Farsura v. QC Terme US Corp

Background

Stefano Farsura and SF Capital Partners LLC sued QC Terme US Corp. over alleged contractual and fiduciary duties concerning the development of spa facilities in the United States, including a proposed facility on Governors Island, New York. The original complaint also named Map S.r.l., Whitebridge Investments S.p.A., and Giuturna Investments S.p.A. as defendants.

Judge Torres previously dismissed the Italian defendants for lack of personal jurisdiction because the complaint did not sufficiently allege facts connecting them to the court’s jurisdiction. Judge Torres also dismissed all claims against QC Terme US except breach of contract. The court later reinstated Farsura’s breach-of-fiduciary-duty claim against QC Terme US as an alternative theory to breach of contract.

Farsura moved to amend the complaint to add allegations supporting personal jurisdiction over Whitebridge and Map’s successor, QC Terme S.r.l. The proposed allegations were partly based on information Farsura possessed before filing suit and partly on information learned during discovery, including depositions taken in September 2022. Farsura filed the motion approximately two weeks after those depositions.

Legal standard

The court applied Federal Rule of Civil Procedure 15(a), which generally favors allowing amendments when justice requires, and Rule 16(b), which requires a showing of “good cause” when the amendment deadline in a scheduling order has passed. Good cause principally depends on the moving party’s diligence. The court also considered whether the amendment would be futile, made in bad faith, or prejudicial to the opposing parties.

Analysis

The court found no indication of bad faith. It also concluded that the proposed jurisdictional allegations were not futile because they addressed the lack of detail identified in the earlier dismissal order. The Italian defendants had already produced documents, and depositions had been planned, so the court found no substantial prejudice from allowing the amendment. Expert discovery had been stayed, and the parties could still file summary-judgment motions later.

The court found that at least three material facts were unknown to Farsura before discovery and were learned during discovery. It also found that other proposed facts were known to Farsura before suit or could have been obtained from publicly available information, meaning those facts alone could not establish good cause for a late amendment. Nevertheless, the newly learned deposition information was important to the jurisdictional allegations, and Farsura moved to amend promptly after obtaining it. The court therefore found sufficient diligence and good cause under Rule 16(b).

Ruling

The court granted plaintiffs’ motion for leave to amend their complaint consistent with the order. The amended pleading had to be filed within seven days of entry of the order. The court stated that the Italian defendants could still move to dismiss the amended complaint for lack of personal jurisdiction or failure to state a claim. The amended complaint could not include claims that Judge Torres had previously dismissed for failure to state a claim and had not reinstated, including the identified claims for breach of the implied covenant of good faith and fair dealing, promissory estoppel, constructive trust, and declaratory judgment.