Bernhard v. Central Parking System of New York, Inc.

282 F.R.D. 284, 2012 WL 1344720, 2012 U.S. Dist. LEXIS 54832
CourtDistrict Court, E.D. New York
DecidedApril 18, 2012
DocketNo. 10-cv-5596 (ADS)(ETB)
StatusPublished
Cited by7 cases

This text of 282 F.R.D. 284 (Bernhard v. Central Parking System of New York, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bernhard v. Central Parking System of New York, Inc., 282 F.R.D. 284, 2012 WL 1344720, 2012 U.S. Dist. LEXIS 54832 (E.D.N.Y. 2012).

Opinion

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

The Plaintiffs Nicholas Bernhard, Ralph Natale, Kirk Conway, and Roy Kohn (“the Plaintiffs”), as Trustees of the Health Fund 917 and the Local 917 Pension Fund (“the Funds” or “the Plaintiff Funds”), brought the present action pursuant to the Employment Retirement Income Security Act of 1974 (“ERISA”). The action is to enforce the obligation of the Defendant Central Parking System of New York, Inc. to make contributions to the Plaintiff Funds under the terms of their collective bargaining agreements and/or under the trust agreement establishing each Fund. The action was also brought against the Defendant John Doe for breach of his duties as a fiduciary of the Plaintiff Funds. Presently before the Court is the Plaintiffs’ motion to add Sonya Mitchell as a defendant in place of the John Doe Defendant. For the reasons set forth below, the motion is granted.

I. BACKGROUND

On November 26, 2010, the Plaintiffs filed this Complaint pursuant to sections 404, 406, 502, and 515 of ERISA, against the Defendants Central Parking System of New York, Inc. (“Central”) and John Doe (“Doe”). The claims against the corporate entity were brought to compel contributions due to the Plaintiff Funds that were identified during a payroll inspection or “audit” of Central’s payroll and related records. In addition, three separate causes of action were brought only against the Defendant John Doe. In particular, the Complaint stated that upon information and belief, “Doe was a person with discretion and/or authority to pay contribution[s] to the Health Fund 917 and the Local 917 Pension Fund on behalf of Central”, and “Doe exercised authority and/or control over payment of contributions and monies due to the Fund from Central.” (Compl., ¶¶ 31-32.) Therefore, the claims against Doe are premised in part on the allegation that Doe caused Central not to pay contributions and other monies to the Funds that had become plan assets of the Funds when they become due from Central, thus breaching Doe’s fiduciary duty under Section 404 of ERISA.

On April 18, 2011, United States Magistrate Judge E. Thomas Boyle issued a scheduling order, which stated that discovery was to be completed by October 28, 2011 and that a joint pretrial order was to be filed by November 30, 2011.

On October 28, 2011, the last day of discovery, the Plaintiffs deposed Sonya Mitchell, Central’s payroll manager. According to the Plaintiffs, they learned at this time that Mitchell was the person vested by Central with discretion and control over payment of the delinquent contributions and the person who determined not to pay the amounts at issue in this case.

On November 3, 2011, the Plaintiffs filed a letter motion to substitute Sonya Mitchell as a defendant in place of John Doe. While the Plaintiffs acknowledge that they had been interacting with Mitchell on the claims since the audit was initiated prior to commencement of the present suit, they were not aware that she had been afforded final authority to determine payments of the amounts claimed until she so testified during her deposition. On November 4, 2011, the Court denied the letter request without prejudice and directed the Plaintiffs to file a formal motion in accordance with the Court’s individual rules governing motion practice.

On November 29, 2011, the Plaintiffs filed the present motion to amend the Complaint to add Sonya Mitchell as a defendant in place of John Doe. On November 30, 2011, the parties submitted a proposed pre-trial order in accordance with Judge Boyle’s Scheduling Order. On December 1, 2011, Magistrate Judge Boyle certified discovery as complete and marked the action as trial ready.

II. DISCUSSION

A. Legal Standard on a Motion to Amend

Pursuant to Rule 15(a) of the Federal Rules of Civil Procedure (“Fed. R. Civ.P.”), a [287]*287party may amend its pleading by leave of court and leave to amend “shall be freely given when justice so requires.” Fed. R.Civ.P. 15(a); see also Monahan v. New York City Dep’t. of Corr., 214 F.3d 275, 283 (2d Cir.2000) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). Generally, amendments are favored because they “tend to facilitate a proper decision on the merits.” Sokolski v. Trans Union Corp., 178 F.R.D. 393, 396 (E.D.N.Y. 1998) (internal quotation marks and citations omitted). Where, as here, a proposed amendment adds new parties, the propriety of amendment is governed by Fed.R.Civ.P. 21, which provides that “[o]n motion or on its own, the court may at any time, on just terms, add or drop a party.” Fed.R.Civ.P. 21; see Garcia v. Pancho Villa’s of Huntington Vill., Inc., 268 F.R.D. 160, 165 (E.D.N.Y. 2010) (citing Duling v. Gristede’s Operating Corp., 265 F.R.D. 91 (S.D.N.Y.2010)); see also City of Syracuse v. Onondaga Cty., 464 F.3d 297, 308 (2d Cir.2006) (“Although Rule 21 ‘contains no restrictions on when motions to add or drop parties must be made, the timing of the motion may influence the court’s discretion in determining to grant it. Thus, the court typically will deny a request that comes so late in the litigation that it will delay the case or prejudice any of the parties to the action.”) (quoting 7 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure, Civil 3d § 1688.1 at 510 (West 2001)). Rule 21 grants the court broad discretion to permit the addition of a party at any stage in the litigation. Sullivan v. West New York Res., Inc., No. 01 Civ. 7847, 2003 WL 21056888, at *1 (E.D.N.Y. Mar. 5, 2003).

In deciding whether to permit the addition of defendants, courts apply the “same standard of liberality afforded to motions to amend pleadings under Rule 15.” Soler v. G & U, Inc., 86 F.R.D. 524, 528 (S.D.N.Y.1980) (quoting Fair Hous. Dev. Fund Corp. v. Burke, 55 F.R.D. 414, 419 (E.D.N.Y.1972)). Thus, leave to amend a complaint to assert claims against additional defendants “should be denied only because of undue delay, bad faith, futility, or prejudice to the non-moving party, and the decision to grant or deny a motion to amend rests within the sound discretion of the district court.” DeFazio v. Wallis, No. 05 Civ. 5712, 2006 WL 4005577, at *1 (E.D.N.Y. Dec. 9, 2006) (citing Aetna Cas. and Sur. Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 603-04 (2d Cir.2005); Zahra v. Town of Southold, 48 F.3d 674, 685 (2d Cir.1995)).

B. As to the Plaintiff’s Motion to Amend the Complaint to Substitute a Defendant

1. Whether the Plaintiffs’ Proposed Amendment is Futile

A proposed amendment is futile if the proposed claim could not withstand a Rule 12(b)(6) motion to dismiss. Lucente v. IBM Corp.,

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282 F.R.D. 284, 2012 WL 1344720, 2012 U.S. Dist. LEXIS 54832, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bernhard-v-central-parking-system-of-new-york-inc-nyed-2012.