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Hostingxtreme Ventures, LLC v. Bespoke Group, LLC

United States District Court, N.D. Texas, Dallas Division

November 20, 2017

HOSTINGXTREME VENTURES, LLC and DOES 1 through 10 inclusive, Plaintiffs,
v.
BESPOKE GROUP, LLC, DIVYESH PATEL, and HINA PATEL, and DOES 1 through 10 inclusive, Defendants.

          MEMORANDUM OPINION AND ORDER

          IRMA CARRILLO RAMIREZ UNITED STATES MAGISTRATE JUDGE

         Pursuant to the order dated November 3, 2015, this case has been referred for full case management, including the determination of non-dispositive motions and issuance of findings of fact and recommendations on dispositive motions. Before the Court is Plaintiffs Motion for Leave to Amend the Complaint, filed September 11, 2017 (doc. 388). Based upon the relevant filings, evidence, and applicable law, plaintiff's motion is DENIED.

         I. BACKGROUND

         This suit arises out of a contract between Bespoke Group, LLC (Bespoke) and Prosper Trade Company (Prosper) for the purchase and delivery of 180 metric tons of bulk “US origin dry green peas” at the price of $552.00 per ton to be delivered by Bespoke from the United States to Prosper in Nhava Sheva, India. (doc. 36 at 4-5.)[1]

         Before the contract was executed, Divyesh Patel (Divyesh), the owner and manager of Bespoke, met with Hitesh Sayta (Hitesh), an individual who “held a mandate on behalf [of Prosper]” to buy dried green peas. (Id. at 4.) According to Hitesh, Divyesh represented that he had an “adequate inventory” of dried green peas that “he could ship subsequent to entering into the purported contract.” (Id. at 4-5.) They negotiated the details of the contract and “agreed that a formal written contract would be drawn up by [Divyesh] and sent out via email to Hitesh.” (Id. at 5.) Though not identified in the written contract, Prosper intended to sell these peas directly to Ask Re Ltd. (Ask Re) in Hong Kong upon receipt. (Id. at 11.) Prosper was later notified via e-mail that Bespoke was experiencing difficulties in shipping the peas due to a lack of rail car transportation caused by bad weather. (Id. at 5.) Bespoke failed to deliver the peas as required by the contract, and Prosper “had to cover its onward contractual obligations [to Ask Re] . . . [by] purchas[ing] goods from another seller” at an increased price. (Id. at 9.)

         Prosper subsequently assigned its rights under the contract to HostingXtreme Ventures, LLC (Plaintiff), which then sued Bespoke, Divyesh, and his wife, Hina Patel (Hina) (collectively Defendants) on April 22, 2014, alleging breach of written contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, common law fraud, intentional interference with contractual rights, and negligent representation.[2] (See doc. 1.) The initial scheduling order set a discovery deadline of September 16, 2015, a deadline for amended pleadings of July 31, 2015, and a trial date of February 16, 2016. (doc. 33.) Plaintiff filed its first amended complaint on February 2, 2015 (doc. 25), and its second amended complaint on July 28, 2015 (doc. 36) that included additional facts but alleged the same claims.

         The discovery disputes became so contentious in this suit that a discovery motion protocol was established on November 4, 2015, that set requirements on scheduling depositions and filing additional discovery motions. (doc. 102.) Despite the discovery protocol, the parties filed over thirty contested discovery motions.[3] (See, e.g., docs. 37, 61, 72, 75, 78, 81, 91, 93, 94, 98, 99, 101, 121, 135, 152, 171, 187, 188, 194, 201, 215, 220, 236, 249, 250, 263, 265, 272, 274, 276.) This includes twelve motions for sanctions (docs. 81, 98, 99, 119, 121, 135, 187, 188, 272, 274, 285, 336), and nine motions to compel (docs. 37, 61, 75, 91, 187, 188, 194, 276, 290). Because of these many disputes, the initial scheduling order was vacated, and an amended scheduling order was issued that extended the discovery deadline until October 14, 2016; the deadline to amend pleadings and join parties was extended until July 15, 2016. (doc. 146.) On August 15, 2016, the remaining deadlines in the amended scheduling order were extended for an additional 90 days, which moved the discovery deadline to January 13, 2017. (doc. 174.)

         The dates and other specifics related to the depositions were so frequently contested by the parties that Defendants' counsel was unable to depose Prosper's representative until December 29, 2016, and Plaintiff's counsel was unable to depose any of the Defendants until February 13, 2017. (doc. 315.) Because of this delay in the deposition dates, the deadline for filing dispositive and all other motions was extended from February 10, 2017, to March 15, 2017. (Id.) Plaintiff subsequently filed an unopposed motion to extend its deadlines under the scheduling order, which was granted in part, and Plaintiff's deadline to file a dispositive motion was extended until April 6, 2017. (doc. 355.)

         On January 27, 2017, Defendants' counsel formally notified Plaintiff's counsel that they would be seeking sanctions unless Plaintiff fully dismissed this suit because they had evidence that all of the invoices and documents that Plaintiff produced during discovery related to its alleged damages were forged and fraudulent. (doc. 336 at 28.) Plaintiff denied the allegations and refused to dismiss. (doc. 352.)

         Both sides timely moved for summary judgment. (docs. 332, 359.) Defendants argued that they were entitled to summary judgment on Plaintiff's breach of written contract claim because it failed to provide any competent evidence of the alleged “cover damages” incurred when Prosper had to buy replacement peas to cover its obligation to Ask Re after Bespoke failed to deliver. (docs. 332, 333.) Plaintiff similarly argued that it was entitled to summary judgment on its breach of contract claim, but it argued that judgment should instead be awarded under an oral contract theory against Divyesh individually because “the contract [at issue] was oral” and “was entered into prior to the written document being circulated.” (doc. 360 at 9, 17.) Though Plaintiff previously identified this document as the “written contract” in its second amended complaint, it now identified this document as a “written memorandum [that] was circulated after the deal was orally done between Hitesh Sayta and Divyesh Patel.” (Id. at 25.) Plaintiff, moreover, did not rely upon any of the invoices that Defendants alleged were forged as the basis for its “cover damages, ” and cited for the first time to Tex. Bus. & Com. Code § 2.713 arguing that it should instead be awarded damages based upon the increase in the fair market value of the peas, as established by an expert report from Mr. Darren Hudson (Hudson), and not the actual amount incurred by Prosper when it had to cover Defendants' breach.[4] (Id. at 19-22.)

         On September 11, 2017, Defendants were granted summary judgment on all of Plaintiff's claims, except for its fraud claim based upon Divyesh's representations made before the contract was formed. (docs. 384, 391.) It was determined that Plaintiff's oral contract theory against Divyesh had “not been previously fairly pleaded” and would “not be considered for the first time on summary judgment.”[5] (doc. 384 at 5-6.) It was also determined as a matter of law that Plaintiff's damages on its breach of contract claim were limited to “the actual amount [Prosper] paid to cover and not the [difference in] market price” because “Prosper elected to cover at the time of the breach by purchasing similar goods” as identified in the second amended complaint. (Id. at 9-11.)

         On the same day that Defendants were granted summary judgment on the breach of contract claim, Plaintiff filed this untimely motion for leave to amend its complaint “to more specifically include the language . . . to support market price damages and an oral contract” theory. (doc. 388 at 2.) With a timely filed response (doc. 393) and reply (doc. 397), Plaintiff's motion for leave to amend its complaint is ripe for determination.

         II. MOTION FOR LEAVE TO AMEND

         Plaintiff moves for leave to amend its second amended complaint under Rules 16(b) and 15(a) of the Federal Rules of Civil Procedure. (doc. 388 at 2.)

         A. ...


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