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Allenmore Medical Investors, LLC v. City of Tacoma

United States District Court, W.D. Washington, Tacoma

December 11, 2014

ALLENMORE MEDICAL INVESTORS, LLC, Plaintiff,
v.
CITY OF TACOMA, et al., Defendants.

ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO AMEND [DKT. # 7]

RONALD B. LEIGHTON, District Judge.

INTRODUCTION

THIS MATTER is before the Court on Plaintiff Allenmore Medical Investor's Motion for Leave to File First Amended Complaint. [Dkt. #7]. The case arises from the development of the existing Walmart store on what used to be the Elks Lodge property in Tacoma. Allenmore, the project's developer, claims that the City of Tacoma's actions hindered and delayed various land use and building permit decisions during the project, costing Allenmore at least $1.8 million.

Allenmore sued the City in Pierce County Superior Court on August 18, 2014. It claimed that the City violated Allenmore's constitutionally-protected property rights and privileges, and conspired to interfere with those rights - claims based on the United States Constitution and federal statutes. The next day, Allenmore served a state law damage claim notice on the City for claims which arose out of the same transaction. It did so as a prerequisite for asserting state law claims against the City as required by Washington's Notice-of-Claim statute, RCW 4.96.020. On September 9, 2014, the City removed the case to this Court. When the 60 day pre-claim notice period expired, Allenmore moved to amend its complaint to assert state law tortious interference and civil conspiracy claims.

The City claims that the motion should be denied as futile because the state law claims are fatally defective as a matter of law - the lawsuit in which they are being asserted was filed before the pre-claim notice requirement was satisfied. It argues that where a plaintiff files a federal claim against a party protected by Washington's pre-claim notice statute, the plaintiff is thereafter barred from amending its complaint to assert state law claims that arise out of the same common nucleus of operative fact because it cannot comply with the state's Notice-of-Claim statute. Put another way, the City argues that the pre-claim notice must be served before any lawsuit is filed - even one that does not initially allege state law claims subject to the notice requirement - if the plaintiff ever wants to assert related state law claims. It claims that the Notice cannot be effective while some other related federal litigation is pending, and a plaintiff must give notice before filing any suit: amendment of an existing complaint even after a "compliant" notice period is flatly prohibited.

The City also claims that amendment would be futile because even though the motion was timely filed, the limitations period expired before the Court permitted Allenmore to actually file an amended complaint. This argument ignores Rule 15's familiar "relation back" provision - even though the City parrots that rule's "same nucleus of operative facts" trigger in its other argument.

DISCUSSION

The district court has discretion to grant or deny leave to amend, and "[t]he court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). In determining whether to grant leave, courts consider five factors: "bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint." United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). Rule 15(a) creates a presumption in favor of granting leave to amend absent prejudice or a strong showing of any of the other factors. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

The only issue here is whether amendment would be futile. The City argues that the state law claims would be subject to immediate dismissal both because Allenmore failed to comply with the state pre-claim requirement by first filing federal claims arising out of the same common nucleus of operative fact, and because the state law claims are time barred. Allenmore contends that filing the federal claims first does not preclude it from later giving notice of related state law claims, and then moving to amend to add them when the respective pre-claim notice period expires. It also points out that if its complaint is amended to include the state law claims under Rule 15, those claims will "relate back" to the date of the original complaint.

A. Washington's Pre-Claim Notice Requirement

RCW 4.96.020 protects local governmental entities by requiring a plaintiff to notify the entity prior to commencing a lawsuit asserting state law damage claims:

(1) The provisions of this section apply to claims for damages against all local governmental entities....
....
(4) No action subject to the claim filing requirements of this section shall be commenced against any local governmental entity... for damages arising out of tortious conduct until sixty calendar days have elapsed after the claim has first ...

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