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Packers Sanitation Services, Inc. v. Moroni Feed Co.

United States District Court, D. Utah, Central Division

August 17, 2018

PACKERS SANITATION SERVICES, INC., LTD., a Wisconsin Corporation, Plaintiff,
MORONI FEED COMPANY, a Utah Corporation; and NORBEST, LLC, a Delaware Limited Liability Company, Defendants.



         Plaintiff, Packers Sanitation Services, Inc. (Packers) moves the court for leave to amend its Complaint. Upon review of the briefing, the court finds oral argument unnecessary to resolve this motion. Because the court concludes that Packers has not established good cause for amendment, the court DENIES Packers' Motion. (ECF No. 15.)


         On September 9, 2012, Defendant Moroni Feed Company (Moroni) entered into a contract with Packers. (See Compl. ¶ 8, ECF No. 2 at 2.) According to Packers, “[f]ollowing a merger with Moroni in 2015, ” Defendant Norbest, LLC (Norbest) “accepted and continued services with” [Packer].”[1] (ECF No. 17 at 2.) Sometime around “January 2018, Norbest sold substantially all of its assets to a third party . . . .” (ECF No. 17 at 3.) “On February 5, 2018, Norbest sent [Packers] a settlement offer specifically informing [Packers] that Norbest had sold substantially all of its assets to a third-party buyer.” (ECF No. 16 at 3.) According to Packers, “prior to February 5, 2018, ” it “was unaware that Norbest had sold . . . its assets in January, after suit had been filed” in November. (See ECF No. 17 at 4.)


         On November 27, 2017, Packers filed a complaint asserting breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. (Compl. ¶¶ 19-34, ECF No. 2 at 3-5.) On December 28, 2017, (Norbest) filed its Answer. (ECF No. 4.) On February 13, 2018, the Magistrate Court entered a scheduling order (ECF No. 9) based upon the Attorneys' Planning Report. (ECF No. 8.) The scheduling order set a May 1, 2018 deadline for the parties to amend their pleadings and add parties. (ECF No. 9 at 3.)

         “On March 13, 2018, ” Packers “served a set of written discovery on Norbest, seeking information relating to the asset sale” that occurred in January of 2018. (See ECF No. 16 at 4.) “On April 27, 2018, Norbest objected and responded to [Packers'] written discovery . . . .” (ECF No. 16 at 4.) As of that date Packers knew Norbest would not voluntarily produce information about the sale and had sufficient information to seek leave to amend the complaint. “On May 11, 2018, [Packers] filed a short form motion to compel discovery relating to the asset purchase sale . . . .” (ECF No. 16 at 4.) On May 18, 2018, Norbest filed its response opposing Packers' motion. (ECF No. 13.) On June 6, 2018, the Magistrate Court entered an order denying Packers' motion. (ECF No. 14.) The Magistrate Court “determined” that the information Packers sought had “no direct relevance to [the] causes of action” in Packers' then existing Complaint. (ECF No. 14 at 3.) But the Magistrate suggested that the information relating to the asset sale “could be potentially relevant” to claims “for fraudulent conveyance, alter ego, and successor liability.” (See ECF No. 14 at 3.)

         On June 13, 2018, (after the May 1st deadline to amend pleadings) Packers filed a Motion to Amend its Complaint, “under Utah Rules of Civil Procedure 15(a)(2), ” “for the purpose of adding additional unknown parties and of adding additional claims for relief previously not known to Plaintiff.” (ECF No. 15 at 1.) Fraudulent conveyance, successor liability, and “breach of contract-alter ego” were some of the additional claims that Packers included in their proposed First Amended Complaint. (See ECF No. 15-1 at 6-11.)

         On June 27, 2018, Norbest filed its Opposition to Packers' Motion to Amend. (ECF No. 16.) Norbest argued that Packers' Motion to Amend should be denied for three reasons. “First, ” they argued that Packers was “dilatory in bringing [its] Motion to Amend.” (ECF No. 16 at 5.) “Second, ” they argue that “the facts and circumstances further suggest that” Packers “is not acting in good faith . . . .” (ECF No. 16 at 6.) “Third, ” they argue that “the addition of the proposed claims would unduly and complicate the proceedings . . . .” (ECF No. 16 at 7.)

         On July 5, 2018, Packers filed its “Reply in Support of its Motion to Amend Complaint filed on June 13, 2018, pursuant to Federal Rules of Civil Procedure 15(a)(2).” (ECF No. 17 at 1.) In the Reply, Packers states that it “seeks to further amend its Complaint to reflect new parties related to Defendant's asset sale in January of 2018, two (2) months after the Complaint was originally filed and served.” (ECF No. 17 at 1-2.) Packers argues that “Norbest's Objection fails and the Court should grant [Packers'] Motion because [Packers] was actively working towards a resolution and did not delay, because [Packers] is acting in good faith and Norbest has no legitimate reason to believe otherwise, and because the amendment does not unnecessarily complicate the proceedings nor prejudice the Defendants.” (ECF No. 17 at 2.)

         On July 9, 2018, the Magistrate Court entered an order for the case to be reassigned. (ECF No. 19.) The case was reassigned to this court on that date. (ECF No. 20.) On August 9, 2018, the court entered an Order to Show Cause. (ECF No. 22.) The court ordered Packers to show cause “(1) why the complaint should not be dismissed for lack of jurisdiction or to amend the complaint to plead properly the citizenship of Norbest's members and (2) why the action should not be dismissed without prejudice against Moroni.” (ECF No. 22 at 5.)

         On August 14, 2018, Packers entered a Notice of Voluntarily Dismissal of Defendant Moroni Feed Company. (ECF No. 24.) It also entered a Response to the court's Order to Show Cause. (ECF No. 25.) In that Response, Packers seeks to “remove and dismiss Stephen Studdert and Richey King individually from the Proposed First Amended Complaint.” (ECF No. 25 at 2.) Additionally, Packers attached a new Proposed First Amended Complaint (ECF No. 25-1) that included “changes needed to properly plead the citizenship of Norbest, Revival Funding, LLC, and Wetzlar Investments, LLC.” (ECF No. 25 at 2.)


         Because Packers seeks to amend its complaint after the time for amendment under the court's scheduling order has expired, [2] it must demonstrate both “(1) good cause for seeking modification under Fed.R.Civ.P. 16(b)(4) and (2) satisfaction of the Rule 15(a) standard.” Gorsuch, Ltd., B.C. v. Wells Fargo Nat. Bank Ass'n, 771 F.3d 1230, 1240 ...

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