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Trusted Transportation Solutions, LLC v. Guarantee Insurance Co.

United States District Court, D. New Jersey

September 25, 2019

TRUSTED TRANSPORTATION SOLUTIONS, LLC, Plaintiff,
v.
GUARANTEE INSURANCE COMPANY, et al., Defendants.

          WILLIAM B. IGOE CASEY GENE WATKINS BALLARD SPAHR LLP On behalf of Plaintiff

          CHRISTINA M. RIEKER LARRY C. GREEN, JR. ANDREW N. JANOF WINGET, SPADAFORA & SCHWARTZENBERG LLP On behalf of Defendants

          MEMORANDUM OPINION

          NOEL L. HILLMAN UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Plaintiff Trusted Transportation Solutions, Inc.’s Appeal (Docket Item 137) of Magistrate Judge Joel Schneider’s September 12, 2018 Order (Docket Item 109) denying Plaintiff’s Motion for Leave to File a Second Amended Complaint (Docket Item 88). The Court will affirm Judge Schneider’s Order because it was neither clearly erroneous nor contrary to law.

         BACKGROUND

         This action arises from the alleged misrepresentation by Defendants Guarantee Insurance Company (“Guarantee”), Patriot Underwriters, Inc. (“Patriot”), Douglas Cook (“Cook”), Brown & Brown of New Jersey, LLC (“Brown & Brown”), and John F. Corbett (“Corbett”) of the terms of a workers’ compensation insurance policy that Plaintiff purchased from them. (See generally Docket Item 38.)

         Plaintiff originally filed a Complaint in New Jersey Superior Court in Camden County against Guarantee, Patriot, and Cook (collectively, the “Insurer Defendants”), who shortly thereafter removed the Complaint to this Court. (Docket Item 1.) Plaintiff later filed, with the Court’s permission, an Amended Complaint, which added Defendants Brown & Brown and Corbett (collectively, the “Brown & Brown Defendants”), along with four new claims. (Docket Item 38.) The new claims included Counts IX and X, which alleged breach of a special relationship and common law fraud, respectively. (Id.) The Brown & Brown Defendants then filed a Motion to Dismiss Counts I through VI and VIII through X of the Amended Complaint for failure to state a claim upon which relief can be granted. (Docket Item 46.)

         In a June 11, 2018 Memorandum Opinion, the late Honorable Jerome B. Simandle dismissed Counts I through VI and VII against the Brown & Brown Defendants with prejudice. (Docket Item 85, ¶¶ 13, 17.) Judge Simandle also dismissed Counts IX and X without prejudice. (Id. ¶¶ 22, 27.) In his Memorandum Opinion, Judge Simandle pointed out several deficiencies relating to Counts IX and X of the Amended Complaint. (See id. ¶¶ 18-27.)

         On July 11, 2018, Plaintiff filed a Motion for Leave to File a Second Amended Complaint. (Docket Item 88.) On September 7, 2018, Judge Schneider held oral argument and ruled against the motion on the record. (Docket Item 110 at 35.) On September 12, 2018, Judge Schneider memorialized that ruling in a written Order. (Docket Item 109.) On September 21, 2018, Plaintiff filed a Motion for Reconsideration solely as to its request to amend Count X. (Docket Item 111.) On January 14, 2019, Judge Schneider issued an Order denying Plaintiff’s Motion for Reconsideration. (Docket Item 134.)

         In his January 14, 2019 Order, Judge Schneider found that Plaintiff’s Proposed Second Amended Complaint “did not cure the deficiencies noted in Judge Simandle’s Memorandum Opinion” of June 11, 2018, and that “[P]laintiff’s conclusory allegations [were] not supported by pleaded facts that plausibly show fraud was committed.” (Id. at 4 (quoting transcript).) Judge Schneider found that “Plaintiff’s proposed fraud claim [was] replete with conclusory allegations that are not supported by well pleaded facts.” (Id. at 5.) Judge Schneider noted that, “[e]ven after the completion of all fact discovery, [P]laintiff did not plead sufficient facts, as opposed to conclusory allegations, to plausibly show that fraud was committed.” (Id. at 7.) Therefore, Judge Schneider denied Plaintiff’s Motion for Reconsideration. (Id.)

         On January 28, 2019, Plaintiff filed the present Appeal pursuant to Fed.R.Civ.P. 72(a) and L. Civ. R. 72. (Docket Item 137.) Plaintiff argues that its Proposed Second Amended Complaint met Rule 9(b)’s pleading requirements for an alleged fraud. (Docket Item 137-2 at 10.) Plaintiff asserts that its Proposed Second Amended Complaint “identified with specificity each misrepresentation or omission made by Mr. Corbett; when he made each of them; whether he made them verbally or in writing; and what they induced [Plaintiff] to do.” (Id. (footnote omitted).) Plaintiff further argues that the Proposed Second Amended Complaint specifically identified both the damages suffered by Plaintiff as a result of the alleged fraud and the motivation for the alleged fraud. (Id. at 11.) Resultingly, Plaintiff asserts that Judge Schneider erred in denying Plaintiff’s Motion for Leave to File a Second Amended Complaint on the basis that the Proposed Second Amended Complaint did not satisfy Fed.R.Civ.P. 9(b). (Id.)

         Brown & Brown Defendants oppose this appeal. (Docket Item 141.) They argue that Judge Schneider properly applied the relevant legal standards and that his conclusion that the Proposed Second Amended Complaint contained mere conclusory allegations was accurate. (Id.) Plaintiff timely filed a reply brief. (Docket Item 143.)

         STANDARD OF REVIEW

         When a magistrate judge decides a non-dispositive motion, the “district court may modify the magistrate’s order only if the district court finds that the magistrate’s ruling was clearly erroneous or contrary to law.” Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1120 (3d Cir. 1986); see also L. Civ. R. 72.1(c)(A)(1) (“A Judge shall consider the appeal . . . and set ...


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