North v. Thomas
- Susan Van Keulen
- 5:24-cv-03410
- U.S. District Court · Northern District of California
- 4
In North v. Thomas, Judge Van Keulen granted both sides leave to amend pleadings, adding a civil-theft claim and an offset defense.
Gerald D.W. North, Anthony Thomas, and Wendi Thomas.
What happened
In North v. Thomas, Gerald D.W. North asked to add a civil-theft claim based on California law. Anthony Thomas and Wendi Thomas asked to add an offset defense to their answer; they withdrew their request to add a counterclaim.
The court granted both motions. North must file the amended complaint by May 5, 2025, and the defendants’ response is due 14 days later. The court did not decide whether the new claim or defense is legally valid.
Judge Susan Van Keulen ruled that the parties had not shown reasons to deny amendment, and that any prejudice to North from adding the offset defense would be minimal.
The detailed version
- North v. Thomas · No. 5:24-cv-03410
- Susan Van Keulen
- Apr. 29, 2025
Background
The court considered two motions under Federal Rule of Civil Procedure 15, which generally allows a party to change its pleadings with the court’s permission when fairness requires it.
Gerald D.W. North sought to amend his complaint to add a fourth cause of action for civil theft under California Penal Code section 496. Anthony Thomas and Wendi Thomas initially sought permission to amend both their counterclaim and their answer. In their reply, they withdrew the request to amend the counterclaim but continued seeking permission to add an affirmative defense of offset to the answer.
The proposed offset defense stated that North’s damages, if any, should be reduced by damages he legally caused the defendants, including damages allegedly resulting from a breach of fiduciary duty.
Court’s Analysis
The court explained that leave to amend is ordinarily granted unless factors identified in Foman v. Davis weigh against amendment. Those factors include undue delay, bad faith, repeated failure to fix deficiencies, and prejudice to the opposing party. Prejudice generally carries the greatest weight.
The defendants did not oppose North’s request to add the civil-theft claim and did not show that any factor justified denying it. The court therefore granted North leave to amend the complaint.
As to the offset defense, the court rejected North’s argument that amendment would necessarily be futile. An amendment is futile when no possible set of facts could make the proposed claim or defense legally valid. The court could not say at this stage that no set of facts could support an offset defense. It also noted that the defendants presented a colorable argument that, under California law, a time-barred claim may be used to offset a lawyer’s claim for fees. The court found that any prejudice to North would be minimal because the defendants would bear the burden of proving the defense.
Ruling
The court GRANTED North’s motion for leave to amend the complaint to add a civil-theft claim and GRANTED the defendants’ motion for leave to amend the answer to add an affirmative defense of offset. North must file the amended complaint by May 5, 2025. The defendants’ response is due 14 days after that filing, and they may include the offset defense in their answer.
The court expressly took no position on whether the new civil-theft claim or offset defense is legally valid. The defendants may seek to file a counterclaim only with further court permission, and they may not seek permission to file a counterclaim for promissory fraud, which the court had previously dismissed without leave to amend.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.