Esper Kallas v. The G & P Agency, Inc.

Background

Emilio Rachel Esper Kallas alleged that the defendants induced him to purchase a life insurance policy for which he did not qualify and caused him to overpay premiums. He alleged that more than $2 million in trust funds was sent to pay premiums, while about $1 million was paid to the insurer. The existing complaint asserted claims against the Price Defendants for breach of fiduciary duty, fraud, and unjust enrichment, and against the Trustee Defendants for breach of fiduciary duty and fraud.

Kallas sought leave under Federal Rule of Civil Procedure 15(a)(2) to file a Second Amended Complaint. The proposed pleading added more specific factual allegations and new claims for professional negligence against the Price Defendants, negligent misrepresentation against Joel M. Price, and professional malpractice against the Trustee Defendants. The Trustee Defendants consented to the amendment if the court extended the fact-discovery deadline. The Price Defendants opposed the amendment.

Reasoning

The court explained that Rule 15(a)(2) generally calls for freely allowing amendments when justice requires, but leave may be denied for reasons including undue delay, bad faith, repeated failure to correct deficiencies, substantial prejudice, or futile amendment.

The court rejected the Price Defendants’ argument that the proposed amendment would cause substantial prejudice. Although the amendment came after the scheduled close of fact discovery and might require additional discovery, the Price Defendants did not show that the added discovery would be so significant or burdensome that it created a unique difficulty in defending the case. The proposed claims also arose from the same core facts as the existing claims: the alleged wrongdoing connected to the sale of the policy, the collection of premiums, and the defendants’ alleged obligations to Kallas.

Ruling

The court granted Kallas’s motion for leave to file the proposed Second Amended Complaint. It also granted the Trustee Defendants’ cross-motion for an extension of time to complete fact discovery.

Kallas was ordered to file the Second Amended Complaint within 14 days of the order. Fact discovery was extended to September 12, 2025. The court also adjourned the post-fact-discovery conference from July 9, 2025, to October 15, 2025, at 9:30 a.m. Judge Margaret M. Garnett issued the memorandum opinion.