Leznik v. Lincoln Financial Advisors Corporation

Background

Jeffrey Lesnik moved under Federal Rule of Civil Procedure 15(a) for permission to amend his complaint. He sought to make the complaint conform to facts he said were uncovered during discovery, remove three existing causes of action, and add claims for breach of contract, actual fraud, and fraud in the inducement.

The original complaint alleged that Lincoln Financial Advisors Corporation misclassified Lesnik as an independent contractor and terminated him in violation of 11 U.S.C. § 525. It also asserted claims involving credit-history discrimination under the New York City Human Rights Law, wage and recordkeeping laws, unjust enrichment, defamation or slander per se, and interference with prospective economic advantage.

Lesnik’s new counsel was appointed in September 2018. In February 2019, counsel told Lincoln Financial’s counsel that an amendment would correct factual and legal errors, and stated that no new causes of action or facts would be added. In March 2019, however, Lesnik sought permission to add the three new claims. He argued that the claims became apparent after deposition testimony and documents produced in late February.

Legal standard

Rule 15(a)(2) generally directs courts to freely allow amendments when justice requires. A court may deny permission because of undue delay, bad faith, prejudice to the opposing party, or futility. The party seeking amendment bears the burden of satisfactorily explaining the delay. Prejudice may exist when an amendment would require significant additional discovery, significantly delay resolution, or otherwise increase the opponent’s litigation burden.

Court’s analysis

The court found both undue delay and undue prejudice. It rejected Lesnik’s assertion that the relevant delay was only the approximately 30 days between discovering the new claims and filing the motion. The court reasoned that Lesnik’s counsel had known about alleged factual errors since counsel’s appointment in September 2018, and that Lesnik waited 11 months after filing the complaint to seek amendment. The court found Lesnik’s explanations for the delay shifting and unsatisfactory.

The court also found prejudice because the motion was filed immediately before the scheduled end of fact discovery. Lincoln Financial had responded to five sets of document demands and two sets of interrogatories, produced nearly 20,000 pages of documents and emails, and participated in depositions. The court found that the proposed new claims had not been covered by the depositions already taken and that allowing amendment would require numerous depositions to be retaken, effectively restarting discovery and significantly delaying the case.

Disposition

The court denied Lesnik’s motion to amend the complaint. It instructed the clerk to close the motion at Docket 44.