Pristine Jewelers NY, Inc. v. Broner

Background

Pristine Jewelers NY, Inc. sued Adrien Broner and others after selling more than one million dollars of jewelry. Ravone Littlejohn, identified as Broner’s manager, signed four checks drawn on the bank account of About Billions, LLC, of which Littlejohn was principal. The checks were returned because the account lacked sufficient funds. Pristine sought damages from Littlejohn based on its contention that he was liable because he signed the dishonored checks. Broner and About Billions, LLC settled the action but did not comply with their settlement agreement.

Littlejohn moved to amend his answer to add two affirmative defenses. The first asserted that Pristine had no cause of action against him because he was not a party to, or beneficiary of, the agreements underlying Pristine’s claims. The second asserted that Pristine knew Littlejohn signed the checks as Broner’s representative rather than in his personal capacity, so Littlejohn could not be personally liable under New York Uniform Commercial Code § 3-403(2)(b).

Legal Standard

Because Littlejohn filed the motion after the deadline in the case-management plan and scheduling order, he had to show good cause under Federal Rule of Civil Procedure 16(b). Good cause generally requires showing diligence and that the pleading deadline could not reasonably have been met despite the party’s efforts. Even when good cause exists, a court may deny amendment if the proposed change would be futile, unfairly prejudicial, or otherwise improper.

For a proposed new defense, futility concerns whether the defense is legally sufficient and could be stricken under Rule 12(f). The court applied the plausibility standard: an affirmative defense must include enough factual allegations to make it plausible, not merely legal conclusions.

Court’s Analysis

The court explained that under New York law, an authorized representative who signs the representative’s own name to an instrument ordinarily is personally liable when the instrument identifies the represented person but does not show that the representative signed in a representative capacity. An exception may apply when the immediate parties had an agreement, understanding, or course of dealing showing that the signer was not intended to be personally liable. That understanding may be express or implied, but it must show that the recipient knew or understood the signer intended to act only as a representative.

The court found that Littlejohn had not pleaded facts supporting such an agreement, understanding, or course of dealing. He had stated the elements of the New York Commercial Code defense but had not provided factual allegations showing why the exception to personal liability would apply. The court also noted that some discovery had already occurred, including completion of paper and expert discovery, leaving only depositions of Littlejohn, Pristine, and possibly Broner, along with limited related paper discovery.

Pristine argued that the proposed defenses were contradicted by objective facts and that Littlejohn was intertwined with and benefited from the transactions. The court did not decide whether those allegations ultimately defeated the defenses. Instead, it concluded that Littlejohn had not pleaded enough supporting facts to amend his answer at that stage.

Disposition

Judge Lewis J. Liman denied Littlejohn’s motion to amend without prejudice to filing a renewed motion within 30 days of the Opinion and Order. The court stated that it would consider the parties’ requests for limited discovery afterward. The Clerk of Court was directed to close Docket Nos. 70 and 72.