United States District Court, E.D. California
CSAA INSURANCE EXCHANGE, as subrogee of Pedro Casteneda, Maria DeRodriguez, Tongo Inthilath, Andrew and Dena Savage, and Audrey Ngo, Plaintiff,
BROAN-NUTONE LLC, Defendant.
L. NUNLEY, UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff CSAA Insurance
Exchange's (“Plaintiff”) Motion for Leave to
File Amended Complaint (ECF No. 8) and Defendant Broan-Nutone
LLC's (“Defendant”) Motion to Sever and
Dismiss (ECF No. 10). Both parties filed oppositions to the
other party's motion. (ECF Nos. 11 & 14.) The Court
has reviewed the briefing filed by both parties. For the
reasons set forth below, the Court hereby GRANTS
Plaintiff's motion to amend and DENIES Defendant's
motion to sever and dismiss.
Factual and Procedural Background
commenced this action in the Superior Court of California,
County of Sacramento on November 15, 2016. (ECF No. 1-1.)
Plaintiff brings this action as subrogee for five of its
insureds - Pedro Casteneda, Maria DeRodriguez, Tongo
Inthilath, Andrew and Dena Savage, and Audrey Ngo (‘the
insureds”). (ECF No. 1-1.) Plaintiff alleges claims of
product defect, failure to warn, negligence, negligent
failure to recall, breach of implied warranty, and breach of
the Consumer Legal Remedies Act. (ECF No. 1-1 at 6-9.)
Plaintiff alleges each of its insureds bought a fan
manufactured between the years 1999-2003 by Defendant. (ECF
No. 1-1 ¶ 10.) Plaintiff alleges the fans malfunctioned
causing fires on five separate occasions between November 9,
2013, and May 1, 2016, at each of the insureds'
residences. (ECF No. 1-1 ¶¶ 15- 18.) Plaintiff
alleges each fan was equipped with the same 27 AWG winding
wire and thermal alloy-link cutoff. (ECF No. 1-1 ¶¶
23-25.) Plaintiff further alleges the two parts together
caused the defect resulting in the fires at the insureds'
homes. (ECF No. 1-1 ¶ 25.)
filed an amended complaint in state court on December 15,
2016. (ECF No. 8 at 3.) Defendant removed the action to this
Court on the very same day, but attached the original
complaint filed in state court rather than the amended
complaint. (ECF No. 3 at 8.) Plaintiff moved to amend on
February 23, 2017. (ECF No. 8.) Defendant moved to sever the
claims of the insureds on March 9, 2017. (ECF No. 10.)
Standard of Law
Motion to Amend
or denying leave to amend a complaint rests in the sound
discretion of the trial court. Swanson v. United States
Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996). When the
Court issues a pretrial scheduling order that establishes a
timetable to amend the complaint, Federal Rule of Civil
Procedure (“FRCP”) 16 governs any amendments to
the complaint. Coleman v. Quaker Oats Co., 232 F.3d
1271, 1294 (9th Cir. 2000). To allow for amendment under FRCP
16, a plaintiff must show good cause for not having amended
the complaint before the time specified in the pretrial
scheduling order. Id. The good cause standard
primarily considers the diligence of the party seeking the
amendment. Johnson v. Mammoth Recreations, Inc., 975
F.2d 604, 609 (9th Cir. 1992). “Moreover, carelessness
is not compatible with a finding of diligence and offers no
reason for a grant of relief.” Id. The focus
of the inquiry is on the reasons why the moving party seeks
to modify the complaint. Id. If the moving party was
not diligent then good cause cannot be shown and the inquiry
should end. Id.
the good cause standard is met under FRCP 16(b), the Court
has the discretion to refuse the amendment if it finds
reasons to deny leave to amend under FRCP 15(a).
Johnson, 975 F.2d at 610. Under Rule 15(a)(2),
“a party may amend its pleading only with the opposing
party's written consent or the court's leave, ”
and the “court should freely give leave when justice so
requires.” The Ninth Circuit has considered five
factors in determining whether leave to amend should be
given: “(1) bad faith, (2) undue delay, (3) prejudice
to the opposing party, (4) futility of amendment; and (5)
whether plaintiff has previously amended his
complaint.” In re Western States Wholesale Natural
Gas Antitrust Litigation, 715 F.3d 716, 738 (9th Cir.
2013) (citing Allen v. City of Beverly Hills, 911
F.2d 367, 373 (9th Cir. 1990)). “[T]he consideration of
prejudice to the opposing party carries the greatest
weight.” Eminence Capital, LLC v. Aspeon,
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
Motion to Sever
a party is permitted to join any claims in its action it has
against an opposing party. Fed.R.Civ.P. 18. However, on a
parties' motion or on its own motion, a court may sever
any claim against a party. Fed.R.Civ.P. 21 (“Rule
21”). The Court has broad discretion in determining
whether or not to sever claims under Rule 21. Brunet v.
United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir.
1992). “There is no established test in the Ninth
Circuit for when a district court should exercise its broad
discretion and sever a claim under Rule 21.” Arcure
v. California Dept. of Developmental Services, No.
1:13-cv-00541-LJO-BAM, 2014 WL 346612, at *6 (E.D. Cal. Jan.
30, 2014). “Claims may be severable under Rule 21 if
they arise from different factual situations or pose
different legal questions.” Khanna v. State Bar of
Cal., No. C-07-2587 EMC, 2007 WL 2288116, at *2 (N.D.
Cal. Aug. 7, 2007). Claims may also be severed where it will
serve the ends of justice and lead to prompt and efficient
disposition of litigation. Id. “Fairness is a
critical consideration in determining whether severance is
appropriate[, ]” and therefore it must be determined
whether any party would suffer prejudice. Pena v.
McArthur, 889 F.Supp. 403, 407 (E.D. Cal. 1994).
“As a general matter, Rule 21 severance creates two
discrete, independent actions, which then proceed as separate
suits for the purpose of finality and appealability.”
Gaffney v. Riverboat Services of Indiana, 451 F.3d
424, 441 (7th Cir. 2006).
motion to sever seeks to separate each insureds' claims
into separate cases. Plaintiff seeks to amend to add two
claims by new insureds allegedly resulting from the same
fans. As the Courts decision on the motion to sever will
similarly affect the new insureds, the Court first determines
whether severing would be appropriate and then turns to the
question of amending the complaint.