1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRUCO LIFE INSURANCE Case No.: 18cv2280 DMS (AHG) COMPANY, an Arizona Corporation, 12 ORDER GRANTING MICKEY Plaintiff, 13 NICHOLSON AND JASON v. VOELKER’S MOTION FOR LEAVE 14 TO FILE A JOINT AMENDED CALIFORNIA ENERGY 15 ANSWER AND COMPLAINT DEVELOPMENT, INC., a dissolved 16 California Corporation, TIMOTHY BRYSON, an individual, MICKEY 17 NICHOLSON, an individual, JOHN J. 18 WALSH, an individual, EDWARD SPOONER, trustee of the LIVING 19 TRUST OF EDWARD SPOONER, LIFE 20 ADVANCE, LLC, a Nevada corporation, DOES 1-10,, 21 Defendants. 22
23 AND ALL RELATED CROSS CLAIMS AND THIRD PARTY CLAIMS. 24
25 26 27 28 1 This case comes before the Court on Mickey Nicholson and Jason Voelker’s 2 motion for leave to file a Joint Amended Answer and Complaint.1 Life Advance, LLC 3 filed an opposition to the motion, and Nicholson and Voelker filed a reply. For the 4 reasons discussed below, the motion is granted. 5 I. 6 BACKGROUND 7 This case involves a dispute over the ownership and beneficiary of an insurance 8 policy issued by Pruco Life Insurance Company on the life of James D. Roberts. Since 9 the filing of the case, Mr. Roberts has died, and Pruco has submitted the proceeds of the 10 policy ($1,001,086.53) into the Registry of the Court. 11 Three parties remain in the case, Life Advance, LLC, Mickey Nicholson and Jason 12 Voelker, and all claim to have an interest in the policy proceeds. Life Advance currently 13 has pending claims for declaratory relief and interference with contract against Nicholson 14 and Voelker, and Nicholson and Voelker currently have pending claims against Life 15 Advance for declaratory relief, conversion, negligence, inducing breach of contract, 16 intentional interference with prospective economic advantage and negligent interference 17 with prospective economic advantage. 18 II. 19 DISCUSSION 20 In the present motion, Nicholson and Voelker, who are both proceeding pro se, 21 request leave to file a joint amended answer and complaint against Life Advance to add 22 claims for rescission, constructive trust and equitable lien.2 Federal Rule of Civil 23 Procedure 15 provides that leave to amend a party’s pleading “shall be freely given when 24
25 1 Life Advance’s motions for summary judgment against Nicholson and Voelker on its 26 cross- and third-party claims is also pending before the Court. The Court will address those 27 motions in a separate order. 2 It appears Nicholson and Voelker have already filed the proposed amendment, (see ECF 28 1 justice so requires.” Fed. R. Civ. P. 15(a). In accordance with this Rule, the Supreme 2 Court has stated, 3 in the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 4 deficiencies by amendments previously allowed, undue prejudice to the 5 opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, be “freely 6 given.” 7 8 Foman v. Davis, 371 U.S. 178, 182 (1962). Of these factors, the Ninth Circuit has stated 9 “it is the consideration of prejudice to the opposing party that carries the greatest weight.” 10 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). The party 11 opposing the amendment bears the burden of showing prejudice. DCD Programs, Ltd. v. 12 Leighton, 833 F.2d 183, 186-87 (9th Cir. 1987). Absent prejudice, or a strong showing 13 of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in 14 favor of granting leave to amend. Eminence Capital, 316 F.3d at 1052. 15 Here, Life Advance does not argue it would be prejudiced if leave to amend is 16 granted. Instead, it argues Nicholson and Voelker unduly delayed in filing the present 17 motion and are acting in bad faith, and that the proposed amendments are futile.3 18 “Undue delay” may be found in two circumstances. The first occurs when a 19 proposed amendment would cause an “undue delay” in the litigation. Stambanis v. Tbwa 20 Worldwide, Inc., No. 219CV3962ODWJEMX, 2020 WL 4060171, at *2 (C.D. Cal. July 21 20, 2020) (quoting Jackson v. Bank of Hawaii, 902 F.3d 1385, 1387 (9th Cir. 1990)). The 22
23 3 Life Advance also argues the present motion was untimely filed and fails to comply with 24 Civil Local Rule 15.1(b). Life Advance is correct that the motion is untimely as the 25 deadline to file motions to amend the pleadings was May 31, 2020, but the present motion was not filed until June 1, 2020. Life Advance is also correct that the motion fails to 26 comply with Civil Local Rule 15.1(b). Given Nicholson and Voelker’s pro se status, and 27 that the motion was filed only one day after the deadline, the Court declines to deny the motion on these bases. Nicholson and Voelker are reminded, however, of their obligation 28 1 second arises when the moving party unduly delayed in requesting the amendment. Id. 2 Here, Life Advance does not argue that Nicholson and Voelker’s proposed 3 amendment would unduly delay the litigation. However, if the amendment were allowed, 4 delay would be likely. Under the current scheduling order, all fact discovery must be 5 completed by September 14, 2020, and it is unclear whether the parties could meet that 6 deadline. Extending that deadline could also necessitate an extension of all other dates, 7 and delay the ultimate resolution of this case, which has now been pending in this Court 8 for nearly two years.4 Accordingly, granting the present motion could cause an undue 9 delay in the litigation. 10 That delay is particularly undue here, where Nicholson and Voelker fail to explain 11 exactly when they learned of the facts underlying their proposed amendment. Although 12 Nicholson submitted a Declaration in which he states repeatedly that he has “now learned” 13 or “recently learned” of certain facts, (see Decl. of Mickey Nicholson in Supp. of Mot. 14 ¶¶16, 24), he failed to provide any specifics as to when he became aware of the 15 information underlying his proposed amendments. Nicholson also fails to explain why 16 he could not have discovered these facts earlier. Thus, the undue delay factor weighs 17 against allowing the amendment. Because undue delay, alone, “’is insufficient to justify 18 denying a motion to amend[,]’” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 19 712–13 (9th Cir. 2001) (quoting Bowles v. Reade, 198 F.3d 752, 758 (9th Cir.1999)), the 20 Court proceeds to the other factors. 21 The next factor is bad faith, and here, Life Advance argues that Nicholson and 22 Voelker have thus far failed to provide any evidence to support their claims, which is 23 evidence of bad faith. However, the Court disagrees. Nicholson and Voelker have 24 provided evidence in the form of their own sworn testimony. Contrary to Life Advance’s 25
26 27 4 It bears mention that the filing of this case was not the beginning of the dispute over the subject Policy. That dispute began nearly two years before the filing of this case, thus 28 1 suggestion, there is no evidence of bad faith on the part of Nicholson or Voelker. 2 Accordingly, this factor weighs in favor of allowing the amendment. 3 The final factor at issue here, and the focus of Life Advance’s opposition, is futility.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRUCO LIFE INSURANCE Case No.: 18cv2280 DMS (AHG) COMPANY, an Arizona Corporation, 12 ORDER GRANTING MICKEY Plaintiff, 13 NICHOLSON AND JASON v. VOELKER’S MOTION FOR LEAVE 14 TO FILE A JOINT AMENDED CALIFORNIA ENERGY 15 ANSWER AND COMPLAINT DEVELOPMENT, INC., a dissolved 16 California Corporation, TIMOTHY BRYSON, an individual, MICKEY 17 NICHOLSON, an individual, JOHN J. 18 WALSH, an individual, EDWARD SPOONER, trustee of the LIVING 19 TRUST OF EDWARD SPOONER, LIFE 20 ADVANCE, LLC, a Nevada corporation, DOES 1-10,, 21 Defendants. 22
23 AND ALL RELATED CROSS CLAIMS AND THIRD PARTY CLAIMS. 24
25 26 27 28 1 This case comes before the Court on Mickey Nicholson and Jason Voelker’s 2 motion for leave to file a Joint Amended Answer and Complaint.1 Life Advance, LLC 3 filed an opposition to the motion, and Nicholson and Voelker filed a reply. For the 4 reasons discussed below, the motion is granted. 5 I. 6 BACKGROUND 7 This case involves a dispute over the ownership and beneficiary of an insurance 8 policy issued by Pruco Life Insurance Company on the life of James D. Roberts. Since 9 the filing of the case, Mr. Roberts has died, and Pruco has submitted the proceeds of the 10 policy ($1,001,086.53) into the Registry of the Court. 11 Three parties remain in the case, Life Advance, LLC, Mickey Nicholson and Jason 12 Voelker, and all claim to have an interest in the policy proceeds. Life Advance currently 13 has pending claims for declaratory relief and interference with contract against Nicholson 14 and Voelker, and Nicholson and Voelker currently have pending claims against Life 15 Advance for declaratory relief, conversion, negligence, inducing breach of contract, 16 intentional interference with prospective economic advantage and negligent interference 17 with prospective economic advantage. 18 II. 19 DISCUSSION 20 In the present motion, Nicholson and Voelker, who are both proceeding pro se, 21 request leave to file a joint amended answer and complaint against Life Advance to add 22 claims for rescission, constructive trust and equitable lien.2 Federal Rule of Civil 23 Procedure 15 provides that leave to amend a party’s pleading “shall be freely given when 24
25 1 Life Advance’s motions for summary judgment against Nicholson and Voelker on its 26 cross- and third-party claims is also pending before the Court. The Court will address those 27 motions in a separate order. 2 It appears Nicholson and Voelker have already filed the proposed amendment, (see ECF 28 1 justice so requires.” Fed. R. Civ. P. 15(a). In accordance with this Rule, the Supreme 2 Court has stated, 3 in the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 4 deficiencies by amendments previously allowed, undue prejudice to the 5 opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, be “freely 6 given.” 7 8 Foman v. Davis, 371 U.S. 178, 182 (1962). Of these factors, the Ninth Circuit has stated 9 “it is the consideration of prejudice to the opposing party that carries the greatest weight.” 10 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). The party 11 opposing the amendment bears the burden of showing prejudice. DCD Programs, Ltd. v. 12 Leighton, 833 F.2d 183, 186-87 (9th Cir. 1987). Absent prejudice, or a strong showing 13 of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in 14 favor of granting leave to amend. Eminence Capital, 316 F.3d at 1052. 15 Here, Life Advance does not argue it would be prejudiced if leave to amend is 16 granted. Instead, it argues Nicholson and Voelker unduly delayed in filing the present 17 motion and are acting in bad faith, and that the proposed amendments are futile.3 18 “Undue delay” may be found in two circumstances. The first occurs when a 19 proposed amendment would cause an “undue delay” in the litigation. Stambanis v. Tbwa 20 Worldwide, Inc., No. 219CV3962ODWJEMX, 2020 WL 4060171, at *2 (C.D. Cal. July 21 20, 2020) (quoting Jackson v. Bank of Hawaii, 902 F.3d 1385, 1387 (9th Cir. 1990)). The 22
23 3 Life Advance also argues the present motion was untimely filed and fails to comply with 24 Civil Local Rule 15.1(b). Life Advance is correct that the motion is untimely as the 25 deadline to file motions to amend the pleadings was May 31, 2020, but the present motion was not filed until June 1, 2020. Life Advance is also correct that the motion fails to 26 comply with Civil Local Rule 15.1(b). Given Nicholson and Voelker’s pro se status, and 27 that the motion was filed only one day after the deadline, the Court declines to deny the motion on these bases. Nicholson and Voelker are reminded, however, of their obligation 28 1 second arises when the moving party unduly delayed in requesting the amendment. Id. 2 Here, Life Advance does not argue that Nicholson and Voelker’s proposed 3 amendment would unduly delay the litigation. However, if the amendment were allowed, 4 delay would be likely. Under the current scheduling order, all fact discovery must be 5 completed by September 14, 2020, and it is unclear whether the parties could meet that 6 deadline. Extending that deadline could also necessitate an extension of all other dates, 7 and delay the ultimate resolution of this case, which has now been pending in this Court 8 for nearly two years.4 Accordingly, granting the present motion could cause an undue 9 delay in the litigation. 10 That delay is particularly undue here, where Nicholson and Voelker fail to explain 11 exactly when they learned of the facts underlying their proposed amendment. Although 12 Nicholson submitted a Declaration in which he states repeatedly that he has “now learned” 13 or “recently learned” of certain facts, (see Decl. of Mickey Nicholson in Supp. of Mot. 14 ¶¶16, 24), he failed to provide any specifics as to when he became aware of the 15 information underlying his proposed amendments. Nicholson also fails to explain why 16 he could not have discovered these facts earlier. Thus, the undue delay factor weighs 17 against allowing the amendment. Because undue delay, alone, “’is insufficient to justify 18 denying a motion to amend[,]’” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 19 712–13 (9th Cir. 2001) (quoting Bowles v. Reade, 198 F.3d 752, 758 (9th Cir.1999)), the 20 Court proceeds to the other factors. 21 The next factor is bad faith, and here, Life Advance argues that Nicholson and 22 Voelker have thus far failed to provide any evidence to support their claims, which is 23 evidence of bad faith. However, the Court disagrees. Nicholson and Voelker have 24 provided evidence in the form of their own sworn testimony. Contrary to Life Advance’s 25
26 27 4 It bears mention that the filing of this case was not the beginning of the dispute over the subject Policy. That dispute began nearly two years before the filing of this case, thus 28 1 suggestion, there is no evidence of bad faith on the part of Nicholson or Voelker. 2 Accordingly, this factor weighs in favor of allowing the amendment. 3 The final factor at issue here, and the focus of Life Advance’s opposition, is futility. 4 Specifically, Life Advance argues there is no merit to the claims proposed in the 5 amendment, therefore the motion should be denied. “A proposed amendment is futile if 6 it could be defeated by a motion to dismiss or if plaintiff cannot prevail on the merits.” 7 Cooper v. Premera Blue Cross, No. C06-1466RSL, 2008 WL 324264, at *1 (W.D. Wash. 8 Feb. 5, 2008). 9 The first claim in Nicholson and Voelker’s proposed amendment is rescission. (See 10 ECF No. 152 ¶¶114-18.) Unfortunately, Nicholson and Voelker do not identify which 11 transaction(s) they are seeking to rescind. Regardless, they do not appear to be parties to 12 any of the alleged transactions concerning the chain of title for the Policy. Absent party 13 status, they have no right to rescind any of the alleged transactions. Schauer v. Mandarin 14 Gems of Cal., Inc., 125 Cal. App. 4th 949, 959, 23 Cal. Rptr. 3d 233, 240 (2005) (stating 15 rescission rights limited to contracting parties). 16 The next claim in the proposed amendment is for a constructive trust. To prevail 17 on this claim, Nicholson and Voelker must satisfy the following three conditions: “(1) 18 the existence of a res (property or some interest in property); (2) the right of a complaining 19 party to that res; and (3) some wrongful acquisition or detention of the res by another 20 party who is not entitled to it.” Communist Party v. 522 Valencia, Inc., 35 Cal. App. 4th 21 980, 990, 41 Cal. Rptr. 2d 618 (1995) (citations omitted). Life Advance argues there is 22 no evidence that it wrongfully acquired the Policy, which dooms this claim. However, 23 Nicholson and Voelker have alleged, and have maintained throughout this case, that Life 24 Advance is not the rightful owner or beneficiary of the Policy, and that it acquired the 25 Policy through wrongful means. Whether the evidence bears that out remains to be seen, 26 but based on the facts alleged, this proposed amendment is not futile. 27 The same can be said for the proposed claim for an equitable lien, which the Court 28 has already held may be a meritorious defense to certain of the claims in this case. (See 1 || ECF No. 100) (granting John Walsh’s motion to set aside default). Thus, although the 2 ||rescission claim appears to be futile, Life Advance has not shown that the other two claims 3 ||in the proposed amendment meet that definition. Accordingly, this factor also weighs in 4 || favor of allowing the amendment. 5 Il. 6 CONCLUSION AND ORDER 7 Although Nicholson and Voelker delayed filing the present motion and there is a 8 || possibility that allowing the proposed amendment will delay the case, undue delay, alone, 9 not enough to deny the present motion. Because the other factors weigh in favor of 10 ||allowing the amendment, the Court grants the present motion for leave to amend. 11 || Nicholson and Voelker’s Joint Amended Answer and Cross-Claims filed at ECF No. 152 12 ||is hereby accepted for filing. 13 IT IS SO ORDERED. 14 ||Dated: July 29, 2020 15 ns my. L4\ Hon. Dana M. Sabraw 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28