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City of Murray v. Robertson, Inc.

United States District Court, W.D. Kentucky, Paducah

October 2, 2017

CITY OF MURRAY, KENTUCKY, PLAINTIFF
v.
ROBERTSON INC. BRIDGE AND GRADING DIVISION, et. al., DEFENDANTS & THIRD PARTY PLAINTIFFS
v.
GRW ENGINEERS, INC., et. al., THIRD PARTY DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge

         This matter is before the Court on two motions. First, Third Party Plaintiffs Robertson, Inc. Bridge & Grading Division and Federal Insurance Company, (“Robertson”), have filed a Motion for Leave to Amend Complaint. [DN 29.] Third Party Defendant GRW Engineers, Inc. (“GRW”) has responded, [DN 30], and Robertson has replied. [DN 32.] Second, GRW has filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). [DN 23.] Robertson has responded, [DN 27], and GRW has replied. [DN 28.] These matters are fully briefed and ripe for adjudication. For the following reasons, Robertson's Motion is GRANTED and GRW's Motion is DENIED WITH LEAVE TO REFILE.

         I. BACKGROUND

         This case arises from a construction project undertaken by Robertson, for which it entered into a contract with the City of Murray, the Plaintiff in this case. [DN 1, at 3.] The City of Murray claims that Robertson performed this contract in a defective manner with respect to the construction of a concrete wet well, which was part of the project. [Id.] The City of Murray filed suit thereafter. Subsequent to the commencement of this lawsuit, Robertson filed a Third Party Complaint against Third Party Defendant GRW. [DN 19.] The Third Party Complaint alleges a breach of contract claim, a negligence claim, and an indemnity claim. Robertson now wishes to amend its Third Party Complaint in order to add a claim of negligent misrepresentation. [DN 29, at 3.] GRW has filed a Motion to Dismiss all of Robertson's claims against it. [DN 23.]

         II. ANALYSIS

         A. Robertson's Motion for Leave to Amend Complaint

         i. Legal Standard

         Federal Rule of Civil Procedure 15(a)(1) permits a party to “amend its pleading once as a matter of course within 21 days after serving it, or if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” However, where that time has passed, Rule 15(a)(2) provides that, “[i]n all other cases, 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.” While the Federal Rules encourage a liberal construction of Rule 15, it may be appropriate to deny leave to amend a complaint “where there is undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.” Miller v. Champion Enters., Inc., 346 F.3d 660, 690 (6th Cir. 2003).

         ii. Discussion

         The proposed amended complaint tendered to the Court with Robertson's instant Motion incorporates by reference its original Third Party Complaint against GRW, and merely adds one additional claim: negligent misrepresentation. [DN 29, at 3.] Specifically, Robertson alleges that both Robertson and GRW “were engaged in a business relationship in which both parties had a pecuniary interest, ” that there was “false information” supplied by GRW to Robertson, upon which Robertson relied, regarding GRW's alleged failure to identify deviations from the contract by Robertson with respect to its construction project. [Id.] Moreover, Robertson alleges that GRW's failure to “exercise reasonable care and competence when it did not issue a proper report to” Robertson caused Robertson pecuniary loss. [Id.]

         At the outset, it is important to note that this would be Robertson's first amended complaint. No issues have been brought to the Court's attention regarding any alleged bad faith or dilatory motive on Robertson's part, nor does GRW claim in its Response to the instant Motion that undue prejudice would result if the Court grants Robertson leave to file its proposed amended complaint. Rather, GRW's principal assertion is that of futility. [DN 30, at 5.] To that end, GRW uses its previously-filed Motion to Dismiss for failure to state a claim upon which relief can be granted, [DN 23], as support for its contention that all claims by Robertson against it should be dismissed with prejudice. In GRW's view, the terms of the contract Robertson had with the City of Murray, coupled with the terms of GRW's contract with the city, absolve GRW of any duty with respect to Robertson's alleged defective work on the concrete wet well.

         Because all of Robertson's claims remain pending, along with the fact that the Court finds no bad faith and no potential undue prejudice to GRW by allowing Robertson to amend its complaint at this stage in the litigation, the Court will grant the Motion. Rule 15, by its very terms, demands that leave to amend be freely given “when justice so requires.” Here, the Court is persuaded that permitting Robertson to file its proposed amended complaint is appropriate under the circumstances.

         B. GRW's Motion to Dismiss

         i. ...


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