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G & E Real Estate, Inc v. Avison Young - Washington, D.C., LLC

United States District Court, District of Columbia

September 28, 2018

G&E REAL ESTATE, INC., Plaintiff,
AVISON YOUNG-WASHINGTON, D.C., LLC, et al., Defendants.



         Plaintiff G&E Real Estate Inc. d/b/a Newmark Grubb Knight Frank (“Plaintiff”) seeks leave to amend its First Amended Complaint in response to several of this Court's decisions and in preparation for trial. Defendants Bruce B. McNair (“McNair”) and David Roehrenbeck (“Roehrenbeck”) (collectively, “Defendants”)[1] oppose on a variety of grounds. Upon consideration of the briefing, [2] the relevant legal authorities, and the record as a whole, the Court shall GRANT-IN-PART and DENY-IN-PART Plaintiff's [217] Motion for Leave to File Second Amended Complaint. Plaintiff may file a version of its Second Amended Complaint that omits Counts I-III, VI, and VIII-X, as to which this Court previously granted summary judgment against Plaintiff, and omits the specific theories contained in Count VII that the Court also rejected at summary judgment.

         I. BACKGROUND

         On February 26, 2016, the Court summarized the background to this case when it resolved motions for summary judgment filed by McNair, Roehrenbeck, and other then-defendants. See generally Mem. Op., G&E Real Estate, Inc. v. Avison Young-Washington, D.C., LLC, 168 F.Supp.3d 147, 151-52 (D.D.C. 2016) (G&E I), ECF No. 138.[3] Going forward, Plaintiff's three remaining claims were limited to breach of contract claims against McNair and Roehrenbeck (Counts IV and V, respectively), as well as a narrow version of its breach of fiduciary duty claim against McNair (Count VII). See G&E I, 168 F.Supp.3d at 169. Specifically, Count VII remained viable “as to the claim that McNair conspired to induce ANSER to terminate its agreement with Grubb & Ellis.” Id. Relevant proceedings since the summary-judgment decision have included the denial of Plaintiff's motion for reconsideration, on August 18, 2016. Mem. Op. and Order, ECF No. 149.

         Not long thereafter, Plaintiff substituted its counsel in this action. Pl.'s Request for Withdrawal and Substitution of Counsel, ECF No. 152. Amidst Plaintiff's trial preparations, new counsel realized that certain emails were not previously produced to Defendants, but should have been. See Mem. Op. and Order at 2-3, G&E Real Estate, Inc. v. Avison Young-Washington, D.C., LLC, 323 F.R.D. 67, 68-69 (D.D.C. 2017) (G&E II), ECF No. 215. Ultimately, Plaintiff produced “approximately 16, 000 emails from the mailbox of Defendant Bruce McNair (the ‘McNair Emails'), which were stored on a computer server previously owned and operated by non-party Grubb & Ellis.” G&E II, 323 F.R.D at 67-68. Defendants sought sanctions in response, which the Court denied. See generally G&E II, 323 F.R.D. 67. The Court nevertheless determined that Defendants were entitled to the reopening of discovery-which previously closed on February 10, 2015-in order to mitigate purported prejudices associated with the belated production. Id. at 71; see also Id. at 68 (citing Min. Order of Dec. 8, 2014)).[4] The Court denied without prejudice a number of the parties' other, mostly pretrial motions, which included an attempt by Plaintiff's new counsel to amend the First Amended Complaint. Id. Plaintiff would be permitted to “renew this motion before the close of the reopened discovery period, ” subject to a briefing schedule unless the parties agreed to the amendment. Id.

         The parties indeed sought a briefing schedule, which the Court issued. Min. Order of Jan. 8, 2018. “In light of the parties' discovery disagreements, and the Court's understanding that its decision regarding the Second Amended Complaint may affect the scope and timeline of reopened discovery, ” the Court determined that Plaintiff's present motion should be briefed and decided before reopening the discovery contemplated by the Court's decision to deny sanctions. Id.

         The Court shall consider any further background where relevant to its evaluation of Plaintiff's renewed attempt to amend the operative complaint. That motion is now fully briefed.


         Under Federal Rule of Civil Procedure 15(a), captioned “Amendments Before Trial, ” a party is permitted to amend its complaint or other pleading “once as a matter of course within” certain alternative time periods. Fed.R.Civ.P. 15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave.” Id. 15(a)(2). Rule 15 makes clear that when the court's leave is sought, that leave should be “freely give[n] . . . when justice so requires.” Id.; see Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1003 (D.C. Cir. 1996) (finding that leave to amend a complaint is within the court's discretion and “should be freely given unless there is a good reason . . . to the contrary”), cert den., 520 U.S. 1197 (1997); Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (noting that “it is an abuse of discretion to deny leave to amend unless there is sufficient reason”).

         One basis for seeking amendment may be to conform the operative complaint to the evidence produced during discovery. Under Rule 15(b), captioned “Amendments During and After Trial, ” “[a] party may move-at any time, even after judgment-to amend the pleadings to conform them to the evidence and to raise an unpleaded issue.” Fed.R.Civ.P. 15(b)(2) (emphasis added). Bearing in mind the caption, the Federal Rules contemplate that such a conforming amendment would be made, if at all, during or after trial “[w]hen an issue not raised by the pleadings is tried by the parties' express or implied consent” at trial. Id. Yet, at least some authority reads the permissive language italicized above to “permit[ ] the motion [to amend under Rule 15(b)(2)] to be made throughout the entire period during which the action is in the district court.” 6A Charles Alan Wright et al., Federal Practice and Procedure § 1494 (3d ed. 2010). Even if a court engaged in pretrial proceedings does not accept this invitation to formally consider amendment pursuant to Rule 15(b)(2), this rule provides support for granting leave to amend under Rule 15(a)(2) where such amendment would conform the pleadings to the evidence available before trial. Granting an amendment for this reason would, of course, remain within the Court's discretion under Rule 15(a) precedent in this jurisdiction. See, e.g., Firestone, 76 F.3d at 1208.

         “When evaluating whether to grant leave to amend [under Rule 15(a)(2)], the Court must consider (1) undue delay; (2) prejudice to the opposing party; (3) futility of the amendment; (4) bad faith; and (5) whether the plaintiff has previously amended the complaint.” Howell v. Gray, 843 F.Supp.2d 49, 54 (D.D.C. 2012) (citing Atchinson v. District of Columbia, 73 F.3d 418 (D.C. Cir. 1996) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). “Courts that have found an undue delay in filing [a proposed amended complaint] have generally confronted cases in which the movants failed to promptly allege a claim for which they already possessed evidence.” United States ex rel. Westrick v. Second Chance Body Armor, Inc., 301 F.R.D. 5, 9 (D.D.C. 2013). An amendment would be unduly prejudicial if it “substantially changes the theory on which the case has been proceeding and is proposed late enough so that the opponent would be required to engage in significant new preparation”; it would “put [the opponent] to added expense and the burden of a more complicated and lengthy trial”; or it raises “issues . . . [that] are remote from the other issues in the case.” Djourabchi v. Self, 240 F.R.D. 5, 13 (D.D.C. 2006) (quoting 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1487 (2d ed. 1990)) (internal quotation marks omitted). With respect to the futility of an amendment, a district court may properly deny a motion to amend if “the amended pleading would not survive a motion to dismiss.” In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213, 218 (D.C. Cir. 2010) (citing, e.g., Foman, 371 U.S. at 182). “With respect to bad faith, courts generally consider the length of the delay between the latest pleading and the amendment sought. However, delay alone is an insufficient ground to deny the motion unless it prejudices the opposing party.” Djourabchi, 240 F.R.D. at 13 (citing Wright, Miller & Kane, supra, § 1488).

         “Because amendments are to be liberally granted, the non-movant bears the burden of showing why an amendment should not be allowed.” Abdullah v. Washington, 530 F.Supp.2d 112, 115 (D.D.C. 2008).


         The following analysis of Plaintiff's Motion is premised on the Court's assumption that all of Plaintiff's allegations are supported by evidence that surfaced during discovery, or in the mishandled tranche of McNair Emails that was produced to Defendants afterwards. See, e.g., Pl.'s Mem. at 5 (alleging that “Defendants . . . have received all the documents on which the proposed amendments are based”). Accordingly, Defendants are purportedly on notice, already, of each of the allegations that Plaintiff develops in its latest proposed version of the complaint. At this pretrial stage of proceedings, Plaintiff's edits should indeed be limited to conforming the operative complaint to the evidence and the claims that remain for trial.

         Also at the threshold, the Court disposes of Defendants' efforts to defend against Plaintiff's Motion based on an incorrect standard. Defendants argue that the Court should consider Plaintiff's Motion under Rule 16(b), because that rule purportedly applies to proposed amendments that fail to comply with a scheduling order. See Defs.' Opp'n at 7-9 (citing Headfirst Baseball LLC v. Elwood, 206 F.Supp.3d 148, 152 (D.D.C. 2016)). The Court need not consider, however, the appropriate standard for a motion filed after a scheduled deadline. Rule 15(a) is the correct standard for a motion to amend a complaint that complies with the Court's schedule, as Plaintiff's Motion does. See Min. Order of ...

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