United States District Court, N.D. Texas, Dallas Division
MILLEDGE A. HART, III, ET AL., Plaintiffs,
TUFENKIAN ARTISAN CARPETS, d/b/a TUFENKIAN CARPETS DALLAS, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
FISH Senior United States District Judge
the court is the motion of Milledge Hart, III and Linda Hart
(collectively, “the plaintiffs”) for leave to
file their third amended complaint. See Motion for
Leave to File Third Amended Complaint to Join Parties and Add
Claims (“Motion for Leave”) (docket entry 28).
For the reasons stated below, the plaintiffs' motion for
leave is granted.
discussion of the factual background of this case may be
found in this court's previous memorandum opinion
deciding the defendant Tufenkian Artisan Carpet
(“Tufenkian”)'s motion to dismiss.
See Memorandum Opinion and Order (docket entry 20).
After the court issued this memorandum opinion and order, on
March 26, 2019, the plaintiffs served Tufenkian with requests
for production and interrogatories. See Motion for
Leave at 1-2. Tufenkian submitted its responses to these
discovery requests on May 3, 2019. Id. at 2.
reviewing Tufenkian's responses, the plaintiffs aver that
they discovered significant evidence showing that Marco
French Studio, LLC (“French Studio”) and Marco
French, who were hired to provide consulting services to the
plaintiffs with respect to the plaintiffs' rug purchases,
conspired with Tory Sommerfeldt, a Tufenkian employee, and
Tufenkian to: (1) double the price of the rugs the plaintiffs
eventually purchased; (2) misrepresent the nature of the
strike-offs of the rugs that Tufenkian was to supply the
plaintiffs; and (3) negotiate a kick-back of nearly $24,
000.00 for Marco French. Id. The plaintiffs contend
that prior to receiving Tufenkian's discovery responses,
they had no idea that French and French Studio were working
with Sommerfeldt and Tufenkian. Id. Therefore, in
light of the newly-discovered facts revealed by
Tufenkian's discovery responses, on May 17, 2019, the
plaintiffs filed their motion for leave to file a third
amended complaint, which would join French Studio, French,
and Sommerfeldt as defendants and assert new causes of action
against them, including “claims for fraud, civil
conspiracy, negligent misrepresentation, negligence, gross
negligence, breach of contract, promissory estoppel, and an
additional claim under the Texas Deceptive Trade Practices
Act.” Id. at 2-3. On June 14, 2019, Tufenkian
filed its response. See Response to Motion for Leave
(docket entry 31). Shortly thereafter, on July 3, 2019, the
plaintiffs filed their reply. See Reply to Motion
for Leave (docket entry 34). The plaintiffs' motion for
leave is now ripe for decision.
Rule of Civil Procedure 15(a)(2) provides that a “court
should freely give leave when justice so requires.” In
fact, “[i]n the absence of any apparent or declared
reason--such as undue delay, bad faith, or dilatory motive on
the part of the movant, repeated failure to cure deficiencies
by amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, . . .
the leave sought should, as the rules require, be
‘freely given.'” Foman v. Davis, 371
U.S. 178, 182 (1962).
Federal Rule of Civil Procedure 20(a)(2) provides that
persons may be joined in one action as defendants if
“(A) any right to relief is asserted against them
jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of
transactions or occurrences; and (B) any question of law or
fact common to all defendants will arise in the
action.” Furthermore, when tasked with determining
whether to permit joinder of non-diverse parties after a case
has been removed from state court on based upon diversity
jurisdiction, the Fifth Circuit has advised that a district
court “should use its discretion” in deciding
whether to permit joinder of a diversity-destroying party.
Hensgens v. Deere & Co., 833 F.2d 1179, 1182
(5th Cir. 1987). In particular, the Fifth Circuit has
explained that a district court must “balance the
equities and decide whether amendment should be
permitted” by considering a number of factors such as:
(1) the extent to which the purpose of the amendment is to
defeat federal jurisdiction; (2) whether the plaintiff has
been dilatory in asking for amendment; (3) whether the
plaintiff will be significantly injured if amendment is not
allowed; and (4) any other factors bearing on the equities.
having read each parties' arguments, the court concludes
that the plaintiffs' motion for leave should be granted.
First, the court agrees with the plaintiffs that they are not
seeking to join French Studios, French, and Sommerfeldt as
parties solely to defeat diversity jurisdiction. See
Motion for Leave at 5. Tufenkian argues otherwise and
contends that the plaintiffs' attempt to join French
Studios, French, and Sommerfeldt as parties is purely an
attempt to defeat diversity jurisdiction, since the
plaintiffs' claims against Tufenkian only arise out of
Tufenkian's contract with the plaintiffs to manufacture
specific rugs, whereas the plaintiffs' claims against
French Studios, French, and Sommerfeldt arise from separate
contracts. Response at 1-3. Tufenkian's argument misses
the mark, however. Although the plaintiffs' claims
against French Studios, French, and Sommerfeldt are premised
on different legal theories than the plaintiffs' claims
against Tufenkian, the court, having read the plaintiffs'
third amended complaint, see Exhibit A to Motion for
Leave (docket entry 28-1), agrees with the plaintiffs that
all of the plaintiffs' claims arise from the same series
of events--the plaintiffs' purchase of rugs from
Tufenkian. As such, the court further agrees with the
plaintiffs that their purpose in seeking leave to join French
Studios, French, and Sommerfeldt as parties “is the
efficient resolution of their claims against all wrongdoers
and to avoid piecemeal or parallel litigation.” Motion
for Leave at 5. Moreover, because at this juncture the court
is assured by the plaintiffs' briefing that their causes
of action against French Studios, French, and Sommerfeldt are
viable under the applicable law, the court holds that this
factor favors the plaintiffs. See Arrington v. Jackson
National Life Insurance Company, No. 3:17-CV-0472-S,
2018 WL 5298388, at *3 (N.D. Tex. Oct 25, 2018) (Scholer,
J.). (“Where the plaintiff has a valid cause of action
against the non-diverse defendant, courts have found that the
principal purpose of the amendment was not to defeat federal
jurisdiction.”) (quotations omitted).
the second factor, whether the plaintiffs were dilatory in
filing for leave to join French Studios, French, and
Sommerfeldt, the court also concludes that this factor weighs
in favor of the plaintiffs. Despite Tufenkian's arguments
otherwise, the court concludes that the plaintiffs were not
dilatory in seeking leave. Here, the plaintiffs filed their
motion for leave a mere fourteen days after receiving the
discovery responses from Tufenkian that contained the new
facts which served as the basis for the plaintiffs'
claims against French Studios, French, and Sommerfeldt.
Id. Courts have found that amending to join parties
in light of newly-discovered factors is not dilatory. See
Arrington, 3018 WL 5298388 at *4. Furthermore, since
no significant activity beyond the pleading stage has
occurred in this case, the court concludes that the
plaintiffs are not being dilatory by trying to amend their
complaint. See Ogunro v. Allstate Vehicle & Property
Insurance Co., No. 3:18-CV-1784-B, 2019 WL 111213 at *3
(N.D. Tex. Jan 4, 2019) (Boyle, J.) (“Normally, courts
find that a plaintiff is not dilatory in seeking to amend a
complaint when no trial or pretrial dates are scheduled and
no significant activity beyond the pleading stage has
occurred.”) (quoting Martinez v. Holzknecht,
701 F.Supp.2d 866, 891 (S.D. Tex. 2010)).
respect to the third factor--whether the plaintiff will be
significantly injured if amendment is not allowed-- the court
concludes that this factor weighs in the plaintiffs'
favor. Here, because the court believes that the same factual
questions underlie the plaintiffs' claims against
Tufenkian, French Studio, French, and Sommerfeldt, the court
agrees with the plaintiffs that if these parties are not
joined the plaintiffs will be forced to begin unnecessary
parallel litigation, which is not only expensive but
judicially inefficient. See AMX Environmental Evolution,
Limited v. Carroll Fulmer Logistics Corp., No.
3:08-CV-0908-G, 2009 WL 972994, at *4 (N.D. Tex. Apr. 9,
2009) (Fish, Senior J.) (“Requiring a plaintiff to
pursue parallel federal and state court actions is generally
disfavored since separate proceedings create judicial
inefficiency and increase the possibility of conflicting
outcomes.”). Furthermore, Tufenkian has not convinced
the court that it will suffer any serious prejudice if French
Studio, French, and Sommerfeldt are joined. Rather, Tufenkian
has argued that it will suffer prejudice as a result of a
delay, since the case will be remanded to state court.
Tufenkian's argument is speculative at best, however.
Tufenkian fails to provide the court with any factual
explanation as to why remanding the action to state court
would result in delay. See Response at 2.
although Tufenkian does not specify that this bears on the
equity of this case in line with the fourth factor specified
in Hensgens, Tufenkian claims that the
plaintiffs' future claims for fraud and negligent
misrepresentation against Tufenkian do not satisfy the
particularity requirements of Federal Rule of Civil Procedure
9(b). Response to Motion for Leave at 4. The court declines
to address this argument at this time. The plaintiffs have
not yet filed their third amended complaint and thus the
court concludes it is inappropriate at this juncture to rule
on whether the plaintiffs' future claims for fraud and
negligent misrepresentation satisfy the procedural