United States District Court, E.D. Pennsylvania
TARGET GLOBAL LOGISTICS SERVICES, CO. Plaintiff/Counterclaim Defendant
KVG, LLC Defendant/Counterclaim Plaintiff
QAIS ANIL MEDICAL EQUIPMENT COMPANY LTD., MOHAMMAD SEDIQ, and ASIA PHARMA LTD. Counterclaim Defendants
S. Perkin, M.J.
matter is before the Court on Defendant KVG's Motion to
Amend its Counter-Complaint Against
Plaintiff/Counter-Defendant Target Global Logistics Company
to Include Fraud (Dkt. No. 174), which motion was filed April
11, 2018. Plaintiff's Opposition to Defendant KVG
LLC's Motion to Amend its Counter-Complaint Against
Plaintiff/Counter-Defendant Target Global Logistics Company
to Include Fraud (Dkt. No. 188) was filed on April 25, 2018.
Having reviewed and considered the contentions of the
parties, the Court is prepared to rule on this matter.
Global Logistics Services, Co.
(''Plaintiff''), a company located in Kabul,
Afghanistan, entered into two APrime-Subcontractor Purchase
''greements'' with KVG, LLC
(''Defendant''), a company located in
Elizabethtown, Pennsylvania. Complaint && 5-6, 8. The
Agreements required Plaintiff to act as a sub-contractor
under an agreement that Defendant had entered into with the
United States. Id. && 1, 6. The Agreements
called for Plaintiff to deliver certain medical equipment and
supplies, for which Defendant was to pay Plaintiff $678,
534.83 under the first Agreement and $179, 136.48 under the
second Agreement. Id. && 8-11. Each
Agreement required Defendant to pay Plaintiff for the goods
within thirty days of delivery. See id. & 12.
Although Plaintiff requested payment from Defendant on
October 15, 2014, Defendant failed to pay for the medical
supplies and equipment that Plaintiff delivered. Id.
January 10, 2016, Defendant filed its Answer and Counterclaim
against Plaintiff. In so doing, KVG alleged that Target
Global “has also demonstrated repeated and continuing
fraudulent intent over the course of its relationship with
KVG.” On June 10, 2016, in response to Target
Global's motion to dismiss and motion to strike, this
Court dismissed said Counterclaim without prejudice. In the
June 10, 2016 Order, the Court noted that “[t]o the
extent that KVG, LLC would plead allegations based on the
tort based claim of fraud, it should be mindful that Federal
Rule of Civil Procedure 9(b) requires that a party plead
‘with particularity the circumstances constituting
fraud.'” On June 22, 2016, Defendant filed its
First Amended Counterclaim against Plaintiff with a Joinder
of three additional nonresident, Afghani Defendants. The
amended counterclaim against Plaintiff consists of nine
different claims, but does not contain any allegations of
fraud. Although Plaintiff filed a motion to dismiss
Defendant's amended counterclaim, the motion was denied,
and Plaintiff filed its Answer and Affirmative Defenses to
the Amended Counterclaim on October 18, 2016. The Defendant
later sought entry of default against the three additional
Afghani defendants, which the Clerk of Court entered.
January 13, 2017, Defendant filed a motion for partial
dismissal of the claims brought by Plaintiff on the basis of
forum non conveniens, which motion this Court denied
on April 12, 2017. On March 14, 2017, Defendant filed a
Motion for Partial Summary Judgment. On March 27, 2017,
Plaintiff filed a Motion for Summary Judgment to
Defendant's First Amended Counterclaim. Subsequently, on
June 22, 2017, this Court denied Plaintiff's Motion for
Summary Judgment, and denied in part and granted in part
Defendant's Motion for Partial Summary Judgment. On
October 5, 2017, Defendant filed a motion to amend its
pleadings and join three additional defendants on the basis
that information about these proposed parties was only
revealed during the unsworn video-stream deposition of Mr.
Yama Ahmadi, Managing Director of Plaintiff, on August 18,
2017. By Memorandum and Order dated November 22, 2017, the
Court denied Defendant's motion to amend, concluding
that, inter alia, it would cause undue prejudice to
15(a)(2) provides that “[t]he court should freely give
leave [for a party to amend its pleading] when justice so
requires.” Fed.R.Civ.P. 15(a)(2). The trial court has
discretion to determine whether a request for leave to file
an amended pleading should be granted or denied. See
Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S.
321, 330, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); see also
Cureton v. Nat'l Collegiate Athletic Ass'n, 252
F.3d 267, 272 (3d Cir. 2001). As a general matter, the trial
court should grant leave to amend “unless equitable
considerations render it otherwise unjust.” Arthur
v. Maersk, Inc., 434 F.3d 196, 204 (3d Cir. 2006)
(citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct.
227, 9 L.Ed.2d 222 (1962)). Denial of a motion to amend must
be grounded in substantial or undue prejudice, bad faith or
dilatory motives, truly undue or unexplained delay, repeated
failure to cure deficiency by amendments previously allowed
or futility of amendment. Heyl & Patterson Int'l,
Inc. v. F.D. Rich Housing of V.I., Inc., 663 F.2d 419,
425 (3d Cir. 1981) (citing Foman, 371 U.S. at 182).
above-listed considerations, “prejudice to the
non-moving party is the touchstone for denial of an
amendment.” Arthur, 434 F.3d at 204 (quoting
Cornell & Co. v. Occupational Safety & Health
Review Comm'n, 573 F.2d 820, 823 (3d Cir. 1978)).
The prejudice inquiry “focus[es] on the hardship to the
[non-moving party] if the amendment were permitted.”
Cureton, 252 F.3d at 273 (citing Adams v. Gould,
Inc., 739 F.2d 858, 868 (3d Cir. 1984). In determining
whether prejudice exists, a court can consider whether the
proposed amendment “would result in additional
discovery, cost, and preparation to defend against new facts
or theories.” Cureton, 252 F.3d at 273.
[c]ourts have found undue prejudice to the non-moving party
and denied leave to amend where the amendment would have
asserted new claims, where new discovery would have been
necessary, where the motion for leave was filed months after
the factual basis of the amendment was discovered by the
moving party, and where the motion for leave was brought
after summary judgment motions were filed.
Cumming v. City of Philadelphia, No. 03-0034, 2004
U.S. Dist. LEXIS 9030, *11 (E.D. Pa. April 26, 2004).
avers that it has shown good cause to amend its counterclaim
because it became aware of “newly discovered
facts” at the deposition of Yama Ahmadi, Target
Global's representative, on March 4 and 5, 2018.
Specifically, KVG contends that Mr. Ahmadi's testimony
“revealed that Target knowingly and materially,
misrepresented, indeed lied about, the material nature and
bona fides of the goods … and that it knowingly
provided goods that were used, counterfeit or stolen.”
See Defendant's Memorandum; Dkt. No. 174-1 at 8.
Plaintiff avers that Defendant's motion should be denied
because it is prejudicial at this late stage, but also futile
given that the counterclaim fails to adequately state a claim
for fraud, the statute of limitations has run, and the
“gist of the action” doctrine bars such a fraud
claim in its entirety. See Plaintiff's
Opposition; Dkt. No. 188 at 1-2.