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Ritchie Bros. Auctioneers (America) Inc. v. Suid

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

April 17, 2018

NAEM SUID, et al., Defendants.


          Mary Alice Theiler United States Magistrate Judge.


         Plaintiff Ritchie Bros. Auctioneers (America) Inc. (“Ritchie Bros.”) filed a Motion for Leave to Amend Complaint. (Dkt. 41.) In the proposed First Amended Complaint, Ritchie Bros. names Naem Suid (“Naem”) as a defendant, but does not seek to recover any amounts from Naem's son, Mohammad Suid (“Mohammad”), personally in light of Mohammad's bankruptcy discharge. (See Dkt. 41-1.) Ritchie Bros. also names the Naem Suid - Mohammad Suid Partnership (“Partnership”) as a defendant, and describes the proposed amendments as providing a more complete picture of the parties' course of dealings and the Partnership. Ritchie Bros. avers defendants are jointly and several liable for debts owed, and also liable as joint tortfeasors.

         Defendants oppose the motion and request oral argument. (Dkt. 42.) The Court, finding oral argument unnecessary, herein GRANTS Ritchie Bros.' motion to file an amendment complaint.


         Naem and Mohammad participated in a live auction conducted by Ritchie Bros. in Orlando, Florida on February 15, 2016. (See Dkts. 1 & 41-1.) Naem and Mohammad entered into bidder agreements and, under two different bidder numbers, incurred a total debt of $575, 710.00 in the purchase of heavy equipment at the auction. As set forth in the proposed amended complaint, Naem and Mohammad also participated in an auction of real estate conducted by Concierge Auctions LLC (“Concierge”) at the same auction site and in conjunction with Ritchie Bros. (Dkt. 41-1, ¶ 4.18.) Neither Naem, nor Mohammad tendered payment for their purchases at the auctions.

         The proposed amended complaint avers that, on or about March 16, 2016, counsel for Concierge sent a demand letter to Stephen Stone, Naem's attorney, seeking payment for the real estate purchases. (Id., ¶ 4.20.) On the following day, March 17, 2016, Stone filed Electronic Articles of Organization for Suid Trucking, LLC (“Suid Trucking”), naming Naem, Mohammad, and Omar Suid as members. (Id., ¶ 4.21.) Ritchie Bros. also sent letters to Naem and Mohammad requesting payment. (See Dkts. 1 & 41-1.) Again, neither individual tendered payment. Ritchie Bros. thereafter exercised its right to resell the purchased equipment, leaving a total debt in the principal amount of $170, 205.00. In a July 28, 2017 email directed to Ritchie Bros.' counsel, Stone stated Mohammad “became confused” at the auction and utilized Naem's bidder number to purchase equipment “for his truck hauling business.” (Dkt. 21, Ex. A; Dkt. 41-1, Ex. F.)

         Ritchie Bros. filed suit against Naem, Mohammad, and Suid Trucking in September 2017, alleging breach of contract and action in debt. (Dkt. 1.) The complaint alleged Naem placed his bids at the auction either personally or through Mohammad, that Mohammad participated in the auction as an agent on behalf of Suid Trucking, and that defendants acted in concert as bidders at the auction and agreed to be responsible, jointly and severally, for the equipment purchased. (Id., ¶¶ 4.13, 4.16, 4.17, 5.2)

         In February 2018, the Court issued an Order granting in part and denying in part defendants' motion to dismiss. (Dkt. 32.) In its opposition to the motion, Ritchie Bros. informed the Court of its discovery Mohammad had filed a voluntary petition for bankruptcy on October 10, 2017. Given the inadequacy of the briefing and information offered, the Court denied the motion to dismiss as to Mohammad and requested input from the parties as to the impact of the automatic bankruptcy stay. Considering the fact Suid Trucking's March 17, 2016 Articles of Incorporation contradicted any inference the LLC existed either at the time of the auction or at the time payment became due, the Court granted the motion and dismissed plaintiff's claims as to Suid Trucking. The dismissal was without prejudice to the submission of an amended pleading offering evidence that could support an earlier date of incorporation. The Court also denied the motion to dismiss all defendants for lack of subject matter jurisdiction and to dismiss Naem for insufficient service of process, while quashing an attempted service and granting Ritchie Bros. additional time to effect service on Naem. Relevant to the motion currently under consideration, the Court noted Ritchie Bros.' argument that Naem and Mohammad had formed a general partnership under Florida law at the time they placed their bids, and observed that the introduction of this argument could warrant an opportunity to amend.


         In the proposed first amended complaint, Ritchie Bros. avers Naem and Mohammad, at the time of the auction, acted as business partners who were deemed to have been in a general partnership under Florida law. (Dkt. 41.1 at ¶ 2.3.) Ritchie Bros. alternatively maintains Mohammad acted as Naem's agent for all relevant purposes at issue in this dispute. (Id., ¶ 2.2.) Richie Bros. avers defendants acted in concert to make purchases at the auction, that Naem and Mohammad acted as agents for the Partnership and Mohammad also acted as an agent for Naem, and that defendants are jointly and severally liable for amounts owing. (Id., ¶¶ 5.2-5.11.) Ritchie Bros. also avers defendants lacked the intention to comply with the terms of the bidder agreements and, by sharing bidder numbers and acting as agents for one another, acted in concert to intentionally and negligently make misrepresentations regarding their intention to be responsible, jointly and severally, for the items purchased at auction. (Id., ¶ 5.12-5.39.) Ritchie Bros. does not seek recovery from Mohammad personally and, instead, seeks to recover from Naem, either because of his partnership with Mohammad or because Mohammad was Naem's agent, and because Naem acted in concert with Mohammad to misrepresent facts to Ritchie Bros.

         Federal Rule of Civil Procedure 15 provides that the Court “should freely give leave [to amend a pleading] when justice so requires.” Fed.R.Civ.P. 15(a). Granting leave to amend serves the purpose of Rule 15 to “facilitate decision on the merits, rather than on the pleadings or technicalities.” Novak v. United States, 795 F.3d 1012, 1020 (9th Cir. 2015) (internal quotation marks and quoted case omitted). The rule should, therefore, be interpreted and applied with “extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990).

         Leave to amend may be denied where there is undue delay, bad faith or dilatory motive, undue prejudice to the opposing party, or when the amendment would be futile. See Foman v. Davis, 371 U.S. 178, 182 (1962). Courts also frequently consider whether a party previously amended its complaint. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). The parties here dispute whether these factors argue in favor or against granting plaintiff's motion to amend. Ritchie Bros. also requests that the Court strike defendants' over-length opposition. The Court, for the reasons set forth below, will consider defendants' opposition, but finds no basis for denying plaintiff the opportunity to amend.

         A. Over-Len ...

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