend. D.E. 41. Lee filed the new motion to amend on December 8, 2016. D.E. 42. On May 8, 2017, the Court denied Lee's motion to amend as futile because the fraud claim as alleged was intrinsic to the contract and therefore, barred by the economic-loss doctrine. D.E. 47. Lee then appealed this Court's Order to Judge Salas but sought an extension of time to file the brief in support of her appeal. D.E. 48. Judge Salas granted Lee's request, and directed that any appeal of this Court's decision, and accompanying brief, be filed by July 7, 2017.[1] D.E. 49.

         On October 13, 2017, new counsel for Lee entered an appearance and notified the Court that prior counsel for Lee, Robert Vort, passed away on September 3, 2017, and had been ill for several months before his passing.[2] D.E. 51, 52. On November 8, 2017, Lee's new counsel filed a letter with the Court seeking leave to file an appropriate Second Amended Complaint.[3] D.E. 54. The Court held a telephone status conference on December 4, 2017, to address Lee's request for leave to amend. D.E. 55. At the conclusion of the telephone status conference, the Court entered an Amended Scheduling Order setting December 22, 2017 as the deadline by which Lee must file her motion to amend. D.E. 56.

         Lee filed the instant motion to amend on December 22, 2017, Zakaria filed his opposition on January 9, 2018, and Lee filed her reply on January 16, 2018. D.E. 58, 60, 61.


         The threshold issue in resolving a motion to amend is the determination of whether the motion is governed by Rule 15 or Rule 16 of the Federal Rules of Civil Procedure.” Karlo v. Pittsburgh Glass Works, LLC, No. 10-1283, 2011 WL 5170445, at *2 (W.D. Pa. Oct. 31, 2011). Rule 15 states, in pertinent part, “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “Rule 16, on the other hand, requires a party to demonstrate ‘good cause' prior to the Court amending its scheduling order.” Karlo, 2011 WL 5170445, at *2 (citing Fed.R.Civ.P. 16(b)(4)).

         a. Rule 16(b)(4)

         Given that Lee's motion was filed after the original January 31, 2017 deadline for the filing of motions to amend the pleadings set forth in the Court's August 22, 2016 Scheduling Order, D.E. 37, the first question before the Court is whether good cause exists to adjust the deadline to permit Lee to now file the instant motion.

         Rule 16 of the Federal Rules of Civil Procedure authorizes courts to enter schedules of proceedings. The pretrial scheduling order allows a court to take “judicial control over a case and to schedule dates for completion by the parties of the principal pretrial steps.” Harrison Beverage Co. v. Dribeck Imps., Inc., 133 F.R.D. 463, 469 (D.N.J. 1990) (quoting Fed.R.Civ.P. 16 advisory committee's note (1983 Amendment)); see also Newton v. A.C. & S., Inc., 918 F.2d 1121, 1126 (3d Cir. 1990) (stating the purpose of Rule 16 is to provide for judicial control over cases, streamline proceedings, maximize efficiency of the court system, and actively manage the timetable of case preparation to expedite speedy and efficient disposition of cases).

         A scheduling order must, among other things, “limit the time to join other parties, amend the pleadings, complete discovery, and file motions.” Fed.R.Civ.P. 16(b)(3)(A). The requirement of a deadline for amending pleadings in the pretrial scheduling order “assures that at some point . . . the pleadings will be fixed.” Fed.R.Civ.P. 16(b) advisory committee's note (1983 Amendment); see also Harrison, 133 F.R.D. at 469 (“The careful scheme of reasonable framing and enforcement of scheduling orders for case management would thus be nullified if a party could inject amended pleadings upon a showing of less than good cause after scheduling deadlines have expired.”). The burden is on the moving party to show “good cause” for its failure to comply with the applicable scheduling order, and accordingly, for the Court to allow its proposed amended pleading. Prince v. Aiellos, No. 09-5429, 2012 WL 1883812, at *6 (D.N.J. May 22, 2012) (quoting Graham v. Progressive Direct Ins. Co., ...

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