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Wells Fargo Bank, N.A. v. American National Insurance Co.

September 13, 2010

WELLS FARGO BANK, N.A., AS TRUSTEE FOR BENJAMIN CABAL 2007 INSURANCE TRUST, PLAINTIFF,
v.
AMERICAN NATIONAL INSURANCE COMPANY, A TEXAS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER DENYING ANICO'S MOTION TO MODIFY SCHEDULING ORDER AND FOR LEAVE TO FILE THE [PROPOSED] SECOND AMENDED THIRD PARTY COMPLAINT [Motion filed on August 4, 2010]

This matter comes before the Court on a motion to modify the scheduling order and for leave to amend the complaint filed by the plaintiff American National Insurance Company ("ANICO"). After considering the papers submitted by the parties, the Court DENIES the motion.

I. BACKGROUND

On March 18, 2009, Wells Fargo Bank, N.A., as trustee for the Benjamin Cabal 2007 Insurance Trust filed a complaint for declaratory relief seeking to rescind the life insurance policy of Benjamin Cabal. On April 20, 2009, ANICO filed a Counterclaim against Wells Fargo and a Third Party Complaint against third party defendant Examination Management Services, Inc. ("EMSI"), formerly known as Profile Services, Inc. EMSI moved to dismiss or for a more definite statement on July 29, 2009. The Court denied the motion to dismiss and granted in part the motion for a more definite statement, after which ANICO filed a First Amended Third Party Complaint ("FATPC") on September 29, 2009.

The FATPC alleges claims for breach of contract as a third beneficiary and for negligence against EMSI. (FATPC ¶¶ 53-59, 70-74.) Specifically, the FATPC alleges that the brokers who submitted Mr. Cabal's application for life insurance to ANICO "arranged for [EMSI] to conduct a background investigation of Mr. Cabal and provide a truthful and accurate report to ANICO for the purpose of confirming the material information contained in the Financial Statement Questionnaire, which was a part of the application for a life insurance policy submitted to ANICO." (Id. ¶ 55.) According to ANICO, "[t]he agreement between the Brokers and [EMSI] was made expressly for the benefit of ANICO, in that ANICO would rely on the information, among other things, in determining whether to issue a policy of insurance on the life of Mr. Cabal." (Id.) ANICO alleged that EMSI breached its contractual obligations to ANICO "by failing to provide accurate and truthful information regarding Mr. Cabal's assets, liabilities, employment background and history, net worth, and general financial information." (Id. ¶ 56.)

The deadlines in this case set forth in the scheduling order are as follows:

* Last Date to Amend Pleadings: December 30, 2009;

* Discovery Cut-Off: March 26, 2010;

* Last Date to File Motions: April 26, 2010;

* Final Pre-Trial Conference: June 28, 2010; and

* Seven Day Jury Trial: July 6, 2010.

(Scheduling Order, Dkt. No. 36.) In a minute order dated June 25, 2010, the Court continued the final pre-trial conference to October 18, 2010, and the trial to October 26, 2010. (Dkt. No. 113.)

On August 4, 2010, ANICO filed this motion to modify the scheduling order and for leave to amend the pleadings. ANICO seeks to amend the Third Party Complaint to add a claim for breach of a direct contract between ANICO and EMSI based on what it claims to be newly discovered evidence. ANICO argues that it first learned of the potential existence of a direct contract between ANICO and EMSI on January 5, 2010, when EMSI served ANICO with its initial Rule 26 disclosures. Those disclosures included copies of an unsigned rate sheet, which ANICO now argues constitutes an express agreement between ANICO and EMSI. EMSI's disclosures also included the name and contact information of the person who interviewed Benjamin Cabal on behalf of EMSI. (Bialack Decl. ¶¶ 5-7.) ANICO did not follow up, except to notice the deposition of EMSI's person most knowledgeable for March 26, 2010, the discovery cut-off date. The deposition was later continued by agreement to April 9, 2010.

ANICO now argues that it did not learn of "the facts necessary to prove that EMSI breached a direct contract with ANICO" until April 9, 2010. (Mot. 3:1-3.) However, ANICO did not move to amend the pleadings at that time. Instead, during negotiations with EMSI concerning the preparation of the Pre-Trial Conference Order on June 10, 2010, ANICO indicated it intended to argue that EMSI breached a direct contract. EMSI's counsel objected that breach of a direct contract was not part of the pleadings and that ANICO should not try to "slip in" an additional ...


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