Wright v. Herman

230 F.R.D. 1, 2005 U.S. Dist. LEXIS 14382, 2005 WL 1692706
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 19, 2005
DocketNo. 05-0324 (RMU)
StatusPublished
Cited by5 cases

This text of 230 F.R.D. 1 (Wright v. Herman) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wright v. Herman, 230 F.R.D. 1, 2005 U.S. Dist. LEXIS 14382, 2005 WL 1692706 (D.C. Cir. 2005).

Opinion

MEMORANDUM OPINION

URBINA, District Judge.

Granting the Plaintiff’s Motion to Amend and Supplement the Complaint;

I. INTRODUCTION

This matter comes before the court on the plaintiffs motion to amend and supplement her first amended complaint. Julia Wright (the “plaintiff’), brings this diversity suit against William Herman and Eric May (the “defendants”), seeking damages for alleged injuries arising out of the parties’ business dealings as members of a Virginia limited liability company. The plaintiff moves to amend her complaint to state with greater specificity her alternative theories of recovery against the defendants, to add claims against the defendants, to add a new defendant, and to supplement her complaint with events she discovered after she filed her first amended complaint. The defendants argue that the plaintiffs proposed amended complaint is futile. Because the liberal pleading standards of the Federal Rules of Civil Procedure allow plaintiffs to allege alternative and inconsistent theories of liability, and because the plaintiff has alleged valid claims the ultimate merits of which will depend on fact-specific questions that may not be dismissed without benefit of discovery, the court grants leave to amend and supplement.

II. BACKGROUND

A. Factual Background

The plaintiff alleges as follows. In January 2004, the plaintiff, a District of Columbia resident, and William Herman, a Maryland resident, agreed to form a project management and real estate development firm to carry out business within the District of Co[3]*3lumbia. 1st Am. Compl. If 7. Although the plaintiff and Herman agreed to operate as partners, they chose to use an existing Virginia limited liability company formed by Herman as a “vehicle” to carry out their business. Id. The plaintiff and Herman renamed the existing company “CRA Urban, LLC.” Id.

The plaintiff and defendant Herman transferred assets to CRA Urban, LLC, bought office supplies and hired staff, and established office headquarters in the District of Columbia. Id. ¶ 8. The plaintiff also made a $32,000 loan to CRA Urban, LLC. Id. On May 1, 2004, the plaintiff and Herman hired defendant Eric May, a Maryland resident, as a Vice President of CRA Urban, LLC. Id. May received a 10% interest in CRA Urban, LLC, Wright and Herman each reducing their interests to 45%. Id. ¶11. Together, Herman and May controlled a majority (55%) of CRA Urban, LLC shares. See id.

In September 2004, after several months of profitable business, Herman and May conspired to exclude Wright from CRA Urban, LLC’s management, profit distributions, and meetings, with the ultimate goal of excluding Wright from the business’ future dealings and terminating her membership interest. Id. H 18.

B. Procedural History

Wright filed her original complaint with this court on February 14, 2005, and amended as of right on March 10, 2005. On March 28, 2005, the defendants filed a motion to dismiss or, in the alternative, for summary judgment. On April 29, 2005, the plaintiff moved to amend her complaint for a second time to “more fully and clearly state the factual and legal basis” for her claims against the defendants, PL’s Mot. to Am. and Supp. at 1, based on two alternative theories of relief: (1) that a partnership existed between the plaintiff and the defendants,1 or in the alternative, (2) that her specific injuries are of a type which affords her the right to bring a direct action against both defendants under Virginia’s Limited Liability Company Act.2 The plaintiff also seeks to amend her complaint by adding additional claims against the defendants, including conversion, id., Att. A (“Proposed 2d Am. and Supp. Compl.”) ¶¶ 46-55, civil conspiracy, id. ¶¶ 56-60, and a claim for equitable relief, id. ¶¶68-73.

The plaintiff seeks to supplement her previous complaint with newly-discovered facts. Specifically, the plaintiff alleges that, after attempting to gain information about the status of the bank account of CRA Urban, LLC, she discovered that Herman and May had drawn disbursements for themselves from the LLC’s bank account in the amount of $40,000, issued checks from the bank account to their legal counsel, and provided the bank with a resolution barring Wright from any further access to information regarding the account. Id. ¶¶20-21. The resolution suggested that the plaintiff “had acted improperly in obtaining information from Citibank regarding CRA Urban withdrawals and payments ... [and] stat[ed] that her continued access to such information ‘would in fact be a detriment’ to CRA Urban.” Id. ¶21. The plaintiff further discovered that defendants Herman and May had formed a new company named Urban Realty, LLC under Maryland law. Id. ¶22. Finally, the plaintiff became aware in April 2005 of a statement released on behalf of Urban Realty, LLC, announcing the termination of CRA Urban, LLC and the formation of Urban Realty, LLC in its place; the statement indicated that CRA Urban, LLC had been unable to conduct normal business any longer “due to one of its professionals leaving the business and some resulting internal changes necessitated by this departure^]” Id. ¶24. The plaintiff alleges that the assets of CRA Ur[4]*4ban, LLC were misappropriated to form Urban Realty, LLC, id. ¶22, and she now seeks to add Urban Realty, LLC on the basis of these newly discovered facts, id. ¶ 61-67. The plaintiff alleges that her interest in CRA Urban, LLC would now be worth approximately $1.1 million if not for the wrongful acts of the defendants. Id. ¶16.

III. ANALYSIS

A. The Court Grants the Plaintiffs Motion to Amend and Supplement3 the Complaint

1. Legal Standard for a Motion to Amend Pursuant to Rule 15

Under Federal Rule of Civil Procedure 15(a), a party may amend its pleading once as a matter of course at any time before a responsive pleading is served. Fed.R.Civ.P. 15(a). Additionally, Rule 15(a) allows a party to amend its pleading to add a new party.4 Id.; Wiggins v. Dist. Cablevision, Inc., 853 F.Supp. 484, 499 (D.D.C.1994); 6 Fed. Prac. & Proc. 2d § 1474. According to our court of appeals, Rule 15(a) “guarantee[s] a plaintiff an absolute right” to amend the complaint once at any time so long as the defendant has not served a responsive pleading and the court has not decided a motion to dismiss. James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 282-83 (D.C.Cir.2000) (citing Fed.R.Civ.P. 15(a)). If there is more than one defendant, and not all have served responsive pleadings, the plaintiff may amend the complaint as a matter of course with regard to those defendants that have yet to answer. 6 Fed. Prac. & Proc. 2d § 1481.

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Cite This Page — Counsel Stack

Bluebook (online)
230 F.R.D. 1, 2005 U.S. Dist. LEXIS 14382, 2005 WL 1692706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wright-v-herman-cadc-2005.