United States District Court, S.D. California
ORDER GRANTING MOTION FOR LEAVE TO FILE AMENDED
TED MOSKOWITZ, CHIEF JUDGE
Bear, LLC, has filed a motion to file a First Amended
Complaint. For the reasons discussed below, Plaintiff’s
motion is GRANTED.
case arises out of fire damage to the motor yacht M/V POLAR
BEAR (“POLAR BEAR”), owned by Plaintiff Bear, LLC
(“Plaintiff” or “Bear”). The vessel
caught on fire when it was undergoing repairs at Defendant
Marine Group Boat Works, LLC’s (“Defendant”
or “Marine Group”) boat yard in Chula Vista.
filed suit on December 16, 2014. Plaintiff contends that the
fire was caused by hot work repairs that were being performed
on the vessel’s steel hull. Plaintiff alleges that
Defendant failed to take adequate safety precautions and
breached the contract by retaining a third party to perform
the hot work repairs. The original complaint asserts the
following causes of action: (1) breach of contract; (2)
negligence; (3) gross negligence; (4) breach of the implied
warranty of workmanlike performance; and (5) bailment.
Case Management Conference Order [Doc. 28] filed on April 27,
2015, Magistrate Judge Major ordered that any motion to amend
the pleadings be filed on or before September 30, 2015. Judge
Major also ordered that any fact discovery be completed by
the parties on or before February 26, 2016, and that all
expert discovery be completed on or before June 17, 2016.
19, 2016, Plaintiff filed the instant motion.
seeks leave to file a First Amended Complaint
(“FAC”) that adds additional facts supporting its
negligence and gross negligence claims and adds a new cause
of action for promissory fraud. As discussed below, the Court
finds that there is good cause for modifying the scheduling
order and that the amendment of the complaint is appropriate
under Fed.R.Civ.P. 15(a).
motion for leave to amend that is filed after the cut-off
date for amendment set forth in a scheduling order, is
governed by Rule 16(b). Johnson v. Mammoth Recreations,
Inc., 975 F.2d 604, 608-09 (9th Cir. 1992). The
scheduling order can be modified for "good cause."
Fed.R.Civ.P. 16(b)(4). Under Rule 16(b), the "good
cause" standard "primarily considers the diligence
of the party seeking the extension." Johnson,
975 F.2d at 609. "Carelessness is not compatible with a
finding of diligence and offers no reason for a grant of
relief." Id. Although prejudice to the opposing
party may provide additional reasons to deny the motion, the
focus of the inquiry is upon the moving party's reasons
for seeking the modification; if the moving party was not
diligent, the inquiry should end. Id.
cause is shown for modifying the scheduling order, the Court
must then consider whether amendment is appropriate under the
more liberal standard of Rule 15(a). Although the policy of
allowing amendment under Rule 15(a) “is to be applied
with extreme liberality, ” a court may deny amendment
if there is bad faith, undue delay, prejudice to the opposing
party, and/or the amendment would be futile. Owens v.
Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712
(9th Cir. 2001).
Court finds that there is “good cause” for
modifying the scheduling order. Plaintiff seeks to amend the
complaint based on facts that it discovered after
the motion cut-off date. Plaintiff learned new details about
the circumstances surrounding the fire, including facts
indicating that Universal Steel Fabrication, Inc.
(“USF”) employees inadvertently set fire to
insulation while welding and that Defendant failed to obtain
a necessary Marine Chemist Certificate before doing the hot
repair work, from depositions of (1) Chula Vista fire
investigator Margarita Greene on February 18, 2016; (2)
marine chemist Leland Pitt on February 22, 2016; and (3)
Marine Group’s Health and Safety Compliance employee
Francisco Garay-s on February 26, 2016. (Exs. E, F to Wright
Decl., Ex. B to Supp. Wright Decl.)
also learned new facts in support of its promissory fraud
claim from depositions of Ryan McAloney, Marine Group’s
welding project manager, on February 17, 2016, and Eric
Lundeen, Marine Group production manager, on January 20,
2016. McAloney testified that at the time he was asked to
provide an estimate for the Marine Group to repair the steel
plating on the POLAR BEAR, the Marine Group already knew that
it was too busy to do the work itself and would have to use a
subcontractor. (Wright Decl. ¶ 32.) Lundeen testified
that at the direction of Todd Roberts, President of the
Marine Group, he misrepresented the bid from subcontractor
USF as $110, 000 (allegedly, the actual bid was $21, 300),
and included a bid estimate of $140, 000 if Marine Group did
the work itself. (Id. at ¶ 29.) On May 14,
2014, the Captain of the POLAR BEAR, Roger Trafton, told
Lundeen that Bear wanted the Marine Group, not a
subcontractor, to perform the steel replacement work on the
POLAR BEAR. (Id. at ¶ 30.) Lundeen agreed.
(Id. at ¶ 31.)
respect to the promissory fraud claim, Defendant protests
that it produced documents in July 2015, including a purchase
order showing that Magana Yachts had been subcontracted for
interior protection and foam removal, and a May 14, 2014
quote from Universal Steel, stating that the price to remove
and replace damage plating on the POLAR BEAR was $21, 300.
But, as ...