United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
E. Wier United States Magistrate Judge.
Inc. (BancTec), moved for leave to file an amended answer (to
include counterclaims) due to allegedly newly discovered
evidence. DE ##49, 50. First Technology Capital, Inc. (FTC),
responded in opposition. DE #61. BancTec replied. DE #62.
Following the briefing close, FTC separately moved for leave
to file a surreply to BancTec's reply in support of its
motion for leave to file an amended answer. DE #63. BancTec
responded in opposition. DE #64. FTC replied. DE #66. Both
motions are now fully briefed and ripe for consideration.
following reasons, the Court GRANTS FTC
permission to file a surreply and DENIES
BancTec leave to file an amended answer. A surreply is
appropriate in these circumstances (to respond to
BancTec's new reply arguments / theories). Further, DE
#20 bars a Schedule 7-based counterclaim, and BancTec
otherwise fails to satisfy the Rules' requirements to
file an untimely pleading amendment.
parties are currently hotly litigating what appears to be a
relatively straightforward commercial lease dispute between
two business entities. See DE ##23, 41, 51, 57, 59,
67 (Orders); see also DE ##65 (Transcript), 51
(referencing “the limited scope of this case”).
To briefly summarize the background (to the extent necessary
here), and simplifying somewhat, FTC and BancTec entered into
a Master Lease Agreement (MLA) in February 2006 to govern FTC
leasing certain equipment to BancTec. See DE #26-1
(MLA). The MLA contemplated a series of equipment
transactions under various “Schedules” or
“Sub-Schedules”; this case involves MLA Schedules
7 and 8. See DE ##26-3 & 26-10. A related case,
concerning only Schedule 8, has pended in the Woodford
Circuit Court since 2015.
present substantive motion, BancTec seeks leave to amend its
answer and to assert counterclaims based on allegedly newly
discovered evidence. Specifically, BancTec asserts that on
October 5, 2016, it discovered an 11/24/09 email from John
Ratliff, the late president of NRI Data and Business
Products, Inc. (a wholly owned subsidiary of FTC), to Lisa
Bridges, BancTec's former Comptroller, on an external
hard drive in BancTec's possession on which Bridges
stored certain emails. BancTec also cites a 10/20/08 email
from Rita Carpenter, FTC's Operations Coordinator, to
Bridges and Ratliff that FTC produced in discovery in the
Woodford Circuit action as a basis for the request to amend
the answer. FTC opposes the motion.
MOTION FOR LEAVE TO FILE A SURREPLY
initial matter, and to ensure completeness of the materials
under consideration, the Court addresses FTC's motion for
leave to file a surreply to BancTec's reply in support of
its motion for leave to file an amended answer. See
DE #63 (Motion). BancTec responded. DE #64. FTC replied. DE
#66. The matter is ripe for consideration.
the Federal Rules of Civil Procedure do not expressly permit
the filing of sur-replies, such filings may be allowed in the
appropriate circumstances, especially ‘when new
submissions and/or arguments are included in a reply brief,
and a nonmovant's ability to respond to the new evidence
has been vitiated.'” Key v. Shelby Cnty.,
551 F.App'x 262, 265 (6th Cir. 2014) (quoting Seay v.
Tenn. Valley Auth., 339 F.3d 454, 481 (6th Cir. 2003)).
“[M]any courts have noted” that surreplies
“are highly disfavored.” Liberty Legal Found.
v. Nat'l Democratic Party of the USA, Inc., 875
F.Supp.2d 791, 797 (W.D. Tenn. 2012). Still, the Sixth
Circuit reviews a district court's decision whether to
grant leave to file a surreply “under the deferential
abuse-of-discretion standard.” Mirando v. U.S.
Dep't of Treasury, 766 F.3d 540, 549 (6th Cir.
2014). A district court abuses its discretion, for example,
when it denies permission to file a surreply after a party
presents “new arguments and new evidence in [its] reply
brief.” Eng'g & Mfg. Servs., LLC v.
Ashton, 387 F.App'x 575, 583 (6th Cir. 2010).
Overall, though, “[w]hether to permit a party to file a
surreply is a matter left to the trial court's
discretion.” Rose v. Liberty Life Ins. Co. of
Boston, No. 3:15-CV-28-DJH-CHL, 2015 WL 10002923, at *1
(W.D. Ky. Oct. 19, 2015).
Court has fully analyzed the underlying briefing-DE ##49, 50,
61, and 62- as well as the briefing on the motion for leave
to file a surreply-DE ##63, 64, and 66. The Court, in an
exercise of its discretion, finds FTC's proposed surreply
appropriate in the circumstances. The Sixth Circuit's
focus is whether “new submissions and/or arguments are
included in a reply brief.” Key, 551
F.App'x at 265; Ashton, 387 F.App'x at 583.
Here, as FTC persuasively lays out, BancTec did indeed
include new arguments in DE #62, and a surreply is therefore
appropriate. To summarize, and speaking generally, BancTec
shifted (at least in its focus) from a $1 buyout theory to a
$0 buyout theory and inserted new arguments concerning,
e.g., “quotes, ” “deal points,
” and the word “purchase.” Compare
DE #50, with DE #62. The arguments likewise differ,
at least by implication, concerning BancTec's posture as
to Stipulated Purchase Value and, indeed, the basic nature of
the FTC-BancTec lease at issue. BancTec also attached new
evidentiary submissions. DE ##62-1, 62-2, 62-3. As FTC
stated, the tendered surreply is confined to BancTec's
new arguments and documents, see DE #63-1, at 2, and
appropriately refrains from returning to ground already
covered in the underlying motion briefing.
FTC filed the motion for leave to file a surreply essentially
immediately (2 days) after BancTec's reply, greatly
diminishing any timing or gamesmanship concerns that may
negatively tinge surreply motions. See Key, 551
F.App'x at 265 (“[c]onsidering the amount of time
that passed between Shelby County's filing of its reply
brief and Key's filing of her motion for leave to file a
sur-reply” and concluding the district court did not
abuse its discretion in denying Key permission to file a
surreply given an “unexplained delay of six months in
moving for leave to file” it). Overall, under the Sixth
Circuit's standard, the Court finds permitting an FTC
surreply, in these circumstances, appropriate. FTC should
fairly have an opportunity to address new arguments or
theories (and documents) BancTec injected into the reply.
these reasons, the Court GRANTS DE #63 and
DIRECTS the Clerk to file DE #63-2 in the
record as a surreply to DE #62.
MOTION FOR LEAVE TO FILE AN AMENDED ANSWER
moved for leave to file an amended answer due to allegedly
newly discovered evidence. DE ##49, 50. FTC responded in
opposition. DE #61. BancTec replied. DE #62. FTC surreplied.
DE #63-2. The matter is ripe for consideration.
DE #20 precludes a Schedule 7-based counterclaim.
In July 2016, the parties agreed, and the Court ordered, as
On or before August 5, 2016, FTC shall file a First Amended
Complaint in this action to assert causes of action under
[Schedules 7 and 8] to the [MLA]. BancTec shall timely file
an answer to the First Amended Complaint and may also assert
a counterclaim, but any counterclaim filed by BancTec,
whether it is asserted in its answer to the First Amended
Complaint or before or after filing of the answer, shall be
limited solely to any causes of action that BancTec may have
under Schedule 8 to the Master Lease. Under ...