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Knight Transportation, Inc. v. Baldwin & Lyons, Inc.

United States District Court, Ninth Circuit

January 24, 2014

Knight Transportation, Inc., et al., Plaintiffs,
Baldwin & Lyons, Inc., et al., Defendants.


STEPHEN M. McNAMEE, District Judge.

Pending before the Court is Defendants Baldwin & Lyons, Inc., et al. ("B&L's") motion for leave to file third-party complaint for contribution. (Doc. 169.) B&L has lodged their proposed third-party complaint with the Court. (Doc. 169-1.) Also pending is B&L's motion for leave to file an amended answer that includes a new affirmative defense. (Doc. 171.) B&L has lodged their proposed amended answer. (Doc. 171-1.) Both motions are fully briefed. (Docs. 176-78, 180-81.) The Court will deny B&L's motion for leave to file a third-party complaint for contribution and grant B&L's motion for leave to file an amended answer that includes a statute of limitations affirmative defense.[1]


In 2001, B&L and Plaintiffs Knight Transportation, Inc., et al. ("Knight") entered into a contractual relationship ("Claims Contract") in which B&L agreed to administer the work-related injury claims of Knight. (Doc. 1-1 at 47-48.) B&L submits that from August 1, 2001, until about February 1, 2009, B&L handled all work-related injury claims that Knight referred to B&L for handling. (Doc. 76 at 11.) Subsequently, in July 2010, Knight filed suit alleging that B&L negligently handled its worker's compensation claims; Knight contends that 92 of the 1, 873 claims referred to B&L over the course of their relationship were mishandled in some fashion. (Doc. 67, Doc. 82 at 2.)

With regard to at least 15 of the 92 claims at issue, B&L hired Third Party Administrators ("instate TPAs"), Crawford & Company ("Crawford") and/or CorVel Corporation and CorVel Enterprise Comp., Inc. (collectively "CorVel") to adjust those claims. (Doc. 169 at 2.) Using the opinions and calculations of Knight's expert's, B&L alleges that the 15 claims adjusted by Crawford and CorVel amount to over $1.6 million of Knight's alleged damages.

On March 4, 2011, the Court issued its case management order stating that "[t]he deadline for joining parties, amending pleadings, and filing supplemental pleadings is 60 days from the date of this Order." (Doc. 19.) The resulting deadline for joining parties and amending pleadings was May 3, 2011. On March 16, 2012, the Court granted leave and Knight filed an amended complaint. (Docs. 66, 67.) On April 20, 2012, B&L filed its answer to the amended complaint. (Doc. 76.) Since the Court's initial case management order, the case management deadlines have been extended five times. (Docs. 50, 62, 73, 123, 165.) The current discovery cut-off deadline is August 8, 2014.

Standard of Review

Amending Case Management Deadlines

Once the court files its pretrial case management order pursuant to Federal Rule of Civil Procedure 16 establishing a timetable for amending pleadings, Rule 16 standards control any modification. See Johnson v. Mammoth Recreations, Inc. , 975 F.2d 604, 607-08 (9th Cir. 1992). The case management schedule shall not be modified except by leave of court upon a showing of good cause. Fed.R.Civ.P. 16(b)(4). The good cause standard primarily considers the diligence of the party seeking the amendment. See Johnson , 975 F.2d at 609. The court may modify the pretrial schedule if amendment cannot reasonably be sought despite the diligence of the party seeking the modification. Id.

Rule 15 Amendment

A party seeking to amend its pleading must both establish good cause for modifying the case management schedule and demonstrate that amendment of pleadings is proper under Fed.R.Civ.P. 15. See id. at 608. Under Rule 15, although leave to amend "shall be freely given when justice so requires, " it "is not to be granted automatically." Zivkovic v. Southern California Edison Co. , 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Jackson v. Bank of Hawaii , 902 F.2d 1385, 1387 (9th Cir. 1990)). The court may deny a motion for leave to amend if permitting an amendment would, among other things, cause an undue delay in the litigation or prejudice the opposing party. See Jackson , 902 F.2d at 1387; see also Solomon v. North Am. Life & Cas. Ins. Co. , 151 F.3d 1132, 1139 (9th Cir. 1998) (affirming the district court's denial of motion to amend pleadings filed on the eve of the discovery deadline). The Ninth Circuit has summarized the appropriate Rule 15 factors to include the following: (1) undue delay; (2) bad faith; (3) prejudice to the opponent; and (4) futility of amendment. Loehr v. Ventura County Cmty. Coll. Dist. , 743 F.2d 1310, 1319 (9th Cir. 1984). Granting or denial of leave to amend rests in the sound discretion of the trial court. Swanson v. United States Forest Serv. , 87 F.3d 339, 343 (9th Cir. 1996).

Rule 14 Impleader

If the party is able to establish good cause for modifying the case management schedule, the party must also demonstrate that impleading a third-party defendant is proper under Fed.R.Civ.P. 14. Under Rule 14, a defendant may bring a third-party complaint against "a nonparty who is or may be liable to it for all or part of the claim against it" as a matter of right. Fed.R.Civ.P. 14(a)(1). Thus, a party can assert a third-party claim where a third-party defendant's liability to the third-party plaintiff is dependent on the outcome of the main claim and is secondary or derivative thereto. Stewart v. Am. Int'l Oil & Gas Co. , 845 F.2d 196, 199 (9th Cir. 1988). If a defendant, and would-be third-party plaintiff, files the third-party complaint more than 14 days after serving its original answer, however, "the third-party plaintiff must, by motion, obtain the court's leave." Fed.R.Civ.P. 14(a)(1). Whether to grant leave is within the "sound discretion of the trial court." United States v. One 1977 Mercedes Benz , 708 F.2d 444, 452 (9th Cir. 1983).

The court's purpose in granting leave to implead a third party is "to promote judicial efficiency by eliminating the necessity for the defendant to bring a separate action against a third individual who may be secondarily or derivatively liable to the defendant for all or part of the plaintiff's original claim." Sw. Adm'rs, Inc. v. Rozay's Transfer , 791 F.2d 769, 777 (9th Cir. 1986). However, the trial court may deny impleader based on the timeliness of the motion, whether the impleader is likely to delay the trial, and whether the impleader will cause prejudice to the original plaintiff. See Irwin v. Mascott , 94 F.Supp.2d 1052, 1056 (N.D. Cal. 2000). The court also considers whether the ...

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