Wheeler v. American Family Home Insurance Company

Background

James Wheeler brought this insurance dispute against American Family Home Insurance Company, which the opinion calls AFH. Wheeler’s original complaint asserted breach-of-contract and breach-of-the-implied-covenant-of-good-faith-and-fair-dealing claims. After the case was removed to federal court, he filed a First Amended Complaint adding fraud and negligent-misrepresentation claims and naming Mark McQuitty as a defendant. McQuitty was identified as an AFH employee. Wheeler later removed McQuitty as a defendant in a Second Amended Complaint.

Wheeler sought permission to file a Third Amended Complaint adding factual allegations supporting his existing claims. AFH opposed the amendment primarily on the ground that it would be prejudiced. AFH also asked to reopen Wheeler’s deposition to question him about the new allegations and asked the court to require Yolanda George, Wheeler’s ex-fiancée, to attend a deposition concerning information about a prior claim discussed in the proposed complaint.

Leave to Amend

Federal Rule of Civil Procedure 15 generally favors allowing amendments when justice requires. The court considered bad faith, undue delay, prejudice, whether the amendment would be futile, and Wheeler’s previous amendments. The court noted that AFH did not argue that the proposed amendment would be futile. Although some facts may have been known to Wheeler earlier, he stated through counsel that some allegations were based on information obtained when AFH produced prior claim files. The court concluded that the delay did not justify denying the motion and that the record did not show bad faith.

The court also considered whether the scheduling order required Wheeler to show “good cause” under Rule 16. The court stated that it was unclear whether the scheduling order triggered that rule because it did not expressly set a deadline for motions to amend pleadings. The court concluded that Wheeler met his burden to show good cause for the late amendments.

Rulings on Wheeler’s Deposition

The court GRANTED Wheeler’s motion for leave to file the proposed Third Amended Complaint. To address any prejudice to AFH, the court allowed AFH to reopen Wheeler’s deposition for the balance of the seven hours permitted under the federal rules. The deposition had to occur by April 30, 2021. The court reserved the possibility of later deciding whether AFH should pay the deposition costs.

Because the court allowed the limited reopening, it DENIED AS MOOT AFH’s discovery dispute and letter brief concerning Wheeler’s deposition. Wheeler was required to file the Third Amended Complaint by April 5, 2021, and AFH was required to answer or otherwise respond by April 26, 2021.

Ruling on Yolanda George’s Deposition

The court RESERVED RULING on AFH’s request to compel George to appear for a deposition. Wheeler’s counsel had stated that he did not represent George, so the court would not consider his procedural objections to the subpoena unless he intended to represent her at the deposition.

The court required the parties to meet and confer by videoconference about whether George had been properly served and to file a joint certification by April 9, 2021. If they could not resolve the service issue, they were required to submit a joint statement by that date. The court extended the deadline for completing fact discovery concerning George beyond April 5, 2021, so the dispute could be resolved.

Other Orders

The parties had not submitted the required joint letter brief on the discovery disputes, and the court received multiple letters because of an apparent email-address mistake. The court DENIED AFH’s request for a telephonic conference. It ordered that future discovery disputes include the date, time, and method of the meet-and-confer process and stated that it would not resolve disputes preceded only by written, electronic, or voicemail communications rather than an in-person, video, or telephone discussion.

Disposition

The court GRANTED Wheeler’s motion for leave to file the Third Amended Complaint; DENIED AS MOOT AFH’s discovery dispute concerning Wheeler’s deposition; RESERVED RULING on AFH’s discovery dispute concerning George’s deposition; and DENIED AFH’s request for a telephonic conference.