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Scansource, Inc. v. Datavision-Prologix

April 8, 2009

SCANSOURCE, INC.,
v.
DATAVISION-PROLOGIX, INC., PAUL J. SPEESE, AND EDWARD BARR,



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM & ORDER

Presently before the Court are the Motion of Plaintiff ScanSource, Inc. for Leave to Amend Verified Complaint Pursuant to Fed. R. Civ. P. 15(a) (Doc. No. 18), and the Motion of ScanSource, Inc. for Leave To Further Amend Its Verified Complaint Pursuant to Fed. R. Civ. P. 15(a). (Doc. No. 21.) For the following reasons, Plaintiff's Motions will be granted.

I. BACKGROUND

Plaintiff ScanSource filed its Verified Complaint on September 9, 2004, in which it made four claims: breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, and negligent misrepresentation. (Doc. No. 1.) Plaintiff named as defendants DatavisionPrologix, Inc., Paul J. Speese, and Edward Barr. (Id.) Plaintiff sought actual and punitive damages. (Id.)

On November 29, 2004, and December 1, 2004, Defendants Speese and Barr each moved to dismiss Count III (fraud) and Count IV (negligent misrepresentation). (Doc Nos. 7, 8.) On April 26, 2005, we granted these motions. (Doc. No. 17.) On December 13, 2004, Defendant Datavision had "failed to plead or otherwise defend" and the Clerk of Court entered a default against Datavision pursuant to Fed. R. Civ. P. 55(a). Plaintiff moved for a default judgment against Datavision on January 21, 2005. The Motion was unopposed. On March 2, 2005, judgment was entered in the amount of $1,480,932.34, in favor of Plaintiff ScanSource and against Defendant Datavision. (Doc. No. 16.)

Following the entry of default judgment, Plaintiff conducted discovery in aid of execution. (Doc. No. 21 at 2.) Plaintiff served subpoenas on several third parties and served Defendants with document requests. (Id.) On the basis of the discovery received, Plaintiff now claims to have new evidence against the existing Defendants as well as evidence implicating a new defendant. Plaintiff requests leave to file an amended complaint.

II. LEGAL ANALYSIS

Federal Rule of Civil Procedure 15(a) provides that "[a] party may amend its pleading once as a matter of course... before being served with a responsive pleading.... In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a). Courts "have shown a strong liberality... in allowing amendments under Rule 15(a)." Bechtel v. Robinson, 886 F.2d 644, 652 (3d Cir. 1989) (citing Heyl & Patterson Int'l, Inc. v. F.D. Rich Housing, 663 F.2d 419, 425 (3d Cir. 1981), cert. denied, 455 U.S. 1018 (1982)). However, "the policy favoring liberal amendment of pleadings is not... unbounded." Dole v. Arco Chem. Co., 921 F.2d 484, 486-87 (3d Cir. 1990). In applying Rule 15(a), the Third Circuit has held that "[a] district court may deny leave to amend a complaint if a plaintiff's delay in seeking amendment is undue, motivated by bad faith, or prejudicial to the opposing party." Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 272-73 (3d Cir. 2001) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

The Third Circuit has further instructed that "prejudice to the non-moving party is the touchstone for the denial of the amendment." Bechtel, 886 F.2d at 652 (citing Cornell & Co. v. Occupational Safety and Health Rev. Comm'n, 573 F.2d 820, 823 (3d Cir.1978)). "A mere claim of prejudice is not sufficient; there must be some showing that [the non-moving party] was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered had the amendments been timely." Dole, 921 F.2d at 488 (internal citations omitted).

A. Additional Allegations Against Defendant Datavision Following Entry of Default Judgment

Plaintiff seeks leave to add allegations based on additional evidence recently procured in discovery. These allegations specifically relate to the express misdeeds of Defendant Datavision. Plaintiff avers that it seeks leave to amend its pleadings "simply... to conform to evidence recently adduced in discovery." (Doc. No. 18 at 9.)

Counts I and II of both the Verified Complaint and of the proposed First Amended Complaint are brought against Defendant Datavision alone. Count III of both the Verified Complaint and the proposed First Amended Complaint is brought against all Defendants, including Datavision. Count IV of the Verified Complaint was brought against all Defendants, including Datavision. Plaintiff has not included an amended version of the original Count IV of the Verified Complaint in the proposed First Amended Complaint but rather has substituted a new Count IV that applies just to Defendant Speese.

On December 13, 2004, after Defendant Datavision failed to respond to the claims against it in the Verified Complaint, a default was entered against it pursuant to Rule 55(a). As referenced above, a default judgment was entered on March 2, 2005. (Doc. No. 16.)*fn1

Generally, a default judgment is a final judgment. See Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 258-59 (1995). "The liberal standard announced in Fed. R. Civ. Proc. 15(a) becomes less flexible after a final judgment is entered." Werner v. Werner, 267 F.3d 288, 296 (3d Cir. 2001). Once a final judgment is entered, Rules 59 and 60 of the Federal Rules of Civil ...


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