United States District Court, E.D. Pennsylvania
A. SITARSKI UNITED STATES MAGISTRATE JUDGE
Pending before the Court is Plaintiff's Motion for Leave
to File Amended Complaint (ECF No. 43) and Defendants'
Memorandum of Law in Opposition thereto (ECF No.
For the following reasons, Plaintiff's Motion will be
procedural posture of this case is well-known to the parties,
so the Court provides only a brief recitation of the
background pertinent to the instant motion. On March 10,
2016, Kang Haggerty & Fetbroyt LLC
(“Plaintiff”) initiated the instant action
against Baxter McLindon Hayes, Jr. and Utilipath Holdings,
Inc. (“Defendants”) in the United States District
Court for the Middle District of Florida, raising claims of
breach of contract (Count I) and unjust enrichment (Count
II). (See Original Record 5, ECF No. 1; Compl., ECF
No. 1-1). The Complaint averred that Hayes, individually and
on behalf of Utilipath Holdings, retained Plaintiff to defend
Defendants in two separate lawsuits: Utilipath, LLC v.
Baxter McLindon Hayes, Jr., et al., Court of
Chancery of Delaware, Civil Action No. 9214-VCN (“the
Delaware Action”); and NewSpring Mezzanine Capital
Ii, L.P. v. Baxter McLindon Hayes, Jr., et al., United
States District Court for the Eastern District of
Pennsylvania, Civil Action No. 2:14-cv-1706-NIQA (“the
Federal Court Action”). (Compl. ¶¶ 8-9, ECF
No. 1-1). Plaintiff was also retained to investigate and
prosecute any available counterclaims, cross claims, or
separate claims in each lawsuit, and to provide professional
services related to other matters. (Id. ¶¶
9, 14). Defendant agreed to pay Plaintiff an hourly fee; a
contingency fee on any recovery from any counterclaim, cross
claim, or separate claim; and “hard costs”
incurred in the representation. (Id. ¶ 11).
Plaintiff expended hundreds of hours of attorney time in
defending Defendants in both lawsuits, pursing a counterclaim
and cross-claim in the Federal Court Action, and providing
services to Defendant in other matters. (Id.
¶¶ 15, 17). In March 2015, Plaintiff withdrew from
the representation “[a]s a result of irreconcilable
conflicts between Plaintiff and Defendant concerning the
nature of the representation.” (Id. ¶
19). At that time, Defendants had “significant
outstanding balances for fees owed” to the Plaintiff.
(Id. ¶¶ 20-22). On March 22, 2017, the
action was transferred to this district on the grounds of
forum non conveniens. (See Original Record
7, ECF No. 1).
April 6, 2017, Defendants filed an Answer, Affirmative
Defenses, and Counterclaim. (Answer, ECF No. 7). Defendants
brought claims of breach of contract (Count I), unjust
enrichment (Count II), and breach of fiduciary duty (Count
III). (See id.). In April 2017, Plaintiff filed a
Motion to Strike Defendants' Answer, Affirmative
Defenses, and Counterclaim (ECF No. 9) and a Motion to
Dismiss Defendants' Counterclaims (ECF No. 15) -
specifically Counts II and III. On June 9, 2017, Plaintiff
filed a Motion for Partial Summary Judgment. (Mot. for
Partial Summary J., ECF No. 24). Defendants opposed each
motion. (Resp. to Pl.'s Mot. to Strike, ECF No. 14; Resp.
to Pl.'s Mot. to Dismiss, ECF No. 22; Mem. of Law in Opp.
to Mot. for Partial Summary J., ECF No. 26).
January 19, 2018, Plaintiff's Motion to Strike was denied
and Plaintiff's Motion for Partial Summary Judgment was
denied without prejudice. (Order, ECF No. 31). On March 1,
2018, Plaintiff's Motion to Dismiss was granted in part
and denied in part. (Mem., ECF No. 35; Order, ECF No. 36).
Specifically, Judge Jones dismissed Defendants' unjust
enrichment claim (Count II), but found Defendants' breach
of fiduciary duty claim (Count III) could proceed. (Mem. 4-9,
ECF No. 35).
March 15, 2018, Plaintiff filed an Answer and Affirmative
Defenses to Defendants' Counterclaims. (Pl.'s Answer,
ECF No. 39).
April 23, 2018, Plaintiff filed the instant Motion for Leave
to File Amended Complaint. (Mot. for Leave to File Am.
Compl., ECF No. 43). Specifically, Plaintiff seeks leave to
file an Amended Complaint to “conform with events that
have transpired since the filing of the Complaint” and
“seek recovery of the contingency fee that is
owed” as a result of Defendants' subsequent
settlement in the Federal Court Action. (Pl.'s Mem.
of Law 2-3, ECF No. 43-2). Defendants filed a Memorandum of
Law in Opposition, arguing Plaintiff's Motion should be
denied because “the Amendment is an exercise of
futility.” (Defs.' Mem. in Opp. 5, ECF No. 46).
Rule of Civil Procedure 15(a)(2) states that, after an answer
has been filed, “a party may amend its pleading only
with . . . the court's leave.” Fed.R.Civ.P. 15(a).
“The court should freely give leave when justice so
requires, ” and the Third Circuit has held that
“motions to amend pleadings should be liberally
granted.” Fed.R.Civ.P. 15(a)(2); Long v.
Wilson, 393 F.3d 390, 400 (3d Cir. 2004). However, leave
to amend under Rule 15 may be denied in cases of: (1) undue
delay; (2) bad faith or dilatory motive; (3) undue prejudice;
or (4) futility of amendment. Cureton v. Nat'l
Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d
Cir. 2001) (citing Foman v. Davis, 371 U.S. 178, 182
(1962)). Given the liberal standard of Rule 15(a), the party
opposing amendment bears the burden of showing undue delay,
bad faith, prejudice, or futility. E.E.O.C. v. Hussey
Copper Ltd., No. 08-809, 2009 WL 918298, at *1 (W.D. Pa.
Apr. 2, 2009); Chancellor v. Pottsgrove Sch. Dist.,
501 F.Supp.2d 695, 700 (E.D. Pa. 2007). The decision to grant
or deny a motion for leave to amend is within the sound
discretion of the district court. Cureton, 252 F.3d
seeks leave to amend the Complaint to “conform with
events that have transpired since the filing of the
Complaint” and to “seek recovery of the
contingency fee that it is owed.” (Pl.'s Mem. of
Law 3, ECF No. 43-2). Defendants argue that amendment would
be futile, and suggest that Plaintiff has demonstrated undue
delay and bad faith. (Defs.' Mem. in Opp. 5-6, ECF No.
46). For the reasons explained in more detail below, the
Court grants Plaintiff's Motion.
argue that amendment would be futile because Plaintiff cannot
recover the contingency fee requested in the proposed Amended
Complaint. (Defs.' Mem. in Opp. 5-6, ECF No. ...