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Headfirst Baseball LLC v. Elwood

United States District Court, District of Columbia

September 1, 2016

HEADFIRST BASEBALL LLC, et al., Plaintiffs,
v.
ROBERT ELWOOD et al., Defendants. ROBERT ELWOOD, Counterclaim Plaintiff,
v.
BRENDAN V. SULLIVAN III, et al., Counterclaim Defendants. HEADFIRST PROFESSIONAL SPORTS, CAMPS LLC, Counterclaim Plaintiff,
v.
ROBERT ELWOOD, Counterclaim Defendant.

          MEMORANDUM OPINION

          REGGIE B. WALTON UNITED STATES DISTRICT JUDGE

         The plaintiffs, Headfirst Baseball LLC, et al., filed this civil action on April 21, 2013, alleging that they terminated their relationship with defendant Robert Elwood after discovering that he had allegedly misappropriated hundreds of thousands of dollars from the plaintiffs over several years, using the money for non-business purposes, i.e., personal expenditures, and that defendant Stacey Elwood was complicit in this alleged conduct. See Headfirst Baseball LLC v. Elwood, __ F.Supp.3d__, __, 2016 WL 912166, at *2 (D.D.C. Mar. 7, 2016). On July 12, 2013, defendant Robert Elwood filed several counterclaims against plaintiff Sullivan, seeking a declaration of the existence of the alleged Headfirst partnership, see id (citing Elwood Countercl. ¶¶ 110-17, 122-28), and damages resulting from being ousted from the alleged partnership, see id (citing Elwood Countercl. ¶¶ 118-21, 129-35). He also filed a counterclaim against Headfirst Professional Sports Camps seeking a compelled buyout of his undisputed 50% interest in the company. See Id. (citing Elwood Countercl. ¶¶ 93-109). Currently pending before the Court is defendant-counterclaim plaintiff Robert Elwood's Motion for Leave to File Second Amended Counterclaim Against Sullivan and Headfirst Professional Sports Camps LLC and Memorandum in Support ("Def.'s Mot."). Upon careful consideration of the parties' submissions, [1] the Court concludes that it must deny defendant Robert Elwood's motion for leave to file a second amended counterclaim.

         I. BACKGROUND

         Much of the factual background of this case was previously set forth by the Court, see Headfirst Baseball, __ F.Supp.3d at__, 2016 WL 91266, at *2, which need not be repeated here to resolve the motion now before the Court.

         Procedurally, on November 6, 2014, defendant Robert Elwood amended his counterclaim. See Answer to Second Amended Complaint of Sullivan, Headfirst Baseball, and Headfirst Camps, Elwood's Amended Counterclaim, and Jury Demand (Nov. 6, 2014), ECF No. 66. Thereafter, on December 1, 2014, the parties filed a joint report of their Rule 26(f) conference that included a proposed scheduling order which designated December 31, 2014, as the proposed deadline for amending the pleadings. See Joint Report of Rule 26(f) Conference (Dec. 1, 2014), ECF No. 70. The Court accepted the parties' proposed deadline for the amendment of the pleadings, see Scheduling Order at 1 (Dec. 9, 2014), ECF No. 71, and set June 5, 2015, as the date for the close of discovery, see Id. at 2.

         After the close of discovery, the parties filed summary judgment motions, and the Court issued its ruling on these motions on March 7, 2016. See Headfirst Baseball, __ F.Supp.3d at __, 2016 WL 91266, at *1. Pursuant to Local Rule 16 and the Court's Pretrial Order, the parties, on May 19, 2016, met and conferred regarding the trial and made "pretrial exchanges, including proposed jury instructions, witness lists, exhibit lists, and exhibits between June 7 and 14, 2016." Pls.' Opp'n at 6. On June 13, 2016, defendant Robert Elwood sought the plaintiffs' consent to further amend his counterclaim, see id, and on the same day, filed his motion for leave to file a second amended counterclaim

(1) to respond to the Court's March 2016 summary judgment opinion in which the Court stated its view of what relief would be available based on the existing circumstances and legal theories, and (2) to respond to the [p]laintiffs' position, first raised on May 16, 2016, that in light of the Court's summary judgment opinion, Elwood's expert's opinion on valuation of the Headfirst Partnership is no longer admissible.

Def.'s Reply at 2.

         II. DISCUSSION

         The plaintiffs assert four arguments in opposition to defendant Robert Elwood's current motion to amend his counterclaim: (1) there is no good cause to justify a significant deviation from the Court's scheduling order and, if defendant Robert Elwood could establish good cause, leave to file the second amended counterclaim should be denied because (2) defendant Robert Elwood unduly delayed asserting these additional claims, (3) leave to file would cause undue prejudice, and (4) the defendant's motion is futile, at least in regards to one of the additional claims asserted. See Pls.' Opp'n at 2. The Court will address each of the plaintiffs' arguments in turn.

         A. The Good Cause Standard of Rule 16 of the Federal Rules Civil Procedure Governs

         The plaintiffs contend that the applicable law governing the motion now before the Court is the "good cause" standard of Federal Rules of Civil Procedure Rule 16(b) ("Rule 16(b)"), and more importantly, that under this standard, defendant Robert Elwood has failed to provide the Court with the requisite

good cause [as to] why the Court should permit him to modify the Court's scheduling Order by amending his counterclaim eighteen months after the Scheduling Order's deadline for amendments to pleadings, twelve months after the close of discovery, three months after summary judgment was decided, during the parties' pretrial exchanges of information under Local Rule 16, and just months away from trial.

Id. at 8-9. Defendant Robert Elwood responds that Federal Rules of Civil Procedure Rule 15(a) ("Rule 15(a)"), which requires district courts to grant leave to file amended pleadings "when justice so requires, " Fed.R.Civ.P. 15(a)(2), is the applicable ...


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